IRVINE, Calif., Nov 19, 2009 (BUSINESS WIRE) ----Cobalis Corporation (Pink Sheets: CLSC) confirms filing Five Count Adversarial Complaint on November 9, 2009 against secured creditor Yorkville Advisors/YA Global Investments, L P ("YAGI") f/k/a Cornell Capital Partners, L P in US Bankruptcy Court, Santa Ana, CA.

Yorkville Advisors LLC ("YA") is a consultancy that arranges financings for public companies using a technique known as Private Investment in Public Equities ("PIPE"). It has been alleged that YAGI and its predecessor Cornell are one of the largest investors in PIPE transactions and may have entered into over 300 transactions with publicly traded companies.

On December 20, 2006, Cobalis entered into a Securities Purchase Agreement with Cornell whereby Cornell agreed to purchase up to $3,850,000 of convertible debentures from Cobalis which could be converted into Cobalis' common stock. The transaction is considered a PIPE transaction as commonly referred to in the securities industry.

Over the next two to three years and beginning in April 2007, just four months after the PIPE agreement was signed, YAGI sold over 15,000,000 shares of Cobalis stock pursuant to their joint disclosure statement filing with the bankruptcy court. From April 2007 to July 2007, Cobalis Corporation share price went from approximately $1.20 per share to $0.10 per share significantly impacting the ability of Cobalis to launch PreHistin(R) to world-wide markets as a nutraceutical allergy relief alternative to antihistamines or to secure funding for another Phase III FDA clinical trial. The resulting drop in Cobalis share price amounted to loss of approximately $60,000,000 in shareholder equity.

On August 1, 2007, less than seven months after execution of the PIPE transaction, YAGI involuntarily filed to convert Cobalis to Chapter 7 liquidation. It has been alleged that this was done ahead of the allowable cure periods for the alleged default as an attempt to prevent Cobalis from honoring its obligations pursuant to the PIPE transaction.

Following are a summary of the claims by Cobalis as filed in the lawsuit:

-- Two counts of Breach of Contract and allegations of "equitable fraud".

-- Breach of contract and accumulating greater than 4.99% of Cobalis shares at one time.

-- Securities Fraud for violation of SEC Rule 10-b-5 relating to short selling without proper representation.

-- Equitable Fraud and Breach of Fiduciary Obligations by YAGI in collecting $415,000 in fees paid by Cobalis for execution of this PIPE transaction.

Cobalis is seeking for relief of costs and damages on all counts and for such further relief as the court deems just and proper. Tentative status conference hearing is scheduled for February 4, 2010.

Cobalis continues to operate and sell PreHistin(R) under a Chapter 11 reorganization and has submitted a reorganization plan to the bankruptcy court that also has jurisdiction over this lawsuit, so they may be successfully discharged from bankruptcy.

The Cobalis Plan intends to pay back all creditors at 100% of allowable claims and also retains 100% of Cobalis shareholder equity. Cobalis believes YAGI may have already recouped all or more of their investment from their sale of 15,000,000 Cobalis shares. If Cobalis pays back YAGI in full, YAGI will be required to return over eight million (8,000,000) pledged shares of Cobalis stock.

YAGI has also submitted a competing plan to the bankruptcy court. Their plan, as filed with the court, intends to wipe-out the common stock of Cobalis and its shareholders, pay creditors 4 to 15 cents on the dollar, and allow 90 % of revenues from the world wide distribution of PreHistin(R) to be accrued to a Canadian business entity alleged to have been recently purchased by YAGI and managed by a current YAGI principal.

The next CH 11 plan hearing date is December 16, 2009. Subsequently, creditors will be properly notified during January 2010 and have an opportunity to vote on the Cobalis Plan or the YAGI competing plan, if either or both, are approved by the court for plan confirmation vote by creditors.

Cobalis continues to execute their international sales, marketing, distribution and licensing strategies and their previously announced direct response television (DRTV) campaign for PreHistin(R). Current DRTV campaign launch is scheduled for December 26, 2009. Cobalis Corp is also initiating plans to return to fully reporting status in early 2010.

To see the Cobalis lawsuit in its entirety please go to https://ecf.cacb.uscourts.gov/cgi-bin/login.pl.

ABOUT COBALIS CORP--PREHISTIN(R)

Cobalis Corp. is an over the counter pharmaceutical and nutraceutical company. Its flagship product, PreHistin(R) is designed to prevent the primary causes of airborne allergies. PreHistin(R), "The World's FIRST Pre-Histamine"(R) is the only Phase III clinically tested sublingual product fully patented for long term and daily use without a prescription to help relieve allergy sufferers from both indoor and outdoor allergens.

PreHistin(R) has shown in previous clinical studies to modulate the body's level of immunoglobulin E (IgE), thus reducing the overproduction of histamines, the primary cause of airborne allergy symptoms. Studies have shown that the active ingredient in PreHistin(R), an FDA safety approved 3.3 mg Cyanocobalamin (Vitamin B12) mega-dose sub-lingual lozenge has essentially no risks or adverse side effects to the general population including sedation and drowsiness found in many allergy medications currently available.

For PreHistin(R) product information and ordering please visit at www.PreHistin.com or call toll free 1-877-4POLLEN. For additional company information please visit their website at www.Cobalis.com.

SOURCE: Cobalis Corporation

   Cobalis Corporation 
   Michael Trcka, 949-260-9007 
   info@cobalis.com 
   info@prehistin.com
   

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