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Certified Organics Limited

Certified Organics Limited

27 June, 2003



Statement made by Dr Earl Stevens, Chairman, Certified Organics, based on his address at today’s annual meeting of the company held in Auckland.

Two separate United States investors are undertaking due diligence with a view to investing up to $30 million facilitating the entry of Certified Organics’ organic weed killer to the American home and garden market.

If either initiative proceeds, the investment will be by way of a joint venture with Certified Organics, rather than the investor becoming a cornerstone shareholder in the New Zealand company.

Certified Organics’ contribution to the joint venture would be the home and garden marketing rights to its pine based weed killer for North, Central and South America.

The ballpark funding figure of $30 million is the estimate the investors have placed as the cost of a successful launch in the Americas.

Up to $2 million of this would go to gaining US Environmental Protection Agency registration for home and garden use of Organic Interceptor™ and the majority for marketing the product.

Both investors have moved beyond needing to convince themselves that our organic weed killer works. They are now focusing on whether anticipated returns justify the cost, and the practicalities of marketing the product.

Dr Stevens said shareholders should see the possibility of the joint venture proceeding as “warm” rather than “hot”.

Letters of intent have been exchanged with the investors through the international management and investment company, Pacific Bridge, but there are many months of detailed negotiations and investigation ahead of us.

The proposals are expressions of interest and I would not want any shareholder to view them as a done deal.

While there are many barriers ahead, discussions are far advanced and have certainly reached the stage where the prospect needs to be flagged to shareholders to ensure that they are aware of initiatives that could affect the value of their investment.

Another message shareholders should take from this development is the huge investment required to successfully launch in the Americas.

Shareholders were told the company now had all the necessary approvals to sell its organic weed killer to the commercial and home market in New Zealand, and would be launching on the home and garden market in Australia before the end of this year.

The company anticipates recording a deficit of $900,000 for the six months to 30 June 2003, and a deficit for the full year of around $1.4 million.


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