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BPI NEWS
www.solidpicks.com
BPI INDUSTRIES INC ("BPR-V") - Trading Suspended Pending
Surveillance Review by the VSE
John Loretto, President of BPI industries Inc. advises that trading in the
Company's shares has been suspended pending a surveillance review
by the Vancouver Stock Exchange. The Company co-operated fully in
the surveillance review and believes that the steps it has taken to
address the concerns of the Exchange will bring the Company into good standing with the Exchange and benefit
shareholders. The Exchange has determined to change the listing status of the Company to a venture company
until the Company has established a high level of regulatory standards that are expected of senior company.
The Company continues to maintain its interests in its 3 principal assets: (1) the Illinois Coalbed Methane
Project, (2) Tega Petroleum, and (3) Pyng Medical, and management will be refocusing its attention on
advancing the Company's business with the completion of the review and the resumption in trading of the
Company's shares.
The review arose from 3 main areas of concern.
Potential dissemination of misleading or premature material information
The Exchange is concerned that the Company has issued news releases with unsubstantiated information with
specific reference to the May 21, 1999, announcement that a Letter of Agreement and Understanding had
been signed pursuant to which a financier had agreed to provide an US$80,000,0000 financing for the
development of the Company's Coalbed Methane Project located in Southern Illinois. The Letter of Agreement
and Understanding for the financing was signed by Mid-Continent Methane, Inc ("Mid-Continent"), the
operator of the lands. The Company was not a party to this Letter of Agreement and Understanding but it was
portrayed by the operator that all working interest owners would benefit from the financing. In disseminating the
news, the Company relied solely on information provided by the operator. No due diligence was performed
regarding the financial ability of the financiers and attempts to obtain clarification regarding the ability of the
financiers have been frustrated by the existence of a Confidentiality Agreement signed by the Company with
Mid-Continent. Under the terms of the Confidentiality Agreement, Mid-Continent has taken a position that it
need not furnish any further information with respect to the financing proposal. The existence of the
Confidentiality Agreement has at times frustrated management of the Company as the Confidentiality
Agreement has been successfully used by the operator to circumvent attempts by the Company to obtain full
particulars of the state of development of the Sands for public disclosure purposes. The terms of participation
as affected by the Confidentiality Agreement is presently under review by the Company's legal counsel.
Until evidence of the financial substance of the financier is obtained, the investing public should view with
caution the operator's ability to close the terms of the financing.
Any financing proposal requires both the consent of the Company as the Company maintains its 49%
equivalent undivided working interest in and to the lands and the approval of the Exchange.
The board of directors has implemented a new policy regarding the publication of news releases by the
Company requiring all releases to be disseminated under the signature of the President or the Secretary of the
Company (except for emergencies occurring in their absence) and to be reviewed and approved by legal
counsel prior to dissemination to ensure their compliance with applicable securities law and policy and proper
substantiation of the information in the releases.
Potential misuse of corporate funds
The Exchange investigated concerns that a total of $640,597 was used for loans and cash advances to related
parties, other business associates of a director, and an operator of a property of the Company. Of specific
concern to the Exchange was $548,590 in advances. During the review period, $299,000 was repaid,
$116,000 was settled by the transfer of certain mud tanks purchased with the funds loaned, $72,590 remains a
loan contribution by the Company as a non-operator participant to Mid-Con Methane, Inc., the operator of
the Illinois Coalbed Methane project, and $61,000 remains unpaid, the recovery of which is being sought
through litigation against an arm's length creditor.
Director Suitability
The Company has reconstituted its management with a view to resolving the concerns expressed during the
surveillance review about the Company's record of compliance with the policies and regulations governing its
affairs and the operation of those affairs in a manner acceptable for a public company. The new board consists
of John Loretto, P. Eng, Harcharnjit Brar, R. Stuyvesant Pierrepont III, John Lichtenbelt, P. Geol. and Douglas
Schmidt, and the chief executive officer and chief financial officer are Mr Loretto and G. Ross McDonald,
C.A., respectively. Lakhwindar Janda has resigned as a director of the Company. Each current director has
provided a confirmation to the Exchange that he will ensure full compliance with the terms of the Company's
listing agreement with the Exchange, the policies and rules of the Exchange, and any other applicable regulatory
rules and requirements. TEL: (800) 803-3204
John Loretto, P.Eng., President TEL: (604) 685-8688
BPI Industries Inc. FAX: (604) 683-1797 EMAIL: info@bpi-industries.com
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