Wednesday, 7 February 2007

Late Filing Brings Stock Halt and Testy Shareholders


As you are probably already aware, JER stock was halted due to the late filing of the annual (August 31) financial statements. That information has now been filed and we have just been notified that the company will resume trading on Monday, February 5th. We are unsure of the exact time.
The company had a number of situations occur simultaneously that led to the delay in the filing of the year end financials. Management has assured us proper controls and backups are in place to prevent a reoccurrence.
The year-end and first quarter results points are listed in the table below with further details available via Sedar.com.

In conjunction with the release, Edward Trueman, JER's new President and CEO stated: "The financial results for fiscal 2006 are disappointing, primarily due to unforeseen technical challenges and their corresponding production delays. However, management is confident that these issues have been resolved and fiscal 2007 will be almost entirely dedicated to the marketing and sales of our wood thermoplastic (WPC) compounds and panel board products. We have a WPC technology that is truly world class and meets a global market demand in a wide range of industries. We also have the capacity to supply our sales pipeline. Management is now focused on the business of creating customers out of potential customers."

We would like to point out that the company is essentially still in its early operational days. The manufacturing capabilities so critical to any sustained sales effort are just coming online – this is very important and is significant to any sales development. In our opinion, the stock’s future is now directly tied to sales ramping up. The company must prove the worth of its product by selling it in volumes that will sustain the operation.

Q1 results didn’t show much change from the year end or the previous first quarter results. Revenues are insignificant, costs are higher and inventories are building again. The costs are largely associated with preparation for ramp up, which is not uncommon for a company in this stage of development but what has been stressed in this edition is that the company must close major sales agreements soon to prove it can be successful!

Of interest to investors, liabilities increased by $1.0 million due to BRZ’s purchase of a 15% ownership stake in JERTech Manufacturing B.C. Ltd. BRZ is granted first position security interest in all JERTech’s present and after acquired property to secure the obligation to return the Preferred Contribution to BRZ.