Canbras Declares Initial Distribution of Sale Proceeds to Shareholders and Releases Second Quarter Results.MONTREAL Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. -- 12G Exemption #82-1927 - Canbras Communications Corp. (NEX NEX abbr. Navy exchange .CBC (1) (Cell Broadcast Center) See cell broadcast. (2) (Cipher Block Chaining) In cryptography, a mode of operation that combines the ciphertext of one block with the plaintext of the next block. .H) ("Canbras" or the "Corporation") today announced that it has declared an initial distribution in the amount of $0.21 per common share (or $11.6 million in the aggregate) to common shareholders of record as of August 11, 2004 (the "Record Date"), which will be payable as of August 23, 2004 (the "Payable Date"). This distribution represents the initial distribution to shareholders of the proceeds received by Canbras upon the sale of all of its operations (the "Sale Transaction"), which Sale Transaction was concluded on December December: see month. 24, 2003. Canbras estimates that the final distribution, which will be made in one or more instalments, will aggregate approximately $0.30 per share (or $16.5 million), bringing the total amount of distributions (including the initial distribution) of proceeds from the sale of all of its operations to $0.51 per share (or $28.1 million). The final distribution will be made in one or more instalments after the receipt of the balance of the purchase price payable pursuant to the one-year note issued to Canbras in the Sale Transaction and due on December 24, 2004 (the "Note"), the satisfaction of all remaining liabilities of the Corporation and the receipt by the Corporation of up-dated tax clearance certificates. Estimated remaining total proceeds to be distributed to shareholders of $16.5 million reflect Canbras' net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. as at June 30, 2004 of $29.3 million less the initial distribution to shareholders of $11.6 million and estimated net costs of wind-up of $1.2 million and assume no unforeseen claims are asserted against the Corporation. Second Quarter Results As the Corporation completed the Sale Transaction on December 24, 2003, the Corporation's unaudited consolidated statements of earnings for the second quarter of 2004 reflect only the winding up activities of the Corporation. As at June 30, 2004, Canbras' shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $29.3 million, down from $29.4 million at March 31, 2004. This decrease reflects the second quarter loss of $80 thousand comprised of $430 thousand of administrative expenses offset by accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. income of $351 thousand. Canbras' cash and cash equivalents and the Note (including accrued interest) as at June 30, 2004 were $19.0 million and $11.0 million respectively. Cash and cash equivalents held by the Corporation pending shareholder distributions in the amount of $19.0 million at June 30, 2004, is being invested in high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. money market instruments Money market instruments See: Cash investments . Accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. of $854 thousand at the end of the second quarter of 2004 represent mainly the provision for estimated remaining costs of completing the Sale Transaction and were up $100 thousand from March 31, 2004 mainly as a result of the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of professional fees. Following the initial distribution to shareholders of $11.6 million, the estimated remaining future net assets of Canbras at December 31, 2005 are $16.5 million. The differences between shareholders equity on the consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. at June 30, 2004 and the estimated remaining future net assets at December 31, 2005 is the deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of the initial distribution to shareholders in the amount of $11.6 million and future net costs from July 1, 2004 to December 31, 2005. Such future net costs are estimated at approximately $1.2 million comprised of wind-up costs of approximately $2.0 million and interest income of approximately $0.8 million. These future net costs exclude any amounts that may be required to settle unforeseen claims against the Corporation including unforeseen indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from claims which might be asserted by the purchaser under the Sale Transaction. The loss for the second quarter was $80 thousand. Forward looking statements This news release may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that reflect the current views and/or expectations of Canbras with respect to future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future events, and may contain words like "believe" "anticipate", "expect", "will likely result", or words or phrases of similar meaning. Such statements are subject to a number of important risks and uncertainties which are difficult to predict and assumptions which may prove to be inaccurate. Whether actual events and developments conform with the Corporation's expectations and predictions are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual events to differ materially from current expectations include, among other things: whether any unforeseen claims are asserted which would reduce the amounts due under the Note; the collectibility of amounts due under the Note; whether any unforeseen claims are asserted against the Corporation (or its directors and officers) in connection with the winding up and liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of the Corporation or otherwise; the timing or amount of distributions of net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the Sale Transaction to shareholders; the timing of and costs associated with the final winding up and liquidation of the Corporation; and certain other factors set forth in the Corporation's filings with the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. securities commissions. In addition, forward-looking statements do not reflect the potential impact of future monetizations of potential assets or any legal or regulatory proceedings that may be announced after these statements are made. Canbras disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
CANBRAS COMMUNICATIONS CORP.
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Estimated Remaining Net Assets for Distribution to Shareholders after
the initial distribution (unaudited, in thousands of Canadian
dollars)
Assets as at June 30, 2004
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Cash and cash equivalents $19,047
Note and interest receivable 10,971
Prepaid expenses and other 171
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Total Assets 30,189
Liabilities as at June 30, 2004
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Accounts payable and accrued liabilities 854
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Total liabilities 854
Net assets as at June 30, 2004 $29,335
Initial distribution to shareholders (11,600)
Estimated future net costs for wind-up to
December 31, 2005 (1) (1,235)
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Estimated remaining future net assets as at
Dec 31, 2005 (2) 16,500
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(1) Includes interest income of $0.5 million on the $10.4 million
Note
(2) Before final distributions to shareholders
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