Presidents letter on UREC. Very compelling IMO.
Dear Shareholders:
We have made monumental strides towards our Company’s vision and market implementation in the last six months.
With so much to share let’s always remember that we’re all here, and are going there, because of our product, the URECOATS
100™ RUBBER SEALANT MEMBRANE(RSM)™. So let’s acknowledge product and benefits, then we’ll move into Company
direction and implementation of specifics. Please consider the magnitude of what we, Urecoats Industries, are achieving;
Worldwide market penetration with joint venture support and even potential political direction. To better understand the wide
range of cross-over industry applications, coupled with broad acceptance and appeal, we must acknowledge two very critical
elements:
1.) Habitation of the Water Planet (“Earth”).
2.) Global Humanitarian Concern.
To start with, we as a species live on the Water Planet. Every century since our development of shelters to structures,
mankind has fought against moisture and natural disasters. I can assure you this will not change. What will change is the
ability for the URECOATS 100™ RUBBER SEALANT MEMBRANE(RSM)™ to retrofit existing structures and infrastructure,
and affectively impact the engineering of new structures so that they will have a cohesive relationship with our planet. Two
extraordinary characteristics of our product make this possible. One, the RSM™ acts as a complete vapor barrier in a seamless
fashion eliminating the possibility of air or water intrusion, thus preventing corrosion and deterioration. Two, the adhesion
forces that enable our RSM™ to attach itself to surfaces or substrates is very much like skin on muscle. It bonds to, and thus
becomes an integral part of the substrate or surface. This not only creates an uncompromisable bond but it also adds structural
integrity to the surface while still offering the ability to flex. “You won’t see that in any epoxy coatings”!
At this time I will inform you of two very critical test reports that will give you a clearer understanding of our
statements to this point:
· Concrete Adhesion and Wind Uplift
· Pull Force on Steel
Remember Concrete and Steel are the building blocks for our Modern World, the key is to Preserve, Protect, and
Reinforce. The Urecoats RSM™ is that key to unlock this worldwide dilemma of preservation of structures.
TEST: Concrete Adhesion and Wind Uplift. The URECOATS 100™ RUBBER SEALANT
MEMBRANE(RSM)™ withstood over 1,000 pounds of pressure per square foot before the seal was compromised.
This, my friends, was called “Structural History” by the president of one of our independent testing labs. To put this
in perspective, Dade County Code Compliance, the most stringent in the world, only requires 45 pounds of uplift and
adhesion for product approval.
TEST: Steel Pull Force. The URECOATS 100™ RUBBER SEALANT MEMBRANE(RSM)™ reached a pull
force of 2,520 pounds per square foot before separation occurred. There is no product or application of this kind to
which to compare. I can only say that the Marine Industry is about to receive significant support in the steel corrosion
area. Not to mention, barnacle and Zebra Mussel free hulls. Also, the URECOATS 100™ RSM™ shows hydrophobic
characteristics. In other words, lower drag coefficient on the hull equals better fuel efficiency for the vessel.
Now for the next critical element and the vital fit for URECOATS 100™ RUBBER SEALANT MEMBRANE(RSM)™.
World leaders, scientists and scholars have fully disclosed the two major fears for humanity in the next decade. We will
acknowledge these two worldwide concerns one at a time, and then explain Urecoats Industries roll in supporting a solution.
The number one humanitarian concern for the next decade is the spread of Infectious Disease. The Primary carrier of
infectious disease to the Human race is the mosquitoe. For those of you in New York City, you are feeling and seeing first
hand this real life drama. For those of you who don’t know, Central Park is now being sprayed to kill mosquitoes because of
detection of West Nile disease. Infectious disease carrying mosquitoes hit the North American Coast and this is just the
beginning for the United States. The number one breeding zone for infectious disease carrying mosquitoes is tire
dumps. There are several billion tires today abandoned worldwide and 300 to 400 million discarded every year in North
America alone. Urecoats is helping to get rid of these tire dumps by supporting recycling efforts with the use of crumb rubber
from recycled tires in its RSM™ products.
The number two humanitarian concern for the next decade is Ozone Depletion. It’s a known fact that the Earth’s
ozone protects mankind from the dangerous rays of the sun that permeates our skin and body. One of the largest contributors
of ozone depletion is the combination of primers and paints sprayed into our atmosphere. Exposed steel requires periodic
maintenance, remember this is just maintenance not a solution. To understand the magnitude of this process let’s look at the
Golden Gate Bridge in San Francisco. Its maintenance program requires 18 to 24 men working three shifts, 365 days a year, to
cut out bad steel, replace with new, then primer, then paint. Now expand this process to “all steel structures worldwide”,
bridges, towers, ships, liquid containment tanks, and offshore oil platforms, just to name a few. No wonder this is a
worldwide problem. URECOATS 100™ RUBBER SEALANT MEMBRANE (RSM)™ goes beyond maintenance and provides a
solution.
The URECOATS 100™ RUBBER SEALANT MEMBRANE(RSM)™ can spray a rubber skin on all steel structures
with a pull force of over 2,500 pounds. Vapor barrier, water repellant, adhesion properties equals “MAINTENANCE FREE
STEEL”.
As you can see we’ve got something very different from just another product. What we have is “THE” product for
the 21ST Century. Remember this is a “Technology of Need” and the “Time is Now”. Urecoats Industries RSM™ offers a
Pollution Solution.
Now that I feel you have a better understanding of our product, its benefits, and our intent, let’s discuss how we plan
on achieving our monumental task and what we see for our short-term goals. First and foremost, as most of you know, our
state-of-the-art delivery systems are the key to our product. You will be pleased to know that two systems have been
completed and spraying for the last 30 days. The other three systems will be completed by the end of September. These five
systems are all large-scale primary systems. It is also our intent to build five more intermediate and portable systems for
revenue producing application by year-end. Yes, I did say revenue producing. We believe that South Florida offers the perfect
opportunity to footprint our application process in all of our targeted areas, with the exception of Automotive. Our direction
and market strategy, which has never wavered, is to still continue to “TEST”. But we feel that ten to twelve systems will allow
us to have the benefit of LEARN and EARN. Five delivery systems will be identified for specific testing locations (LEARN).
The other five systems will be working in concert with local municipalities with the assistance of the Broward Soil and Water
Conservation District, local roofing and waterproofing companies, and specific targeted areas for high profile impact and
revenues (EARN).
All of this will coincide with the build-out of a new all-inclusive manufacturing facility. At this time two facilities have
been identified and negotiations are in the works. Within sixty-days we will conclude our Company’s business plan for North
America distribution (excluding Mexico), which will involve licensing and franchise rights. We are confident that the merger of
our new facilities, all tests, established business practice, and application procedure will coincide at our targeted date, second
quarter 2001. Remember we are preparing and building a solid foundation of quality and credibility to meet the market demand
that is already lining up at our front door.
Currently the negotiations for the sole distribution and licensing rights to the Southern Hemisphere are going well. I
apologize if our timetable has not met some of your short-term goals, but just the knowledge of our Pull Force Test on steel is
too valuable for this Company not to be diligent in its contract negotiations and market strategy. It’s not a question of giving
away but more a desire of understanding what we truly have developed. I can tell you that the adhesion properties have totally
taken everyone by surprise. Remember, these are quite sensitive negotiations and inherently bring to the table a high degree of
confidentiality.
As you already know, Dr. Gary Zeller (www.zeller-int.com) has accepted our offer to become a board member. This
noted Eco-Warrior and high profile chemist is a powerful addition to our new but impressive group. His ability to create
immediate application needs for the RUBBER SEALANT MEMBRANE(RSM)™, along with his willingness to develop additional
patents for Urecoats’ portfolio will be a crucial asset to our worldwide market penetration. Also it doesn’t hurt that he is on
retainer with the Army Corps of Engineers.
You now see and better understand our product and direction. We are currently 7,200 shareholders strong and when
Mr. Kurtz and I took over, there were only 1,800. Be proactive . . . we have the resolve, be confident . . . we have the results,
be part of our Team, after all you are a URECOATS INDUSTRIES shareholder. We now have the product and delivery
systems, distribution, and franchise programs that will be worldwide. Understand our vision and direction, we are developing
the infrastructure to bring us closer to our next step, the NASDAQ Small Cap.
At this time, I would like to thank each shareholder for their confidence and support in our Management Team. In the
interim, I look forward to keeping you apprised of our further efforts and invite your questions and comments. Again, be
proactive and share this letter.
All My Best,
URECOATS INDUSTRIES INC.
/s/ Larry T. Clemons
Larry T. Clemons
President and Chief Operating Officer
P.S. Yes the Asphalt Sealant project is looking great! It’s just another Multi-Billion dollar Industry for Urecoats to aggressively
develop.
