CTC Inc. Advisory 4665 Cornell Road Suite 167 Cincinnati, OH 45241 513-4469-0202 MEDIZONE INTERNATIONAL, INC. (MZEI.U) The Company: Medizone International, Inc. is a development stage company founded in 1986 to scientifically explore the effectiveness of ozone in the decontamination of blood and blood products of lipid enveloped viruses and in the treatment of certain virally caused diseases, including Acquired Immunodeficiency Syndrome (AIDS) and Hepatitis B. Medizone holds US patent No. 4,632,980 entitled "Ozone Decontamination of Blood and Blood Products" which covers a procedure for the decontamination of blood and blood products of lipid enveloped viruses while permitting the physiological characteristics of the blood or blood component to be retained. This procedure describes a method of treatment of blood and blood components with a precise mixture of ozone and oxygen ("MEDIZO3NE"). The use of MEDIZO3NE as a therapeutic drug in the treatment of certain human viral based diseases and as a procedure to decontaminate blood and blood components are applications covered under this patent. The Company also owns similar patents (based on the U.S. patent) in Canada, Europe (EPC), Australia, Hong Kong, Japan and Malaysia, with pending applications in other countries, including Singapore. The Company has also developed an apparatus specifically designed to produce and deliver MEDIZO3NE. Patent No. 5,052,382 has been issued in the U.S. Foreign patents based upon this equipment patent have been granted in Australia and Europe and an application for a similar patent has been submitted in Canada. Medizone has financed its research and process development with equity offerings and funding grants. The Company has not recorded revenue to date and is considered a "development stage company." The Company has not received regulatory approval in any country to license or market its products. The Product: MEDIZO3NE a precise mixture of ozone and oxygen, is produced by an apparatus developed by the Company, which is designed to generate, dose and monitor this gaseous drug. This apparatus includes a disposable hollow fiber device which interfaces MEDIZO3NE with a patient's blood or unit of donor blood. As the blood comes into contact with the ozone/oxygen mixture, lipid enveloped viruses present are inactivated, while the integrity of the blood (including both cells and proteins) is retained. Applications: MEDIZO3NE is currently being investigated for two separate applications: * A technology for the decontamination of blood and blood products As a process for the decontamination of the blood supply, donor blood is infused with MEDIZO3NE using Medizone's patented apparatus. When the mixture of ozone and oxygen (MEDIZO3NE) comes into contact with the donor blood, lipid enveloped viruses present in the donor blood (both free and cell-incorporated) are rendered inactive. * A drug treatment for certain virally caused diseases As a drug for the treatment of certain virally caused diseases, small amounts of patients blood, about eight ounces, are treated outside the body (extracorporeally) and reintroduced into the patient in a treatment program repeated on alternate days for a finite period of time (projected to be 12 weeks). In part, the biological "shelf life" of lipid peroxides, a residual active product of ozone's reaction with lipids, requires the treatment to be completed within one hour. Immediately upon contact MEDIZO3NE inactivates the lipid enveloped viruses present and thereby makes them unable to infect other healthy cells. Although MEDIZO3NE is exhausted almost instantaneously, the lipid peroxides generated by MEDIZO3NE exhibit antiviral activity themselves, and continue to inactivate both free virus and virally infected cells for relatively longer periods of time. What is Ozone?: Ozone is a naturally occurring triatomic form of oxygen and is not only present in the earth's atmosphere, but is also created as a byproduct of any electrical discharge. Ozone's healing properties were first described in the late 1880's. By 1910, several methods of using ozone to treat wounds were being used in North America and Europe. In the early 1900's, ozone was manufactured in North America using compressed air (which includes nitrogen) rather than pure oxygen. The resulting products of this process, including ozone and other highly reactive nitrogen based compounds, coupled with dangerous delivery methods then used, eventually discredited ozone as a medical treatment in North America. However, ozone continues to be extensively used throughout Europe, specifically in Austria, Germany and Italy, and studies dating back to 1930 anecdotally document its benefit in treating a myriad of medical conditions. In the U.S., the non-medical applications for ozone include waste water treatment and water purification as an alternative to chlorine. Research: The status of Medizone's sponsored research supporting the potential use of its process and drug related technology as a blood decontamination process and as a human therapeutic drug is as follows: Research involving a preliminary animal model, human HIV target cells, a limited feline model, human peripheral blood, and Factor VIII spiked with HIV-l, have all evidenced the relatively low toxicity of MEDIZO3NE. Blood plasma purification studies are underway with funded costs totally sponsored by the Canadian Defense Department Blood Forces Program. The first and second stage of these studies have been successfully completed. In May 1994, the Canadian Blood Forces Program finalized funding of the third stage of research investigating MEDIZO3NE's ability to prevent transmission related disease in a live Simian Immunodeficiency Viral animal model in macaque monkeys. This stage of study is being conducted at the New York State College of Veterinarian Medicine, Cornell University. These Canadian studies have been expanded with the goal of the Company to gain regulatory approval to license Medizone's patented process for the sterilization of blood derivatives and potentially whole blood prior to fractionation. Medizone has a submission pending with the U.S. FDA for human clinical Phase I trials for its drug in the treatment of HIV infection. The Company's Canadian subsidiary has a similar submission with Health and Welfare, Canada, with both regulatory agencies requesting large animal toxicity data prior to considering approval. A pig model has been developed by the Company and submitted to both agencies to meet their large animal toxicity data requirements. The Company will require additional funding to commence this portion of its research, a necessary prerequisite for either agency to approve the commencement of human testing. Clinical human trials (Phase I) studying Medizone's proprietary process as a treatment for both HIV infected and chronic, active Hepatitis B patients, are being conducted in an Italian multi-site University Hospital based program sponsored by the Italian Ministry of Health. On May 30, 1994, Medizone announced the commencement of the first site of these Phase 1 clinical trials with its Italian collaborators at the University of Naples to study the effect of MEDIZO3NE therapy on human patients infected with either HIV or Hepatitis B. Potential Markets: There is obviously an important market for an effective drug that provides therapeutic treatment for AIDS and other virally caused diseases. However, an attempt to quantify a revenue and earnings contribution from this source would be premature given the Company's present stage of regulatory development. The blood decontamination market, if regulatory approval is obtained, would be a significant income and revenue source which is more readily quantified. It is estimated that 25 - 26 million units of blood and blood products are collected, processed and transfused annually in the United States with an estimated $5 billion market. The worldwide market for transfusions is projected at an additional $10 billion. Cost to decontaminate each unit of blood is estimated at about $60 per unit -- a potential annual market of $450 million estimating a 10 percent market share of the worldwide market. Investment Considerations: Medizone International, Inc. is attempting to evolve from a development stage company focused solely on rigorous scientific research investigating the medical applications of ozone to a stage where its products receive regulatory approval for licensing and marketing. There appears to be renewed interest in ozone's potential as a bona fide medical treatment which has attracted the attention of governments and the scientific community. As a true "penny stock", with an excess of 119 million shares outstanding, Medizone has a present market value of $18 million. Management believes this is modest considering the potential market for the Company's products if regulatory approval(s) are obtained. Since its founding in 1986, Medizone has financed its research and product development with equity offerings and funding grants. Up to this time, the Company has not yet recorded any revenues and is considered a "development stage company." Medizone has no sales, no earnings and limited capital. Although its reported research to date has been positive, Medizone must be considered a highly speculative investment suitable only for accounts with a high risk/reward profile. MEDIZONE INTERNATIONAL Approximate Shares Outstanding (as of 4/28/95) 119,000,000 Estimated Float 58,000,000 Recent price (as of 4/28/95) Bid $0.14 Ask $0.16 52 Week High/Low Bid $0.31 - $0.07 Average Daily Volume Not Available Market Makers 12 CTC, Inc. serves as the investor relations counsel to Medizone International Inc. It is acting on the Company's behalf in issuing this newsletter and is receiving compensation in return. The information contained in this newsletter is furnished to inform the brokerage community and is not an offer to buy or sell securities.