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Shine Holdings is ready to move out of the prototype phase
with technologies for global fish farming and hormone eradication from municipal
wastewater and drinking water
Development
Biotechnology/Technology
(SHDG: OTCPK)
Shine Holdings, Inc.
2500 Regency Parkway
Cary,
NC 27511
Phone: 919-654-3014
Brett Swailes
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – March 29, 2007
BIO: Brett Swailes, CEO
Brett Swailes, age 54, is the Chief Executive Officer of SHDG. He has broad experience in
marketing and project development, was a journalist, and is a published author. He was
also a corporate pilot (ASMEL), and has acted as both a basic and instrument flight
instructor (CFI, CFII). He and his wife have together started and managed various business
enterprises. He is a public speaker. Mr. Swailes joined SHDG in 2006.
Company Profile:
Shine Holdings, Inc., headquartered in Cary, North Carolina, has a core focus of creating
patented technologies to provide its shareholders with capital appreciation and income.
CEOCFO: Mr.
Swailes, what attracted you to Shine Holdings?
Mr. Swailes:
“I had previously worked with Shine’s executive advisor Dennis L. Mast, who is
also the founder of our Clean Water Scientific subsidiary. It was back in the early
1980’s, and Dennis and I worked together with his dad, first to develop and then
market a computer-operated grain drying system. It didn’t use propane or high heat to
drive out the moisture in the corn from the field, just natural air, like the old
corncribs. It was very advanced for its time and was developed right there on their family
farm in Pennsylvania. It eventually changed American grain handling with slashed energy
costs, and better grain quality, but it was a real difficult sell in the beginning. First,
we had to develop a computer controller to actuate the fan system, and then had to
convince the farm operators in the Midwest grain belts that this system actually worked. I
started out flying the company airplane for that corporation. Immediately, Dennis and I
were a good team, as he taught me all the technical workings of the grain system. Later
on, when we were trying to get to meetings in the Midwest together, I was often flying the
airplane by myself in bad weather with a quirky autopilot. Dennis was great with learning
the avionics (the radio stack) and also with handling the approach charts, so it made it
much easier for me get us where we needed to go on schedule. So the idea of working with
Dennis Mast, this time in 2006, was something that I had always wanted to do once again. I
mean here was a one-time farm boy who had this tremendous intuitive grasp of technical
details and with the fabrication of mechanical devices. In that way, he’s like his
dad and his uncle, Aquila Mast, who designed many of the patents for what became Sperry
New Holland.
Dennis would take all these ideas and just go out and
talk to engineers. He also loved the arcane world of finance and banking. As for me, I was
good at asking probing questions and later on, at putting on meetings for big grain
co-ops. Dennis sold his construction end of the business and got into asbestos removal and
remediation back in the mid-1980’s. He proceeded into other environmental businesses
where he has been ever since. He eventually owned an environmental engineering company and
this was even before he finished his graduate degrees. He later started concentrating
solely on water treatment methods and finally progressed into creating his own patents. In
the meantime, I had started a business in Florida in the mid-1980’s with my wife,
which ran successfully until 1998. I started writing again, but for newspapers this time,
and in 2005 I wrote a book.”
CEOCFO: What is the vision for the
company and how do you plan to get there?
Mr. Swailes:
“Our business model, in a nutshell, is to find an environmental problem, find a
workable solution, solve the problem and get paid. Right now, we are mainly a research and
development company. On February 9 of 2007, Shine Holdings announced the filing of a
provisional patent application with the U.S. Patent and Trademark Office for hormone
removal in water. The process uses an ultra high-efficiency ozone process for eliminating
EDCs (Endocrine Disrupting Chemicals) in water, as well as waterborne hormones and other
compounds. Human ingestion of hormones in drinking water has been linked with early
puberty, reproductive diseases, and deterioration in human male fertility. In the United
States, many laws include EDCs and hormones. I stated at that time that ‘we are
laying groundwork to create significant intellectual property…[which] forms a
foundation for a pioneering line of future products.’ In keeping with that same idea,
on March 26, we announced a follow-up, which is a landmark filing of a provisional patent
for an oxygenation process for the fish farming and aquaculture markets. This development
enables our company to aim for licensing agreements to collect royalties for a myriad of
related water applications.”
CEOCFO: What is the technology going to
do?
Mr. Swailes:
“In 1995 Dennis Mast recalled a trade show that he had been to years earlier. He
subsequently went to Canada and saw a device that cleaned pond scum in lagoons. It used
nothing but ambient air! It did not use any chemicals, nor did it have any complex
mechanical devices other than this oxygen-diffusing device. This thing raised the
dissolved oxygen level in the ponds tremendously, and that increased the metabolism of the
bacteria that was already in water. The result was the pond scum was all gone when they
went back, later on. That made an impact. He went back and bought the technology, and then
went on to design and perfect his own process that earned him a patent in 2001 for
cleaning wastewater using an ultra high efficiency oxygen and ozone diffuser process. He
licensed that technology to a North Carolina corporation. That invention has now been
deployed globally, and today successfully treats millions of gallons of wastewater
everyday.
We previously identified the municipal wastewater and drinking water markets as targets
for our sales efforts. Our thinking was, if we remove the hormones there in America’s
water as cheaply as we think, that this is a huge market, over $100 billion per year. That
fact, plus the EPA has recently stated the need for almost $300 billion in infrastructure
for just the drinking-water segment. The water equipment market where we sit, by itself is
an $8 billion a year segment. However, mostly municipalities do not move without
governmental regulations and enforcement, which is a crying shame. While some of the
regulations and enforcement that we anticipate for municipalities are not yet in place, we
wanted and found a smaller highly defined market: fish farming. We expect fish farming and
aquaculture to provide almost immediate revenue once we move out of prototype stage, which
is where we are now, and proceed to introduce a production system. It is a $70-billion per
year global industry that we want to have a shot at.”
CEOCFO: Would you tell us about the
device and if you are going to be licensing it out or selling the system?
Mr. Swailes:
“Right now, we are looking at both of those options for both the fish farming and the
water industries. We will offer something that contains a ‘mass transfer
contactor.’ It is a small device; meaning that in most cases, it is 4 to 6 feet
square and about 6 feet tall. What it is really, is the world’s best bubble maker.
Most of the diffusers on the market now are creating oxygen bubbles at between 100 to 500
microns in size. Our system, that was already deployed for wastewater pre-treatment and
was licensed, reliably produces bubbles of 5 microns or smaller. I think Dennis has
probably described the process as being like a waterfall, where you have water falling a
long way and then hitting the rocks below with such force that you actually get a foggy
mist. Remember the little boat that floats tourists around the base of Niagara Falls? That
is sort of what we do with bubbles. These bubbles are so small they look like a mist or a
fog, not in the air, but in the water. The good part is that the bubbles do not cavitate
and mess up pumps and instruments with unwanted surges. They work just like they do for
regular water. I first saw this device in 2000; Dennis had it fabricated, and the device
was connected to a clear Plexiglas tank filled with water. When it was turned on, we saw
what looked like milk flowing into the clear water. This milk-like area spread out from
the front to the back and from the top to the bottom, until the whole clear Plexiglas tank
looked like cloudy water. It took hours for it to completely dissipate. When the
engineering crew later did the calculations, the device produced the highest dissolved
oxygen (DO) in the world.”
CEOCFO: What role does the government
play?
Mr. Swailes:
“In fish farming, the government isn’t really the driving force. Rather, the
industry itself knows that proper oxygenation is critical to efficient feed conversion and
faster fish production. If the oxygenating process is efficient, economical, and easy to
acquire, so much the better. That is where we will come in. Now, as for hormones in water,
there are a number of regulations; the Clean Water Act is one and there are several
others. The EPA is now requiring all chemical companies to list each new compound they
synthesize and to describe its effect on the environment. In addition, there is intense
scrutiny going on in the scientific community now because hormones cause early onset of
puberty in people, decreased male sperm motility and a number of other problems. The
problem is, nobody has an efficient way to filter these compounds out of water. Right now,
the reason that we are announcing a new market application is we are not just going to sit
around and wait for the government to come up with regulation and enforcement. We have an
application right now in fish farming and we are going to go after it as soon as we move
out of prototype stage. We are hoping to do that by the end of 2007.”
CEOCFO: You recently acquired a
publishing company; would you tell us the strategy?
Mr. Swailes:
“I wrote a book called, ‘The Cancer Link’ in 2005, and I felt compelled to
take advantage of a position where I could be proactive with a real solution to some of
the water problems I wrote about in the book. Therefore, Shine Holdings acquired Alpaca
Publishing Group in order to distribute my book, and to also quickly provide media kits
and product guides to end users worldwide. The book and Alpaca Publishing are focused on
the EPA (Environmental Protection Agency) and municipal water suppliers and what they do
not want you to know about the water that flows into the home. The book goes into bottled
water issues, why bottled water is sometimes just about the same as tap water and why it
is not really a solution. It also covers what people can do to greatly reduce their risk
of cancer, diabetes and heart disease simply by concentrating on their water. Also
important is how we can stop one in twelve children in the US from mental or physical
disabilities and compel the government to clean up our water. Information on the book can
be found at www.thecancerlink.com.”
CEOCFO: Please tell us more about the
role Alpaca Publishing is going to play.
Mr. Swailes:
“We are going to use Alpaca Publishing to not only market books, but to market media
kits as well as technical journals on installation of the devices that we will use out in
the field. All of this kind of grew out of my activity as a journalist writing primarily
for a Pennsylvania-based newspaper chain. That company owns some 27 daily papers and 327
non-daily papers.”
CEOCFO: Why is this the right time for
your water treatment technology?
Mr. Swailes:
“There is a tremendous focus on the world’s water. T. Boone Pickens, Jr. has
recently invested in purchasing water rights in Texas. Water is on everyone’s mind as
well as is the associated issue of global warming. Water problems are not going to go
away, they are going to increase and we are there in the market already.”
CEOCFO: Are you planning future
acquisitions?
Mr. Swailes:
“Yes, we want to keep open the prospect of acquiring biological technologies when we
see them. A big part of our vision is keeping an eye out for what is new and effective. A
lot of times at the back of tradeshows or in the magazines, someone is selling something
for which we might have a huge market. Therefore, part of our business model is to find or
create innovations that are presently not being used to full capacity.”
CEOCFO:
Development and creation is always expensive; what is the financial picture of Shine
Holdings?
Mr. Swailes:
“We have enough capital for the year. As we are a research and development company at
present, we really do not have revenues to report. However, we are going to be doing our
filings this year, a 10-Q and a 10-K form, and we see significant revenues ahead in the
markets that I spoke about previously. We also have a $50-million dollar commitment from
our founder.”
CEOCFO: What are the challenges you
foresee in acceptance and how can you overcome?
Mr. Swailes:
“Municipalities, which we have previously identified as target markets, are highly
resistant to change. In many cases, you are dealing with a good-old-boy network and that
is a hard nut to crack. There are chemical companies that are in there and it reminds me
very much of that grain-drying system that we once marketed. What we did then, with
air-drying of grains, was much cheaper and more effective than what was then in use. This
is disruptive technology and with it comes all the promise of innovation, but our
obligation is to get out and tell the story over and over again until people get it, and
have the guts to violate the status-quo. However, eventually the mavens in society are
going to get the picture. We are already in-touch informally with the EPA and the National
Institutes of Health. On a non-official basis, they are very interested in what we are
doing. We have a number of engineering hurdles to get past and we are moving through those
now. This is not something that we are unfamiliar with, so I expect it to be successful;
otherwise I would not be here.”
CEOCFO: Why should investors be
interested at this time?
Mr. Swailes:
“In fish farming and aquaculture you are talking about a $70-billion global market. A
1/2 percent penetration in that market would mean huge revenues. We also spoke of an
$8-billion market just in water equipment manufacturing. There too, a 1/2 percent
penetration in that arena would mean vast revenues. I hate to use the old catchphrase of a
‘ground level opportunity,’ but in hindsight we will all one day say, ‘here
was a formative industry.’ These markets are simply going to increase by orders of
magnitude in the coming years.”
CEOCFO: In closing, what should people
take away from this interview?
Mr. Swailes:
“Water is our future. Water is the universal solvent. The companies that are involved
in water have been almost uniformly profitable over the last 25 years. It is a tremendous
area for investment. It is wide open for innovation and we are going to concentrate on
finding the markets that have an immediate need for a solution and an opportunity for us
to bring in immediate revenues as soon as we move out of the prototype phase.”
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