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Issue# 1514
August 2, 2009

Smokefree Innotec, Inc. Nears Launch of Revolutionary Electronic Cigarette

NASHVILLE, Tenn.–(BUSINESS WIRE)–Smokefree Innotec, Inc. today provided updated information on the launch of its cigarette alternative that operates differently than any other e-cigarette in the market. Thomas Schroepfer, President of Smokefree Innotec, stated, “Our new product will be the world’s first completely smoke-free, ‘hi-tech’ cigarette. Whereas the competitors’ products yield a smoky vapor and have a light at the tip end imitating the fire in a traditional cigarette, inhaling our ‘Real Smoke-free’ e-cigarette yields exclusively nicotine and aroma.” Mr. Schroepfer went on to say, “The most significant distinction between the Real Smoke-free e-cigarette and its competitors is that the Smokefree Innotec product does not utilize cartridges filled with transponder substances and nicotine. We use a slightly adapted, yet traditional, cigarette filter with nicotine interspersed through nanotechnology – enough to emulate the satisfaction of a traditional cigarette, but in a much lower dosage – and produced in Germany subject to rigid quality-control standards.”

The Real Smoke-free “hi-tech cigarette” will be introduced in August in test markets in the USA, Germany and Belgium, and will become widely available in a rollout beginning in September in the Netherlands, Belgium, Germany, South Africa, New Zealand, Brazil, Australia, Greece and Argentina followed by worldwide distribution in 2010.
About Smokefree Innotec, Inc.
Smokefree Innotec, Inc. is in the business of designing, developing, manufacturing and marketing a hi-tech, smokeless tobacco innovation. Our patent-pending, odorless cigarette-style electronic device utilizes a liquefied, vaporizable depot of a raw, unmanipulated extract of tobacco. Smokefree Innotec’s products are designed to protect the nonsmoker from secondhand smoke and all its effects while providing the smoker a way to enjoy a smoke-free cigarette anywhere, including places where smoking is prohibited. Further, our products will allow the smoker to enjoy smoking while not having to worry about the dangers and ill effects of regular cigarette smoking.

SMOKEFREE INNOTEC, INC.
Stock Symbol :: SFIO E-Mail this Article to a Friend
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SMOKEFREE INNOTEC, INC. (SFIO) Smokefree Innotec, Inc. is in the business of designing, developing, manufacturing and marketing a hi-tech, smokeless, nicotine delivery cigarette-like electronic device which is completely smoke-free and tobacco-free.
Recent Price$.065
Market Capitalization$24.05M
Est Float8.7M
Outstanding Shares370M
ExchangeOTC.PK

Smokefree Innotec, Inc.
257 Wallace Rd.
Nashville, TN 37211

Phone: 615-866-4358
Fax: 615-866-4358
http://www.rauchless.com Company Highlights

· Smoke Free Innotec Inc. “Smokfree Cigarette” is targeted for use by smokers in smoking restricted areas like offices, airplanes, restaurants, other public places, in homes, around children and other unhealthy areas.

Similar Companies in Sector

· Star Scientific, Inc. (Star Scientific) is a tobacco company that focuses on reducing toxins in tobacco leaf and tobacco smoke. The Company is primarily engaged in the development, implementation and licensing of its technology for the curing of tobacco to prevent the formation of carcinogenic toxins present in tobacco and tobacco smoke, primarily the tobacco-specific nitrosamines (TSNAs); the manufacture, sales, marketing and development of very low-TSNA dissolvable smokeless tobacco products, including ARIVA compressed powdered tobacco cigalett pieces, and STONEWALL Hard Snuff, and the licensing of trademarks for certain of its cigarette brands. NASDAQ:STSI Recent Price: $4.35
· UST Inc. through its direct and indirect subsidiaries is engaged in the manufacturing and marketing of consumer products. The Company’s segments include Smokeless Tobacco Products, Wine and All Other Operations. The Smokeless Tobacco Products segment manufactures and markets smokeless tobacco products. NYSE:UST Recent Price: $69.46

Current Projects
Smokefree Innotec, Inc. Addresses FDA Concerns About Electronic Cigarettes
Smokefree Innotec, Inc issued a statement referring to articles in USA Today and The New York Times of Wednesday, July 22, and Thursday, July 23rd , regarding the FDA taking aim at electronic cigarettes. The national dailies stated that tests show that certain e-cigarettes contain “known carcinogens and toxic chemicals,” including diethylene-glycol (an ingredient used in antifreeze, printing ink, brake fluid and glue) and nitrosamine (which is used in rubber products, the tobacco industry, and – less concentrated – in beer and fish-products). Smokefree Innotec, Inc. Seeks Distribution Pact for Australia and New Zealand
Smokefree Innotec, Inc. today announced that it has entered into a Letter of Intent for additional distribution of its product, the world’s first “totally smoke-free cigarette.” The Letter of Intent was made with Bryant West PTY Ltd. for marketing and distribution in Australia and New Zealand. Brendan Jackson of Bryant West stated, “We are impressed with Smokefree Innotec’s smoke-free device and will begin distribution as soon as the Company rolls out its product. It is our intention to make sure everybody in our territory is fully aware of this excellent alternative for avid smokers

Company Overview
Smokefree Innotec, Inc. (OTC.PK: SFIO)
Smoke Free Innotec Inc. “Smokfree Cigarette” is targeted for use by smokers in smoking restricted areas like offices, airplanes, restaurants, other public places, in homes, around children and other unhealthy areas. SFI will facilitate those smokers, who do not want to quit, and want to continue smoking in an increasingly restrictive and sometimes hostile public environment. In any environment where second hand smoke is a problem. There is absolutely no smoke generated. The smokeless cigarette is a one-time cost and the disposable filters would be approximately same price as a pack of cigarettes.

Technical Aspects and Patent Application
When the smoker starts “smoking” he/she takes the smokeless cigarette and inserts a filter, which contains the aroma and the nicotine, and then takes the first drag. The sensor signals the consequent ‘under-pressure’ to a mini processor unit in the cigarette, which heats up the 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 giving the satisfaction of taste (generated by the smell) and the desired effect of nicotine to the body. The built-in sensor distinguishes whether the smoker sucks on the filter or not. The pressure triggers the intensive heating up of the coil to evaporate the nicotine and aroma in the filter. The key to this process is the instant heating of the air, which is patentable.

A Swiss and European patent attorney stated in a letter to the Company, “I herewith confirm that we have filed on 10 May 2008 the international patent application successfully with the International Bureau of WIPO in Geneva ”. Worldwide patent protection is the Company’s target.

Organizational Structure
SFI is headquartered in Nashville, Tennessee USA, but has established offices and teams in Shanghai, China for R & D and manufacturing; Zurich, Switzerland to coordinate the German speaking territories; Antwerp , Belgium for international marketing and distribution.

Market Size and Marketing Strategy

Worldwide annual consumption of cigarettes stands at 5.5 trillion. In the US the dollar amount is $1.8 trillion per annum. There is a minor decline in the western world, but smoking is increasing in the developing countries, especially in Africa, China and the other countries in the Far East Contracts have already been put in place with retail distribution companies in pilot markets in Europe . After the pilot test marketing, the smokeless cigarette will be introduced in most countries in the European Union including Spain , Italy , Germany , France , United Kingdom and Scandinavia Following the European Union, key markets will be entered in the Americas , China , Korea and Japan SFI intends to enter into cooperation with an international advertising agency with respect to the looks of its packaging, advertising and point of sale presentations.

Funding Requested and Source
The members of management and friends of management have funded the development of the product over the last few years to the tune of $2,500,000.

Now that the R & D has been completed, SFI is seeking $8,000,000 during 2009 to launch the manufacturing and first phase marketing with the first tranche of $2,500,000 in the second quarter followed by $5,500,000 in the third quarter. Another $8,000,000 is requested for 2010 to support the second phase marketing program.

An investment banker, Kings Pointe Capital, Inc, located in California has been hired to raise the required funds by merging SFI into a public shell and obtaining the investment capital through the selling of public stock under a private placement program. Kings Pointe working with Dallas Jones Associates has the funding commitment from their investment sources once SFI is a public company, which is planned to be accomplished by the end of 2008.

Electronic Cigarette Parts
(Three parts: EC body, filter and lighter looking charger)

EC Body
A battery inside the EC body may be recharged before the first use, even it has some voltage volume when it is from factory. How to charge it, please read section USAGE.

Filter
The filter contains the right amount of nicotine and aroma which is vaporized by the heated air from the coil as the user sucks on the filter.

Charger
Charger is used to charge EC battery. It combines a 220V AC external adapter, a USB cable and a charger. Thanks to a built-in 600mAh Li-Polymer battery in the charger, the charger ensures it can directly charge to EC battery in about 3 or 4 times without external adapter. When LEDs flicker alternately between red and green, it indicates that the charger battery itself needs to be recharged. This can be done by an external adapter or computer via USB cable.

Usage of Charger to Charge EC
Open the charger, put EC (without filter) into it and close charger cover, it begins to charge EC.

Charging the internal Charger Battery
If LEDs flickering alternately between red and green, which means that charger battery voltage is lower. So, an adapter or a computer will be used to charge the charger battery.

Connecting charger to external power supplier
There are two ways to connect charger to external power supplier: A 220V AC adapter to the charger; or a USB cable to computer port.
Note: USB cable is for connecting charger to adapter or to computer. USB cable is one side as standard port to adapter or to computer, and MINI-USB port for other side to charger.
Product Diagram

Leadership
Thomas Schroepfer, CEO and President
Mr. Schroepfer completed his professional education in Sales & Marketing in Hirmer & Co in Munich in 1975. He relocated in the United Kingdom and worked in the sales departments for several stock brokerage companies in London. Mr. Schroepfer migrated to the US and was granted his permanent residence status in 1995. He became Chairman of ITC, Inc. and Glow Bench, Inc. in Fort Lauderdale Florida. Since2006, he has been a member of the Nashville Area Chamber of Commerce and working on thesmokeless cigarettes project.
Robert Wang, Director of R & D and Manufacturing
Mr. Wang was president of Shanghai Standard Radio Telecom Co, a joint venture of
Swedish Standard Radio Telecom AB and local enterprises in Shanghai , China Mr. Wang was also a consultant to Swedish companies SAAB and Ericsson Business Innovation. He held positions of marketing director for China and Swedish Ericsson and CEO and president of Shanghai 42Networks AB, a software research and development company. Mr. Wang has a university degree in physics and information technology from Jiao Tong University in Shanghai and a PhD. in physics from Stockholm University
Manfred Bogaert, Vice President and Marketing Director
Mr. Bogaert has a degree 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. He then started his own international business center in Antwerp, Belgium, which he later sold. He also hasaccount director experience for a number of international advertising agencies. In 1992, he was hired by the International Hotel Group Alfa Hotels. Since 2006 he has dedicated his work to introducing the smokeless cigarette to the market.
William Whalen , Vice President of Sales and Marketing
Mr. Whalen is currently the president and CEO of EBS Worldwide, LLC. Through his wholly owned corporation, EBS Worldwide, he owns and manages subsidiaries that cover various industries including tobacco, consumer products, building materials, and horticulture. From the mid 90s until the early 2000s, Mr. Whalen was the Division Manger and Marketing Director for multi-national horticultural distribution company. 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

Market Snapshot

News
Updated Featured report on OTCReporter.com SFIO
July 31, 2009
Smokefree Innotec, Inc. Nears Launch of Revolutionary Electronic Cigarette
July 31, 2009
Smokefree Innotec, Inc. Holds International Launch Conference
June 17, 2009
Smokefree Innotec, Inc. Products will Utilize Filters which Meet European and US Safety Recommendations
June 16, 2009
Smokefree Innotec Strengthens Position in Europe
June 3, 2009
Smokefree Innotec in Distribution Pact With SENCO G.C.S.
June 1, 2009

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