August 3, 2009

SMOKEFREE INNOTEC, INC.
Stock Symbol :: 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.

Smokefree Innotec, Inc.

257 Wallace Rd.

Nashville, TN 37211

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

·


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

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 23^rd
,
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

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

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