WILLIAMSVILLE, N.Y., May 15 /PRNewswire-FirstCall/ -- CVF Technologies Corporation (BULLETIN BOARD: CNVT) a holding company that is involved in the business of developing and managing early stage companies primarily engaged in the clean-tech sector today reported financial results for the first quarter 2008.
2008 First Quarter Financial Results -- Judging CVF on its income statement alone is not very helpful due to significant changes in revenue and income that can occur from quarter to quarter and from year to year. An example of how this revenue fluctuation can occur is when CVF's ownership interest in one of its portfolio companies goes below 50%. The portfolio company may still have significant revenue as does Biorem whose revenue was cdn $3,184,200 for the first quarter ended March 31, 2008. However that revenue is not shown in CVF's income statement. It is therefore important to focus on CVF's business model which is to invest its capital and human resources primarily in early stage, clean-tech companies with significant growth potential. The intent is to develop these companies until they either go public as did Biorem in January 2005, or are acquired as was Gemprint in December 2005.
When these events occur there will be a significant increase in CVF's income, as there was in 2005, when Gemprint was sold. In order to pass this realization of value to its shareholders CVF may initiate a stock repurchase program as it did in 2006, when it repurchased a total of $1,626,400 of its preferred and common shares, or it may decide to issue dividends to its shareholders. It may also decide to invest some of its funds in its current portfolio or in new business opportunities.
Portfolio Highlights -- Biorem -- (23% owned by CVF) announced this week the receipt of a new order in the amount of cdn $3.1 million from the Regional Municipality of York for two in-ground Biofiltair odor control systems at the Duffin Creek plant in Pickering, Ontario. BIOREM's Biofiltair system is the technology of choice for the Region and was pre-selected based on the Company's track record of delivering high-quality projects.
"This is an important order for Biorem which leverages our engineering and process knowledge and continues our evolution to larger projects," said Peter Bruijns, Biorem President and CEO. "The population expansion in Greater Toronto and other urban areas across North America continues to create demand for odor control at public works facilities. We are pleased to be a leader in this growing market."
Xylodyne Corporation -- (40% owned by CVF) In March and April of 2006 CVF invested cdn $325,000 in Xylodyne Corporation, a newly formed company which focuses on the development and distribution of 4-wheel drive off road electric vehicles. The mission of Xylodyne Corporation is to further the sales of environmentally friendly electric vehicles. Xylodyne has two business units: Recreational Vehicles and Engineering Services. The Recreational Vehicle group sells and services off road electric vehicles that are targeted at outdoorsmen but also has applications in the mining and turf care area. The Engineering Services group assists companies in the development of new electric and hybrid vehicles. In 2007, Xylodyne established a joint venture with Ecoval to develop and market a line of products into Ecoval's sales channels. The first of these initiatives should launch in mid-2008.
Xylodyne is currently focusing its efforts on building its distribution network for its vehicles in the US and Canada, where it has now signed dealers in New York, Delaware, Maryland, Massachusetts, and Ontario. CVF owns 40% of the equity of the company plus holds a two year note for cdn $313,000 from Xylodyne. In 2008 Xylodyne will continue to aggressively work to expand its dealer network in the northeastern United States and Canada.
Ecoval -- (85% owned by CVF) The Ecosense herbicide, produced and marketed by Scotts Canada, its licensee, is available in every major retail chain in Canada and has become the leading environmentally friendly herbicide in Canada. Ecoval has also signed an exclusive distribution agreement with Plant Products the largest commercial, non-retail horticultural distributor in Canada for Ecoval's EcoClear herbicide product. The Scotts and Plant Products agreements are expected to make Ecoval's herbicide the dominant product of the non-chemical herbicide category in Canada. Ecoval now plans to leverage off its success in Canada to begin an aggressive marketing campaign in the US as it seeks out partners similar to what has been achieved in Canada. Ecoval is continuing its negotiations with several companies to offer its herbicide product to the US market in an exclusive distribution agreement. An agreement of this type has the potential to produce significant income to Ecoval in future years. Ecoval hopes to complete these negotiations in the coming months. Ecoval is also in serious discussions with a number of companies to add additional products.
Ecoval will continue to grow its sales by further promotion of its current product line. This includes supporting the current marketing programs, signing up new distribution partners and licensees, and entering new markets. Ecoval will also look to cut expenses through improvements in manufacturing, raw materials cost, and logistical management. The company is working on a number of business development projects to launch new products into Ecoval's distribution channels, including the joint venture with Xylodyne Corporation.
G.P. Royalty Distribution Corporation -- (formerly Gemprint Corp,) - (65% owned by CVF) was formed to receive potential royalty distributions from Collectors Universe Corp who purchased the assets of Gemprint in December 2005. The royalty agreement is for $1 for each Gemprint over 100,000 Gemprints per year until December 2010. Gemprint is a unique non-invasive identification system for diamonds. Based on Collectors Universe's recent press releases, their G Cal diamond grading program is described as a core part of their business model and Gemprint is a key component of it.
Petrozyme -- (50% owned by CVF) is continuing to explore marketing opportunities for its proprietary biologically based remediation technologies for the petroleum and petrochemical industries. The company is seeking a partnership or licensing agreement with a major North American environmental company as well as licensing agreements in the Middle East.
CVF GAAP financial results for first quarter 2008 -- On a consolidated basis CVF reported a decrease in revenue of $569,600 for the first quarter 2008 primarily due to a decrease in sales from Xylodyne, its new investee company. It should also be noted that Biorem's revenue of cdn $3,184,200 for the first quarter 2008 is not consolidated in CVF's financial statements as CVF owns less than 50% of Biorem.
Net loss for the first quarter 2008 was $965,500 compared to a loss of $437,900 in the first quarter 2007. This equates to a loss per share of $0.08 for the first quarter 2008 compared to a loss per share of $0.03 for the first quarter 2007. Most of this increase in the loss was due to adoption of FASB 157 and FASB 159 which requires recognition of the change in the market value of the Biorem shares held by CVF. This translated into a loss of $542,600 which is recognized in the loss for the first quarter 2008. Adoption of FASB 157 and FASB 159 also required CVF to show the market value of the Biorem shares held by CVF on its balance sheet. The total shown in the balance sheet on March 31, 2008 is $2,128,500.
CVF Technologies Corporation (http://www.cvfcorp.com/) is headquartered in Williamsville, New York. CVF is a technology development company, whose principal business is sourcing, funding and managing emerging pre-public, clean-tech companies with significant market potential.
Certain statements made in this press release which are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these statements involve risks and uncertainties, which may cause actual results or achievements to be materially different from any future results and achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, product demand and market acceptance risks for the products and technologies of CVF's subsidiary companies and investees; the impact of competitive products, technologies and pricing; delays or difficulties in developing, producing, testing and selling new products and technologies; the ability of the company's subsidiaries and investees to obtain necessary financing for their operations and to consummate initial public offerings of their stock; the effect of the Company's accounting policies; the effect of trade restrictions and other risks detailed in the company's Statement on Form 10-SB/A filed with the U.S. Securities and Exchange Commission and any subsequent filings with the Commission.
