StockGuru Blog: Medizone (MZEI)
Medizone International, Inc.(OTCBB: MZEI)
Chairman’s Message
Shareholder Update
March 11, 2010
It has been brought to my attention by shareholders there has recently been some misunderstanding as to development path timeframes for AsepticSure™. This message is intended to hopefully clear up those perceived misunderstandings.
The end of 2008 and going into early 2009 the company believed it would finalize product development by the end of 2009 with first deliveries during the first quarter of 2010. That has obviously proven to be an overly optimistic time frame, and I accept responsibility for not being more conservative with our projections at that time. Those projections were based on statements made to me by our development partner that the prototype equipment being planned for full-scale room treatment “would be very close to a production prototype.” This clearly has not proven to be the case.
As projects like this involving revolutionary technology and break through science evolve, they do have a tendency to take on a life of their own. Relative to the development of the room scale prototype, initially our development partner fell behind expectations relative to delivery time. Also, and this is a very big positive, on January 5, 2010 we announced “Test results achieved over the past two months now predictably demonstrate greater than 6 logs of bacterial “kill” across the full spectrum of hospital contaminants including MRSA, C difficile, E coli, Pseudomonas aeruginosa and VRE in addition to the internationally accepted surrogate for Anthrax, Bacillus subtilis.” Those first 6-log results were achieved in our laboratory unit with technology that had not yet been integrated into our full-scale equipment. This incredible scientific accomplishment was explained in the January 10, 2010 press release relating to greatly enhanced patent protection. "This was made possible", commented Dr Michael Shannon, Medizone’s Director of Medical Affairs, “through the integration of several complimentary technologies, each with their own antimicrobial effects, which in combination were shown not to be additive, but multiplicative.”
In sum, the goal posts had moved. Additional technologies that greatly enhanced the AsepticSure™ product now had to be integrated into a design that had not originally been considered for this additional technology that greatly enhanced efficacy. Thus, in reality, what was once intended to be “very close to a production prototype,” had clearly become a development machine that required additional engineering prior to being ready for hospital beta testing and production. During the last half of 2009, I tried to soften expectations relative to commercialization time frames in both how press releases were drafted and also with our SEC filings. I hope this communication will clear up once and for all any misunderstanding.
Currently, utilizing an expanded and enhanced design team that is experienced in bringing products from the research stage to full production, Medizone is finalizing the design of a new, fully integrated AsepticSure™ system for hospital beta testing. This design will achieve the same results as the current beta prototype while also being a major step forward and very close to what we expect the full production prototype will be. Shareholders must comprehend, now that we understand the science and clearly understand what is required for open space sterilization such as in hospital settings, it is absolutely essential to deliver a product into the hospital beta test environment that maintenance staff within the hospital can easily be taught to use and the equipment must be 100% reliable. Anything short of that is a recipe for failure. Medizone management from top to bottom and all of our development staff, are dedicated to that outcome; deliver a first rate, reliable machine, that hospitals can count on. Nothing less will do.
Hospital beta testing is expected to begin by late spring at sites in both the US and Canada. Production developments from the hospital beta system are not expected to be in the hardware or basic design, but more related to things like state of the art packaging. However, let me caution, as I stated earlier in this communication, these things do have a way of taking on a life of their own.
We believe moving from hospital beta testing to initial production and sales at modest rates should prove to be a smooth, manageable transition. We expect sales should flow smoothly out of a successful beta test program. In closing, I think it is important for shareholders to remember that Medizone has achieved results in both laboratory and room scale trials that are absolutely unheard of in the scientific and medical communities. We expect the same success in commercialization.
We are still a small company with limited resources. I am proud of what we have achieved. It is absolutely essential that we not rush this next phase of product development, as it must be done correctly the first time. I assure you both Dr Shannon, myself and all of our team, are putting our full effort into making sure that is the case.
As we successfully transition into hospital beta testing, when the first peer reviewed journal article is published (expected this summer), as partners are announced and the management team and board are expanded to reflect the skill sets of a rapidly growing commercially viable company, our contribution to science and medicine will be clear to all.
Yours truly,
Edwin G. Marshall
Chairman &
CEO
Medizone International, Inc.
This Chairman’s message contains certain forward looking statements that involve substantial risks and uncertainties, including, but not limited to, the results of ongoing clinical studies, economic conditions, product and technology development, production efficiencies, product demand, competitive products, competitive environment, successful testing and government regulatory issues. Additional risks are identified in the company's filings made with the Securities and Exchange Commission.
Medizone International, Inc.(OTCBB: MZEI)
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