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Certified Organics to acquire NZ Nature Company

certified organics LIMITED

May 24, 2005

Certified Organics to acquire New Zealand Nature Company

Statement made by Wayne Cartwright, Chairman, Certified Organics Limited

Certified Organics is to purchase a leading New Zealand e-commerce retailer, New Zealand Nature Company (NZ Nature), for $5 million.

NZ Nature is a Nelson-based, privately owned operation that primarily markets New Zealand-made consumer products domestically and internationally through the Internet.

NZ Nature has sales revenues in excess of $4 million, and earnings before tax of $1 million a year.

NZ Nature’s substantial earnings and cash flow will enable the Certified Organics board to generate shareholder value through prudent reinvestment in the growth of the NZ Nature business, as well as the ongoing development and commercialisation of the existing pine extract-based domestic and agricultural control products.

Certified Organics will fund the acquisition through a share placement, a rights issue and borrowings. Of the $5 million purchase price of NZ Nature, $3 million will be paid in cash and $2 million in Certified Organic shares, valued at six cents a share.

The company plans a share placement for $0.4 million, which is fully subscribed and a one for two rights issue to raise $3.2 million. At this stage, the Company anticipates that up to $1.5 million of the rights issue will be underwritten. Both share placement and rights issue will be at 5.5 cents per share with attached options.

NZ Nature sells products selected for its carefully targeted ranges including high quality clothing made from sheepskin, merino and possum wools and silks, as well as cosmetic and alternative health products, energy saving products, educational toys and Kiwiana.

50 percent of its sales are exported, primarily to the North American market. Certified Organics will appoint a General Manager to work alongside the vendors during an agreed handover period.

Certified Organics recently announced a 96 percent growth in sales on the first quarter in 2004. At the same time Certified Organics also announce that the Department of Conservation, Government of South Australia, had ordered a shipment of Organic Interceptor with a sales value in excess of $250,000.


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