SEPROTECH ANNOUNCES OVERSTATEMENT OF REVENUES

OTTAWA, Dec. 29 /CNW/ -- 
OTTAWA, Dec. 29 /CNW/ - Seprotech Systems Incorporated (TSX-V: SET; "Seprotech" or the "Company") announces that preliminary
 investigations by management and the audit committee of the Company indicate that the Company's revenues as reported in its
 financial statements for the quarters ended November 30, 2009, February
 28, 2010 and May 31, 2010, and for the year ended August 31, 2009, have
 been overstated, by an as yet undetermined, material amount. The
 Company believes that its overstatement of revenue has resulted from
 over-billing to a significant customer of the Company. The Company's
 audit committee is currently working with management and the Company's
 auditors to confirm the extent of such overstatement, and the impact of
 such overstatement on the Company's balance sheet, statements of
 operations and deficit and comprehensive loss, and statements of cash
 flows for the three-month periods ended November 30, 2009, February 28,
 2010, May 31, 2010 and possibly for the year ended August 31, 2009.


The Company announced on December 17, 2010 that it will not be able to
 file its audited financial statements for the year ended August 31,
 2010 and related MD&A and CEO and CFO certificates by December 29, 2010
 as required under securities laws.  Due to the potential for
 restatement, the Company cautions that its previously filed financial
 statements should not be relied upon until the Company can confirm
 their accuracy or restated financials are filed. As additional
 information becomes available, updated press releases will be issued.


As has been previously reported, the Company has a significant working
 capital deficit and, accordingly, is considering sources of additional
 financing which may be available to it.  The Company is not currently
 in compliance with financial covenant ratios in its secured loan
 agreement, and depending upon the extent of final determination of the
 revenue discrepancy, could be in a materially more adverse financial
 condition with respect to the non-compliance.


About Seprotech


Seprotech is a provider of pre-engineered water and wastewater treatment
 plants to the land development, resource sector and military market
 place, including CrystalBlue™ membrane-based water recycling systems
 and the ROTORDISK® wastewater treatment systems.


Neither TSX Venture Exchange nor its Regulation Services Provider (as
 that term is defined in the policies of the TSX Venture Exchange)
 accepts responsibility for the adequacy or accuracy of this release.
 The TSX Venture Exchange has neither approved nor disapproved of the
 information contained herein. Some of the statements in this press
 release, including those relating to the Company's strategies and other
 statements that are predictive in nature, that depend upon or refer to
 future events or conditions, or that include words such as "expects",
 "anticipates", "intends", "plans", "believes", "estimates" or similar
 expressions, are forward-looking statements within the meaning of
 securities laws. Forward-looking statements include, without
 limitation, the information concerning possible or assumed future
 results of operations of the Company. These statements are not
 historical facts but instead represent only the Company's expectations,
 estimates and projections regarding future events. The Company does not
 undertake any obligation to update or release any revisions to these
 forward-looking statements to reflect events or circumstances after the
 date of this presentation or to reflect the occurrence of unanticipated
 events, except as required by law.


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