Urecoats Industries Closes Infiniti Acquisition

Business Wire, Sept 5, 2001

Business Editors

POMPANO BEACH, Fla.--(BUSINESS WIRE)--Sept. 5, 2001

Urecoats Industries Inc. (OTC:UREC), today announced that it has closed its previously announced acquisition of Infiniti Paint Co., Inc. (Infiniti), a Florida-based distributor of proprietary coatings, sealants and foams.

The deal included cash and stock valued at $1,550,000.

"The closing of the Infiniti transaction is a primary building block in the aggressive growth plan of the company, " explained Richard J. Kurtz, Urecoats Chairman and CEO. "In June 2001 we announced the unveiling of our core product, the UrecoatsRSM-100(TM) Rubber Sealant Membrane(RSM)(TM). With the closing of this transaction we have added a crucial component to its success -- a comprehensive distribution infrastructure to support the marketing of our revolutionary product and spray application system, and we can capitalize on this channel for introducing additional products."

Urecoats sought to acquire a partner that would provide the company with the distribution of products to its initial U.S. target market, roofing contractors. "For the past 3 years, Infiniti has been a niche distributor to the roofing industry providing reflective coatings and foam products. Our goals are to create a point of sale for UrecoatsRSM-100(TM) and related products, enhance Infiniti's current inventory and develop new regional markets," said Timothy M. Kardok, President and COO.

Urecoats flagship product, UrecoatsRSM-100(TM) Rubber Sealant Membrane (RSM)(TM), is comprised of a patented formula which includes crumb rubber from recycled tires. Employing revolutionary technology, UrecoatsRSM-100(TM) is spray-applied hot, literally curing as it aggressively bonds to the applied surface. It creates a permanent fused seal that fully adheres to steel and concrete roof decks or flashing, forming our patented membrane that adds longevity, durability and weatherproofing to most types of roofs and substrates.

"Financially, Infiniti will be accretive to our top and bottom line," Kardok continued. "We are projecting steady growth for Infiniti with many new locations planned within the next five years. This expansion, coupled with the host of Urecoats' and Infiniti's products and Infiniti's proven business model and management, are key elements of Urecoats' long and short-term growth strategies."

The Infiniti acquisition is synergistic on three levels. First, Infiniti already distributes products to the roofing and general contracting trades, and specifically plural component foam systems and related foam application equipment. Our UrecoatsRSM-100(TM) product and BlueMAX(TM) application system distribution requirements are similar to those required for foam products. Second, Infiniti markets and sells other products and we will be adding revenues from the sale of these products. Third, we can capitalize on profitability from both the manufacturing and distribution of our products. We plan to use the Infiniti model, coupled with a plan to expand distribution using an affiliated network concept, for the regional, national and international distribution of our products.

Three-year-old Infiniti expects to generate annual sales of approximately $2.8 million in 2001. Infiniti currently boasts an impressive suite of high performance products for roofing and weatherproofing, including components for energy -efficient foam roofing systems, primers, bonding agents, topcoats, and interior and exterior paints. The company will continue to operate autonomously with no impact to its current customer base. Senior executives David S. Ziluck and Jon Palmsciano will continue as operating management for Infiniti. Richard Zegelbone, who was the President and a shareholder of Infiniti, will continue manufacturing Infiniti's products through his company, Tropical Asphalt Products Corporation.

About Urecoats Industries

Urecoats Industries, through its wholly owned subsidiaries, Urecoats International, Inc., Urecoats Technologies, Inc., Urecoats Manufacturing, Inc., Urecoats Distribution, Inc., and Rainguard Roofing Corporation, is a developer, marketer, distributor, and applicator of roofing and waterproofing and other types of sealants and coatings, which include recycled material in their compositions. The Company's flagship product, UrecoatsRSM-100(TM) RUBBER SEALANT MEMBRANE (RSM)(TM), creates a seamless vapor barrier that eliminates air or water intrusion, thereby preventing corrosion and deterioration. The adhesion forces create an uncompromising bond that enhances structural integrity with an ability to flex.

The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including general economic conditions, consumer spending levels, adverse weather conditions and other factors could cause actual results to differ materially from the Company's expectations.