SOURCE: JER Envirotech International Corp.

January 22, 2008 21:16 ET

JER Envirotech Announces First Quarter Fiscal 2008 Results

VANCOUVER, BC--(Marketwire - January 22, 2008) - JER Envirotech International Corp. (TSX-V: JER) (FRANKFURT: KFTB) ("JER" or the "Company") is pleased to announce its financial results for the first quarter of fiscal 2008 ended November 30, 2007.

Highlights and Milestones for the Quarter

- Total revenues increased 365% to $396,856 in Q1 2008 from $85,272 in Q1 2007 representing record year over year growth;

- Closing of a four-year minimum supply agreement with Guardian Building Products Distribution, Inc. on November 1, 2007;

- Closing of a six-month minimum supply agreement with a North American bathroom fixtures manufacturer on November 19, 2007.

Summary of Results

During Q1 2008, JER recorded revenues of $396,856, which were up 365% over Q1 2007 at $85,272. These revenues were realized primarily through the sales of the Company's JERTech™ thermoplastic biocomposite compounds (pellets), which accounted for 96% of overall sales. Sales were down 32% from Q4 2007 (at $581,964) primarily due to the cyclical nature of the decking extrusion industry, which accounted for approximately 80% of JER's sales during Q1 2008.

During Q1 2008, JER focused on closing a number of sales opportunities, including two significant supply agreements for its proprietary compounds. In addition, the company focused on developing initiatives in the injection molding industry. The results of efforts will be realized through the remainder of fiscal 2008, starting with the announcement on January 8th, 2008 of a four-year minimum supply agreement with Sprig Toys, a specialty toy manufacturer based out of Fort Collins, Colorado. "The Company's sales pipeline is robust and growing," stated Edward Trueman, JER's President and CEO. "Management fully expects to reach its breakeven milestone in the second half of fiscal 2008."

Operationally, JER continued the refinement of both its pellet and sheet production capabilities. For its pellet production line, the Company is expanding its range of polymers and fibers compounded into application specific opportunities.

During the quarter, the Company also received its newly designed sheet extrusion die, which was scheduled for attachment to the Delta-based sheet line for pre-production testing. This new die was designed by JER's CTO, Peter Kelly, after in-depth rheology analysis. This die is expected to deliver better flow and temperature dispersion than the previous design, resulting in both a higher quality end product and improved line output.

JER PURCHASES 100% OF DELTA COMPOUND PRODUCTION LINE

JER is also pleased to announce today that the Company has purchased the 25% stake in one of its Delta-based compounding lines previously owned by PGCO Investments Ltd. JER now owns 100% of both of its compounding lines. "With sales of our proprietary JERTech™ thermoplastic composite pellets ramping up, it makes financial sense for the Company to secure full ownership of its production assets," stated Mr. Trueman. "The Company is now able to fully benefit from pellet sales opportunities realized and it is also unencumbered when it comes to future decisions regarding equipment expenditures and line maintenance."

ABOUT JER ENVIROTECH INTERNATIONAL CORPORATION

JER is a global manufacturer of thermoplastic biocomposite compounds and sheeting. The Company's patented technology utilizes waste or by-product materials, such as wood fibre or rice hulls, to produce environmentally friendly alternative products for applications in a range of industries. The Company currently has a line of biocomposite formulations which it developed in collaboration with the National Research Council - Industrial Materials Institute of Canada.

JER currently has manufacturing operations in Canada, Malaysia and the Philippines. The Company is publicly traded on the TSX Venture Exchange (TSX-V) under the symbol "JER" and on the Frankfurt Stock Exchange under the symbol "KFTB."

For more information, please visit www.jerenvirotech.com or contact:

JER ENVIROTECH INTERNATIONAL CORPORATION
Mr. Ji Yoon
Chief Financial Officer, Corporate Secretary
International: (604) 940-9262
jyoon@jerenvirotech.com

For more information:

Mr. Mark Komonoski
VP Corporate Communications
Toll-Free: 1-877-255-8483
International: (403) 470-8483
mark@jerenvirotech.com

"The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release."

This news release contains certain forward-looking statements that reflect the current views and/or expectations of JER Envirotech International Corp. with respect to its performance, business and future events. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, those relating to changes in the market, potential downturns in economic conditions, foreign exchange fluctuations, demand for thermoplastic biocomposites, competition and our ability to implement our business plans and strategies in a timely manner or at all. These risks, as well as others, could cause actual results and events to vary significantly.

JER Envirotech International Corp. does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements.

(2008-01 #2)

JER ENVIROTECH INTERNATIONAL CORP.
(A development stage company)
Consolidated Balance Sheets
November 30, 2007 and August 31, 2007
(Unaudited - Prepared by Management)

=========================================================================
                                       November 30, 2007  August 31, 2007
-------------------------------------------------------------------------
                                             (unaudited)        (audited)
ASSETS

Current assets
   Cash                                       $2,520,307         $660,264
   Short-term investment                              -         1,500,000
   Receivables                                   360,954          360,810
   GST recoverable                                74,716           65,278
   Inventories                                   510,417          499,756
   Prepaid expenses and deposits                 175,706          166,843
-------------------------------------------------------------------------
                                               3,642,100        3,252,951
Deferred financing fees                           40,470           46,170
Lease deposit                                     30,476           30,476
Equipment and leasehold improvements           7,639,029        7,614,715
License                                            5,509            5,759
-------------------------------------------------------------------------
                                             $11,357,584      $10,950,071
=========================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Accounts payable and accrued liabilities     $269,620         $771,094
   Due to related parties                          1,720           52,561
   Current portion of loans payable              175,537          243,155
   Current portion of notes payable              435,515          441,651
-------------------------------------------------------------------------
                                                 882,392        1,508,461

Convertible debentures                         2,510,000                -

Notes payable                                    857,567          934,100

Loans payable                                    257,934          308,775

Preferred contribution                         1,000,800        1,056,400

Non-controlling interest                         835,696          948,588

Shareholders' equity
   Common stock                               16,229,996       16,230,411
   Subscriptions receivable                            -        (120,000)
   Contributed surplus                         2,093,119        1,926,461
   Deficit accumulated in the
   development stage                        (13,309,920)     (11,843,125)
-------------------------------------------------------------------------
                                               5,013,195        6,193,747
-------------------------------------------------------------------------
                                             $11,357,584      $10,950,071
=========================================================================

JER ENVIROTECH INTERNATIONAL CORP.
(A development stage company)
Consolidated Statements of Operations and Deficit
For the three months ended November 30, 2007 and 2006
(Unaudited - Prepared by Management)

=========================================================================
                                                    2007             2006
-------------------------------------------------------------------------
Sales                                           $396,856          $85,272
Cost of sales                                    786,028          451,263
-------------------------------------------------------------------------
                                               (389,172)        (365,991)
-------------------------------------------------------------------------
Expenses
   Amortization                                   18,964           16,158
   Bank charges                                    2,310            2,076
   Consulting                                    174,450           62,441
   Interest on notes payable                      26,097           24,675
   Investor relations                             65,374           14,500
   License, duties, fees and taxes                 9,296            2,920

   Management fee                                 23,725           19,592
   Office and administration                     107,132          135,599
   Professional fees                              82,694           73,789
   Regulatory fees and transfer agent              5,554            4,494
   Rent                                           70,422           47,153
   Research and development                       42,513           11,947
   Royalty                                             -            1,579
   Sales and Marketing                            53,965           54,016
   Stock-based compensation                      147,259           81,329
   Travel and promotion                          148,734          141,895
   Wages and benefits                            221,210          266,349
-------------------------------------------------------------------------
                                               1,199,699          960,512
-------------------------------------------------------------------------
Loss before other items                      (1,588,871)      (1,326,503)
-------------------------------------------------------------------------
Other items
   Interest and other income                       9,184            9,682
-------------------------------------------------------------------------
Loss before non-controlling interest         (1,579,687)      (1,316,821)

Non-controlling interest                         112,892          160,228
-------------------------------------------------------------------------
Net loss for the period                      (1,466,795)      (1,156,593)

Deficit, beginning of period                (11,843,125)      (6,853,701)
-------------------------------------------------------------------------
Deficit, end of period                     $(13,309,920)     $(8,010,294)
=========================================================================
Basic and diluted loss per share                 $(0.04)          $(0.04)
=========================================================================
Weighted average shares outstanding           37,982,104       27,388,895

=========================================================================

JER ENVIROTECH INTERNATIONAL CORP.
(A development stage company)
Consolidated Statements of Cash Flows
For the three months ended November 30, 2007 and 2006
(Unaudited - Prepared by Management)

=========================================================================
                                                    2007             2006
-------------------------------------------------------------------------
Cash provided by (used in)

Operating Activities
   Net loss for the period                  $(1,466,795)     $(1,156,593)
   Items not affecting cash
      Amortization                              106,699            98,084
      Foreign exchange loss on preferred
      contribution and loans payable            (89,220)                -
      Stock-based compensation                   147,259           81,329
      Compensation on agent warrants              19,399                -
      Non-controlling interest                 (112,892)        (160,228)
   Change in non-cash working capital items:
      Receivables                                  (144)        (103,784)
      GST recoverable                            (9,438)           64,481
      Inventories                               (10,661)        (217,092)
      Prepaid expenses and deposits              (8,863)           21,416
      Accounts payable and accrued liabilities (501,474)         (46,260)
      Repayments to related parties             (50,841)                -
-------------------------------------------------------------------------
                                             (1,976,971)      (1,418,647)
-------------------------------------------------------------------------
Investing Activities
   Short-term investment                       1,500,000          779,875
   Acquisition of equipment                    (125,063)        (573,680)
-------------------------------------------------------------------------
                                               1,374,937          206,195
-------------------------------------------------------------------------
Financing Activities
   Repayment of loans payable                   (84,839)                -
   Repayment of notes payable                   (82,669)        1,206,273
   Proceeds from convertible debentures        2,510,000                -
   Subscription receivable                       120,000           47,250
   Share issuance costs                            (415)                -
   Contributions by non-controlling interest           -          171,392
-------------------------------------------------------------------------
                                               2,462,077        1,424,915
-------------------------------------------------------------------------
Change in cash                                 1,860,043          212,463

Cash, beginning of period                        660,264          848,488
-------------------------------------------------------------------------
Cash, end of period                           $2,520,307       $1,060,951
=========================================================================
Supplemental cash flow information
Cash paid during the period for
   Interest                                      $26,097           $3,762
=========================================================================

Contact Information

  • For more information:

    Mr. Mark Komonoski
    VP Corporate Communications
    Toll-Free: 1-877-255-8483
    International: (403) 470-8483
    Email: Email Contact
    Website: www.jerenvirotech.com