SOURCE: Edgewater Foods

November 29, 2006 08:00 ET

Edgewater Foods Announces Record Scallop Results, Confirms Guidance

GAITHERSBURG, MD -- (MARKET WIRE) -- November 29, 2006 --Edgewater Foods International, Inc. (OTCBB: EDWT) announced today record results for its scallop harvest, which began in October, due to the dramatic improvement in the average size of the Company's Pacific scallop. Average weight per scallop increased from 150-180 grams to over 225-250 grams -- representing an increase of over 20% from the previous year. The Company expects to bring approximately 500,000 scallops to market from our harvest that began in October. Scallop prices have also improved significantly in 2006 (effective December 1, 2006): from $3.95/lb to $4.20/lb. The Pacific scallop, farmed by the Company, also continues to prove itself highly disease resistant, with a 95% survival rate during the grow-out phase.

In addition, the Company announced that it spawned 350 million larvae in the spring of 2006 and planted significant numbers of scallops of the 2006 class. These scallops are currently in pearl nets and will be reduced in density and moved to lantern nets in the coming months.

As a result of the beginning of the harvesting of our remaining 2004 scallop class, inspection of growth rates of our 2005 class and the highly encouraging performance of the Company's developed scallop stock, Edgewater has confirmed its harvest guidance through 2008 as follows:

--  We anticipate commencing harvesting up to approximately four million
    2005 year-class scallops during April of 2007.
    
--  We expect to begin harvesting the 2006 year-class scallops during the
    Spring of 2008, however, we could begin harvesting portions of the class
    sooner if mortality rates (at various points of the growth cycle) are
    significantly better than our current projection or if growth rates are
    substantially higher. We anticipate that at least 10 million scallops could
    reach full maturity and thus be harvested.
    
--  We anticipate that beginning February 2007, we will plant 100 million
    scallop seed and rapidly increase farm production with a projected minimum
    2007 scallop class of at least 50 million, which we expect to begin to
    harvest in early 2009.
    
--  Lastly, we expect to produce more than 200 million scallop seeds in
    2008, with a projected 2008 scallop class of at least 100 million scallops.
    
Robert Saunders, Chairman and CEO, stated, "This harvest activity is a strong testament to the exceptional results shown by Edgewater's expanding marine hatchery operation, and our products are proving to be of the highest quality in the industry. It also speaks to our ability to augment and enhance our operations after fully capitalizing our scallop operations through our US$5.4 million financing completed on July 11, 2006. Since the completion of the financing, we have aggressively focused on the grow out of the Company's onshore scallop operations, its onshore hatchery facilities, expansion of its processing capacity as well as continuing to develop larger and faster growing scallops through our breeding program.

"Much of success in the last several months can be credited to our finance committee's ability to fully capitalize our scallop operation in July; it sent a very compelling message to the Edgewater Team," said Rob Saunders. "It was a message of faith and confidence and, as a result, we were finally given the opportunity to prove the validity of our marine hatchery business model."

Edgewater Foods has developed a series of proprietary hatchery techniques for a number of marine species, most notably hybridizing the Pacific scallop. In addition, Edgewater was the first company to produce commercial quantities of sablefish juveniles. Both of these breakthroughs required many years of research and considerable investment. In the case of sablefish, which is a cold-water fish that spawns at depths of 800-2400 ft, a variety of techniques were required to successfully mature, spawn, incubate and rear the larvae.

The scallop species farmed by Island Scallops has a proven record of being disease resistant, with a 95% survival rate during the grow-out phase. The Company has the necessary farming infrastructure to significantly increase its scallop production to 25 million scallops annually by the fall of 2007.

Edgewater Foods is the predominant producer of live "in the shell" scallop products in North America. There are no known direct competitors in the scallop farming business in British Columbia and ISL is the only hatchery producing the Pacific scallop. The Company sells scallop seed to a number of small independent scallop growers who sell their products into the same marketplace; however, production from these growers totals less than 500,000 scallops per year. Five British Columbia joint venture farmers are currently farming scallops and receive scallop seed, technology, and support in an arrangement with ISL.

ISL currently distributes the scallops through specialty wholesalers with particular expertise in selling to restaurants, and has developed a market for whole live scallops that exceeds 5,000 lbs. per week into Vancouver. As distribution is expanded, the Company will continue to focus on specialty wholesalers with strong ties to major restaurants.

ISL, a Vancouver Island aquaculture company, was established in 1989 and for over 15 years has successfully operated a scallop farming and marine hatchery business. ISL's scallop farms are situated along both the east and west coasts of Vancouver Island. These facilities represent the largest private marine research hatchery and the first fully integrated shellfish producer in Canada.

ISL is dedicated to the farming, processing and marketing of high quality, high value marine species: scallops and sablefish (or blackcod). Farmed scallops are relatively new to North America and ISL is the only producer of both live-farmed Pacific scallops and live sablefish. ISL has developed proprietary hatchery technology for the hybridization of Pacific scallops and production of juvenile blackcod. These new husbandry techniques significantly increase growth yields, while strengthening the selected strain's ability to resist disease. In the case of blackcod, there were a number of technical difficulties associated with spawning that ISL has solved with its technological innovations. As such, there are no existing competitors that produce and/or harvest both scallops and blackcod. Edgewater seeks to become a leader in the highly profitable niche seafood industry.

Through ISL, Edgewater is an aquaculture and marine hatchery that provides consumers with healthy, environmentally friendly alternatives to the current market. The unique hatchery technologies held by Edgewater give it the advantage of being a "Green" environmentally friendly business. For additional information on Edgewater Foods International Inc., please visit http://www.edgewaterfoods.com or call (800) 793-0087.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this news release include certain predictions and projections that may be considered forward-looking statements under securities law. These statements involve a number of important risks and uncertainties that could cause actual results to differ materially including, but not limited to, the performance of joint venture partners, as well as other economic, competitive and technological factors involving the Company's operations, markets, services, products and prices. With respect to Edgewater, except for the historical information contained herein, the matters discussed in this news release are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, Edgewater's extremely limited operating history, uncertainties related to the Company's access to additional capital, competition and dependence on key management.

Contact Information

  • Contact:
    Tom Bostic
    (800) 793 0087

    Aurelius Consulting Group, Inc.
    (800) 644-6297


    PR Global Concept
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