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Founded in 1995, Environmental Products and Technologies Corporation (EPTC) is engaged in the business of designing, marketing, selling, installing and servicing a proprietary line of Closed-loop Waste Management Systems for the processing of wet organic waste products. As EPTC, which has offices in California and North Carolina progresses from development stage to revenue generation, the company has retained the services of Jordan Richard Assoc. to launch a North American investor relations campaign.
"EPTC was founded upon the belief that, with proper methods, the environment can be cost-effectively renewed, and that to do so represents not only sound stewardship but also solid profit opportunity. Today, nearly four years after its founding, the company has identified an important niche and is closer than ever to its goal of becoming a premier 'green' investment," said Madeleine Franco, president of Jordan Richard Assoc.
SOME AMAZING STATISTICS
EPTC's market opportunity can probably be best appreciated by examining a few simple, if not alarming, facts. Perhaps one of the most glaring of these is that, nationwide, 130 times more animal waste ("effluent") is produced than human waste, representing 5 tons for every person in the United States. In central California alone, the region's 1,600 dairies produce more waste than a city of 21 million people.
These shocking statistics are not simply fodder for the "lunatic fringe." Mainstream television news magazines such as "60 Minutes" have featured America's agricultural waste problem as a major twentieth century dilemma. And, on March 6, 1998, The New York Times reported that more than 450,000 domestic livestock operations are out of compliance with federal environmental standards.
TROUBLE FOR OLD METHODS, OPPORTUNITY FOR INNOVATORS
A strong livestock industry, of which animal feeding operations (AFOs) are an integral part, is essential to the nation's economic stability, the viability of many rural communities, and the sustainability of a healthful and high-quality food supply for the American people. However, America's heritage of plenty and the entire agricultural economies of a number of key beef, dairy, pork and poultry production states are at risk. Standards are becoming more stringent with the implementation of the Unified National Strategy for Animal Feeding Operations, a document jointly prepared by the United States Department of Agriculture (USDA) and the Environmental Protection Agency, which became effective in January 1999.
According to traditional practices, "lagoons" (animal waste deposit repositories) are used for disposal of livestock effluent. These lagoons are typically dug adjacent to animal confinement buildings. Often lined with clay and/or vinyl material to increase their containment life span to as long as 15 years, waste lagoons can cover several acres and can be 20 to 30 feet deep. Improper construction is commonplace. Susceptible to damage from the elements, often the lagoons are structurally compromised. This allows the waste within to flow easily across fields into public waterways, seep into aquifers and threaten drinking supplies and overall living conditions throughout a widespread area through deposit of unwanted and potentially harmful hormones, pathogens, nitrates, ammonia, phosphorous and coliform bacteria.
The Code of Federal Regulation has defined agricultural wet organic waste products as hazardous waste, due to the high concentration of nitrates and phosphorus. This spells big trouble for old methods of dealing with animal waste. Indeed, the push is on to find a solution to the unacceptable environmental conditions resulting from large-scale, "industrialized" farming and animal breeding. EPTC has developed a cost-effective solution that is ready to go to market.
A THREE-PRONGED BUSINESS APPROACH
Currently, EPTC's business is focused on three complementary areas; namely, agricultural waste management, the production of soil amendments as a by-product of its waste conversion process, and power cogeneration. EPTC markets, sells, installs and services a proprietary line of custom-configured Closed-loop Waste Management Systems for the processing of wet organic waste products. More than simply reducing the amount of material destined for disposal, EPTC's revolutionary bio-conversion process is designed to recapture and redeploy the value contained in the waste. This completely changes the approach to waste management, and defines a goal of conversion of agricultural "waste" to a valuable agricultural resource in as short a time as possible, producing a safe and stable end product having significant market value.
An environmentally sound alternative to traditional "lagoon" storage of agricultural waste, EPTC's Closed-loop Waste Management System may be used to treat and convert the agricultural wastes from dairies, feedlots, poultry and other animal operations, as well as food wastes. For its initial marketing phase, EPTC has identified large dairies (1,000 or more head) as a primary target for its products and services based upon the potential for immediate environmental impact and marketing economies of scale.
In addition to providing equipment and services for the treatment of agricultural waste, the company intends to market Bioliteª, an extent- pathogen-free, weed seed-free, pasteurized, nutrient-rich by-product of its waste management system. Biolite will be sold in bulk as an organic soil amendment, potting soil or agricultural soil where the grower desires to restore organic matter to cropland. EPTC's Closed-loop Waste Management System is designed to utilize methane from the waste stream to power an engine in a cogeneration system. Power produced from the cogeneration will be supplied to the producer of the waste stream, with excess power sold back to the utility company. Relatively uncomplicated and highly reliable, the entire system provides a textbook illustration of "Reduce, Reuse, Recycle," with revenue generation occurring and recurring throughout the process.
ENVIRONMENTALLY FRIENDLY PEST CONTROL AND "DESIGNER" SOILS
The market is also ripe for safe, organically produced and environmentally safe insecticides. It is, therefore, important to note that, on December 14, 1998, EPTC announced that the company had executed a letter of intent in anticipation of a formal agreement with privately held National D.E. Systems, Inc. ("NDES"), relating to the sale of its Diatomaceous Earth ("DE") claims, in a transaction slated for completion during the first calendar quarter of 1999.
DE contains several features not found in other commercially available pesticides and has a high knockdown rate for a broad range of pests with no adverse effect on beneficial insects. Applicable electrostatically as a dust or wettable powder, the product is not subject to dissipation over time, unless washed away or turned into the soil. DE, which is completely non-toxic to mammals, can also be applied for stored grain and seeds, flea and louse control on animals, and the extermination of fire ants and cockroaches. DE, which inhibits the ability of pests to build a resistance, is widely acceptable to the agricultural community.
The aforementioned transaction calls for EPTC to sell NDES its 640-acre DE claims, known as Tiger 1, 2, 3 and 4, in exchange for stock in NDES. Upon consummation of the transaction, which is subject to completion of due diligence and the approval of the boards of directors of both companies, EPTC will own 80 percent of the outstanding shares of stock of NDES... Currently, NDES owns additional DE properties, which when combined with EPTC's Tiger claims, will give
NDES a substantial presence in the marketplace. According to the management of EPTC, upon completion of the proposed transaction, EPTC plans to distribute to its shareholders a portion or all of the NDES shares it will receive.
NDES expects to begin operations by marketing DE product to a number of agricultural and commercial markets. NDES also plans to sell to EPTC a Diamotaceous Earth product, which can be blended with the output from EPTC's Closed-loop Waste Management System. This combination will be used to produce ``designer'' soils with unique, customized, and variable characteristics, including moisture-retention capacity, friability and nutrient content.
Having delineated U.S. sales territories and representation based upon the concentration of potential customers, EPTC has also identified a number of contract manufacturers whose locations are ideally suited to its regional sales approach. With 65 bioreactors projected for delivery throughout North America in 1999, the company has entered full-scale production of EPTC's bioreactor line. An initial 40-day equipment production cycle is expected to be shortened to 30 days effective in the second calendar quarter.
PRACTICAL APPLICATIONS AND PROVEN NEED
EPTC has turned the corner and is advancing rapidly toward revenue generation. At the same time, research and development continues on potentially marketable applications of the company's proprietary technologies. Product development programs are being conducted at Utah State University's Caine Dairy and with California Polytechnic, Pomona on the Closed-loop Waste Management System, with a demonstration unit having been placed at a Chino dairy, in the heart of California's dairy country.
Additionally, EPTC is participating with Terra Cycle (Tucson) and the University of Arizona in a project designed to process 15 to 25 tons per day of spoiled fruits and vegetables. And, under an agreement with Vineyard Engine Systems, Inc., the company is preparing to test Vineyard's gas-powered stationary power unit with methane generated at an EPTC installation.
Research on processed by-products continues, and EPTC is developing its Biolite product line. EPTC has filed a patent application with the U.S. Patent & Trademark Office, and a program is in place for the continued protection of the company's valuable intellectual property. As an adjunct to the R&D process, EPTC is also in the process of implementing the guidelines and systems necessary to qualify as an ISO 9002 company.
EPTC-SPONSORED WEBSITE CREATES
SYNERGISTIC MARKETING OPPORTUNITIES
Through the recent establishment of an EPTC-sponsored website: www.I-C-A-N.COM (Integrated Compliance Assistance Network), linked to its own home page, the company is creating a single source for information, resources, education and products concerning the issues of compliance; federal, state and local permitting requirements; sources of financial assistance; current and alternative practices; and step-by-step guidance. In an age of instantaneous communication, the ICAN website will encourage repeated visits and assist EPTC in generating sales leads through consistent tie-ins to EPTC's main website www.eptcorp.com. EPTC plans to add to the staff trained engineers to assist potential customers with the preparation and processing of applications to obtain government funding to purchase and install the company's Closed-loop Waste Management System as a solution to the increasing pressure of compliance issues.
Recognizing that trade shows are an important part of the marketing mix, EPTC has designed and built a portable, trailer-mounted demonstration Bioreactor capable of processing five tons of wet organics in batch mode. Following the company's participation at the Madison, Wisconsin World Dairy Expo, a production unit will be introduced at the California Farm Equipment Show & International Exposition in Tulare, California on February 9-11, 1999. Attendees are expected from across the country and from over 50 countries around the world to see this show, which unlike many farm equipment shows, offers a highly diverse display of products for the farm, dairy, ranch and construction industries.
EPTC plans to exhibit at additional trade, agricultural and specialty trade shows during 1999, and the company especially looks forward to participating as a featured exhibitor at the Bio-Cycle 29th Annual National Conference at Albuquerque. As evidenced by the many sales leads generated by EPTC's website and its participation in these events, the company's waste conversion concept and unwavering commitment to quality and reliability are being well received.
EXPERIENCED MANAGEMENT TEAM COMMITTED TO BUILDING WEALTH
On the threshold of revenue generation, EPTC continues to build the management infrastructure necessary to support long-term growth. It is a management committed to building wealth and increasing shareholder value by capitalizing on opportunities in a growing specialty market that is beginning to take center stage. Key management includes the following:
Marvin Mears , president and chief executive officer, formerly served as president of Corporate Capital Resources, Inc., a publicly traded venture capital company. Mears, who has assisted in the financing of numerous research and development partnerships, has also been highly influential in the development and management of several large agricultural properties. He currently serves on the boards of directors of Chatsworth Products, Inc. and Robert T. Dorris and Associates, both of California.
CONCLUSION
EPTC has experienced and focused management and products that work hard and smart toward making the Earth a better planet. With its ability to transform agricultural cost centers into profit centers -- and public sentiment and legislation moving in the right direction -- EPTC is one 'green' investment that appears to have the green light for excellent revenue generation and profitable growth.
NOTE: Statements contained in this profile that are not strictly historical are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1998, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The company makes these forward-looking statements based upon information available to it as of the date hereof, and the company assumes no obligation to update such forward-looking statements. Although the company believes the expectations reflected in such forward-looking statements are reasonable, editors and investors are cautioned that such forward-looking statements invoke risk and uncertainties that may cause the company's actual results to differ from these forward-looking statements. Such risks and uncertainties include, but are not limited to, the ability of EPTC and NDES to complete the contemplated transaction on or before January 15, 1999 and according to the terms outlined in the letter of intent, market demand for each company's product(s), the ability of each company to fulfill demand, sales levels, and competitive trends, as well as other economic, regulatory, governmental and market factors outlined in EPTC's reports to shareholders and periodic filings with the Securities and Exchange Commission.
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