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BOSTON, Jan 30, 2008 (BUSINESS WIRE) -- Converted Organics Inc. (NASDAQ:COIN) announced today the details concerning purchase of United Organic Products and Waste Recovery Industries. The purchase of the assets of United Organic Products, LLC (UOP) of Gonzales, CA, as well as the assets, including the intellectual property, of Waste Recovery Industries, LLC (WRI) of Paso Robles, CA.
These acquisitions make Converted Organics the exclusive owner of the proprietary technology and process known as the High Temperature Liquid Composting (HTLC) system, which processes various biodegradable waste products into liquid and solid organic-based fertilizer and feed products. Converted Organics also acquires a leading liquid fertilizer product line, as well as a state-of-the-art production facility that services a strong West Coast agribusiness customer base through established distribution channels.
"Through these transactions, Converted Organics has acquired cutting-edge microbial digestion technology that we will leverage throughout the global marketplace to provide recycling solutions that create high-quality organic fertilizer for commercial sale," said Edward J. Gildea, President of Converted Organics Inc. "The HTLC system and the experience of the UOP and WRI organizations enhance Converted Organics' competitive advantage and market opportunities, positioning us well in the retail, turf management, and agribusiness marketplaces."
Converted Organics entered into private financing agreements with Professional Offshore Opportunity Fund, LLC, Preferred Traders Fund, LLC, and High Capital Funding, LLC for a total amount of $4.5 million. Converted Organics acquired the assets of United Organic Products for $2.5 million, $1.5 million of which was paid in cash and $1 million in notes payable. Converted Organics acquired the assets of Waste Recovery Industries for a purchase price of $500,000 in notes payable. In addition, the purchase price provides for future royalty payments when and if additional tons of waste-processing capacity are added to the company's current capacity, using the acquired technology, capped at $7 million, with no minimum.
"Use of the HTLC technology will result in lower capital and operating costs for future Converted Organics facilities, as well as reduced royalty expenses," said Mr. Gildea. "Remaining proceeds from the financing transaction will be used to increase capacity and enhance operations at the existing UOP facility, as well as for other working capital needs."
About United Organic Products, LLC
United Organic Products, LLC is a multi-disciplinary company specializing premium quality organic fertilizer products since 1987. Located in the Salinas Valley region of California, often referred to as the "Salad Bowl of the World" (this region produces over 70% of the lettuce, broccoli and cauliflower crops in North America), their products have been extensively proven in large-scale commercial operations and used by some of the largest growers (both conventional and organic) within the United States.
Their ever expanding product lines, including their premium quality Biolizer(R) and SoilStart(R) brands, have become the standard by which other organic fertilizers are compared. United Organic Products strives to set the standard in sustainable agriculture with a strong emphasis on quality control and food safety assurances, to the benefit of all customers.
About Waste Recovery Industries, LLC
Waste Recovery Industries, LLC is a privately held company with offices in California and British Columbia, Canada. Waste Recovery Industries specializes in the design, manufacture and installation of advanced microbiological processes for solving organic waste disposal problems. Waste Recovery Industries is a pioneer in high temperature digestion and the High Temperature Liquid Composting (HTLC) system, providing real world solutions since 1978.
About Converted Organics Inc.
Converted Organics (NASDAQ:COIN), based in Boston, MA, is a development stage company dedicated to producing valuable all natural, organic soil amendment or fertilizer products through food waste recycling. The company uses proven, state-of-the-art technologies to create a product that helps grow healthier food and improve environmental quality. Converted Organics plans to sell and distribute its environmentally-friendly fertilizer products in the retail, turf management, and agribusiness markets.
Converted Organics' fertilizer products will be produced in both a dry pellet and liquid concentrate. Converted Organics products have been tested in numerous field trials for more than a dozen crops with the result that, on average, the net value of the farmer's crop increased 11-16%, depending on the particular crop and product application. This is due, in part, to the disease suppression characteristics of the product, which reduce or eliminate the need for other costly, often toxic, crop protection applications. Increased use of nitrogen in commercial agriculture and turf grass applications, such as golf courses, has reduced the soil's ability to absorb nitrogen and other nutrients. Using the products produced by Converted Organics helps restore the soil by replenishing these micronutrients. This reduces the amount nitrogen required in a virtuous cycle that benefits from long-term use. As a result, use of the product will reduce chemical run-off to streams, ponds and rivers, an objective with significant long term benefits to the environment.
The products have a long shelf life compared to many other organic fertilizers. In a number of lab and field trials, the liquid product has been shown to be effective in mitigating powdery mildew, a leaf fungus that effects most plants and grasses and restricts the flow of water and nutrients to the plant. The Company's fertilizer products can be used on a stand-alone basis or in combination with more traditional fertilizers and crop protection products. Converted Organics expects to benefit from increased regulatory focus on organic waste processing and on environmentally-friendly growing practices.
This press release contains forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. In some cases, you may identify forward-looking statements by words such as "may," "should," "plan," "intend," "potential," "continue," "believe," "expect," "predict," "anticipate" and "estimate," the negative of these words or other comparable words. These statements are only predictions. One should not place undue reliance on these forward-looking statements. The forward-looking statements are qualified by their terms and/or important factors, many of which are outside the Company's control, involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially from the statements made. The forward-looking statements are based on the Company's beliefs, assumptions and expectations of our future performance, taking into account information currently available to the Company. These beliefs, assumptions and expectations can change as a result of many possible events or factors, including those events and factors described in "Risk Factors" in the prospectus, not all of which are known to the Company. Neither the Company nor any other person assumes responsibility for the accuracy or completeness of these statements. The Company will update the information in this press release only to the extent required under applicable securities laws. If a change occurs, the Company's business, financial condition, liquidity and results of operations may vary materially from those expressed in the aforementioned forward-looking statements.
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SOURCE: Converted Organics Inc.
PR Financial Marketing Jim Blackman, 713-256-0369 jim@prfmonline.com
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