Enzyme Environmental Solutions Letter to Shareholders
August 22 2008 - 8:56AM
Marketwired
Enzyme Environmental Solutions Inc. (PINKSHEETS: EESO) -- The
following letter was sent by Jared Hochstedler CEO of Enzyme
Environmental Solutions Inc., to the shareholders of EESO.
Dear Shareholders,
Since beginning in early 2008, I have seen EESO move from dream
to reality. It has been a difficult road, one of which we continue
to travel. The world's economies are in turmoil, unemployment is
rising and financial markets have all but melted down, making
reasonable financing extremely tight and difficult to obtain.
However, all of that being said, I am encouraged with the progress
we have made and wished to take this opportunity to update everyone
on some major steps that EESO is about to embark on.
At the end of June 2008 I announced the signing of a letter of
intent with VESCOR for the sale of the GC 2000. However, during the
discussions and negotiations with VESCOR and with end user
companies, it became increasingly clear to me that proceeding down
the path I originally planned would have been extremely foolish in
the long term planning and growth potential for EESO and our
shareholders. Therefore, after careful consideration the Senior
management of VESCOR and I have decided instead of selling the
process to a larger company and then get a small percentage of the
ongoing revenue from the sale of the separation units, we would
build the prototype separation unit ourselves instead of selling
the rights. This decision while it will slow the project down in
the near term, I believe will add greater value to the company in
the long term.
After doing additional market research we realized that the
GC2000 project has much higher potential than originally thought.
In addition, we have developed international and national contacts
that have shown interest in seeing a completed prototype. This will
allow us to be in charge of the end sales and demand a much larger
profit for the technology. Whereas, the initial GC2000 project was
being marketed at $7 million, of which EESO would have received
25%, by staying in control of the technology we believe the
technology will potentially be worth closer to $30-40 million on an
initial payment. Of course I fully intend to structure all future
involvement with continued residual income for the life of the
project.
During the negotiations it just became clear that we had not
fully understood the tremendous value of the GC2000 technology and
all of its applications. The estimated cost of the prototype
including any additional testing could be up to $900,000 and I
anticipate having a working prototype by the end of the year. I am
happy to report that even though reasonable financing terms are
difficult to obtain, I have negotiated and secured a line of credit
up to $700,000. This line of credit will be in the form of an 8%
interest only note maturing in one year. Our ability to negotiate
these kinds of term shows the strength of our financial situation.
The additional capital will be raised as needed, as part of the
financing terms I must increase the authorized shares.
We continue to build the wholesale network of our sustainable
product lines. The new website is taking a little longer than I had
hoped for, but once completed each product page will have a
demonstration video along with profiles and MSDS sheets available
to be printed out. Additionally, I have contracted to have EESO
products featured in 2 movies that are scheduled to be produced
later this year enhancing the national awareness and credibility of
the company. We are working on getting pioneers in the green
movement as well as actors/actresses to endorse our product lines.
With these endorsements comes credibility and our ability to
leverage their contacts to increase sales. I look forward to
releasing the names of the individuals once available.
Regarding the stain pen, I am happy to report that demand is
growing. One of our largest customers at the last minute requested
that we make a slight change to the graphics on the wipeout stain
pen. This request delayed production by several weeks, however
should produce positive affect on orders going forward. To date we
have booked orders of over 500,000 pens.
Shipments of product to Convenience stores are progressing and
products are being placed on the shelves at several stores. We also
have just been added to a major restaurant equipment supplier for
all of our cleaning products. This promises to open many other
doors for future sales. And finally, the farm is currently being
converted to an odor free farm so that we can use it as an example
for international as well as domestic guests wishing to see the end
result.
I would like to thank everyone for their patience as we build
EESO. Please rest assured, my goal has always been to create long
term shareholder value. These are exciting days and I am very
optimistic as we continue to grow.
Best Wishes,
Jared Hochstedler
This letter to shareholders contains certain "forward-looking"
statements, as defined in the United States Private Securities
Litigation Reform Act of 1995 that involve a number of risks and
uncertainties. Statements, which are not historical facts, are
forward-looking statements. The Company, through its management,
makes forward-looking public statements concerning it expected
future operations, performance and other developments. Such
forward-looking statements are necessarily estimates reflecting the
Company's best judgment based upon current information and involve
a number of risks and uncertainties, and there can be no factors
that could cause actual results to differ materially from those
estimated by the Company. They include, but are not limited to, the
Company's ability to develop operations, the Company's ability to
consummate and complete the acquisition, the Company's access to
future capital, the successful integration of acquired companies,
government regulation, managing and maintaining growth, the effect
of adverse publicity, litigation, competition, sales and other
factors that may be identified from time to time in the Company's
public announcements.
Contact: Enzyme Environmental Solutions, Inc. Jared Hochstedler
President/CEO www.enzymeenvironmentalsolutions.com 260-399-3837
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