Interview with: Brett Swailes, CEO - featuring: their technologies for global fish farming and hormone eradication from municipal wastewater and drinking water.

Shine Holdings, Inc. (SHDG: OTCPK)

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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

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Shine Holdings, Inc.

2500 Regency Parkway
Cary, NC 27511
Phone: 919-654-3014

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Brett Swailes
Chief Executive Officer

Interview conducted by:
Lynn Fosse, Senior Editor
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.

: 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”

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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“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.” - Brett Swailes does not purchase or make
recommendation on stocks based on the interviews published.