News You Can Use

RTA NEWS YOU CAN USE
October 15, 2014

THE FOLLOWING IS BEING SENT AT THE REQUEST OF RTA MEMBER
LEN LOTTRIDGE FOR YOUR READING INTEREST

INTRODUCTION
My name is Len Lottridge and my family has been in the tire remoulding and tire repair business for over 60 years
since my father, Bill Lottridge Sr. started in operation. I have been in the business for almost 40 years.

Initially the company was the exclusive distributor in Canada for the Lodi brand of hot cure passenger, truck and
OTR equipment. At the time, over 50% of tire remould equipment sold worldwide was manufactured by Lodi.

I along with several partners are about to launch Green Arc Tires Manufacturing Inc. (http://www.greenarc.ca/), a
Passenger, SUV and LT Tire heat cure remoulding facility.

GREEN ARC TIRES MANUFACTURING INC.

A funding of $37 million has been secured with one requirement still to be met – that being non-binding
expressions of interest from potential customers.

One of the financing partners has purchased a 400,000 sq. ft manufacturing facility in St. Marys, Ontario. At a
community job fair over 1,700 people filled out applications.

The first funding is close and will pay for the down payment for the initial manufacturing equipment as well as
building leaseholds, and the hiring of core staff.

In this first stage the equipment order will have three deliveries – each 3 months apart. The inspectors, buffers,
builders, presses, etc. are all new equipment from Marangoni of Italy, the premier tire remoulding equipment
manufacturer worldwide. The six and eight segmented radial moulds are from a subsidiary of Marangoni. The Non-
Destruct tire test equipment is from Germany.

Installation, testing and training for the first wave of equipment will take about two months. The two subsequent
deliveries will take less time to bring into service. Each delivery is a fully functional plant.

Initially winter tires will be produced. This is a market that is under serviced due to relatively low production from
new tire manufacturing and this is a result of the high cost a consumer must pay for a second set of tires. While we
expect to replace some new tire sales with Green Arc Tires, we fully expect that most sales will be to new
customers who will now be able to afford a set of 4 winter passenger tires.

All Season tires will be produced as demand and production capability exists.

Tread, sidewall and other rubbers will be supplied by AirBoss of Kitchener, one of North America's leading custom
rubber mixers with the capacity to supply over 250 million pounds annually. AirBoss also compound for the US
Space Program, various military applications worldwide and a vast array of other specialized rubber products.
Production rates for this first stage are projected to reach 1.2 million units by the end of Year 3. The ultimate goal
is 3 million units per year.

Green Arc Tires will become the largest passenger tire remoulder in the world. At 3,000,000 tires per year and
based on rubber usage as published annually by Modern Tire Dealer's Top 100 Retreaders in the USA, Tires would
be in the Top 5 today.

Since Green Arc Tires will be using casings collected in Canada, hundreds of good paying manufacturing jobs will
stay in Canada.

THE JUSTIFICATION

A little over 25 years ago passenger tire remoulding disappeared almost completely when the change over from
bias to radial was complete. The equipment to remould radial passenger tires is completely different than that for
bias passenger tires and considerably more expensive. Almost all passenger remoulders exited the business.

Also, at that time, the cost difference between a new tire and a remoulded tire was a lot less than today. The
introduction of less expensive Asian and other off-shore new passenger tires made a remoulded tire far less
competitive. Today, domestic and off-shore pricing is significantly more expensive.

Green Arc Tires will be exceedingly competitive. Since 70% - 80% of the value of a tire is in the casing, Green Arc is
able to produce a remoulded tire at a fraction of the material cost of a new tire.

The 3 R's

The 3 R's of Recycling are first Reduce, then second Reuse and finally Recycle.
The advent of the radial tire combined with vastly superior, modern new tire technology has met the Reduce test.
To Recycle passenger tires by trying to turn them into other products has proved problematic and quite
unprofitable. To Reuse a passenger tire by remoulding is the best option before Recycling.

Educating consumers on these issues will be overcome when the consumer receives a warranty equivalent to new
tires and yet paying 30% to 50% less for a green, eco-friendly tire. All other remoulded applications of tires,
including truck, aircraft, OTR, etc., have proved this.

Over 25 years ago, passenger tire remoulding accounted for 20% of all passenger tire sales in Canada and the USA.
Some European countries had far in excess of 20%. Based on Modern Tire Dealer's January 2014 Facts Issue and
using the standard Canadian rule of thumb, there are approximately 220,000,000 passenger replacement tires sold
in Canada and the USA every year. Winter Tire and All Season Tire Remoulding potentials are huge.

Various European tire magazines have recently reported that passenger tire remoulding is experiencing a resurgence
there.

By reusing casings the amount of non-renewable oil saved versus new tire manufacturing is hundreds of thousands
of barrels. The amount of water saved by not manufacturing new tires will be in the billions of liters. The amount
of Carbon Dioxide and other toxic, air borne emissions saved by not incinerating will be in the tens of thousands of
tonnes. The extra purchasing power for consumers will be in the hundreds of millions of dollars. These numbers
are based only on Green Arc's eventual production of 3,000,000 tires.

PRICING AND PRODUCTION

Our pricing structure will be one price per rim size. Discounts from Dealer to Retailer will be up to 40% and from
Retailer to Wholesale will be up to 25%. These and further possible discounts will all be predicated on volumes.
Please review the attached pricing comparisons and the Green Arc Winter Tire 2014 – 2015 Price List.
Our pricing and discount structure will make even the smallest retailer competitive.

Winter tire sizes and production quantities for Passenger, SUV and LT will be based on Rubber Association of
Canada Winter Tire Sales history and trends.

Warranties and performance will be similar to or better than new tires.

The Ontario Tire Stewardship has advised that the Tire Stewardship Fee of $5.43 per Passenger and Light Truck
Tires will not apply to Tires, thus saving the customer even more. The HST difference between a new tire and a
Green Arc Tires will also provide a significant savings for a customer purchasing 4 Green Arc Tires.

PURPOSE OF THIS CORRESPONDENCE

To secure our funding we are asking businesses like yours to give an expression of interest in choosing Green Arc to
be a supplier of remoulded tires.

Your expression of interest does not in any way constitute an obligation or commitment or intent on your part to purchase any remoulded tires from Green Arc Tires and does not in any way constitute an obligation or
commitment or intent on Green Arc Tire's part to sell any such Green Arc Tires to you.

If you are interested in doing business with Green Arc Tires once we are in operation, a return email indicating this
would be most helpful and appreciative. Also, if you could estimate the number of remoulded winter tires each
season you might order it would be of help to us going forward.

Any information you provide will be confidential and will only be shown to potential investors once they have
signed a Non-Disclosure Agreement.

If you have any questions at all, please do not hesitate to email or phone me. As a matter of interest ONLY major brand casings will be considered for remoulding in our facility.

Thank you in advance for reading this and I hope to receive a positive response from you.

Sincerely,

L.H. (Len) Lottridge
Green Arc Tires Manufacturing Inc
E-mail – len@lottridge.ca
Cell – 905-978-3883

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THOUGHT FOR THE DAY

Promises build hope.
Delivering on those promises build trust.

~RTA member Rich Elliott