Description of Business:

Bioshelters, Inc (BSI) and Waterfield Farms International (WFI) are integrated production and marketing businesses. Bioshelters grows organic, sustainably produced herbs (mainly organic basil), fish (Tilapia), and soon fresh water shrimp in linked aquaculture and hydroponics systems where the fish make the fertilizer for the plants and the plants clean the water for the fish. Waterfield Farms markets Bioshelters products to over 500 supermarkets and 50 restaurants in the Northeast US, offering the freshest possible products, delivered daily. The reputation of BSI and the WFI brand is based in part on the premium quality and freshness of our products, and in part on our environmentally sustainable method of production.

Importance of Business:

Over-fishing is contributing to a mass extinction of species. Eighty percent of all species on the endangered species list are marine animals at risk primarily because of over fishing. Aquaculture has been heralded as one of the solutions to over-fishing, but has created its own, equally destructive environmental problems - shrimp production alone causes massive water pollution and deforestation. BSI has created unique production methods (including hydroponic integration) that make aquaculture environmentally safe and sustainable. WFI has developed a brand name and distribution system that creates the higher profit margins necessary to make the products economically viable. BSI & WFI's effective marketing of sustainable production realizes the promise of aquaculture as a way to relieve over-fishing without creating new environmental issues.

Social and Environmental Impact:

BSI and WFI's goal is to generate respectable profits while helping to preserve the world's ecology by developing and disseminating sustainable food production practices that also support the creation of stable local economies. 1)Bioshelters' entire system is contained in a solar-heated greenhouse that creates the least expensive and best environment for plants, animals, and people. 2) BSI works only with fresh water systems and has eliminated salt from its growing process, so that its fish manure can be used as fertilizer for organic farms. BSI believes that any saltwater species fed terrestrial feeds is unsustainable and therefore focuses only on fresh water crops and species. 3) The high quality of water in BSI's system produces healthy fish and no antibiotics or medication are needed. 4) Since Tilapia and shrimp feed low on the food chain, they do not require high protein feed. Low protein feeds help protect natural fisheries by not utilizing wild fish protein to make feed. 5) No pesticides or fungicides are used on our produce. BSI integrates biological pest control into its greenhouses, using natural insects to eat pests. 6) Besides using hydroponically grown crops to clean and recycle 99.7% of its water, BSI integrates specially engineered marshes to handle the other 0.3%, resulting in exceptionally clean discharges. 7) All of the electricity and heat used by BSI is produced by a co-generation system fueled by natural gas and recycled vegetable oil. This reduces air pollution and allows around a fifty- percent savings in electrical costs and up to a seventy percent savings in heating costs. 8) In order to integrate all workers in our community, Bioshelters' facility and most production equipment is designed to employ handicapped workers. Nearly half of BSI's hydroponics work force is comprised of mentally handicapped workers.

Market:

BSI & WFI's target customers are 1) health conscious 2) place a value on extremely fresh products, 3) committed to sustainable production, and 4) value competitive prices. Market size: In the last 8 years, Tilapia's market has grown over 6,000% with US 2001 consumption exceeding 228 million pounds or $912 million in revenue. 2002 consumption grew to ~ 280 million, making it among the top 10 consumed species. Shrimp is now the most consumed seafood item in the US. BSI's primary herb is basil, which is the top selling herb in the country. The $450 million US fresh herb market has been growing at 8% over the last 10 years due to the growing trend for healthier diets. Market share: BSI has 50% of the New England fresh basil market and will maintain herb sales at that level.

Marketing Plan:

WFI has focused its' marketing efforts exclusively on direct sales to large volume supermarkets and ethnic restaurants. WFI has developed a seamless operation from production through company owned and subcontracted distribution to direct store marketing. By limiting sales to a local region, no larger than a two hour shipping radius (Boston to Hartford to Albany for region 1) BSI keeps distribution costs low and has maintained the personal relationships with markets that create a strong advantage over the national broker-dealer system. Sales personnel visit stores at least twice a year, supporting the stores' staff with "in-product" mailings and "show & sell" trainings. This education effort turns store staff into our advocates and a de-facto sales force.

Key Principals:

John Reid, President and CEO, has over 22 years of experience in integrated aquaculture systems and marketing. He pioneered aquaculture research at Hampshire College, which led to the development of their aquaculture program. His thesis was a cost-benefit economic analysis of Bioshelter systems. Mr. Reid has also worked in the computer and construction business. He is a regular speaker and has consulted for many corporations across the country. Tracy Hightower, Vice President of Marketing and Sales, has 20 years of marketing and production experience working for some of New York's largest advertising firms and their clients such as, General Foods, Tyson Foods, Proctor and Gamble. Her knowledge of the food industry and experience in managing large-scale marketing operations in multiple countries is invaluable to the Company's ability to grow. Dr. Jose Llobrera, BSI Director of Aquaculture through 12/02 and now a consulting associate, has his doctorate in aquaculture from Texas A&M and 15 years production experience in Tilapia and freshwater shrimp production. As senior aquaculturist for the Philippine government and through worldwide consulting, he understands the nuance of international business practices and the network of markets that make up the aquaculture industry. Marshall Keener, BSI's Director of Operations, manages the unified aquaculture and hydroponic production operations. A specialist in organizing and motivating large teams of workers, he has managed a hydroponic facility, national environmental conferences and political offices. BSI is also supported by several financial advisors and technical consultants.

For additional information about the company, please contact us at info@bioshelters.com