CES Cons Ecoprogress clarifies news releases
2004-10-26 16:48 ET - News Release
Mr. John Banks reports
ECOPROGRESS CLARIFIES STATEMENTS IN PREVIOUS NEWS RELEASES
At the request of the TSX Venture Exchange, Consolidated Ecoprogress Technology Inc. wishes to clarify and update certain statements reported on the company's website and in various news releases for the period from January, 2003, to Sept. 8, 2004.
Clarification of news in Stockwatch on Jan. 21, 2003
The distribution agreement entered into with Shazil International, 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 flushaway 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 "flushaway products are now available in 1,600 U.K. stores representing 37 per cent 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 United Kingdom, which represented approximately 37 per cent 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 per cent of the market share. Please refer to additional comments regarding the company's current U.K. retailers under clarification of news in Stockwatch on Feb. 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 in Stockwatch on Feb. 18, 2003
The company initially disclosed, in Stockwatch on Feb. 18, 2003, in part, that, "Dambi (UK) Ltd. has taken on the responsibility for sales, marketing and distribution of the flushaway range of feminine hygiene products in the United Kingdom," 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 flushaway 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 in Stockwatch on March 11, 2003
The company previously reported, in part, "excellent progress toward setting up an important distribution program for its flushaway products in the huge $1.3-billion (U.S.) market." The entity that the company was negotiating with was Norsea Natural Products. While negotiations toward a distribution agreement for the company's flushaway product to be distributed in the United States were continuing, 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 Stockwatch on 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 per cent of all dry good grocery sales" was intended to refer to environmentally friendly "green" dry good grocery products in general, and not flushaway in particular.
Furthermore, since no distribution agreement between the company and Norsea was entered into, no sales were attained.
Clarification of news in Stockwatch on May 13, 2003
The company previously reported that it had entered into an agreement with Primorka-Zagrab d.o.o. to distribute the company's flushaway product in the Balkan states. The agreement was dated Feb. 25, 2003, is for a term of three years and is still in effect. The company initially reported that negotiations were under way with Primorka for an order of three large containers of the company's flushaway 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 its market and required additional product development. The company does not anticipate any orders from Primorka in the immediate future.
Clarification of news in Stockwatch on Aug. 12, 2003
The company previously disclosed that, "(Norsea Natural Products) ... has been unexpectedly delayed in the implementation of its marketing plan for flushaway." 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 toward such an agreement eventually ceased. Concurrently, the company entered into a distribution agreement with Premier Care Industries, which was announced in Stockwatch on Aug. 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 flushaway product to date. Premier, however, continues to manufacture product for the company in North America.
Clarification of news in Stockwatch on Nov. 19, 2003
In Stockwatch on Nov. 19, 2003, the company reported that it had entered into an agreement with Premier whereby Premier would manufacture the company's flushaway 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, totalled $140,295.
The company also wishes to clarify a previously reported statement that "flushaway continues to flourish at Boots, Sainsburys and Waitrose." This statement was based on U.K. sales of approximately $169,000 in the preceding five quarters ended Sept. 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 in Stockwatch on April 26, 2004
The company previously reported that the flushaway 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 flushaway 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, Mass., an independent testing laboratory.
Clarification of news in Stockwatch on June 2, 2004
The company previously reported that Wal Mart has ordered the flushaway product from Dr. Fresh Inc., a distributor for the company's flushaway 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 in Stockwatch on Aug. 18, 2004
The company previously reported that Dr. Fresh submitted a second order for the company's flushaway product to be shipped to Wal Mart. Pursuant to this reorder, Dr. Fresh acquired 1,690 cases for total sales to the company of $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 its flushaway product remains at approximately 45 per cent of participating Wal Mart stores.
Clarification of news in Stockwatch on Sept. 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 flushaway 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 flushaway product and will continue to pursue placing its flushaway product in various retailers in the U.K.
Investor relations agreement
The company has entered into a consulting agreement for investor relations services, dated effective July 1, 2004, with KCrew Communications Inc. of Vancouver, B.C. The agreement was for a term of three months, but has been renewed for an additional three months, expiring on Dec. 31, 2004. The sole shareholder of KCrew is 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 a total 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 Nov. 19, 2003, to April 26, 2004, the company had undergone a significant internal reorganization. J. Ron McGregor relinquished his position as president of the company and the company appointed 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.
