ITEM 2. MANAGEMENT'S PLAN OF OPERATION
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FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements. For this
purpose, any statements contained in this Form 10-QSB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or the negative or other variations
thereof or comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial risks and
uncertainties, and actual results may differ materially depending on a variety
of factors.
PLAN OF OPERATION
Urecoats Industries Inc.'s (the "Company") plan of operation for the
next twelve (12) months, through its wholly-owned subsidiary, Urecoats
International, Inc., engaged in the business of acquiring, developing, and
marketing sealant and coating products containing recycled material in their
composition, for use in various industries, such as roofing, constructions,
automotive, shipping, trucking, and pavement. is to complete prototype
development of its spray application system for its "URECOATS 100" roofing
product ("Roofing Product"). The Company has set up a testing, training and
laboratory facility, for various research and development related to the
Company's current sealant products. In October 1997, Urecoats acquired all
right, title and interest in two formulae, including certain technologies for
their manufacture and application. Urecoats is also developing in its new
laboratory facility, an asphalt sealant product incorporating crumb rubber,
for the pavement industry ("Pavement Sealant").
Urecoats also entered into a Consulting Agreement on July 21, 1998,
effective June 1, 1998, with Creative Chemical and Ponswamy Rajalingam, Ph.D.
("Dr. Raja"), the owner and inventor, respectively, of the formulas purchased
by Urecoats International, including certain technologies for their spray
application (collectively referred to as "Raja Agreement"). Dr. Raja is a
chemist dedicated to researching, developing and commercializing products
incorporating recovered raw materials in their composition. The Company also
entered into a Consulting Agreement on January 31, 1999, effective January 1,
1999, with R. Uma Umarani, Ph.D. ("Dr. Umarani"), a chemist, for the research
and development of the Pavement Sealant formula. Dr. Raja and Dr. Umarani are
both expected to become full-time employees of a to be formed wholly-owned
subsidiary, Urecoats Laboratories, Inc., which entity will be responsible for
research and development efforts of the Company.
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MARKETS AND STRATEGY
The Company focuses on select value-added niche markets in which it can
establish strong market positions and have advantages in product development,
manufacturing and distribution.
The Company has identified the $20 billion Roofing Industry for the
introduction of its first Product. The Company plans to continue
implementation of product development for value-added end-use applications in
higher growth market segments, particularly sealant and coatings which
facilitate recycling and other environmentally useful sealants and coatings.
Management believes the Company's technologies provide it with advantages in
the development of new products and the penetration of new markets.
The Company intends is pursuing additional strategic acquisitions that
will allow it to establish its market position in targeted markets. Management
believes that the high degree of fragmentation in the adhesives, sealants and
coatings industry will continue to provide suitable acquisition candidates.
Potential acquisition candidates will be evaluated based upon the ability of
the Company to: (i) expand its product line; (ii) enhance its product
development capabilities; (iii) market products through new or expanded
distribution channels; and (iv) increase its international presence.
Management believes it has significant opportunities to establish its
products in international markets, to enter developing markets and to
establish new customer relationships. Management also believes it has a
world class "Rubber Sealant Membrane (RSM)" that will enhance, support and
change many industries.
MANUFACTURING, PACKAGING AND DISTRIBUTION
Urecoats has initiated plans to handle initial URECOATS 100 manufacturing,
packaging and distribution through contract manufacturers. These contract
manufacturers will prepare the various components of the product, as specified
by Urecoats, provide for private label packaging and assist with shipping of
product components to Mexico and other countries, for distribution to the
customer. The Company is also considering establishing a subsidiary to handle
its future manufacturing, packaging and distribution needs.
RESEARCH AND DEVELOPMENT
The Company presently conducts research and development activities,
primarily related to products containing recycled materials in their formula
and spray application systems, through outside consultants. As mentioned
above, Urecoats retained Dr. Umarani, to concentrate on research and
development of an Pavement Sealant formula, made for the pavement industry.
The goal of the Pavement Sealant is to develop a sealant with excellent
performance, longer duration and lower cost, as compared to existing asphalt
sealant products in the marketplace today.
The Company expended approximately $235,888 on research and development
of products and spray application systems for the quarter ended March 31, 1999. |
