try again: The FULL news releaseForterra Environmental Completes Private-Placement Financing
- Issue of debentures and other bridge loans provide company with
nearly $389,000 of capital through seasonal selling period
- Loans reflect support for the company by certain directors and other
individuals
- Company reports initial shipments through national supplier to Weed
Man and other retailers as spring season begins to heat up
PUSLINCH, ON, April 20 /CNW/ - Forterra Environmental Corp. (TSXV: FTE),
a manufacturer, marketer, and seller of premium organic soil-enrichment
products based on worm castings, today announced that it has raised $214,400
through the non-brokered issue of a 12% Secured Debenture - Series B to three
directors of the company.
The financing is intended to be a bridge loan with the debentures and
interest due and payable on August 31, 2010, subject to earlier redemption
without any penalty at the option of Forterra. Subject to the approval of the
TSX Venture Exchange, the three lenders will receive Bonus Shares at the rate
of four common shares of Forterra for every $1.00 principal amount of the loan
(a total of 857,600 shares to be issued). The deemed value of the common
shares to be issued is
.05 per share.
In addition, Forterra also has received loans totaling $174,539.35 from
certain holders of 12% Secured Debentures - Series A that were issued by the
company in April 2009. Payments on the Series A debentures were to be made, in
part, when Forterra received tax incentive payments from the Canadian federal
government under the Scientific Research and Experimental Development Program
(SR&ED). After receiving their payments from the SR&ED funds paid to Forterra,
the individuals elected to loan them back to the company. Terms of these loans
are the same as those for the 12% Secured Debenture - Series B, with the
exception that no Bonus Shares are being issued.
"The decision by the lenders to make these loans to Forterra is based on
our recognition of the company's immediate need for capital during the current
critical seasonal selling period, our appreciation of the progress that the
company has been making in attracting significant new customers, and our
expectation that its sales efforts will be successful," said Don Green,
Forterra's Chairman and Chief Executive Officer. Mr. Green is one of the
lenders receiving the Class B debentures and, as a holder of Class A
debentures, who has elected to lend back to the company the payments that he
received from the SR&ED funds.
"Forterra has begun shipping to the national supplier with which we are
working to provide our product to Weed Man franchises and other customers,"
said Rick Denyes, Forterra's president and chief operating officer.
"The arrival of unseasonably warm weather is welcome, but, like everyone,
it caught our customers by surprise and has not had an immediate effect on
orders. We expect that the next four to eight weeks will give Forterra a far
better appreciation of the potential level of our sales in the second and
third quarters of this year. So far, the feedback that we have been getting is
very encouraging and we have been increasing our inventory to meet the surge
in shipments that we hope to be making over the next few months," he
continued.
Forterra will use the proceeds of the loans to make payments on key
accounts payable, as working capital, and for investments in its plant and
equipment to enhance its production operations.
About Forterra Environmental Corp.
Forterra manufactures, markets, and sells environmentally friendly soil
enhancers, using worm castings, which boost fertility while restoring the soil
with organic matter for sustainable, longer-term benefits, including stronger
root growth, and drought and pest resistance. Forterra products contain only
organic material. They are ideal for golf courses, sports fields, lawn care,
parks, nurseries, orchards, and vineyards. Essentially, Forterra uses red
wriggler worms to convert organic material into vermicompost or worm castings.
Worm castings contain micronutrients, which are required for healthy plant
development. Worm castings also contain microbes, which increase the rate at
which plants take up available macronutrients and micronutrients. Further
information is available on the company's website at www.forterra.com.
Forward-Looking Statements
This news release contains forward-looking statements based on current
expectations. These forward-looking statements entail various risks and
uncertainties that could cause actual results to differ materially from those
reflected in these forward-looking statements. Such statements are based on
current expectations, are subject to a number of uncertainties and risks, and
actual results may differ materially from those contained in such statements.
These uncertainties and risks include, but are not limited to, availability of
resources, competitive pressures, changes in market activity, the ability to
sign contracts with customers, the development of markets for worm castings,
its ability to breed and maintain a sufficiently large worm population, and
regulatory requirements. Risks and uncertainties about Forterra's business are
more fully discussed in the company's disclosure materials, including its
annual information form and MD&A, filed with the securities regulatory
authorities in Canada. Forterra assumes no obligation to update any
forward-looking statement or to update the reasons why actual results could
differ from such statements.