Envirokare Tech, Inc. Chairman`s Letter to the Shareholders

Fri Jul 10, 2009 12:17pm EDT
 
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NEW YORK--(Business Wire)--
ENVIROKARE TECH, INC. (Pink Sheets: ENVK) 

Dear Shareholders and Friends of Envirokare Tech, Inc., 

We are pleased to provide you with an update on recent activities for both
Envirokare (the "Company") and its interest in LRM Industries. 

The Company and its wholly owned subsidiary, Envirokare Composite Corp. ("ECC"),
NOVA Chemicals Inc. ("NOVA") and Zesiger Capital Group, LLC ("Zesiger"), reached
agreement in conjunction with the developers of the state-of-the-art patented
TPF ThermoPlastic Flowforming and patent-pending STF Sheetless Thermoforming
technologies (the "Polks"), wherein a Merger and Plan of Reorganization (the
"Agreement") was completed on July 2, 2009. Highlights of the Agreement are as
follows:

* LRM Industries, LLC merged into a newly formed Delaware corporation, LRM
Industries International, Inc ("LRM Int."). 
* LRM Int. was recapitalized with $4.5 million, as provided by clients and
members of Zesiger in exchange for preferred stock in LRM Int. 
* ECC received 1,323,530 shares of common stock in LRM Int., representing 100%
of all issued and outstanding common stock. 
* The Polks received a partial payment from LRM Int. to secure the proprietary
technologies, together with a warrant to purchase preferred stock, with future
payments to be made by LRM Int. as specified in the Agreement. 
* NOVA has no further equity interest in LRM Int., but will receive an earn-out
based on future positive net earnings at LRM Int. 
* NOVA converted all outstanding debt and obligations due from ECC or the
Company to NOVA into 1,746,677 shares of the Company`s common stock, which
equaled 2.8 percent of the issued and outstanding common stock of the Company
when issued. 
* Both NOVA and ECC forgave all outstanding debts, including accrued interest,
owed by the LRM joint venture to the respective parties. 
* Post-merger capitalization of LRM Int. is: clients and members of Zesiger
received preferred stock representing approximately 80 percent of LRM Int.
(among other rights and preferences, holders of the preferred stock are entitled
to certain preferential dividend payments and payments on a liquidation of LRM
Int.); ECC received common stock representing approximately 20 percent of LRM
Int.; Dale Polk Jr. received a warrant to acquire 15 percent of the authorized
preferred stock; and an equity pool was created to incentivize key LRM Int.
employees, based on performance standards as established from time-to-time.

The reorganization of the LRM joint venture is a positive step towards achieving
success for the project participants and the Company shareholders. As the
economy began to unwind during 2008, we were confronted with a set of very
difficult corporate realities. These realities extended beyond the Company to
our joint venture partner and the LRM joint venture itself, creating the
necessity to recapitalize and restructure the joint venture. We believe that LRM
Int. is now in a position to capitalize on production opportunities within the
thermoforming industry. 

Sincerely, 

Envirokare Tech, Inc.

 Paul G. Gillease  
 Chairman          


TPF ThermoPlastic Flowforming and STF Sheetless Thermoforming are emerging
process technologies for the low pressure, fully automated molding of
long-fiber-reinforced ("LFRT") and non-reinforced thermoplastic large structural
parts providing enhanced mechanical properties through, with respect to LFRT
parts, the randomization and preservation of fiber length in molded parts. The
enhanced mechanical properties of TPF ThermoPlastic Flowforming molded products,
coupled with low material costs (including the use of recycled polymers) and low
conversion costs, make the patented TPF ThermoPlastic Flowforming and
patent-pending STF Sheetless Thermoforming technologies strong contenders for
this multi-billion pound opportunity. 

Envirokare welcomes inquiries regarding their products and programs. 

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

Any statements contained in this letter that are not statements of historical
fact are forward-looking statements. You can identify these statements by words
such as "prospects," "believe", "towards" or other similar words. These
statements discuss future expectations, contain projections of results of
operations or financial condition or state other forward-looking information and
are based on certain assumptions and analyses made by Envirokare in light of its
perception of current conditions, expected future developments and other factors
it believes are appropriate in the circumstances. Such statements are subject to
a number of assumptions, risks and uncertainties, including such factors as
uncertainties in cash flow, expected time and costs of litigation, the
volatility and level of oil and natural gas prices, production rates and reserve
replacement, reserve estimates, competition, litigation, environmental matters,
the potential impact of government regulations, fluctuations in the economic
environment and other such matters, many of which are beyond our control. You
are cautioned that forward-looking statements are not guarantees of future
performance and that actual results or developments may differ materially from
those expressed or implied in the forward-looking statements.



Envirokare Tech, Inc.
George E. Kazantzis, 212-634-6333
Fax: 212-634-6339
info@envirokare.com
www.envirokare.com

Copyright Business Wire 2009

 

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