This list of clarifications of previous news releases gives some idea of some of the problems, how some of the sales were, and of course, how CES used their news releases to pump....unfortunately the TSX wasn't happy.
This is just up to the fall of 2004. Things went downhill from there with both production and sales problems.
Date: October 26, 2004
Vancouver, B.C.
Ticker Symbol: "CES" TSX.V ECOPROGRESS CLARIFIES STATEMENTS IN PREVIOUS NEWS RELEASES
At the request of the TSX Venture Exchange (the "Exchange"), Consolidated Ecoprogress Technology Inc. (the "Company") wishes to clarify and update certain statements reported on the Company's web site and in various news releases for the period from January 2003 to September 8, 2004.
Clarification of News Release dated January 21, 2003
The Company wishes to report that the distribution agreement entered into with Shazil International ("Shazil"), dated July 24, 2002, is still in effect. The agreement is for a term of three years, expiring on July 24, 2005. A single container of the Company's flushawayTM product was ordered and subsequently delivered in March 2003. Payment for the entire container ordered was received in March 2003.
The Company also wishes to clarify the final sentence of the news release which states, in part, that "flushawayTM products are now available in 1,600 UK stores representing 37% of this market". This statement was intended to convey the fact that the Company's products were available from approximately 1,600 stores in the U.K., which represented approximately 37% of the total number of stores in the U.K. selling this type of product. This statement was not meant to infer that the Company had 37% of the market share. Please refer to additional comments regarding the Company's current U.K. retailers under "Clarification of News Release dated February 18, 2003" below.
Business activities with Shazil, relating to the distribution agreement, are currently dormant. Although the agreement is still in effect, the Company has not received any subsequent orders from Shazil, nor does it expect to receive any additional orders in the immediate future. The Company and Shazil have not discussed additional orders in 2004 as the Company has focused its attention on the North American market.
Clarification of News Release dated February 18, 2003
The Company initially disclosed, on February 18, 2003, in part, that "Dambi (UK) Ltd. ("Dambi") have taken on the responsibility for sales, marketing and distribution of the flushawayTM range of feminine hygiene products in the UK", following the receivership of The Healthy Forum. The Company wishes to report that no formal written sales and marketing agreement with Dambi was entered into. Certain sales and marketing services were provided to the Company by an individual contracted by Dambi from March 1 to May 31, 2003. Dambi did not directly provide any further sales and marketing services to the Company. No new retailer listings were realized. Dambi was, however, the Company's manufacturer and distributor of the flushawayTM product in the U.K.
In the absence of new sales, sales volumes for the 12-month period commencing on March 1, 2003 for the Company's three major customers in the U.K., Sainsburys, Boots and Waitrose, did not increase "significantly", as originally anticipated, neither did the Company obtain any sales listings for additional U.K. retailers, Tesco, ASDA, Morrisons and Safeway, nor did the Company realize any additional export sales to the Middle East, as was originally anticipated.
Clarification of News Release dated March 11, 2003
The Company previously reported, in part, "excellent progress towards setting up an important distribution program for its flushawayTM products in the huge $1.3 billion US market". The entity that the Company was negotiating with was Norsea Natural Products ("Norsea"). While negotiations towards a distribution agreement for the Company's flushawayTM product to be distributed in the United States were ongoing, a contract, ultimately, failed to materialize due to a change in Norsea's management.
The Company also wishes to clarify that certain statements reported in the news release dated March 11, 2003 may have implied future sales projections. Norsea's comments that "the U.S. "green" market is growing rapidly…accounting for approximately 10% of all dry good grocery sales" was intended to refer to environmentally friendly "green" dry good grocery products in general, and not flushawayTM in particular.
Furthermore, since no distribution agreement between the Company and Norsea was entered into, no sales were attained.
Clarification of News Release dated May 13, 2003
The Company previously reported that it had entered into an agreement with Primorka-Zagrab d.o.o. ("Primorka") to distribute the Company's flushawayTM product in the Balkan states. The agreement was dated February 25, 2003 and is for a term of three years and is still in effect. The Company initially reported that negotiations were underway with Primorka for an order of three large containers of the Company's flushawayTM product. No sales directly related to the Primorka agreement have been concluded and, as such, no containers have been ordered or delivered as was previously anticipated. Primorka has reviewed the Company's product and determined that it was too costly for their market and required additional product development. The Company does not anticipate any orders from Primorka in the immediate future.
Clarification of News Release dated August 12, 2003
The Company previously disclosed that "[Norsea Natural Products] . . . . has been unexpectedly delayed in the implementation of its marketing plan for flushawayTM". This statement may have created an impression that the Company had entered into an agreement with Norsea. The Company and Norsea did not enter into a distribution agreement and negotiations towards such an agreement eventually ceased. Concurrently, the Company entered into a distribution agreement with Premier Care Industries ("Premier"), which was announced on August 12, 2003. Further to the distribution agreement with Premier, the Company wishes to report that Premier, as a distributor, has not attained any sales of the Company's flushawayTM product to date. Premier, however, continues to manufacture product for the Company in North America.
Clarification of News Release dated November 19, 2003
On November 19, 2003, the Company reported that it had entered into an agreement with Premier whereby Premier would manufacture the Company's flushawayTM product for the North American market. However, the agreement was subject to certain conditions which were not removed. As such, the agreement is not in force. The Company wishes to report that Premier has manufactured product for the Company, which has been sold and delivered, including to Wal Mart stores in the United States. Sales for product produced by Premier for the quarter ended June 30, 2004 totaled $140,295.
The Company also wishes to clarify a previously reported statement that "flushawayTM continues to flourish at Boots, Sainsburys and Waitrose." This statement was based on U.K. sales of approximately $169,000 in the preceding 5 quarters ended September 30, 2003. While a decline was noticed in the quarter preceding the news release, the Company believed sales would be sustainable. Subsequently, sales for the U.K. continued to decline.
Clarification of News Release dated April 26, 2004
The Company previously reported that the flushawayTM brand of feminine hygiene products was being piloted at a major U.S. retailer with more than 3,000 stores. The U.S. retailer that participated in the pilot program was an entity other than Wal Mart. The identity of the retailer has not been disclosed as the Company has not obtained consent from the retailer. The pilot program was conducted solely by Premier and was a one-time event achieving mixed results. The Company also reported that "recent critical testing by an independent U.S. laboratory indicates flushawayTM is ready for the U.S. market and capable of competing". The Company wishes to report that the entity that performed the independent testing was Shuster Laboratories, Inc. of Canton, Massachusetts, U.S.A, an independent testing laboratory.
Clarification of News Release dated June 2, 2004
The Company previously reported that Wal Mart has ordered the flushawayTM product from Dr. Fresh, Inc. ("Dr. Fresh"), a distributor for the Company's flushawayTM product, to be sold in certain Wal Mart stores in the U.S. The Company wishes to report that, pursuant to this initial order, the Company attained sales of $140,295. The Wal Mart order was produced and shipped during May 2004.
Clarification of News Release dated August 18, 2004
The Company previously reported that Dr. Fresh submitted a second order for the Company's flushawayTM product to be shipped to Wal Mart. Pursuant to this re-order, Dr. Fresh acquired 1,690 cases for total sales to the Company of CDN$30,000. The second order is expected to be produced and shipped by the end of October 2004. The Company wishes to report that the distribution of it's flushawayTM product remains at approximately 45% of participating Wal Mart stores.
Clarification of News Release dated September 8, 2004
The Company previously reported that it had entered into distribution and manufacturing agreements with Hong Kong Champion International Holdings Ltd. ("HKC"). HKC was reported to be "a consortium of well established Chinese companies". HKC is, in fact, owned by four individuals each of whom is active in the Chinese business community and are senior executives and principals in more than 10 large Chinese enterprises.
U.K. Sales Listings
The Company has recently been verbally advised that its flushawayTM product is no longer being stocked for sale in the Boots and Sainsburys stores in the U.K. The Company is continuing negotiations with Boots to maintain its listing. The Company's product is still sold in Waitrose stores in the U.K. The Company will continue to develop its flushawayTM product and will continue to pursue placing its flushawayTM product in various retailers in the U.K.
Investor Relations Agreement
The Company announces that it has entered into a consulting agreement for investor relations services, dated effective July 1, 2004, with KCrew Communications Inc. ("KCrew") of Vancouver, BC. The agreement was for a term of three (3) months, but has been renewed for an additional three (3) months, expiring on December 31, 2004. The sole shareholder of KCrew is Mr. Raymond Szeto. The services to be provided by KCrew include certain administrative duties, shareholder communications, preparing promotional and multimedia material and investor relations services.
In consideration of KCrew providing the investor relations services to the Company, KCrew will receive a fee of $10,000 per month for each month of the agreement, for an aggregate fee of $60,000.
General
The Company's board of directors has established a new disclosure committee which will adhere to a written disclosure policy intended to ensure timely and balanced disclosure of all material information. The Company also plans to adopt an audit committee charter to ensure that matters relating to financial disclosure comply with regulatory requirements for timely, accurate and thorough disclosure.
Since November 19, 2003 to April 26, 2004, the Company had undergone a significant internal reorganization. Mr. J. Ron McGregor relinquished his position as President of the Company and the Company appointed Mr. John Banks as President on March 29, 2004. In addition, and as a result of production and operational obstacles, the Company was forced to focus, almost exclusively, upon its core business relationships. As a result of the reorganization and the production and operational issues, the Company did not provide regular updates on the status of its business activities.
For further information, please contact:
toll free: 1-888-432-6669
phone: 604-738-7011
email: ir@flushaway.com
website: www.flushaway.com
ON BEHALF OF THE BOARD OF DIRECTORS
"John Banks"
President
Consolidated Ecoprogress Technologies, Inc
Forward Looking Statements: This news release contains certain information that may constitute forward looking statements under applicable securities laws. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Actual results achieved may vary from the results anticipated or implied herein and variations may be material. There is no representation by the Company that actual results achieved will be the same in whole or in part as those implied in any forward looking statements.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
