Frank3:
Please allow me to set the record straight concerning the press release issued by Consolidated Eco-Systems, Inc. on November 13, 1997. I am not providing in this forum, nor can I provide, any information which is not otherwise public, but felt the need to correct potential misperceptions concerning the agreement with American Physicians Service Group, Inc.
Consolidated Eco-Systems, Inc. ("ConEco") entered into an agreement with American Physicians Service Group, Inc. ("APS") which provided, among other things, that APS could convert its debt into equity if, and only if, the following events occurred: (a) either ConEco must be in default under the terms of the agreement or ConEco must consent to the conversion; and (b) shareholders must approve the use of stock for conversion of the debt to equity. ConEco certainly does not anticipate that it will default on the agreement. However, if a default does occur, you can imagine that the situation would be very grave. The use of the conversion feature could, in such circumstances, save ConEco and its shareholders from future harm.
This is NOT another Reg S or Reg D convertible debenture or anything remotely similar. As long as current management is associated with ConEco, there is NOT, and will NOT, be another Reg S or Reg D deal. Mr. Connors, President of ConEco, has specifically directed that no more dilution of shareholder equity through future convertible debentures will occur.
The conversion feature in the APS agreement does not become effective, even if ConEco defaults, unless shareholders approve the use of additional stock for conversion purposes. Even if shareholders approve, APS cannot convert its debt to equity unless the Company is in default or otherwise consents.
Mr. Connors has adamantly demanded that there must be a minimum floor on the conversion price which would be effective even if shareholders consented and the unlikely event that ConEco defaults occurs. APS has verbally indicated its willingness to agree to this.
All in all, the Company views the agreement with APS as positive and as the next logical step in Mr. Connors' current business plan which, beyond any doubt, has been the force that saved the Company.
On a personal level, I firmly believe that Mr. Connors, President of ConEco, is committed to ensuring shareholder value. I personally believe that continued faith in Mr. Connor's business plan will result in economic benefit to each shareholder of ConEco.
This post contains forward-looking statements with respect to the results of operations and business of ConEco that involve risks and uncertainties. These risks and uncertainties are detailed from time-to-time in the Company's filing with the Securities and Exchange Commission, including the Company's Report on Form 10-K for the year ended December 31, 1996 and on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997, and September 30, 1997.
Chip Sexton
Executive Vice-President
Consolidated Eco-Systems, Inc. |
