Message #71 From:
Stock News Bot Date: October 31, 2006 11:31:00 AM
BUGS News U.S. Microbics CEO Optimistic About Future
CARLSBAD, Calif.--(BUSINESS WIRE)--Robert Brehm, President and CEO of U.S. Microbics, Inc. (OTCBB:BUGS)
(BCN:615212), an innovative environmental products and services company,
was recently interviewed by shareholders and potential investors
desiring to learn more about the company’s
current status and future potential. In the interview Brehm expressed
his optimism about the future prospects of U.S. Microbics and its
operating subsidiaries based upon the recent increase in contract
authorizations and business accomplishments in Mexico made during FY
2006 and 2007. This press release serves to update all interested
parties about the company.
Q. Bob, it appears that BUGS has gone through significant change in
2006. Can you briefly describe some of these key changes and their
effects?
A. FY 2006, ending on September 30, has been a year of focus on our
mission to utilize our technology and professional services to create
jobs, attract foreign investment and clean up the environmental problems
for the people of Mexico. Through our environmental cleanup subsidiary,
Sub-Surface Waste Management (SSWM), we have successfully crafted a
unique business relationship with the heads of state governments, the
national university, and various federal regulatory agencies to navigate
its Mexico subsidiary company, Environmental Tec International, S.A. de
C.V. (ETI) toward becoming a leading environmental service provider
throughout the country using the BUGS cleanup technology. The effect of
this refocusing effort has generated the highest authorized contract
backlog in the company’s history as an
environmental firm with substantial growth anticipated in the future
after the new president and legislators take office in December.
Q.Tell us about the core business accomplishments in 2006 and
how they will affect future revenue and earnings?
A. BUGS’ major revenue generating subsidiary
is SSWM, our environmental engineering company, and its Mexico operating
subsidiary, ETI with offices in Mexico City and projects in Torreon,
Puebla and Yucatan. ETI has an exclusive arrangement for its projects to
provide environmental services with the National Autonomous University
of Mexico (UNAM) an entity of the Federal Government. Coupled with top
down political access and our proven yet protected technology we are
today in the enviable position of becoming the dominant player in our
field in this burgeoning new market for environmental services.
Our business model in Mexico means we promote and identify needed and
sustainable environmental service solutions for Federal entities and
State and City Governments and then bring our UNAM partnership into play
with UNAM as the 'prime contractor.' ETI in partnership with UNAM has
its engineer's scope, design and cost the remedy required by the project
assignment, which subsequently becomes our working 'sub contract' with
UNAM with milestone tasks and objectives that are invoiced as the work
is completed. UNAM marks-up our subcontract and this becomes the master
contract with the client. Our working relationship with the Federal
Electricity Commission (C.F.E.), the world's largest electric company,
uses this business model which has resulted in recent contract
authorizations of over $5.1MM.
Q.Can you comment on FY 2006 results?
A. Our fiscal year ends on September 30 and we are currently preparing
for our annual audits for SSWM and BUGS and expect to release the
audited results in January. However preliminary numbers are close to the
expected revenues for SSWM/ETI as it has successfully transitioned from
working on projects from US clients with Mexico operations directly to
contracts with Mexico state government agencies. This significant change
in clients has resulted in revenues of approximately fifty percent of
the prior year but has also yielded a record-breaking authorized
contract backlog of over $7.1MM as of today which could make FY 2007 our
best year yet as an environmental company. Our successful business
development efforts have also created a substantial pending contracts
backlog for emergency response centers and landfill work in several
states awaiting the approval of new state and federal legislatures to be
installed in December of this year.
Q.What do you see as the major opportunities in Mexico and
when do you think SSWM/ETI will begin to realize results?Are the
risks and profits worth the effort?
Mexico is a wonderful country of opportunity for environmental services
now that they must meet the same environmental standards as the US under
a sidebar NAFTA agreement. SSWM/ETI has forged significant political
relationships with various state governors and has embarked on a
campaign to not only assess and cleanup environmental problems but also
to install new governmental infrastructure for pollution discharge
permitting, health risk assessment from chemical discharges and
emergency response centers for contaminant discharges.
Many of the environmental infrastructure changes require political
interaction, discussion and agreement as SSWM/ETI has spent considerable
time and resources to establish political relationships with state
governors and federal agency officials to craft new policy guidelines
for the implementation of environmental infrastructure which will create
new jobs, attract foreign investment, and cleanup major environmental
problems affecting many people in Mexico.
SSWM/ETI is beginning to see the fruits of their labor from FY 2006 as
new contract authorizations continue through FY 2007 from CFE ($5.1 MM),
and the State of Puebla ($2 MM) with another $1.8MM pending and expected
before the end of 2006 from Puebla. The ERC project in Veracruz awaits
the approval of the new legislators to be installed December 1 and the
Tlaxcala landfill project is pending approval of the governor and the
landfill siting report authorization.
Although there is great business opportunity in Mexico for high revenue
and gross profits, there are also risks involved with significant time
delays, political relationship building, and government bureaucracy.
However the proactive stance of certain governors and federal officials
who foresee the development of a new environmental industry to create
new jobs and economic prosperity as well as cleanup the environmental
problems plaguing the people for many years, provides a significant
opportunity for SSWM/ETI to utilize their technology and services to
increase shareholder value in a short period of time.
Q.Bob have you investigated other business opportunities that
could use the BUGS technology to generate revenue and to augment the
SSWM/ETI activities?
A. BUGS continues to look at business opportunities for its technology.
Currently under consideration and investigation are several promising
projects including:
Alternative energy using bio-digesters with bugs for methane gas
production from animal wastes to generate electrical power.
Plant growth enhancement for bio-fuels such as sugar cane and corn used
for ethanol production – currently looking at
alternatives in Mexico and elsewhere –
remember we had a 38% increase in sugarcane yields using our bug
technology, less water and no fertilizer and that may come in very
useful since ethanol is in a shortage position in the US.
Use of our existing laboratory and fermentation facility for third party
use and our FDA soil testing lab for third party products. We are
currently looking into equipment and manpower requirements and revenue
potentials for our fermentation subsidiary.
We are now formulating and creating product packaging for the Bi-Agra™
agriculture growth enhancement and soil amendment product line including
Too Tall Tomatoes™ and other products. We
expect product information and beta testing from a collaborative network
of shareholders and friends of BUGS to be announced this quarter.
Q.Bob, with all these accomplishments why is the stock price
at a historical low?Why is it not reflecting the true value of
BUGS?
A. BUGS stock price doesn’t necessarily
indicate the future prospects of the company. When you have more buyers
than sellers, or stock shorters, then you have a stock price that is
increasing. Yes our stock price is lower and yes we have had to issue a
lot of shares at this lower price to continue our business development
in Mexico but our sacrifice is paying off as we have a significant
authorized contract backlog and the SSWM balance sheet had a healthy
cash position at fiscal year end. I personally have bought a lot of BUGS
and SSWM stock this year as I am a firm believer in the direction we are
moving and the results we are achieving with the opportunities in
Mexico. Savvy investors should do their own due diligence and determine
if they should accumulate BUGS and SSWM stock at these historical low
levels for future appreciation.
I should also add that BUGS has no plans for a stock reverse at this
time as our analysis shows that our expected Mexico business in 2007 and
beyond could contribute significant earnings for higher stock prices and
cash flow for possible buyback programs.
Q.Bob, there is a lot of scuttlebutt on the chat rooms and
investor boards about BUGS and SSWM, could you comment?
First of all I don’t consider the chat rooms
and boards like Raging Bull creditable sources of company information as
many of their posters have their own personal agendas, often fabricate
messages using multiple usernames or interpret company results for their
own personal spin. I do not personally post on Raging Bull but have
participated in a German chat room because of a good following of German
shareholders who are genuinely interested in the forward progress of
BUGS. We also have some Brazilian shareholders and we have created a
Portuguese section of our website for them. I do answer emails from
shareholders regularly as far as it concerns public information from our
press releases or filed financial reports. Many shareholders have also
suggested business opportunities which we do follow up. Potential
investors and existing shareholders should consider a variety of sources
before investing including the company websites, SEC filings and other
pertinent information suitable to them.
Q.Bob, where do you see the company going from here?
A. We have made solid progress in 2006 –
record contract authorizations in Mexico, major pending contract
proposals for Emergency Response Centers, landfill operations, health
risk assessments, and new permitting infrastructure. We have set the
foundation for achieving positive cash flow in 2007 as we start these
projects and generate the revenue and collect proceeds as task
milestones are met. I congratulate our management team for going the
extra mile and achieving extraordinary accomplishments in record time on
a limited budget.
When investors discover BUGS and SSWM and complete their due diligence,
I think they will find a company on its way to becoming a major player
in the environmental industry of developing nations using environmental
technologies to drive job creation, economic prosperity and cleaner
living conditions for their people.
About U.S. Microbics Inc.
U.S. Microbics is a business development and holding company that
acquires, develops and deploys innovative environmental technologies for
environmental cleanup and agriculture yield enhancement using local
resources and stimulating regional economies in developing nations.
The information contained in this press release includes forward-looking
statements. Forward-looking statements usually contain the words
"estimate," "anticipate," "believe," "expect" or similar expressions
that involve risks and uncertainties. These risks and uncertainties
include the company's status as a startup company with uncertain
profitability, need for significant capital, uncertainty concerning
market acceptance of its products, competition, limited service and
manufacturing facilities, dependence on technological developments and
protection of its intellectual property. The company's actual results
could differ materially from those discussed herein. Factors that could
cause or contribute to such differences are discussed more fully in the
"Risk Factors," "Management's Discussion and Analysis or Plan of
Operation" and other sections of the company's Form 10-KSB and other
publicly available information regarding the company on file with the
Securities and Exchange Commission. The company will provide you with
copies of this information upon request.
