Eco-Safe Systems USA, Inc. (ESFS-OTCPK)

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April 3, 2009 Issue

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Eco-Safe Systems Is Providing Supermarkets And Restaurants With A Safe And Organic, FDA Approved Way To Clean And Better Preserve Their Meats, Poultry, Fish, Fruits And Vegetables Using Ozone, Which Kills All Known Pathogens Including E. coli And Salmonella

Company Profile:

Eco-Safe Systems, based in Los Angeles, is the manufacturer of patent pending water treatment and water reclamation systems. Their technologies produce ozonated water for food disinfection at significantly less maintenance cost and greater energy savings than our competitors in a completely green and organic manner. They currently offer supermarkets and restaurants a cost effective way to safely extend the shelf life of meat, poultry, seafood, fruits and vegetables. Additionally, Eco-Safe's Natural-Clean Ozone laundry system can help commercial laundries eliminate most chemicals and save money on heating and water costs while extending the life of fabrics. Eco-Safe's acquisition of Ozonetics, an ozone disinfection company based Albuquerque, NM, was completed in September 2008 with critical sanitation applications to the enormous dairy industry. Other expansion plans include distribution of water purification and desalinization products.

Michael Elliot, Chairman, Chief Executive Officer, and President

Michael Elliot has had an extensive and distinguished career in a variety of industries. He began in the Entertainment Industry as a teenager, and worked actively in film and television for over 40 years. Michael still maintains active relationships with film industry personnel throughout the world. Since 1983, he has focused on Marketing, where he has been exceptionally successful. In that year, Michael was employed as Marketing Director for the Rockley Resort on the Island of Barbados, where he helped them realize an increase of 700% in monthly gross sales. Michael was the first person to adapt the concept of timesharing to hotels, rather than condos. His company named Hideaway Beach Clubs was the first company to market 5 Star Hotels on the ocean throughout the Caribbean and Mexico. This company generated an extra $45M for the hotels at each of the five locations. Since then, Michael has successfully marketed resorts under the trade names of Rams Hill Marketing Group, Tradewinds Marketing, Interval Investments, and Global Marketing Enterprises, Inc. For the past five years, Michael has been instrumental in developing the products and marketing plan for Eco-Safe, which he co-founded with Mike McCluney. Michael is co-inventor on all provisional patents held by Eco-Safe.

Industrial Goods
Water Treatment
(ESFS-OTCPK)

Eco-Safe Systems USA, Inc.
19528 Ventura Blvd.
Tarzana, CA 91356
Phone: 800-649-1434

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – April 3, 2009

CEOCFO: Mr. Elliot, what was your vision when you founded Eco-Safe, and where are you today?
Mr. Elliot: “We wanted to come up with something that cleaned water. We started off cleaning dye houses, because dye houses were being charged 125% a month of their water bill to dump the water into the sewer. Let’s say your bill was $10,000 for water; they charge them $12,500 to dump the water in the sewer. When I first got the idea to do this I was talking to people about ozone and got a few people to try and test it. What I found was we were able to make it drinkable, better than tap water. The total undissolved solids in tap water was around 400, but we were able to get the water down to 15 total undissolved solids. That is where we started and that was about eight years ago. Then the FDA approved the use of ozone on food, and we started testing. Ozone is made of oxygen, so it is absolutely organic. It was first used in the 1890s in France. It has taken about 100 years for the FDA to approve its use on food. It is totally organic and totally clean and clear; a wonderful substance. After lightning, when you smell the air, you will notice that it is fresher. This is because ozone is made by lightning; however, we do it electronically.”

CEOCFO: What is it that you are actually doing to the water or to the food?

Mr. Elliot: “Basically we make the ozone from oxygen, which we insert into the water system of a supermarket or restaurant. It is not harmful to anyone who touches it. If you rinse your hands with ozone, it actually disinfects your hands, so you don’t even need soap. We put the ozone into the water and then the supermarket or restaurant working with meat and fish packing, if they rinse off their products and their cutting boards, it just kills all the bacteria. Ozone kills more than 200 pathogens, including salmonella and E. coli. It is an organic way of disinfecting the surface.”

CEOCFO: Are there government requirements to use disinfectants in the cleaning and cutting boards or is this voluntary?
Mr. Elliot: “Everyone is required to use disinfectants. They mostly use chlorine or other substances that are really harmful to human beings and animals, where ozone is not. Not only does the federal government approve this, we are also NSF International (National Sanitation Foundation) approved; we get county approvals. The employees of the county asked us to give them our training manual, so we sent them back, ‘As long as the employees know how to turn the water off and on, they are fully trained.’ Most people don’t know that we are even using ozone except that it smells better in the supermarket and restaurant and the fish and meat packing plants because the ozone kills the bacteria so it kills all the odors, and they use it to put down their drains because it sanitizes the drains. Actually it is quite helpful; it doesn’t hurt people at all.”

CEOCFO: Who is using your products now?

Mr. Elliot: “Seafood City and about forty or fifty clients are using our ozone system. More than half a dozen brand-name companies are testing it. I can’t mention their names, but they are all recognizable names.”

CEOCFO: What is the cost comparative between the more traditional ways and EcoSafe?

Mr. Elliot: “It actually saves supermarkets and restaurants money by using ozone, because there is a certain amount of labor saving and clean-up. There is a certain amount of savings in the chemical refills; there is a certain amount savings in shrinkage for example. Most of the savings is in shrinkage. Normally in supermarkets the shrinkage is very large, it is larger than the profit margin. What happens with ozone is it actually saves them about 25% of their total shrinkage, which increases their profit margin. It is beneficial. For example, in one supermarket, it costs them $500 for the three departments to lease the unit, but it saves them up to $12,000 a month. Therefore, we are offering a very cost effective product.”

CEOCFO: How do you reach your potential customers; do people know about you today?

Mr. Elliot: “People refer us. We have four Ph.D.s on board and people refer us. We have nine salespeople at this moment in five states. We are in Hawaii, California, Nevada, Arizona, and Alaska. Most of the people we call up, and give them a free demonstration. We put in a unit, which doesn’t cost them anything, and we let them experience the savings. So that is how we promote our business. We have five products. They also now have these ‘Pet Hotels’ and we are starting to put them in there. We have a new product called, Ozone Safe Pet and they love it because this place is small and with the ozone they sprinkle the ozone water on the problem areas and they kill all the bacteria and reduce the cost of all the chemicals that they have to use. It is actually healthy for the pets because it is made of oxygen. We have our products in supermarkets, restaurants, and some restaurants chains are seriously looking at it. We also have a home unit for larger homes called Flo/Pure, where every tap in the house becomes better than bottled-water quality. We have some very interesting products.”

CEOCFO: What is the protection on your technology?

Mr. Elliot: “We have six patents pending. We build our own units; we design, install and service them.”

CEOCFO: What are the plans to expand beyond your current geographic footprint?

Mr. Elliot: “We are working with some large green investment companies. We are trying to raise upwards of $10 million to go into all fifty states. I would love to be in every city in the US. The product is very good; it is not something that is harmful to anyone. It is very simple to train people to install them. Since five years ago when we first started selling we spent about five and a half years in research and development. We also just sold our Laundry Unit to the Raffles L-Ermitage Hotels, which is a 5-Star hotel in Beverly Hills, California. We also sold our Laundry Unit to the Army about eight years ago; they love it and have it serviced every year. They love using it and it saves them money. When you have a laundry unit you don’t have to use hot water and you don’t have to use chemicals on your sheets and pillow cases and uniforms. In addition, linens usually last 200% longer staying fresh and beautiful.”

CEOCFO: What is the competitive landscape?

Mr. Elliot: “It is mostly the chemical industry that competes with us. When we go in, they lose customers. There are some large chemical companies, but the other ozone companies really are not large in comparison to us. There is no one in the ozone industry doing exactly what we are doing. They may be doing it for the farmers and other sections of the industry.”

CEOCFO: Because you have so many different products, how do you stay focused as a company?
Mr. Elliot: “That has been our major issue, to keep our blinders on because everyone wants us to do something different. We find our number-one industry is food disinfection. For example we have a producer of poultry and they process 125 thousands chickens a day and they swear by our technology.”

CEOCFO: It sounds like a no-brainer!

Mr. Elliot: “Your right, I think that within a year or two we are going to get sort of suddenly discovered.”

CEOCFO: Why should potential investors be paying attention?

Mr. Elliot: “When I started this company I was the only investor, and until we went public in 2006, I was the only investor. I didn’t want people to think of us as a start-up. Now we are established, and we have a footprint, but it is still a small company in comparison. I actually believe we are going to become a billion-dollar company, and that is my goal. I believe when people see us now, we are in a seven, eight cents or somewhere in there, I believe we are going to be in the dollars fairly soon. I would suggest people look at our website and look at the technology. They should also consider where the future is, because President Obama’s administration is talking about the next investment that they feel is going to get us out of the economic hole is going to be everything that is green and clean. I believe that. That is what we have established ourselves as, and that is what we are. I think that is the future.”

CEOCFO: What should people reading about Eco-Safe Systems remember most?

Mr. Elliot: “It is good for people, it is green, it is clean, and it is non-harmful. For example, when refilling chemicals there is a danger of spilling on people and they have to wear special protective clothing. However, with Eco-Safe, using ozone you don’t need any of that. Therefore, they should remember that Eco-Safe is green and clean.”

disclaimers

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“Basically we make the ozone from oxygen, which we insert into the water system of a supermarket or restaurant. It is not harmful to anyone who touches it. If you rinse your hands with ozone, it actually disinfects your hands, so you don’t even need soap. We put the ozone into the water and then the supermarket or restaurant working with meat and fish packing, if they rinse off their products and their cutting boards, it just kills all the bacteria. Ozone kills more than 200 pathogens, including salmonella and E. coli. It is an organic way of disinfecting the surface.” - Michael Elliot