Artificial Life (PINK:ALIF)

HONG KONG, March 28, 2012 (GLOBE NEWSWIRE) -- Artificial Life, Inc. (OTCPK:ALIF), an innovative investment Company, announced today its Board of Directors and its Independent Audit Committee has approved the filing of a Form 15 by the Company with the U.S. Securities and Exchange Commission to voluntarily deregister its common shares under the Securities Exchange Act of 1934. The Company intends to file the Form 15 with the SEC on or about March 30, 2012. 

The Company is eligible to deregister its common shares because it had fewer than 300 holders of record of its common shares at the beginning of its current fiscal year. Upon the filing of the Form 15, the Company's obligation to file certain reports with the SEC, including Forms 10-K, 10-Q and 8-K, will immediately be suspended. Other filing requirements will terminate upon the effectiveness of the deregistration, which is expected to occur 90 days after the filing of the Form 15.

The Company's Board of Directors and its Independent Audit Committee made this decision after careful considerations and review of the cumulative costs and pros and cons of being an SEC registered company. The Company believes that currently the incremental cost of compliance with general SEC regulations and Sarbanes-Oxley and other reporting requirements does not provide a discernible benefit to the Company and its shareholders and is currently not commercially justifiable.

The Company has been charged more than USD 450,000 and USD 850,000 for auditor fees and related legal fees for the fiscal year 2010 and 2011, respectively. Therefore, the savings derived from the deregistration are expected to be significant. The deregistration will also allow management to devote more time and resources to build up the business, to implement its new investment business model, to support its existing promising subsidiaries like Artificial Life Investments, Alife Studios and Green Cortex, to make new investments and to focus on its lawsuits against KPMG and others.

In addition, management is intending to improve and solidify the Company's financial basis by licensing its assets, by establishing credit lines and by raising new funds for growth and acquisitions. The goal of management for the next quarters is to increase shareholder value and to substantially increase the market value of its equity.

Since June 17, 2011, the Company's shares have been listed on the Pink Sheets segment and the Company expects that they will remain traded there after deregistration. Although no longer required by the SEC after deregistration, the Company presently intends to provide performance data from time to time to the public and its shareholders. There can be no assurance, however, that the Company will continue to provide such information in the future or that its common shares will continue to be quoted on the Pink Sheets after deregistration of the common shares.

The Company may elect to register its shares again with the SEC or other foreign regulatory authorities at a later point in time after the new business model has been fully implemented and the market value of its equity has resumed higher levels.

HONG KONG and LOS ANGELES, April 18, 2011 /PRNewswire-Asia/ -- Artificial Life, Inc. announced that it has learned that a purported securities class action lawsuit was filed on April 15, 2011 against the Company and its CEO.

The Company assumes that the allegations are without merit and intends to vigorously defend itself. The Company is currently preparing a motion to dismiss the lawsuit in due course.

The management of the Company does not assume that these legal proceedings will distract it from its usual course of business.

"We will defend the Company against any false claims and accusations and will use all available means to do so," said Eberhard Schoeneburg, CEO of Artificial Life, Inc.

On March 18, 2011, the audit committee of Artificial Life, Inc. approved the dismissal of KPMG as the Company’s principal accountant effective March 30, 2011

During the course of the audit of the Company’s financial statements for the fiscal year ended December 31, 2010, KPMG identified a number of accounting matters that would have prevented KPMG from rendering an unqualified opinion if the issues were not resolved. After KPMG notified the Company of such matters, the Company provided KPMG with various detailed assessments. In late March 2011, there were discussions between the Company, its audit committee and KPMG in connection with these matters, which principally related to: accounting for a Joint Venture agreement, reserves for accounts receivables, revenue recognition and impairment of license rights related to its 2010 fiscal year. These issues remained unresolved at the end of KPMG’s engagement.

On April 1, 2011, Artificial Life, Inc. filed a Form 12b-25 disclosing that it was still in the process of having its financial statements for the fiscal year ended December 31, 2010 audited by its independent accountants and that it would not be able to complete its audit and Annual Report on Form 10-K (the “2010 10-K”) by March 31, 2011 without incurring undue hardship and expense. At the time of the filing, the Company anticipated that the 2010 10-K would be filed no later than fifteen calendar days after its original due date. On April 6, 2011, the Company announced the termination of its engagement with KPMG, its independent auditors. Such engagement was terminated effective March 30, 2011, though after such termination, the parties continued discussing the possibility of KPMG’s engagement being extended in order for the audit to be completed within the timeframe of the 12b-25 extension. The Company is now in the process of assigning and evaluating new independent registered public accounting firms to audit its financial statements for Fiscal Year 2010. The Company will file its 2010 10-K at such time as its audit has been completed.