Omni Adjusts Results and Secures Major Investors

November 1, 2000

2 Min Read
Omni Adjusts Results and Secures Major Investors

Omni Adjusts Results and Secures Major Investors

LOS ANGELES--Omni Nutraceuticals (NASDAQ:ZONE) reported that it madeadjustments to previously reported results for earlier quarters, and it alsoreported that its four largest shareholder groups have agreed to secure a totalof 19 million, or two-thirds, of ZONE stock.

The reported adjustments are result of allowances made to a customer byOmni's former management in first quarter 2000. The customer claimed in thirdquarter 2000 that it was entitled to certain allowances, deductions and credits.Upon review, current management discovered the former management personnel didnot provide for these allowances, and the company must not adjust previous 2000and 1999 quarters to reflect the impact of the allowances, which is expected tototal a net of about $3 million. Current Omni management and both current andformer accountants for the company worked throughout October to finalize theadjustments and the periods affected.

Klee Irwin, chief executive officer, said that the accounting decisions madeby former management have made it difficult for Omni to meet its goals thisyear. "But thanks to over $1 million in recent financing from two of ourvendors in the form of debt conversions to equity, and an additional pending $3million near term growth have not changed," he said. "These accountingcorrections to prior periods will be one of the final steps in cleansing thecompany of the management practices of the past."

In a vote of confidence on Omni's new direction and current management, fourof its largest shareholders signed agreements to lock into a total of 19 millionshares of Omni stock. The deal was made between Omni, its principal stock sellerGlobal Capital and four large shareholders, including Irwin, former Omnichairman Lindsey Duncan and John Liviakas of Liviakas Financial Communications.The details of each agreement were not disclosed, except for certain details ofthe agreement with Duncan. Global Capital agreed to help Duncan sell $1 millionworth of stocks over the net six and a half months, and will also help him sellan additional 500,000 shares if the stock trades above $6 per share and averages500,000 shares per day for 20 consecutive days. For his part, Irwin will beallowed to sell much smaller batches of shares in orderly block sales as themarket permits and only with permission from Global Capital.

"As the largest shareholder, I do not believe that the current price ofZONE stock is in line with the true value of the company's worth," saidIrwin. Liviakas added, "I have the utmost confidence in the direction ofcurrent management and am not planning on liquidating my stock at these lowprice levels." He stated that he would not sell his shares until thecompany fully executes its 2001 growth plans.

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