Chromos to Shed Tax Losses for Cash Plus Dividends

Chromos to Shed Tax Losses for Cash Plus Dividends

Chromos Molecular Systems Inc. (TSX: CHR) has entered into an arrangement agreement dated August 6, 2008 with, among others, Calyx Bio-Ventures Inc., a wholly-owned subsidiary of Chromos, and Modatech Systems Inc., pursuant to which the parties to the agreement have agreed to effect a plan of arrangement.

Modatech, a British Columbia company, has an equity investment in Markham Ventures Partnership, which owns a commercial income producing property, Market Village Mall, located in Markham, Ontario.

Upon completion of the Arrangement, Calyx will be the holder of all of the assets, property and undertaking of Chromos, together with additional cash of $2.35 million (before taking into account certain expenses relating to the transaction), and will be responsible for all of Chromos' obligations up to the effective time of the srrangement.

Calyx will own all of Chromos' intellectual property and all of the outstanding shares of Chromos' subsidiaries, as well as 29% of the outstanding shares of Agrisoma Biosciences Inc.

The shareholders of Chromos will hold all of the issued and outstanding shares of Calyx and all of the Class A voting preferred shares of an entity to be formed by the amalgamation of Modatech and 0828688 B.C. Ltd., a corporation which is currently a wholly-owned subsidiary of Chromos. Such shares will be entitled to an annual cumulative dividend of 6% per year of the retraction price and are retractable by the holder at any time after August 31, 2013 at a price of $0.056401 per share, for an aggregate retraction price of $500,000 to the shareholders of Chromos, plus dividends accrued up to such date.

Shareholders holding approximately 34.1% of the outstanding voting shares of Chromos, have agreed to support the arrangement.

TSX Venture Exchange has conditionally approved the listing of the common shares of Calyx, subject to the satisfaction of customary conditions.

As at December 31, 2007, Chromos had investment tax credits of approximately $4.4 million available to offset future federal income taxes payable as well as British Columbia provincial income taxes payable. It also had loss carryforwards of approximately $30.4 million available to offset future taxable income in Canada and the United States.

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