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Winning Brands Corporation (Pink Sheets: WNBD) (Jan 2, 2008) Winning Brands Corporation www.WinningBrands.ca reports that initial production of its Winning Colours Stain Remover was blended on schedule and without incident at the previously announced new manufacturing facility in Grand Rapids, Michigan in December as forecast. Surefil LLC of Grand Rapids, Michigan www.surefil.com, a top rated custom manufacturing facility, was able to produce the first 1/2 truckload batch on December 27th in a fraction of the previously required time, for packaging January 2nd and delivery to the distribution pipeline during the first week of January. This initial production was earmarked for use by Home Depot Canada to fill new custom metal aisle display stands of Winning Colours Stain Remover for testing at 100 stores; a merchandising concept requiring 9,240 32oz bottles. The M.S.R.P. value of these bottles to consumers is $91,938.00. Other stores to be announced in due course are also testing a smaller number of these new merchandising displays.
Winning Brands and Surefil are treating their strategic relationship as a model to illustrate the capabilities of both companies. In the case of Winning Brands, this capability relates to the design of environmentally progressive solutions that have profound long term growth potential -- and developing its branding strategies to justify breakthrough relationships with top retailers. In the case of Surefil, the capability being illustrated is super-efficient production capacity utilization for the benefit of brand partners. In the words of Surefil CEO Bill Hunt -- "Surefil's carefully planned expansion will allow us to keep up with Winning Brands capacity demands, in turn allowing them to scale up to meet the needs of even the most senior retail chains in the world. Currently, we have 125 million units of planned production capacity with more than 50 million units of capacity already in use by qualified brand partners like Winning Brands. If more capacity is required, we will expand and install new production lines."
Winning Brands CEO Eric Lehner favours this form of production capacity for the benefit of shareholders. "Our retail investors know that we need to raise capital from the market. They will accept and support this as long as the capital that we obtain is put to good use and grows the value of our brands through marketing methods. This increases the value of Winning Brands by a greater amount than the investment itself. That is true growth. By letting Surefil apply their capital to be tops in production expertise and Winning Brands apply its capital to be tops in brand strategy development, then the stakeholders in both organizations get the most for their money."
Winning Colours Stain Remover achieved initial distribution in the Paint & Decorating sector as an eco-solvent that is exceptionally kind to skin and to surfaces that would ordinarily be off-limits to conventional solvents. Initial results from early marketing have revealed that consumers have been expanding their uses of Winning Colours Stain Remover into a wide range of additional applications. Accordingly, Winning Brands has revised its label for 2008 to suggest this wider range of uses at the point-of-sale and facilitate listing by retailers in sectors beyond Paint & Decorating. Winning Colours Stain Remover is being positioned to become North America's favourite stain remover. Winning Brands has begun to use the phrase "Got Stains?" on its merchandising, packaging and advertising of Winning Colours Stain Remover to make the existence of stains and Winning Colours Stain Remover an automatic association.
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Solar EnerTech Corp. (OTCBB: SOEN ) (Jan 2, 2008) Solar EnerTech Corp. (the "Company") today announced results for the fourth quarter and the 2007 fiscal year.
Fourth Quarter 2007 Financial Results
For the fourth quarter ended September 30, 2007, Solar EnerTech reported total revenue of $4.1 million compared to no revenue in the same period in 2006. The Company incurred a negative gross profit of $368,000 for the quarter ended September 30, 2007.
Total operating expense, which included a $3.0 million non-cash stock compensation charge related to the hiring and retention of key executives, was $4.1 million for the quarter ended September 30, 2007. Excluding stock compensation expense, operating expense for the quarter was $1.1 million.
Net income for the fourth quarter, which included $10.4 million in non-cash gains associated with a change in fair market value of compound embedded derivative liability and change in fair market value of warrant liability, was $5.1 million. Both the compound embedded derivative and warrant liabilities were recorded in conjunction with the convertible notes transaction entered into by the Company in March 2007. Excluding these non- cash gains, the Company had a net loss of $5.3 million, or $(0.07) per diluted share.
Mr. Leo Young, Chief Executive Officer of Solar EnerTech commented, ''Our results for the fourth quarter met our internal plan as we continued to take the appropriate steps to ramp up production and expand capacity. During our 2007 fiscal fourth quarter, we had one production line running, while we fine-tuned our manufacturing process and made progress towards completing our second manufacturing facility. These initiatives have positioned us well for increased solar cell shipments in fiscal 2008.''
Fiscal 2007 Financial Results
For the fiscal year ended September 30, 2007, Solar EnerTech reported total revenue of $5.6 million, compared to no revenue in the 2006 fiscal year. During its initial production run, the Company incurred higher than average manufacturing costs which resulted in a negative gross profit of $361,000 for the fiscal year ended September 30, 2007. Total operating expense, which included a $9.3 million non-cash stock compensation charge, was $12.0 million for the year ended September 30, 2007. Excluding stock compensation expense, total operating expenses for the 2007 fiscal year were $2.7 million.
The Company recorded a net loss of $29.4 million, or ($0.38) per diluted share in fiscal 2007, which included $15.7 million in non-cash losses associated with the issuance of convertible notes, the change in fair market value of compound embedded derivative liability and change in fair value of the warrant liability. Excluding these non-cash charges, the Company had a net loss of $13.7 million, or $(0.18) per diluted share.
Mr. Young continued, ''We are pleased with the progress we made in our business during the course of fiscal 2007 and are proud of our accomplishments. In addition to growing our revenues, we established a joint R&D venture with Shanghai University, completed our first 25 MW solar cell production line, signed a long-term material silicon supply agreement, obtained ISO 9001 and 14001 Certifications, received IEC Certification which has facilitated our entry into the European market, added an additional 21,000 square feet of manufacturing space which will increase future module production capacity, and improved our accounting and corporate governance functions.''
Financial Outlook
Order trends for Solar EnerTech's businesses continue to track internal expectations and the Company has positive, growth-driven momentum heading into fiscal 2008. The Company's revenue outlook for the fiscal 2008 first quarter, ending December 31, 2007 is $4.7 million to $5.0 million.
''As we look to the first quarter of 2008, our business continues to be on track and we have positive, growth-driven momentum for photovoltaic cell and module sales as customer demand remains very high in Europe and is increasing in other countries around the world. We were pleased to recently announce our largest sales contract win to date to ship solar modules to one of the largest solar system integrators in Europe. We expect the majority of this $21.8 million contract to be fulfilled in our fiscal 2008 second quarter. We have completed our first production line and are currently working diligently to ensure that our second production line is up and running in the second half of calendar year 2008. The growth of the renewable energy market remains strong and we are well positioned to increase our performance with our leading solar cell products and modules,'' concluded Young.
As of September 30, 2007, the Company had $3.9 million in cash, $900,000 of accounts receivables, $6.5 million of prepayment primarily for purchase of raw materials and $5.7 million of inventories on hand. Additionally, the Company had $9.6 million of accounts payable and accrued liabilities. It also recorded $16.8 million of derivative and $17.4 million of warrant liabilities.
Fiscal 2006 Restatements
In the fiscal year ended September 30, 2006, the Company accrued $2.1 million of compensation expense for its President and a U.S. employee. The Company has the obligation to withhold tax upon exercise of stock options by U.S. employees. The withholding tax absorbed by the Company was accounted for as additional compensation expense to employees. During fiscal year 2007, the Company's management ascertained that the initial estimate on the withholding tax liability was understated by $2.3 million. As a result, the Company restated its 2006 financial statements by increasing its fiscal year 2006 compensation expense and the accrued liability balance due to related party by $2.3 million. Information related to restated 2006 financial results can be found in today's Form 8-K filing being made with the Securities Exchange Commission.
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SES Solar Inc. (OTCBB: SESI) (Jan 2, 2008) SES Solar Inc., a European-based developer of cost-effective, high productivity solar panels and solar roof tiles, is pleased to provide a year end update on certain developments with the Company.
I. Manufacturing Facility Update
As previously announced, we commenced construction of our new manufacturing facility in July 2007.
Although the start date was delayed due to a change in contractors, we believe that with the assistance of our new contractor, we are now ahead of schedule and expect to complete the facility in early 2008.
The official ground laying ceremony, attended by the Minister of Energy for the Geneva Government, Mr. Robert Cramer, occurred on September 25, 2007. The Mayor of the Municipality of Plan-les-Ouates and the CEO of the Geneva Electric Utility ("SIG") were also in attendance. The Geneva Canton and Geneva Government have shown their support to us by granting leasehold rights to the land on which the facility is being built in the High Technology Industrial Park of Geneva, by issuing to us authorization to build the manufacturing facility and by granting to us several construction loans.
The concrete work on the facility was finished in early November, three weeks ahead of schedule, and we were able to commence installation of the photovoltaic (PV) roof in mid-November. The installation of the PV roof was completed on December 20.
Our PV roof will be the biggest solar powered roof on a private building in Switzerland and will be rated 567 kW for a 550,000 kWh production. As previously disclosed, we entered into an agreement with SIG for them to buy back the electricity produced by the roof at an above market price. As part of the financing, we granted to SIG an option to purchase the PV roof (exclusive of the building).
The cost of the building is expected to reach or exceed $10 million. We expect that the cost of the machinery necessary for the assembly line will be approximately $3 million.
II. Commercial Update
Although we are not able to commit to a production date with prospective clients until the manufacturing facility is completely operational, we do believe there is strong interest in our products from several markets, and we are in ongoing discussions with various parties regarding potential contracts.
In addition, and as jointly announced in a press release at the European Solar Fair in Freiburg, Intersolar and on Form 8-K filed June 26, 2007, we have developed with DuPont a PV film that we intend to license to other solar companies. These licenses would represent a new revenue stream for us. We also announced, our other latest development regarding a new method to connect strings of cells at the back of any PV module.
III. Financial Update As disclosed on Form 8-K filed November 13, 2007, we renegotiated our Construction Credit Agreement with Banque Cantonale de Geneve (BCGe) whereby the loan amount was increased from $4.1 million (CHF 4.8 million) to $7.6 million (CHF 8.5 million). We also secured another loan from the Geneva (Switzerland) State Department of Energy ("ScanE") in the amount of $3.9 million (CHF 4.5 million) at a 5% interest rate. We believe that the proceeds from these loans will provide us with funds sufficient to complete our new manufacturing facility and to purchase the equipment necessary to commence full blow manufacturing and assembly operations in early 2009.
IV. Industry Update
Based on various industry sources, we believe the market for solar PV is still growing at about 40% per year and additional subsidies are being planned by different countries (although of course there is no assurance that they will be implemented) to support the development of solar electricity. This governmental support is critical as the cost of solar electricity exceeds the retail price of electricity in every significant market in the world. To date, France, Spain, Germany and Italy have already approved subsidies and Switzerland is planning to follow suit in October 2008, after years of hesitation. We believe we are well situated to supply the growing demand with our high-quality and cost-effective solar tiles and modules.
V. SB-2 Registration Statement Update
On December 21, 2007, we filed Amendment Number 2 to our resale registration statement on Form SB-2. We encourage you to read it for information about our business.
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