Overview

Smokefree Innotec, Inc. is in the business of designing, developing, manufacturing and marketing hi-tech, nicotine and non-nicotine cigarette-like delivery devices which are completely smoke and vapor-free and tobacco-free. Smokefree Innotec’s products are designed to protect the non-smoker from second hand smoke and all its effects while providing the smoker a way to enjoy a smoke-free cigarette anywhere, including places where smoking tobacco or similar substances is prohibited. Further, the Company's products will allow the smoker to enjoy smoking either nicotine or flavored non-nicotine cigarettes while not having to worry about the offensive dangers and ill effects of regular cigarette smoking.

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Investment Highlights

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Profile

Cigarette smoke. It is the topic of conversation from kitchen tables to Congress for reasons varying from the true ingredients in the tobacco to the secondhand smoke and its effects. With the rising costs nationwide (a pack of brand name cigarettes in New York City costs nearly $10) and the increased level of awareness of the unhealthy physical consequences to both the smoker and the nonsmoker alike, more and more people are trying to stop smoking traditional cigarettes and looking for alternatives to still provide the pleasure of smoking they desire.

It has become common knowledge and supported by a substantial body of evidence built up over the last 50 years that smoking is a major cause of illness and premature death. In recent years, several reports have also concluded that exposure to environmental tobacco smoke (ETS) can cause lung cancer in people who have never smoked. Back in 1992, the Environmental Protection Agency (EPA) classified ETS as a known human carcinogen and estimated that ETS exposure is responsible for about 3000 lung cancer deaths each year among adult nonsmokers. It has also been proven that there are about 60 cancer-causing chemicals and 4000 poisonous chemicals in cigarette smoke.

In his opening statement at the April 14, 1994 Hearing on the Regulation of Tobacco Products House Committee on Energy and Commerce Subcommittee on Health and the Environment, Honorable Henry A. Waxman, Chairman, stated,

“Nearly a half million Americans die every year as a result of tobacco. This is an astounding, almost incomprehensible statistic. Imagine our Nation's outrage if two fully loaded jumbo jets crashed each day, killing all aboard. Yet that is the same number of Americans that cigarettes kill every 24 hours. Sadly, this deadly habit begins with our kids. Each day 3,000 children will begin smoking. In many cases they become hooked quickly and develop a life-long addiction that is nearly impossible to break. For the past 30 years a series of surgeons general have issued comprehensive reports outlining the dangers these children will eventually face. Lung cancer, heart disease, emphysema, bladder cancer, and stroke are only some of the diseases caused by tobacco causes. And now we know that kids will face a serious health threat even if they don't smoke. Environmental tobacco smoke is a Class A carcinogen, and it sickens more than 1 million kids every year. In fact, five former surgeons general of the United States testified before this subcommittee this year, that the most important legislation in disease prevention that we could enact would be restrictions on smoking in public places.”

Even though this was nearly 20 years ago, the ill effects of the chemicals in cigarette smoke have been gaining more infamy and governments across the country have been enacting more and more laws prohibiting smoking.

While the United States Congress has not attempted to enact any nationwide federal smoking ban, smoking bans in the United States have been addressed entirely through state and local criminal and occupational safety and health laws. Smoking laws vary widely throughout the United States. Some places in the United States do not generally regulate smoking at all, some ban smoking in certain areas and not others, and some ban smoking nearly everywhere, even in outdoor areas (no state bans smoking in all public outdoor areas, but some local jurisdictions do). As of October 2009, according to the American Nonsmokers' Rights Foundation, 71% of the U.S. population lives under a ban on smoking in workplaces, and/or restaurants and/or bars through state, commonwealth, or local law. A smoking ban (either state, county, or local) has been enacted covering all bars and restaurants in nearly each of the 60 most populated cities in the United States.

As of July 2010, 26 states have enacted statewide bans on smoking in all enclosed public places, including bars and restaurants. While there are a variety of exemptions, casinos and cigar bars for example, in some states the surge to ban smoking in public places is clearly evident. In fact, there are only 11 states that have not enacted some sort of statewide smoking ban, but these states still have regulations regarding designated smoking areas and posting of warning signage.

In the United States, it is estimated that more than 20% of the population are smokers and it is estimated that there are 1.4 billion smokers worldwide. Estimates have the total number of smokers worldwide to reach 1.6 billion by the year 2025. What seems evident is that smoking is going to continue on our planet, but the battle will wage on with regards to overall health effects from the chemicals in the smoke and certainly the protection of bystanders from the dangers of secondhand smoke.

Luckily, there are viable alternatives. Smokefree Innotec, Inc. (Pink Sheets:SFIO) is the leader in providing a solution to the problem of “smoking without the smoke.” SFIO develops and markets a hi-tech electronic smokeless cigarette which is completely smoke-free and tobacco-free. Smokefee’s products are designed to protect the non-smoker from second hand smoke and all its effects while providing the smoker a way to enjoy smoking anywhere, including places where smoking is prohibited. Furthermore, it allows the smoker to enjoy smoking while not having to worry about the dangers and ill effects of regular cigarette consumption.

The SFI ‘smokeless cigarettes’ provide the smart smoker her or his accustomed delight without smoldering tobacco and therefore without irritating bystanders with second hand smoke.

The proprietary design works quite simply and effectively. When the smoker starts “smoking”, he takes the “smokeless cigarette”, casually inserts a filter in the electronic 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. Occasionally, the electronic Zig needs charging which is accomplished by inserting the Zig into a Zippo-shaped power unit. 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 subsequent smoke exhalation.

The “cigarette” has the same look and size of a standard cigarette and also overcomes the obstacle regarding aroma and taste that has limited the success of attempts by other companies to develop a product of this nature. While a standard cigarette is typically smoked in 20 puffs, the “smokeless cigarette” is presently good for more than 100 puffs with SFIO refining the lifespan presently. The Company expects to meet its goal of 200 puffs in the near future.

The market capacity for the technology is vast, to say the least, as detailed in previous paragraphs. Smokefree intends to capitalize on the many factors that are driving smokers to go smokeless and not only avoid the chemicals from cigarette smoke themselves, but also follow the many regulations that are being enforced nationally and internationally without giving up their pleasure of smoking where and when they desire. This includes the military and government as laws are being passed regularly prohibiting smoking and tobacco use on or in a variety of government-owned properties.

Also noteworthy is the limited amount of competition in the industry. While several companies produce products along similar lines, competitors do not have products that are smoke and vapor free while still providing the nicotine. In fact, there are only 3 patented technologies in the industry, of which Smokefree owns two of them.

The international market is already producing sales for SFIO. As recently announced on June 28th, the Company is shipping its first order of 1500 cartons (each carton contains 10 packs) of Smokefree products to Conway Distribution in Belgium. Conway is the biggest distributor in smokers’ product in Belgium, the Netherlands and Germany. Conway controls more than 6,000 vending machines in Belgium alone and 140,000 locations total in Europe. Just over a month ago, SFIO released information on access to new European production and distribution facilities that will be used to facilitate international growth. The original order is for $70,000 and is only scratching the surface of what is possible with the European giant.

The business strategy of Smokefree is methodical and expansive. Joint Venture partners have been signed with NASCO Specialty Brands, LLC and Cannabis Sciences, Inc. (OTCBB:CBIS) to expand the potential products from SFIO technologies and develop new national and international branding and distribution of their respective company products.

Led by Chairman and CEO, Ralph Angiuoli, who is the former President of R. J. Reynolds Tobacco, NASCO has already established a footprint worldwide in the tobacco-free cigarette product industry and is sold in the largest grocery store chain in Europe. The Joint Venture has been established to create additional new products dispensing nicotine employing SFI’s nanotechnology and NASCO’s packaging and manufacturing capabilities. The Companies are working on several projects including a “Wellness Stick” which is being manufactured in a revolutionary way with includes no nicotine, but a “caffeine-like” ingredient to provide pleasure to the “smoker” in a nicotine-free fashion.

The Joint Venture with Cannabis Sciences was just released late last week (August 12th). This relationship has been established to develop and market several high-tech smoke-free vaporized medical cannabis pharmaceutical products. In its simplest sense, the nicotine in the Smokefree filter design will be replaced with THC from Cannabis. At a lower cost and in a “cleaner” fashion, smokers of medical marijuana will be able to achieve the desired effects without any smoke being released. Again, the benefits of this technology will be appreciated by all as no toxic chemicals will be released from lighters, the cigarette (or “joint” if you will) and will allow the smoking of the medical marijuana in any location that typically would not permit it.

From a technical standpoint, the SFIO chart appears to be making a bottom at $.005. While it has been in a long term downtrend, it has touched $.005 each of the last three days and recovered to close each day with a long lower shadow. Today, volume picked up on the bounce off $.005 further strengthening the idea of a possible bottom. Overall, the chart appears to be trying to flatten which is indicative of the possibility of selling stopping as it does not want to easily drop lower. Accompanying this flattening is a positive divergence of the MACD with the price per share (PPS). Technical traders often look to the commonly used MACD as a sign of a long term reversal.

Other lower indicators are also giving hints of a reversal as the Percentage Price Oscillator (PPO) is trending towards zero and the Commodity Channel Index (CCI) is trending upward and looking to break through -100. In addition, the Relative Strength Index (RSI) is seeing a curl in the shorter terms RSI’s as the 7 day is moving north and looking to break through the longer RSI’s of the 14 and 21. Some of the key points to the SFIO chart are found in the candles. The indicators may be in nice positions, but they still have key bullish benchmarks to break and this will only be accomplished by the PPS holding support levels and pushing hard at key resistance levels. The bottom support level at $.005 must hold and a push north to test staggered levels of resistance is important. The resistance appears to be stronger with each step north. It starts slightly at .006 (bid and ask today actually both closed above this level as the stock closed at $.006). Resistance will pick up slightly at $.007 and $.008 as that is an area of both the 20dma and 50dma and previous resistance. Further up, the resistance will stiffen at $.009 and certainly $.01. From a longer term standpoint, if these upper levels of resistance can be reached (and produce significant gains of over 50%), a retrace to touch the top side of the moving averages should produce support and create a new higher low indicating that the SFIO chart has indeed found a bottom at these levels.

It all starts with holding the base, which is imperative because there is no solid support below that level. Should the support level of $0.005 be breached significantly, it may mean that prices are continuing on their trend lower and stop losses would be encouraged just below that level. As always, these are only our interpretations of the SFIO stock chart and we encourage all investors to do their own due diligence and consult with a financial advisor prior to making any investment decisions.

At a current very affordable price of $.006, SFIO may be ready to turn the corner in the near future. They are set apart from many developmental companies as they already have a product that is producing revenues. They are not localized as international sales are happening while only just now beginning to tap into the true breadth of the market capacity. Through Joint Ventures, they are “forward-looking” with respect to the best way to continue expansion and tap into the resources of well established companies. Smokefree and its partners are looking to capitalize on an international trend that has been gaining momentum to prohibit cigarette smoke in more and more areas and venues. As their presence continues to be felt around the world, the capacity for large gains may be picked up by investors and traders as this may potentially be a bottom price for SFIO. With only approximately 39 million shares in the float, the price can move very easily on little volume as well. We at AllPennyStocks.com are also feeling the momentum turn, and look with interest to SFIO and the investment opportunity presented and for the reasons above, decided that SFIO met our criteria to be the next U.S. Company Spotlight.

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Recent News and Press Releases

Smokefree Innotec Confirms Joint Venture with Cannabis Science, Examines Potential of Medical Cannabis Market
Business Wire (Wed. Aug 18)

Cannabis Science Signs Joint Venture With Smokefree Innotec Inc. to Develop High-Tech Smoke-Free Vaporized Medical Cannabis Products
GlobeNewswire (Thu, Aug 12)

Smokefree Innotec Announces Joint Venture with Colorado Based Laboratories
Business Wire (Tue, Aug 3)

Smokefree Innotec Announces Access to New European Production and Distribution Facilities
Business Wire (Tue, Jul 20)

Smokefree Shipping Cartons to Begin Filling Conway's 140,000 Europe Locations
Business Wire (Mon, Jun 28)

Smokefree Innotec Relocates Corporate Headquarters to Southern California
Business Wire (Thu, Jun 17)

NASCO Teams with Smokefree Innotec in Joint Venture for International Distribution
Business Wire (Mon, Jun 14)

Smokefree Innotec, Inc. Mourning Loss of South African Partner; Expresses Confidence in Continuing Achievements of the Trifactor Distribution and Agency Team
Marketwire (Thu, Apr 29)

Smokefree Innotec Begins Drawing on $417,000 Line of Credit to Fund Distributors
Marketwire (Fri, Apr 16)

Smokefree Innotec, Inc. Provides Smokefree Alternatives to the Navy
Marketwire (Tue, Apr 6)

Smokefree Innotec, Inc. Comments on U.S. Navy Submarine Smoking Ban Under Consideration
Marketwire (Tue, Mar 30)

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Management

Evert Wilbrink - Chairman of the Board of Directors

Evert Wilbrink is Chairman of the Board of Directors as well as International Business Manager for the SFI Group of Companies. Wilbrink was born in 1948 in Alkmaar, the Netherlands, and is living in Nashville with his wife Deborah.

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. 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.

Wilbrink was also closely involved with the development of BMG’s Benelux distribution operations and BMG’s international marketing structures and strategies.

Later Wilbrink was hired as Managing Director of Tomato Records/The Music Works; held the Presidency at King Biscuit Flower Hour where he turned an operating loss into a profit; and at the start of the new millennium helmed his own Corazong Music Management. Throughout his career Wilbrink has doubled as a writer for various magazines (including the biggest Dutch weekly Veronica, of which he was managing editor).

Wilbrink obtained significant experience in setting up international licensing agreements while with the Bertelsman Group.

Thomas Schroepfer - President and International Sales Manager

Thomas Schroepfer is President and International Sales Manager for the SFI Group. 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. Mr. Schroepfer was recognized for outstanding service in 1994 by President Bill Clinton and received the City of Fort Lauderdale Community Award in 2003 from the hands of Sheriff K. Jenne. 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 and Development

Robert Wang, born in 1958, 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. Robert 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 - VP and Marketing Director

Manfred Bogaert is VP and Marketing Director of SFI . He 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

William Whalen, Vice President of Sales and Marketing USA. Born 1973, 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.

From the mid 90s until the early 2000s, Mr. Whalen was the Division Manger and Marketing Director for multi-national horticultural distribution company.

In his career, Mr. Whalen has been responsible for new product development, conducted national and international product launches, chain store promotions and programs, e-commerce initiatives, creation of catalogs and brochures, licensing and sales force training. Mr. Whalen is an expert on identifying market trends and finding products to satisfy or create demand from global sources.

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.

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Contact

Corporate Contact:

Smokefree Innotec, Inc.
15615 Alton Parkway
Irvine, CA 92618

Investor Relations: Kim Carroll
+1.949.813.5729

Sales Relations: Ken Fuentes
+1.805.495.7480

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FORWARD LOOKING STATEMENTS

This report includes forward-looking statements that reflect Smokefree Innotec, Inc. current expectations about its future results, performance, prospects and opportunities. Smokefree Innotec, Inc. has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Smokefree Innotec, Inc.'s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company's growth expectations and ongoing funding requirements, and specifically, the Company's growth prospects with scalable customers, and those outlined above. Other risks include the Company's limited operating history, the Company's history of operating losses, consumers' acceptance, the Company's use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company's securities, the possible volatility of the Company's stock price, the concentration of ownership, and the potential fluctuation in the Company's operating results.

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Disclaimer

AllPennyStocks.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. This is an advertisement for Smokefree Innotec, Inc. The purpose of this advertisement, like any advertising, is to provide coverage and awareness for the company. The information provided in this advertisement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.

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