PUSLINCH, ON, June 10 /CNW/ - Forterra Environmental Corp. (TSXV: FTE), a manufacturer, marketer, and seller of premium organic soil-enrichment products based on worm castings, today announced that its Board has determined that based on the company's inability to meet its debt obligations, including to its trade creditors, Forterra can no longer be deemed to be a "going concern".
To date, the company has been unsuccessful in its efforts to raise the funding it requires to operate and grow its business. The company intends to maintain its product inventory and its worm castings production operations, using minimum staffing at its plant, and to explore hiring a new management team as it seeks opportunities to raise capital or sell the business. In the event that it is unsuccessful in finding a new management team and additional working capital or a buyer, the Board intends to proceed with the orderly liquidation of the company.
Forterra also informs that on June 4, 2010, the Canadian Revenue Agency (CRA) seized the company's bank account as the result of the company's failure to make required tax source deductions and remittances. The company is working with CRA to remove the seizure. Also on June 4, the company's President and Chief Operating Officer, Rick Denyes, tendered his resignation.
The Board of Directors elected at the company's October 29, 2009 annual and special meeting of shareholders remains in place, save for Randy Pilon who Forterra announced had resigned in its June 2, 2010 news release. The company remains in good standing with its transfer agent, Equity Transfer & Trust Company.
On June 2, 2010, Forterra released its financial results for the first quarter ended March 31, 2010, disclosing cash and equivalents of approximately $25,000 and current accounts payable and accrued liabilities of approximately $1.3 million.
As previously reported by the company, Forterra's products have been well received as the company developed a number of significant customer relationships that appeared to have great promise for potential sales. However, Forterra learned that it needed to carry out a strong marketing and sales program of its own to stimulate these potential sales and the company has lacked the working capital to fund such an effort. This resulted in substantially lower sales and cash flow than had been anticipated as well as a significant build-up in its inventory of unsold product.
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.
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.
Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE FORTERRA ENVIRONMENTAL CORP.
For further information: For further information: Investor and Media Relations: Richard W. Wertheim, Wertheim + Company Inc., Email: email@example.com, 416-594-1600, 416-518-8479 (cell)