Smokefree Innotec, Inc. (OTC.PK: SFIO)
Worldwide consumption of cigarettes per year stands at 5,500 billion. The smokers market (regular tobacco products and substitutes combined) totals a turnover of US $1.8 trillion p.a. The WHO anticipates the number of smokers worldwide to increase from currently 1.4 billion to 1.6 – 2.0 billion in the medium term, depending on the development of the population. As a minor decline
is to be expected in the western world, due to increasing smoking bans, major increase will occur in developing countries in Africa and the Far East.
Smoking bans and/or limitations are becoming effective on a daily basis in countries all around the world. The question as to how long it will take SFI to penetrate all these market places is answered not only by the marketing strategy implemented but also by the amount of capital and production capacity available.
SFI is actively developing the existing patent applied for ‘smokefree cigarette’ to a marketable product and schedules the launch of a commercial product in the course of 2009.
In order to achieve its goals, SFI has established offices and teams in Shanghai, China, for R&D and manufacturing; in Antwerp, Belgium, for International Marketing and Distribution; and the Main Office in Nashville, Tennessee, USA. The company will need funding to complete R&D (redesign, procedures for mass production); enable its sales management to round off all European Distribution Contracts; afford its marketing staff to initiate in-depth Market Studies and Consumer Tests, create Publicity and Advertising by the beginning of 2009, start Mass Production of electronic parts in China and filters with aroma and nicotine in Europe and support the Launch Markets with adequate Marketing, Promotion and PR spending.
The SFI ‘smokefree cigarette’ is targeted for use by smokers in areas where smoking is restricted such as offices, airplanes, restaurants and other public places. SFI will facilitate those smokers, who do not want to quit and wish to continue smoking in an increasingly restrictive and sometimes hostile public environment.
Based on the percentage of smokers in each market, acceptance of the product by smokers is expected to be at 0.1%-0.5% of the smoking population, with participating smokers adapting to smoking an average of 2 to 3 SFI alternatives in the morning and 2 to 3 SFI filters in the afternoon. Assuming that all tranches of financing be completed as scheduled, SFI has developed a business model that will yield satisfactory sales revenues in the years to come.
The SFI ‘smokeless cigarette provides the smart smoker her or his accustomed delight without smoldering tobacco and therefore without irritating bystanders with second hand smoke. When the smoker starts ‘smoking’ he takes the ‘smokeless cigarette’, casually inserts a filter in the stick or ‘Zig’ and takes her or his first drag. A sensor signals the consequent ‘under- pressure’ to a mini processor unit in the cigarette and a spiral is instantly heating up. Thus the device starts warming up incoming air the moment the smoker starts inhaling. The heated air evaporates the nicotine and aroma at exactly the right temperature within the filter and then the mix is inhaled by the smoker without any harmful or annoying by-products.
The device is an electronic stick (‘Zig”) in which it a filter fits which contains the aroma and the nicotine. From time to time the battery has to be charged with a Zippo-shaped power unit.
The aroma is of major importance as throughout the years alternatives for cigarettes have been launched of which the success became limited by (bad) taste. ‘Taste’ is a matter of smelling (using one’s nose) and tasting (orally) combined. If you can’t smell (or see) a cheese, or wine, it will taste very different. The smell is even more important than the oral sensation as far as the overall impact of the taste in concerned. Since in the case of the SFI ‘smokeless cigarette’ there is absolutely no smoke generated, there is no smelling sensation possible and thus the aroma for our purpose needs to be invigorated to compensate for the lack of ‘nose’.
The feel, the taste and the temperature of the device need to be perfect as Smokefree Innotec wants to make the smart smoker feel at ease with that special feel and taste that he or she recognizes as part of his or her personality.
Implementing new technology is the defining motivation behind their activities. It started with an idea and lead to a product ready to serve a need in the marketplace.Their objective is to protect the non-smoker from the effects of second hand smoke and to enable the smoker to enjoy smoking, even where smoking is prohibited.
In February 2007, a group of engineers, businessmen and financial experts came together in order to initiate the development and introduction of a smokefree Hitech cigarette to the global marketplace. They founded SFI in Nashville, TN with branches in Belgium and China. Fundamental research has been completed and technological development is still taking place. The Belgium branch will be elaborating the conmpany’s marketing and organizing European operations like filter production, packaging and logistics.In China, SFI opened a branch for Research & Development, in Shanghai, under the supervision of Dr. Robert Wang, SFI’s Technical Director, who will also oversee the manufacturing of SFI electronic products in China.
The company expects to start an awareness campaign in the second quarter of 2009 in the Benelux market (the Netherlands and Belgium) with partner Funbox. The Benelux has a dense population in a rather small territory; a relatively high number of potential retail outlets for their product; and well organized logistics and infrastructure for communication with retail. Before the hard launch, the SF Marketing Department will organize together, with Funbox Company, a focus groupprogram, to find out how the consumer will react to various ways of advertising as well as different aromas. Subsequently, Funbox will start selling the smokefree cigarettes in September 2009.
In 2010, SFI smokefree cigarette will be introduced in most countries of the European Union, where markets are with relatively high percentages of smokers will be prioritized: Spain, Italy, Germany speaking territories, France, UK and Scandinavia.By the end of 2010, SFI will also be addressing key markets in Asia: Korea and Japan. These will, like North America, require relatively high budgets for marketing and SFI will schedule more planning for Asia in the course of the year 2010.
Evert Wilbrink, Chairman of the Board of Directors
Mr. Wilbrink studied political and social sciences at Amsterdam University prior to joining CBS Records as press officer. Via EMI Records he became Product Manager at the Bertelsman Music Group, where he was involved in acquiring and managing the Island, Chrysalis and Virgin Records licenses. Mr. Wilbrink was also instrumental in Richard Branson’s first international deal for Virgin records and pivotal in the acquisition of Clive Davis’ Arista Records, now a staple in Sony/BMG’s international operations and valued in 2004 at 3 billion dollars, and in the career development of many international stars, like the Flying Burrito Brothers, Blondie, Roxy Music, Bob Marley, Herman Brood, Mike Oldfield and Cat Stevens. Mr. Wilbrink was also closely involved with the development of BMG’s
Benelux distribution operations and BMG’s international marketing structures and strategies.
Thomas Schroepfer, President and International Sales Manager
Mr. Schroepfer was born in 1957 in Erfurt and grew up in Munich, Germany. After graduating in 1972, Mr. Schroepfer completed his professional education in Sales & Marketing at Hirmer & Co in Munich,
1975. From there, he relocated to the United Kingdom and worked for the sales departments of several stock brokerage companies in London. Upon his return to Munich, he managed sales for Diner’s Club and the Wax Group. In the fall of 1993, Mr. Schroepfer migrated to the U.S. and was granted his Permanent Residence status in 1995. He became Chairman of ITC Inc. and Glow Bench, Inc. in Fort Lauderdale/Florida and worked as a Sales & Marketing Manager for several investment companies Since 2006, he is a member of the Nashville Area Chamber of Commerce and of the Southern Area Business Council for the Nashville Area Chamber of Commerce.
Robert Wang, Director for Research & Development
Mr. Wang is a citizen of Sweden. In recent years, he was President of Shanghai Standard Radio Telecom Co. Ltd, a joint venture of Swedish Standard Radio Telecom AB and local enterprises in Shanghai/China. Additionally, Mr. Wang was a consultant to Swedish companies SAAB Tech AB (CelsiusTech System AB) and Ericsson Business Innovation AB. He held the positions of Marketing Director for China at Swedish Ericsson Telecom AB, and of the CEO and President of Shanghai 42Networks AB, is a software research and development. Mr. Wang has a university degree in physics and information technology from JiaoTong University in Shanghai and a Ph.D. of physics from Stockholm University.
Manfred Bogaert, Vice President and Marketing Director
Mr. Bogaert will start up SFI’s European Operations. After his graduation in Marketing and PR from Ghent/Belgium College, he became management consultant for Metra Proudfoot International and executed several projects in France, the United Kingdom, and Canada for the company. Subsequently, he started his own International Business Center in Antwerp/Belgium which he sold four years later. During the following six years, he worked as Account Director for a number of international advertising agencies. He was, from 1990 to 1992, Sales and PR Manager for the nationwide daily De Gazet Van Antwerpen. In 1992, he was hired by the International Hotel Group Alfa Hotels. His responsibilities were opening and promoting new business throughout Europe, Asia and the Middle East. In 2001, Mr.
Bogaert purchased a hotel in Barcelona/Spain which he operated until 2006. Since then, he has dedicated his work to introducing the smokefree cigarette to the market.
William Whalen, Vice President of Sales and Marketing USA
Mr. Whalen is currently the president and CEO of EBS Worldwide, LLC. Through his wholly-owned corporation, EBS Worldwide, Mr. Whalen owns and manages subsidiaries that cover various industries including tobacco, consumer products, building materials, and horticulture. His companies have successfully launched products into major retailers across North America. Mr. Whalen is an alumnus of Entrepreneurial Management from The Wharton School of Business at the University of Pennsylvania, Widener University, and Centro Bilingue in Cuernavaca Mexico