ENVIROKARE COMPOSITE CORP. CHAIRMAN'S LETTER TO THE SHAREHOLDERS
Las Vegas, Nevada – November 14, 2011 - ENVIROKARE COMPOSITE CORP. (a private company, www.envirokare.com).
Dear Shareholders and Friends of Envirokare Composite Corp.:
On behalf of Envirokare Composite Corp.’s (ECC, or the Company) board of directors, we are pleased to update you on recent activities at both ECC and LRM Industries International, Inc. (LRM). In a prior communication to ECC shareholders, we provided the basic details of the February 26, 2010 sale of Envirokare Tech, Inc.’s (ECC’s former parent) trading shell which resulted in a spin-off of all shares of ECC to Envirokare Tech, Inc. shareholders of record on January 29, 2010. Envirokare Tech, Inc. also communicated directly with its shareholders regarding this transaction. As a result of the spin-off completed in 2010, ECC retains an approximate 10 percent interest in LRM through its now private company.
Presently, ECC has an operating footprint that requires nominal capital (approximately $10,000 per annum) to meet its obligations. ECC attends to these capital requirements through borrowings supported by issuance of promissory notes due to contributors. Shareholders interested in these promissory notes, as they are needed, should contact Rob Davidson at the Company (702-315-0447).
The ECC Board is composed of three members including Mr. Steve Pappas, Dr. John Verbicky and myself, Dr. Nicholas Pappas. As shareholders and Board members, our hopes and expectations remain with LRM’s continued progress and development.
In our current update regarding LRM, we are pleased with the progress and growth being made in commercializing the unique TPF Thermoplastic Flowforming™ and Sheetless Thermoforming™ molding technologies, in protecting and enlarging the scope of the technology with additional patents and in adding significant productive capacity. Commercialization includes ongoing growth in sales and significant development of new applications.
With growth in both in-house branded products and in products produced for others, LRM is in the process of incrementally expanding capacity. LRM expects to complete this phase of plant expansion activities during this fiscal year. In addition, options for additional capacity that is expected to be needed within the next 12 to 18 months are currently under consideration. This growth has resulted in the addition of approximately 30 new jobs at the Rockledge facility since 2005.
As a result of successful marketing efforts and growth towards full production capacity, LRM currently is operating on a three-shift seven-day-per-week basis in order to meet both current customer production and its own branded product requests.
The primary focus for LRM is to meet current customers’ needs, cultivate new customers and deliver additional sales to its operations while working towards maximizing shareholder value. This current year of operations has started well, and all indications are that revenue streams will continue to expand throughout this year and into future years. LRM has broadened its customer base and seeks to add licensing customers to its client foundation creating an outlook for growth and increased profitability beyond 2011. Proprietary in-house products have been developed and introduced including HydroDome™ storm water chambers, ValuStair™ stairways and SolaSprire™ solar water heaters.
Intellectual Property Protection
The strength of LRM is supported strongly by its suite of patents that relate to both the TPF Thermoplastic Flowforming™ and Sheetless Thermoforming™ process and technologies and products that can be made with these processes. LRM now holds use rights to 14 United States Patent and Trademark Office issued patents and additional patent applications are pending. Additionally, LRM has filed a number of international patents further extending its technology protections into various foreign jurisdictions.
Development of Business Systems and Safety:
We are very pleased to report that LRM continues to focus on a commitment to employee safety. The LRM management team is committed to safe, efficient and quality manufacturing in all its operations. This commitment includes a determination to protect their employees, contractors, customers and the community through effective safety and environmental management programs.
LRM is also pleased to announce the appointment of Richard Cochrane as President and Chief Operating Officer. Rick comes to LRM from Waste Management, Incorporated, where he most recently served as a Senior Business Director in the Organic Growth Group. In that role, he had the general management responsibility for a number of wholly owned companies, including WM Lamp Tracker, WM Trash Monitor Plus, and WM Asphalt Products. Prior to joining Waste Management, Rick held senior management positions at Texas Molecular LLC, a company involved in chemical manufacturing and environmental services. Rick brings extensive operating experience, experience in mergers and acquisitions, and hands-on experience in having grown companies. He holds a Chemical Engineering Degree from Vanderbilt University and is participating in the Executive Scholars Program at the Kellogg School of Management.
We are encouraged by the progress at LRM and the prospects for future additional growth, yet we recognize that the true challenge of project success rests on the ability to convert your investments into bottom line success. We remain committed to that end. We thank you for your continued support and interest in Envirokare Composite Corp.
Envirokare Composite Corp.
Nicholas Pappas; Board Chairman
John Verbicky; President and Director
Steve Pappas; Secretary, Treasurer and Director
Envirokare Spin-off Transaction Notice
Envirokare Tech, Inc. (ENVK) recently conducted a spin-off of its wholly-owned subsidiary, Envirokare Composite Corp. (ECC, a private company). The spin-off included a share distribution of ECC common stock to Envirokare Tech, Inc. shareholders of record on January 25, 2010. The distribution was conducted on a 1:1 basis meaning that for each share of ENVK common stock owned as of the record date, one share of ECC stock was issued to that shareholder. The stock distribution was conducted on a tax-free basis, and the value of the stock distributed was calculated at $.02 per share (rounded). ECC recommends that ECC shareholders consult their respective tax advisors for advice on applicable tax treatment of this ECC stock distribution.