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H2H recently inked its first licensing agreement with a major hardwood plywood manufacturer. They are converting over to our formaldehyde free adhesive at a rate that should have 80% of their production converted by the end of 2008. Royalty income started in February 2008.

We have run several full scale line trials at both particleboard and medium density fiberboard plants with successful results and are currently in negotiations for licensing agreements. We are also in final negotiations with one of the largest wood flooring manufacturers in North America to supply adhesive for their engineered wood flooring products. H2H is also negotiating a licensing agreement with one of the largest OSB manufacturers. All previous trial have been successful and we are actually exceeding performance standards set by their current adhesive.

CARB Emissions Rule
Following six years of cooperative work between agency staff and industry, the California Air Resource Board has finalized the toughest production standard in the world for formaldehyde emissions from composite wood products. The expression, ”as goes California so goes the nation” is relevant here. It is inconvenient for the manufacturing-distribution system to maintain separate product inventories and track specifically where products go; thus, companies tend to manufacture toward the most stringent requirements.

The CARB regulation applies to all panels made for sale or use in California. Any manufacture, foreign or domestic, producing products for sale in California will be governed by the new rule. The first stage of its implementation is January 1, 2009. This is excellent news for HRT and H2H Innovations and solidifies our belief that we are “in the right place”.