Boysen & Associates and the Scrap Tire Recycling Industry

Boysen & Associates has provided consulting and financing services in the scrap tire recycling industry since 1990. In 1994, B&A organized and financed one of the most successful state-of-the-art scrap tire recycling centers in the United States. That facility is owned by an international product manufacturing company.

B&A's services include compiling Feasibility Studies, Market Assessments, Marketing Plans, Operational Cost Analysis, Strategic Production Plans, Financial Proforma's and comprehensive Business Plans for recycling scrap tires into marketable products for diverse industries.

Our familiarity with the methodologies and different types of equipment used for recycling scrap tires allows us to base our recommendations on proven facts and economic models. Our knowledge of environmental codes and facility requirements enable us to secure state, county and municipal recycling permits.

B&A has successfully secured equity capital and financing for scrap tire recycling centers. Funding results from our preparation of a comprehensive Business Plan. The following outline describes B&A's process and considerations in compiling that Plan.

MARKET DIRECTORY

B&A conducts regional Market Assessments and compiles Marketing Plans for prospective Scrap Tire Recycling businesses on a select basis. The document serves as an independent market feasibility study for lenders or investors. It also serves as the basis for the preparation of a business/operational plan for securing investment capital and institutional loans.

B&A has an extensive proprietary computerized database of national and regional buyers of crumb rubber, forming a Market Directory, which is divided into seven regions: Northeast, Mid-States, Northcentral, Northwest, Southeast, Southcentral, Southwest.

The regional buyer information is compiled onto three exhibits for each project.

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Exhibit I

Illustrates the regional demand of specific buyers, categorized by industry and volume purchased. This information results in a Sales Forecast.

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Exhibit II

Illustrates the industry volume of Exhibit I, categorized by particle size. This chart is used to determine a proposed Scrap Tire Recycling center's production plan. The production plan is based upon targeted sales of particular particle sizes. This is the basis for selecting the related type of equipment system, technology, management requirements, and raw material supply for each prospective site.

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Exhibit III

Identifies the buyers by name, address, phone number, contact person, product specification, volume and purchase price.

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PRODUCTION SYSTEMS

Current: For the past seventeen years, B&A has evaluated the various types of equipment systems within the industry and compared their capital investment, production performance, useful life, and operational expenses.

New: B&A continuously evaluates the various equipment systems and machinery used for recycling scrap tires throughout the world. The capital investment, proven production performance, useful life, and operational expenses are compared to conclude the best processing method and equipment system for each project. The system methodologies evaluated include ambient, cryogenic, water, and chemical processes.

B&A has no affiliation or fee arrangement with any equipment manufacturer. In establishing operational/financing plans, B&A negotiates the purchase terms, performance guarantees, servicing agreements, and equipment warranties for the benefit of each client.

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SITE SELECTION / PERMITS

Within each region, a site will be selected with consideration of not only the market potential, but with knowledge of a state´s regulations pertaining to the collection, hauling and storage of waste tires. Additional consideration is given to the availability of grants or low interest loans from a state or municipality for recycling waste tires. B&A is a contact or liaison with the state and municipal authorities for securing permits for the expansion or establishment of a Scrap Tire Recycling center.

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TIRE SUPPLY

Of primary consideration to B&A is the availability of waste tires within a region through established companies which are currently permitted or registered to collect, haul and/or process waste tires. These companies may also provide acquisition or merger opportunities. B&A's due-diligence investigation of each prospective site further determines the investment strategies.

Additional value may be added to a tire collection business which is currently selling the "high-grade" or resalable tires which have been collected.

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FINANCIAL ANALYSIS

B&A has developed a proprietary computer software program which defines all of the production variables relating to the conversion of tires, shreds or other waste rubber into various particle sizes of crumb rubber. Any production scenario can be evaluated by entering variables that pertain to the raw material volume, weights, system throughputs and resulting product output. Management variables pertain to hours, weeks and months at specific production levels. Related proformas reflect the capital requirements, cash flow, debt structure and return on investment.

The computer program provides a sophisticated means of evaluating each proposed Scrap Tire Recycling center startup, acquisition or merger. B&A has a reputation for compiling conservative projections based on documented facts and realistic assumptions.

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PROPRIETARY OPERATING FORMATS, PROCEDURES, AND DOCUMENTS

B&A has an internal office management system for compiling accurate data, evaluating business operations, developing business plans, and recommending operational strategies which are cost effective and provide investment security. B&A's proprietary formats, procedures and documents have proven effective through extensive, professional due-diligence investigations. Proprietary systems and Databases include:

1. Regional Buyer's Market Survey
2. Regional Market Directory
3. Industry Tons Per Particle Size for Regional Markets
4. Project Assessment Format
5. Equipment Evaluation Format
6. Equipment Comparison Format
7. Tire Procurement Development Procedure
8. Financial Projection Criteria
9. Financial Projections and Proformas (3 yrs.)
10. Project Development Plan & Procedures
11. Financial Presentation Format for Lenders and Investors
12. Confidentiality and Non-Circumvention Agreements
13. Client Exclusivity Agreements

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PROJECT FINANCING

With 30 years of project financing experience, B&A is knowledgeable of the expectations of investors and lenders. That knowledge, combined with Scrap Tire Recycling expertise and marketing ability, enables B&A to secure the capital required to establish Scrap Tire Recycling centers, whether for end- use manufacturing or the direct sale of crumb rubber.

B&A has been instrumental in securing the funding to establish successful Scrap Tire Recycling centers which have combined innovation, state-of-the-art technology, and efficient production methods.

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