Neal Frye, Entech Inc. July 3, 2009 Conversation phone: (269)483-2318 ext. 204 cell: (574)612-5031 Neal@4entech.com

>Given the economic recession and potential fo recast of declining demand for TDF, we’re looking at the potential for other markets to absorb the tires.

>In Ohio there was a case a few years ago when the major consumers of TDF (different endusers) stopped taking on TDF. Since that was the only existing tire recycling market, it was a single-market system, so when it failed and ther e was suddenly a build-up of non-recovered tires.

This is something that EPA is interested in, th ey want to understand on a national level, whether

if TDF markets fail beca use of the economic recession, whether or not other markets could pick up the slack.

And other things that we produce. Once the tires ar e ground down to the size of that tire turf, it also can be used in other applications. The one other application th at potentially consume enormous, enormous amounts of tires would be rubberized asphalt. And we do sell into that market, but every state has its own issues when you start getting at a state level. That creates a difficulty because in every state you have to ge t people who are interest ed in using it who are involved in putting down pavement and they’ve b een doing it their standard way. Breaking into that industry is very difficult. Fo r example, there are states, MA, NJ but the only states that have used significant amounts are AZ, CA, TX, and FL . They’ve consumed a lot of it and the test

results that come out of there are that the road s last longer, which is actually a problem. Don’t make as much money off it. By making a road last longer (and much quieter), I have been struggling last year to introdu ce it to the Midwest (Indiana) . One lane, one mile long = 1,000 tires. That market could open up a la rge, large, and the nice thing is that the roads, it’s not the end of life for it. Roads take up that overlay su rface and grind it to put down a new road. Texas, if you look at their website – open grade friction course. AZ uses si milar type. As it’s raining, the water and then disperses out to the end of the road. Spray off tr ucks is virtually eliminated. Doug Carlson is the President there, Rubber Pavements Association. Recycled rubber.

Profit margin compared to TDF? >I think rubber asphalt and TDF ha ve huge potential. TDF is huge t hough, it really re ally is. If it went away, it would be an enor mous problem. As long as the power plants and the paper mills are being monitored closely as far as their emissi ons, it’s a wonderful use. At least one steel mill in AL that’s using scrap tires, also usi ng carbon for high-carbon steel. And using other components like the oils for an ignition type agent.

>We’re a long way aways from that. There ar e not enough markets to absorb crumb rubber. People make these (our investment is 2.5-3 million to take chips from TDF to crumb and then we can produce an enormous amount of this stuff) . Melting down plastic with crumb rubber but we’re still on the forefront of that, and the co mpanies still haven’t switched over. Overabundance of material—TDF helps so much—that you can b ack off your production of your one item.2 If it went away, it would bankrupt so many co mpanies. A couple notices – major crumb producers that have gone bankrupt and all their equipment is up fo r sale. The market to use all that material still isn’t. We’re just in the fore front of those markets. A lot of the crumb rubber products are really sub-standard. People buy them because they’re just trying to be generous to the recycling market.

Rubber playground/rubber mulch. In the past we ’ve used a lot of wood. In about 3 years it deteriorates and you have to freshen it up. Biodegradable pro duct, so you’re making topsoil around the base of your house. Weeds come through the weed barrier. What happens when you don’t want it anymore? Companies shred it down further? They don’t want dirt, rocks, leaves in

the material and all sorts of debr is. Very expensive to try to sift through and clean. It’s not a huge volume. We = steady supply of hundr eds of thousands of tires. Not very practical for companies to go around to each house and pick up. Could maybe make it aggregate system. Wal-Mart Æ end-of-life. Just prolonging e nd of life. Adding possibly 10 year s of life but not looking longterm. A road is considerably longer, can pick it back up, re-grind it, add more rubber, and put it back down. Using 60% back into the same road; other part they use for new roads. The rubber

would not deteriorate.

TDF--We need power. Cheaper fuel source. We ’ve gone through a couple new startups. And I have become convinced that most power plants do as good a job of cleaning up the air with rubber as they do with anything else th ey burn. There’s a lo t of mistrust.

3⁄4 of a million dollars. From there to do to cr umb rubber – another 1.5 to 2 million. For a small plant. And at that point, your crumb rubber is about 10 mesh. To go smaller, need more equipment to get to 40 or 50 mesh.

TDF profit margin Æ $10-20 depending on how far away the power plant is. Probably a fair

number.

Crumb rubber Æ thought it would be greater but it’s not that much. 40 mesh, we’re seeing people selling that in th e 16-20 cent range for 40 minus and we s ee that, the cost to produce it is probably above that 16-20 cent range. More li ke 18-19 cent range. What people are doing is screening it out; trying to sell th e finer particles that are a bypr oduct. Could never set up a plant to make just 40 mesh – not viable. The crumb r ubber market is being inundated with crumb right now, not enough companies using it a nd developing products for it.

Gov’t should encourage end markets – create a pull. Instead a push on production. Gives an unfair confidence/edge to companies. Normally the people that get the grants are better financially off; states want to give money to a company that’s doing ok.

Infill – for sports arenas, pulling in quite a big of material too. But I don’t believe they are terribly profitable. Too much available.

Miracle to the whole system is asphalt. Convinced that once states approve this, it will be a huge benefit to the whole industry. Can sell within ow n state. Our state could consume every tire we process, easily. Profitable Æ on a larger scale??3 Playgrounds, in terms of volume, yah it’s ok. One playground takes 400 tires. One playground every 5 square miles. There’s no thing like a road. One thing about roads; there’s still room for improvement, making them quieter and safer.

We’re going to take our co mpany in that direction.