Forterra EnvironmentalPursuing Financial Restructuring
PUSLINCH, ON, June 10 /CNW/ - Forterra Environmental Corp.(TSXV: FTE), a manufacturer, marketer, and seller of premium organicsoil-enrichment products based on worm castings, today announced thatits Board has determined that based on the company's inability to meetits debt obligations, including to its trade creditors, Forterra can nolonger be deemed to be a "going concern".
To date, the companyhas been unsuccessful in its efforts to raise the funding it requires tooperate and grow its business. The company intends to maintain itsproduct inventory and its worm castings production operations, usingminimum staffing at its plant, and to explore hiring a new managementteam as it seeks opportunities to raise capital or sell the business. Inthe event that it is unsuccessful in finding a new management team andadditional working capital or a buyer, the Board intends to proceed withthe orderly liquidation of the company.
Forterra also informsthat on June 4, 2010, the Canadian Revenue Agency (CRA) seized thecompany's bank account as the result of the company's failure to makerequired tax source deductions and remittances. The company is workingwith CRA to remove the seizure. Also on June 4, the company's Presidentand Chief Operating Officer, Rick Denyes, tendered his resignation.
TheBoard of Directors elected at the company's October 29, 2009 annual andspecial meeting of shareholders remains in place, save for Randy Pilonwho Forterra announced had resigned in its June 2, 2010 news release.The company remains in good standing with its transfer agent, EquityTransfer & Trust Company.
On June 2, 2010, Forterra releasedits financial results for the first quarter ended March 31, 2010,disclosing cash and equivalents of approximately $25,000 and currentaccounts payable and accrued liabilities of approximately $1.3 million.
Aspreviously reported by the company, Forterra's products have been wellreceived as the company developed a number of significant customerrelationships that appeared to have great promise for potential sales.However, Forterra learned that it needed to carry out a strong marketingand sales program of its own to stimulate these potential sales and thecompany has lacked the working capital to fund such an effort. Thisresulted in substantially lower sales and cash flow than had beenanticipated as well as a significant build-up in its inventory of unsoldproduct.
About Forterra Environmental Corp.
Forterramanufactures, markets, and sells environmentally friendly soilenhancers, using worm castings, which boost fertility while restoringthe 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 golfcourses, sports fields, lawn care, parks, nurseries, orchards, andvineyards. Essentially, Forterra uses red wriggler worms to convertorganic material into vermicompost or worm castings. Worm castingscontain micronutrients, which are required for healthy plantdevelopment. Worm castings also contain microbes, which increase therate at which plants take up available macronutrients andmicronutrients. Further information is available on the company'swebsite at www.forterra.com.
Forward-Looking Statements
Thisnews release contains forward-looking statements based on currentexpectations. These forward-looking statements entail various risks anduncertainties that could cause actual results to differ materially fromthose reflected in these forward-looking statements. Such statements arebased on current expectations, are subject to a number of uncertaintiesand risks, and actual results may differ materially from thosecontained in such statements. These uncertainties and risks include, butare not limited to, availability of resources, competitive pressures,changes in market activity, the ability to sign contracts withcustomers, the development of markets for worm castings, its ability tobreed and maintain a sufficiently large worm population, and regulatoryrequirements. Risks and uncertainties about Forterra's business are morefully discussed in the company's disclosure materials, including itsannual information form and MD&A, filed with the securitiesregulatory authorities in Canada. Forterra assumes no obligation toupdate any forward-looking statement or to update the reasons why actualresults could differ from such statements.
Neither the TSXVenture Exchange Inc. nor its Regulation Services Provider (as that termis defined in the policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of this release.