SOURCE: HQ Sustainable Maritime Industries, Inc.

November 13, 2006 16:11 ET

$5 Million Financing for Aquaculture as Practiced by HQ

HQSM Funding for Toxin-Free Feedmill Plant Brings Further Aquaculture Growth, Profitability and Reduces Pressures on Our Oceans

SEATTLE, WA -- (MARKET WIRE) -- November 13, 2006 -- HQ Sustainable Maritime Industries, Inc. (HQ) (OTCBB: HQSM), a leader in zero-toxin integrated aquaculture and aquatic product processing, announced today that it has completed a $5 million convertible promissory notes financing with two investors. Attached to the financing is the right to purchase an aggregate of up to 4 million shares of Common Stock.

Terms and conditions of the financing are included in a related Form 8-K, which the Company has filed with the Securities and Exchange Commission on November 13, 2006.

The net proceeds of the financing will be used by the company toward its construction of a 100,000 ton extruded toxin-free feed plant. Management expects this plant to begin operations in 2007. We expect that the use of this plant will reduce production costs of our toxin-free tilapia and is an essential condition for eventual organic certification of our tilapia products. The company's total estimated feed plant costs of USD 7 million will be funded by the combination of the proceeds of this financing and the company's funds.

The investors in the completed financing were The Tail Wind Fund Ltd. and Solomon Strategic Holdings Ltd., both of which were advised by Tail Wind Advisory & Management Ltd., a London-based firm regulated by the U.K. Financial Services Authority and a leading investor in North American companies with small capitalization.

Norbert Sporns, CEO of HQSM, said, "The potential collapse of ocean fisheries (See Salt-Water Fish Extinction Seen By 2048, Study By Ecologists, Economists Predicts Collapse of World Ocean Ecology http://www.cbsnews.com/stories/2006/11/02/health/webmd/main2147223.shtml) if realized, is a terrible event if current practices go unchecked. Expanding HQ's toxin-free aquaculture is important to relieve the pressure on our oceans. We believe that the construction of this feedmill brings strong growth synergies with the other components of HQ's business is accretive to our shareholders and important in the fight to save our oceans."

About HQ Sustainable Maritime Industries, Inc.

HQ Sustainable Maritime Industries, Inc. is an integrated aquaculture and aquatic product processing company, with operations based in the environmentally pristine island province of Hainan, in the South China Sea. HQ practices cooperative sustainable aquaculture, using nutraceutically enriched feeds and conducting fish processing and sales. The company is dedicated to sustainable toxin-free methods giving its customers the purest products possible. The Company holds HACCP certification from the U.S. FDA and the EU Code assignment of quality, permitting its products to be sold in these international markets. It owns a nutraceuticals and health products company, which is HACCP certified, and produces and sells products subject to stringent laboratory tests certified by the China Ministry of Health. This plant produces nutraceuticals, which enrich feed used by HQ's cooperative aquaculture operations. In addition to headquarters in Seattle and operational offices based in Haikou, Hainan, HQ has offices in Hong Kong, Beijing, and Shanghai. (http://www.hqfish.com).

Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of HQ Sustainable Maritime Industries, Inc. (the Company) to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov under "Search for Company Filings." Consulting For Strategic Growth I, Ltd. ("CFSG") provides HQ Sustainable Maritime Industries, Inc. (HQ) with consulting, business advisory, investor relations, public relations and corporate development services, for which CFSG receives a fixed monthly fee for the duration of the agreement. Independent of CFSG's receipt of cash compensation from HQ, CFSG may choose to purchase the common stock of the company and thereafter sell those shares at any time it deems appropriate to do so.

Contact Information

  • Contact:

    Norbert Sporns
    Chief Executive Officer
    HQ Sustainable Maritime Industries Inc.
    Tel: 206-621-9888
    Fax: 206-621-0318
    Email Contact

    Daniel Stepanek
    Media Relations
    CFSG1
    Tel: 212-896-1202
    Fax: 212-697-0910
    Email Contact