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Home Message From The CEO |
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| Revised 10/10/08 |
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| "I invite you to join us as we introduce TechroBond commercially, and share in our success as we work with industry leaders to transform some of the world's most commonly used compounds into more efficient, better performing, more environmentally friendly products to satisfy the demands of the market today and for years to come." |
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| Last fall, I welcomed you to the PRO family and referred to key goals that the company outlined in an April, 2007 press release. As with many other early-stage development companies, access to investment capital is critical to the company’s success. As you know, the financial markets have changed dramatically since the fall message and PRO had to delay its pursuit of institutional capital. To preserve and maintain liquidity, PRO undertook the following actions to support continued operations. |
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- Reduced all possible expenses
- Rescheduled payables to key law firms and other providers
- Reduced payroll and consultancy fees and offer option grants as compensation for these concessions
- Completed an interim financing of $1,500,000.00 led by an affiliate of EFO Holdings ("EFO" and PRO's largest stockholder) and the R.T. Vanderbilt Company (RTV)
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| This financial plan has been critical in supporting the Company’s efforts to establish a major technological breakthrough in passenger car motor oil. |
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| PRO has been working with R.T. Vanderbilt (RTV) for approximately one year in the optimization of a fully formulated, ultra low phosphorus engine oil. The engine oil has been subjected to extensive lab testing at RTV and The University of Texas at Arlington (UTA), with further testing at Southwest Research Institute (SWRI). Additionally, the work has been focused on achieving two successful industry wear tests; the IVA and IIIG Sequence Tests. On August 1, 2008, the PRO / RTV oil achieved the first step – a passing grade on the IVA test at SWRI. The passing grade was a great achievement by PRO / UTA and RTV technicians, and was supported by very important proprietary products from RTV that were carefully blended with PRO's TechroBond™ 240. This accomplishment is only the first step toward our desired "Breakthrough", the successful passing of the IVA and IIIG tests by an engine oil with a phosphorus level of less than 250 parts per million (PPM). The IIIG sequence test is a more difficult challenge and successfully passing the test may take more than one attempt. The Sequence IIIG engine test measures wear resistance and it also evaluates the engine oil’s resistance to increased viscosity. Also, this engine oil has previously passed several other demanding American Society of Testing and Materials (ASTM) performance tests. The IVA and IIIG are two tests within this series of sequence tests which are designed to satisfy engine life and performance standards established by the ASTM and imposed by the major automakers. The IIIG will be run later this fall. |
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| Technical breakthroughs are important achievements and are meaningful to the scientific community. However, commercial breakthroughs bring revenue, market share, profitability and shareholder value. PRO’s commercial breakthrough is focused on two very important engine oil categories. The first is to produce a GREEN oil for the OEM market. The GREEN oil would bring the automakers a low phosphorus, fuel efficient, emission system compatible and high performance motor oil with an extended drain capability. The second is to bring more wear resistance to the high mileage, used car engine oil segment which is dominated by impressive brands such as BP Castrol, ExxonMobil, Valvoline and Shell. Additionally, there is an emerging need for GREEN in motor oil as a fuel efficient product offering. A new fuel economy protocol, the Sequence VID, has been developed by ASTM and PRO believes that the PRO/RTV oil should perform well in this test when run this fall. |
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| To update you about TechroBond™ 280 (T-280) grease additive, our ability to generate a revenue stream through the sale of this product has not met our prior expectations. T-280 was designed to be a replacement additive for molybdenum disulfide (moly) in grease applications. The key features noted in the product launch in January 2008 were lower cost and higher performance. Moly was being priced at that time at approximately $20 to $25 per pound. The cost advantage never materialized because successful grease manufacturers were able to enter into long term contracts at $10 or less per pound, avoiding the spot market which today prices Moly around $20 per pound. There is a market for T-280; however, sales will only come after extensive industry testing which confirms the performance benefits. Generating these revenues will require an aggressive sales effort and a competitive pricing strategy. PRO / UTA are also evaluating other proprietary materials that are less costly than the materials that comprise T-280 today. |
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| All of PRO’s product development and testing activities with potential customers are conducted under non-disclosure agreements that these potential customers require. Therefore, we cannot disclose the identity of these potential customers. I want to assure you that PRO is actively pursuing these product development and testing activities with a number of potential customers. Should you have any questions, we would appreciate it if you can go to the company website, www.platinumresearch.com and submit your information, including an email address that we can use to communicate information to you. In order to keep all shareholders fully informed, when appropriate, we will post your email and our response on our Website. From the point of view of both the expense and speed of delivery, this is the best way for us to keep you up-to-date on all matters. As always, you can email your questions to Charles Moskowitz at cam@platinumresearch.com or he can be reached at 617-633-2259 for any questions and /or comments you may have. In appropriate circumstances, these questions and responses will also be posted on our Website. |
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| In conclusion, I firmly believe that the PRO technology will achieve a real technical breakthrough in engine oil technology and other market applications; however, this breakthrough will be commercially successful only if PRO acquires additional “strategic” capital. The definition of strategic is investors with industry knowledge and relationships. EFO and RTV are excellent examples of strategic investors. Considering the planned testing protocols and the need for additional strategic capital, a very high degree of risk surrounds the activities of PRO. At the same time, I am very pleased and impressed with the resiliency of our Board, Management, Consultants and Advisors (the “team”). The last eight months have been inundated with risk and uncertainty and the team has worked through this period with a remarkable sense of unity and common purpose. We did lose one valuable Board Member and a very talented CFO. However, we have hired an equally talented new CFO and we retained 95% of the individuals who impact the ongoing activities of PRO. Under the operating conditions that PRO faces today, a 95% retention of talent is a remarkable statement in itself. |
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| Thank you for visiting PRO’s website. |
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Cordially,
John (Cork) T. Jaeger Jr.
President & CEO |
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