Business Plans

Business  Plans

Phillips Company announced on October 26, 2007 that we have become the world's first not-for-profit company to manufacture new anti-MRSA products that kill MRSA bacteria without the use of antibiotics.

A staph infection often begins as a skin lesion that refuses to heal normally. “We have a new solution,” said a spokesman for Phillips Company. “A simple topical application, much like a soap, will kill MRSA bacteria on contact.” StaphWash, the first anti-MRSA product to be manufactured by the company has already been developed by Phillips & Co.

Phillips Company is the world’s first non-profit manufacturing company whose aim is to "identify low-cost health solutions that are not being developed, match these solutions with very important skin diseases and take these solutions to the people who need them." Many simple low-cost and effective health-care solutions are not available because pharmaceutical companies have no incentive to put them through clinical trials necessary to get regulatory approval. Sometimes this is because the low-cost solution can not be patented or because it costs millions of dollars for clinical trials needed to get regulatory approval.

“We have a mandate to do this and take it to the people,” said a company spokesman. “We will develop and manufacture low-cost and effective health care solutions. Many already-developed solutions do not require regulatory approval. When research leads to solutions that require costly regulatory approval, we plan to license the technology, at low cost, to other companies having an interest in conducting clinical trials needed to get regulatory approval.”

Phillips Company is the new name for Phillips & Co. Until now, the company has operated as a for-profit company. Like its predecessor, Phillips Company operates as a division of a limited-liability corporation. The company is financed by private capital and there are no plans for seeking contributions or investment capital. The company is under no pressure to make a profit for investors and shareholders. Revenue from sales will be used to fund research, manufacture new products and take them to the people through a growing group of distributors and strategic alliances.

Phillips Company was inspired by the formation of a San Francisco-based nonprofit, Institute for OneWorld Health; an organization that is partnering with foundations, for-profit drug companies, NGOs, and governments around the world to bring neglected drugs to market. Both companies were formed as nonprofits because the pharmaceutical industry spends billions of dollars developing medical drugs to cure the ailments of wealthy Westerners, but very little to treat the diseases that kill millions of people every year in the US and in the developing world.

OneWorld was the first non-profit pharmaceutical company. Phillips Company is the first nonprofit manufacturing company to produce and sell low-cost anti-MRSA products.

Products and business focus

We manufacture a range of products in the fields of anti-allergen products, anti-venom products and anti-bacterial products.

Our planned focus over the next year is the development and commercialization of anti-bacterial products.

We plan to expand our commercialization of an effective anti-bacterial topical application to kill Methicillin-Resistant staphylococcus  aureus (MRSA.)  There is strong value in having a formulation that produces no side effects. Impact of doing this is that the new anti-bacterial formulation, to be named "StaphWash," can be used with antibiotics with no concern for interactive effects.

Expected Outcomes of our business focus on StaphWash

• 1. The development of an effective anti-bacterial topical application used to kill MRSA bacteria.
• 2. The completion of additional culture tests to optimize the effectiveness of the formulation.
• 3. The completion of additional human field testing to demonstrate effectiveness and lack of side effects.
• 4. The completion of additional test marketing on a local and regional basis to obtain user feedback.
• 5. Work to comply with all FDA and FTC requirements for new applications this new product.

Need and Specific Weaknesses in the Current Approaches to Meet this Need.

The report by the Pennsylvania Health Care Cost Containment Council was the first in the nation with statewide statistics on hospitalization of patients with MRSA.  The Pennsylvania agency found 13,722 patients with MRSA based on 2004 data--the latest data available.  MRSA patients are four times more likely to die and stay in the hospital two-and-a-half times longer than patients without the antibiotic-resistant infection.  Hospital charges for patients with MRSA were three times higher than charges for patients without the infections.

"The prevalence of MRSA in every hospital in the U.S. poses a very serious health risk to patients who are unwittingly exposed to these superbugs" said Lisa McGiffert, Director of Consumer's Union "Stop Hospital Infections" campaign. 

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MRSA is present in the general population and is more easily transmissible than ebola. It  can be found in common places and situations.  While it is treatable, MRSA is a bona fide superbug that shows no inclination toward disappearing.

The first-line antibiotics--the ones originally used to treat staph and many other bacterial infections--have largely been rendered useless.  Bacteria, like all living things, adapt to threats in their environment.  Over the decades, they have, to varying degrees, become resistant to treatment.

It is an opportunistic infection that attacks those who are already weakened.  In other community settings, MRSA is less serious at its onset but can become very serious, and even fatal if ignored.

In a health-care environment, MRSA is a deadly threat.  It infects surgical patients and anyone who has undergone an invasive procedure or has a weakened immune system.  According to the CDC, MRSA in health-care settings commonly causes serious and potentially life-threatening infections such as bloodstream infections, surgical site infections or pneumonia. [Report aired on NBC Today, January 3, 2007.]

Our topical application has been shown to kill staph bacteria which cause staph infections which often begin as a skin lesion before the staph infection becomes systemic.

Commercial Application of the Research and Innovation Inherent in this new product

We have conducted preliminary test marketing on a local and regional basis to obtain user feedback.  To do this, we have enrolled distributors at different locations.  A list of our distributors is kept current online on our website.

We have written a report describing our preliminary results.  This progress report, describing our preliminary field test results is available on our web site:   http://www.phillipscompany.4t.com/FieldTest.pdf

Societal, Educational and Scientific Benefits of StaphWash

The societal benefits will come from improvements in the human condition-one person at a time.  The following actual report is an example of how this has happened and will happen in an amplified way as a result of the expanded commercialization of StaphWash.  

Tiffany W was under the care of a physician for Eczema.  Symptoms for this condition typically include patches of chronically itchy, dry skin, usually on the hands, neck, face and legs.

The exact cause of Eczema is not known.  Although it is activated by the immune system and is related to allergic reactions, it is not the same as other allergic reactions.  People with Eczema have the lgE antibodies (immunoglobulin E) produced by the immune system as part of the body's response to allergic reactions.

She has seen her physician because she had about a dozen bumps on her hand and the bumps were inflamed.  The bumps would show some cleaning and then the bumps would return.  "They would come and go and would sometimes show signs of cleaning up." She said.

Tiffany was enrolled in the StaphWash field trial on June 18, 2007. She reported unusually good results: "I put it on the bumps and the next morning they were almost all healed," she said. "I put StaphWash on my hand and I thought I would take a photo the next morning. By morning, there was almost nothing left to photograph." The bumps were totally healed within 2 days and she had no recurrence during the next month.

StaphWash was not developed for Eczema treatment. The lesions that began as Eczema probably became the sites of secondary bacterial infections. The use of StaphWash was probably effective against the bacterial infection, allowing the body's rapid healing to proceed. The ingredients of StaphWash are known to be an effective anti-allergen. This case study raises the question of whether this product might also be effective for people who suffer from eczema. This is an open question and additional data from other people with eczema will be needed to form the basis of any conclusion about the possible benefits of StaphWash when applied to eczema lesions.

At the time Tiffany provided information during the follow-up interview, she was free of symptoms and her hand had remained completely healed since the successful use of StaphWash.  Tiffany was interviewed and reviewed the accuracy of this report on July 10, 2007.  On July 11, she summarized her experience with StaphWash by saying, "That was great."

Educational benefit

This is not an educational business. We claim no direct benefit to the field of education. However, StaphWash will have an indirect educational benefit as results are informally communicated to and among health professionals. An example of how this has happened follows:

Mariah H lives in Arkansas with her mother, Teresa, and her father, Chris. Teresa owns a loan closing service business and she is a member of NNA with certification. She suspended her professional work at the beginning of 2007 to provide full-time care for Mariah. Mariah was diagnosed with MRSA with infected multiple skin lesions.  Prior to using StaphWash, Mariah had been treated with Silvia Gel, Lanaseptic, Bactroban and Accuzyme. Wound #1 (described below) was being cleaned and dressed daily. Her physician described wound #1 as a pressure wound of the type often seen in nursing homes.

Because of her allergies, Mariah was not being treated with antibiotics during the time she used StaphWash. She is allergic to penicillin and most other antibiotics. Mariah was enrolled in the StaphWash field test on February14, 2007. Following the use of StaphWash, Mariah's pediatrician took special note of the total healing that had occurred with the SECOND lesion and the THIRD lesion (described in our field test report). He asked  Mariah's mother about the history of those lesions and the causes for the rapid and complete healing that had occurred. Teresa explained, "Those lesions healed because of the use of StaphWash, a product that is not yet on the market, so you don't know about it." After a thorough physical examination of the healed skin, the physician said, "StaphWash? Whatever it is, it did a good job." 

Scientific Benefits

Staph is a Gram-positive bacteria. The scientific knowledge gained from our StaphWash R&D will form the basis for subsequent research leading to an effective topical application for Gram-negative bacterial infections, including E. Coli. In nursing homes, the vast majority of bed-sore bacterial infections are due to staph and E. Coli. The scientific benefits will be the knowledge required to formulate a topical application that (1) is effective for Gram-positive bacteria including staph and MRSA; (2) is effective for Gram-negative bacteria including E. Coli; and (3) has no side effects when used as directed.

Non-commercial impacts have been, and will continue to be made, as a result of StaphWash research and field trials. No charge and no commercial benefits occurred during the use of StaphWash by George, a financially-stressed homeless Californian.  Here is his story:

George E. is a 48-year-old resident of San Diego County, California. He has skin that is sensitive, with a history of reactions to poison ivy, bee stings and what was suspected to be spider bites.

In early December 2006, George received two bee stings on his right hand. He developed lesions mostly confined to the skin surface, but spreading. He counted more than a dozen lesions located at various points on his body including his hand, wrist, arm, nose and one on the bottom of one foot. In mid-December, he sought medical attention and was treated with two antibiotics. Cultures were taken for evaluation. George was diagnosed with MRSA bacterial infections, and he was informed of this on December 28, 2006, as part of his 10-day follow up medical examination.

He received StaphWash on December 26. No commercial benefit resulted from this donation.  StaphWash was provided to him as part of a national field test, sponsored by the developer of StaphWash, to evaluate the effectiveness of StaphWash when used to attack MRSA bacteria that prevents natural healing of skin lesions. On January 11, George reported a successful outcome." All of the spots are healing nicely or have already healed. All of the spots have lost their red color and have returned to a nice pink color," he said. When asked if, in his opinion, StaphWash had benefited him, he said, "It definitely helped." This is only one of many non-commercial benefits that have occurred as a result of StaphWash development. The future use of StaphWash will result in hundreds - maybe thousands - of similar non-commercial benefits.

Corporate objectives and Mission Statement:

Take it to the people    --   Phillips Company is committed to providing the highest quality, up-to-date products and convenient, fast services to our customers. We are a manufacturing company.

Core competencies

We research remedies for poison ivy, poison oak, poison sumac, as well as anti-venom skin care for fire ants, venomous snakes, wasps, bees and other insects. We invented and developed an anti-bacterial skin cleanser that neutralizes Staph bacteria, including MRSA.

Phillips Company management

Our business model is unique. The management of our company is the responsibility of Howard Phillips, PhD., the owner of Phillips Company.  His education includes a Ph.D. degree in engineering and R&D experience in the fields of biomedical engineering and manufacturing engineering. 

According to Larry Wade, Director of Higher Education for the Choctaw Nation of Oklahoma, he is the only tribal member to earn Ph.D. and masters degrees in the fields of electrical engineering and nuclear engineering.  The Choctaw Nation of Oklahoma is the third largest American Indian tribe in the USA, with a tribal membership of more than 200,000 Choctaws.

We use outsource capabilities for all needed support. Our distributors (listed on our web site) are outsourced (independent businesses).   Our manufacturing support and labor is outsourced (contract manufacturing and related independent businesses).  We live in the Choctaw Nation of Oklahoma.  Our company is located in McCurtain County, Oklahoma, where the poverty rate is 26.5 percent (Ref:  www.ruralisc.org/pdf/printable_versions/littledixie_pdf.pdf  ).  One function of this company is to provide work for qualified women and minorities, and in the process elevate workers to independent providers of services.

History of previous Federal and non-Federal funding

Phillips Compnay. has never received any Federal or NON-Federal funding. We are privately financed. We are a debt-free company.

Regulatory experience

We have benefited from regulatory consultants, including the head of the Regulatory Sciences Department in a major university. We regularly benefit from the counsel and advice provided by a range of medical professionals. We recognize the need, as a small pharmaceuticals R&D company, for more regulatory knowledge.

Subsequent commercialization of current products and services.

Our company has a range of products in the fields of anti-allergen products, anti-venom products and anti-bacterial products.  

IvyStop and IvyMed are products offered by Phillips Company. to stop itching caused by poison ivy, poison oak and poison sumac. Use of either of these products will stop the itching within one minute and dry up the weeping lesions within 3 days.

StingStop, StingMed, Venom-X for Snakebite, Venom-X Wash Kit for Snake Bite, Sting Stop for Fire Ants, Fire Ant Sting Block, StingMed for Fire Ants, StingMed for insects (a general-purpose anti-venom skin cleanser), and Venom-X for SpiderBite are products offered by Phillips Company to:

• 1. Neutralize the venom from insects, snake bites and spider bites
• 2. Stop itching and scratching from insect bites and stings
• 3. Stop the burning and prevent formation of blisters after fire ant stings.

StaphWash skin cleanser for people with Staph infections, and StaphWash for hospital room decontamination are products formulated to kill bacteria that causes Staph infection.  These products are equally effective as killers of MRSA and VRE.  These products prevent Staph infection at the location of a skin injury or kill the bacteria that can cause hard-to-heal skin lesions.  Before product introduction, extensive laboratory culture tests and human field trials were conducted.  Contact Phillips Company. for a report describing the amazing results obtained by patients and test subjects during the field trials.  These products are all described on our web site.

Origins of the company.

This is the story of how we developed something useful for the millions of people who are allergic to poison ivy and other poisonous plants. These products are called anti-allergen skin cleansers. That success was followed by the development of anti-venom skin cleansers, including the world's first and only product formulated to neutralize venom from a snake bite when used as a skin cleanser immediately following a snakebite event. Next, we developed anti-bacterial skin-cleanser products that kill the bacteria that cause staph infection.

The beginning: IvyStop and IvyMed began with a great idea. We developed this idea slowly, at first, while I held full-time jobs as a professor in the College of Engineering at the University of North Carolina at Charlotte, and later as part of a medical research team at the University of Southern California in Los Angeles.

The problem: During summer recess, I spent time "on the reservation" in southeastern Oklahoma where there is a LOT of poison ivy, poison oak and sumac. I enjoyed being there because that's where I grew up, and because I am a member of the Choctaw Nation of Oklahoma.  Even though we Choctaws tend to like being outdoors, I am allergic to poison ivy/poison oak.

The need for a better remedy: The care of a physician typically includes the use of ointments and lotions, and sometimes steroid injections but the poison ivy allergy often persists for one to two weeks. During this period, the itching continues, and the spreading to other skin areas is usually a problem. Not satisfied with this, we put into motion the traditional Native American process for developing a remedy for poison ivy.

Nature often offers solutions for allergies. One example is a plant called Jewelweed which grows naturally in some regions of the U.S. Jewelweed is often effective for treating a wide variety of natural irritants.

Our search for a better remedy: We considered both natural and commercial product  combinations  in the quest for an instant relief from the itching caused by a poison ivy or poison oak attack.  After two years of evaluation, we developed IvyStop, followed by IvyMed.

A successful result: Our conclusion is that IvyMed works better than any other known remedy to instantly stop the itching and quickly dry up the "weeping" that often results from a poison ivy attack. We are finding that this conclusion is shared by people who have used it this product.

Developed by engineers and Native Americans:  Our products are a mix of engineering and home remedy developed using Native American tradition. We are not representatives of pharmacists or physicians.

Phillips Company is a manufacturing company. The NAICS codes for our company are 325998 and/or 325412. The D-U-N-S number for our company is 612368238. We are a 100% minority-owned business. We are located in an SBA-designated HUB Zone. We are not a retail sales company.

Vision of the future and how we will grow/maintain a sustainable business entity

The first element of our vision of the future is to expand our products.  We have done that during our first two years of operation by beginning with our first anti-allergen products (IvyStop and IvyMed); then rapidly progressing to develop the world's first and only anti-venom product (Venom-X) for use immediately following a snake bite event.  Following that product introduction, we rapidly developed our first formulation for StaphWash and we have successfully field tested and test marketed that product.

The second element of our vision is to expand our marketing and sales.  We have done that by enrolling 9 distributors (listed on our web site) during our second year of operation.  We plan to continue to enroll regional and national distributors in the future, with a goal of reaching most national and international markets for our broad range of products.

The third element of our vision of the future is to expand our advertising operations.  Recently (July, 2007), we initiated our advertising program by providing each distributor with an advertising budget of $1000/month.  We plan to expand this marketing and advertising program at a rate of 15% per year, as our sales continue to grow.

How we will meet critical management functions as our company evolves from a small technology R&D business to a successful commercial entity

Our business model calls for our company to outsource many operations.  With those operations, many of the new and expanding management functions and needs will also be outsourced.  We plan to expand the company through licensing of technology and manufacturing; and to expand our network of strategic alliances.  We have done that by completing our first licensing agreement in May 2007.  Our second licensing agreement is currently (August 2007) in negotiation.  Regarding strategic alliances, we noted above that our company has enrolled a team of distributors (listed on our web site) during our second year of operation.  Each distributor operates as an independent business with management functions necessary to operate a product distribution and sales company.   We will continue to enroll regional and national distributors in the future, with a goal of reaching most national and international markets for our broad range of products within 5 years.

Market, Customer and Competition

We have entered three segments of the commercial marketplace with the following:

• 1. Our first anti-allergen products (IvyStop and IvyMed)

• 2. The world's first and only anti-venom product (Venom-X) for use immediately following a snake bite event

• 3. Our first anti-bacterial formulation for StaphWash

We have entered these markets during our first two years of operation and we have successfully field tested and test marketed our products in these three market segments.

The customer identification ranges from chain pharmacies to end-users.  Our first chain pharmacy customer is Smith Drug Company, a firm that wholesales to more than 1000 independent pharmacies throughout the southern regions of the USA. 

 Each distributor develops customers with encouragement from Phillips Company which operates as a manufacturing company and supplier to our distributors.  Each distributor operates as an independent business with customer-contact functions necessary to operate a product distribution and sales company.  

We noted above that our company has enrolled a team of distributors (listed on our web site) during our second year of operation.  We plan to continue to enroll regional and national distributors in the future, with a goal of reaching most national and international markets for our broad range of products within 5 years.

Competition varies depending on the market segment of our products:

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    • Our first anti-allergen products (IvyStop and IvyMed) have approximately a dozen competitors, some of them very well established.  Even so, our product sales started small and continue to grow.  One reason is that we offer a 100% satisfaction guarantee.

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  •  
    • The world's first and only anti-venom product (Venom-X) for use immediately following a snake bite event has no competition at all.  No other company offers a similar product.

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  •  
    • Our first anti-bacterial formulation for StaphWash has only one competitor.  Because of the urgent and growing need for effective anti-bacterial products, we expect growing competition for our products in this business segment.  StaphWash is formulated to kill staph bacteria.  Our next product, now in successful testing, will simultaneously kill staph, VRE, E Coli, and a range of other harmful bacteria, both Gram-positive and Gram-negative.  We expect our new-product introductions will sustain our ability to remain competitive during our business start-up and growth during the next 5 years.

Hurdles and challenges we must overcome to increase market/customer acceptance

One hurdle we face is the challenge of convincing customers that our products perform as well as we claim.  For example, our StaphWash product has shown consistently that it kills 100% of bacterial that cause staph infections when tested in controlled laboratory conditions.  And, we expect no side effects, as has been verified during our field testing.  This is an amazing capability for a topically-applied formulation that is a skin cleanser - not a drug.   This hurdle is also difficult for us because we are a small company.  Because we are a small company, some people think "if it were possible to develop a product that works this well, with no side effects, then surely it would have been introduced by Johnson & Johnson, Merck or some other established, credible, large corporation."

Another hurdle we face is the challenge of explaining to customers that our product, as advertised, does not require FDA approval.  Our claims (on the package and elsewhere) are much less than the actual capability of the StaphWash product.  We have test marketed this product with claims limited to those consistent with a cosmetic skin cleanser.

A third hurdle we must overcome is the need to qualify our future products, with appropriate FDA approvals, as an "OTC drug" [same product, but with stronger claims] and then later as a prescription drug [same product but with even stronger claims for specific treatments].  We plan to overcome these hurdles through licensing and strategic alliances with larger companies that have experience carrying through on programs to obtain FDA approvals as required. In May 2007, we completed our first license agreement to do this. 

Strategic alliances, partnerships and licensing agreements

In this section we summarize our plan (described above) to expand the company through licensing of technology and manufacturing; and to expand our network of strategic alliances. 

Regarding strategic alliances, we noted above that we have enrolled 9 distributors during our second year of operation.  Each distributor operates as an independent business with management functions necessary to operate a product distribution and sales company.   We plan to continue to enroll regional and national distributors in the future, with a goal of reaching most national and international markets for our broad range of products within 5 years.

We plan licensing agreements, programs and strategic alliances with larger companies that have experience carrying through on programs to obtain FDA approvals as required. In May 2007, we completed our first license agreement to do this.  

Work with our strategic alliances will lay the groundwork for expanding our licensing and strategic alliances with larger companies to obtain FDA approvals as required. 

Marketing and sales strategy

We have enrolled 9 distributors  during our second year of operation. 

Recently (July, 2007), we initiated our marketing program by providing each distributor with an advertising budget of $1000/month.  We plan to expand this marketing and advertising program at a rate of 15% per year, as our sales continue to grow.

Our vision is to expand our marketing and sales.  We plan to continue to enroll regional and national distributors in the future, with a goal of reaching most national and international markets for our broad range of products.

Intellectual property protection

Most of our products are skin-cleanser products.  Patent applications have been filed as described below:

StaphWash is fully covered by these patent application filings.

We plan to expand our IP footprint as we develop new products.  For some products, we may rely on TRADE SECRETS to establish and maintain a competitive advantage.  We will decide which form of protection is best on a case-by-case basis.  For example, our Strivector product simultaneously kills Staph, MRSA, E.Coli, Acinetobacter and Klebsiella, and a range of other harmful bacteria, both Gram-positive and Gram-negative.  We expect that maintaining trade secrets about our new-product introductions will sustain our ability to remain competitive during our business start-up and growth during the next 5 years.  Following that, we will probably file patent applications for new product-improvement innovations for that product.

Finance plan

Phillips Company began as sole proprietorship (Phillips & Co.) and then became part of a corporation.  Phillips Company is wholly owned by Howard Phillips, LLC (an Oklahoma corporation).  It is owned by the founder, Howard Phillips, PhD.

All start-up funding has come from private financing.  The company is debt-free, and strategic business alliances are planned to accelerate the planned business operations of the company.

Even as we operate as an overall not-for-profit company, we are pleased that during the second year of operation, the company became profitable on a direct-cost basis because of early product introductions and sales.  We plan to continue to operate the company as a debt-free business.  Progress will be consistent with a pay-as-we-go operation.  New distributors and new strategic business alliances are sought to accelerate the planned business operations of the company.

Production and marketing plan

The focus of this section is production and manufacturing.  For a description of our marketing plan, please see information above under the following headings:

• Market, Customer and Competition
• Marketing and sales strategy

The owner and founder of our company has extensive experience in manufacturing and manufacturing sciences research, as detailed in a full professional biography available publicly (http://www.phillips.8k.com/).

Because of this background the company rapidly established a manufacturing capability for prototyping, low-volume production and full-scale manufacturing.  We have powder mixers, liquid loaders, purchasing functions, materials inventory, packaging, QC, shipping & receiving, invoicing and other functions that are currently operational.

We have been manufacturing products and delivering these products to distributors for more than a year.  We have never been late on a production delivery, and we have never had a production cost overrun.

We currently have the manufacturing capacity to deliver up to 50,000 units per month.  This capability has been established with private financing.  The manufacturing operation has been established as a just-in-time manufacturing operation to achieve low manufacturing costs and quick delivery of finished products.

We have established outsource strategic alliances to provide contract manufacturing support as needed.

In our company, manufacturing operations pay for themselves.  Our products are manufactured and sold for a modest profit.  As a nonprofit company our revenue from sales will be used to fund research, manufacture new products and take them to the people through a growing group of distributors and strategic alliances.  No additional (outside funding) capital is needed or anticipated for our production operations, including the scale up for future production.

Revenue Stream

We have established a revenue stream.  Revenue from sales will be used to fund research, manufacture new products and take them to the people through a growing group of distributors and strategic alliances.  As described above, our manufacturing operations pay for themselves.  No outside funding is needed or anticipated for our production operations, including the scale up for future production.

Our revenue stream will increase as we implement and realize our vision for the future of the company:

• The first element of our vision of the future is to expand our products. As described above, we have done that during our first two years of operation by beginning with our first anti-allergen products; then rapidly progressing to develop our first anti-venom product. Following that product introduction, we rapidly developed our first anti-venom product. More recently, we developed a formulation for StaphWash, our first anti-bacterial product. We have successfully field tested and test marketed that product.

• The second element of our vision is to expand our marketing and sales. We have done that by enrolling 9 distributors during our second year of operation. We plan to continue to enroll regional and national distributors in the future, with a goal of reaching most national and international markets for our broad range of products.

• The third element of our vision of the future is to expand our advertising operations. We initiated our advertising program by providing each distributor with an advertising budget. We plan to expand this marketing and advertising program at a rate of 15% per year, as our sales continue to grow.

We have been manufacturing products and delivering these products to distributors since 1995.  We have never been late on a production delivery, and we have never had a production cost overrun.

We plan licensing agreements, programs and strategic alliances with larger companies that have experience carrying through on programs to obtain FDA approvals as required.  In May 2007, we completed our first license agreement to do this. Our revenue stream will increase as a result of licensing, particularly when manufacturing operations of the Licensee result in royalties which have been negotiated into our first license agreement.

Strategic alliances and new distributors are sought to accelerate the planned business operations of the company.  These new business relationships will accelerate our product development and result in an increased revenue stream for our company.

Executive Summary

We offer an effective anti-bacterial topical application to kill Methicillin-Resistant staphylococcus  aureus (MRSA.)  There is strong value in having a formulation that produces no side effects. Impact of doing this is that the new anti-bacterial formulation, named "StaphWash," can be used with antibiotics with no concern for interactive effects.

Our topical application has been shown to kill staph bacteria which cause staph infections which often begin as a skin lesion before the staph infection becomes systemic.

We have conducted preliminary test marketing on a local and regional basis to obtain user feedback.  To do this, we have enrolled distributors at different locations.  A list of our distributors is kept current online on our website.  We have written a report describing our preliminary results.  This progress report, describing our preliminary field test results is available on our web site.

Our business model is unique. The owner of Phillips Company is Howard Phillips.  His education includes a Ph.D. degree in engineering and R&D experience in the fields of biomedical engineering and manufacturing engineering. 

According to Larry Wade, Director of Higher Education for the Choctaw Nation of Oklahoma, he is the only tribal member to earn Ph.D. and masters degrees in the fields of electrical engineering and nuclear engineering.  The Choctaw Nation of Oklahoma is the third largest American Indian tribe in the USA, with a tribal membership of more than 200,000 Choctaws.

We use outsource capabilities for all needed support. Our distributors (listed on our web site) are outsourced (independent businesses).   Our manufacturing support and labor is outsourced (contract manufacturing and related independent businesses).  We are located in the Choctaw Nation of Oklahoma.  Our company is located in McCurtain County, Oklahoma, where the poverty rate is 26.5 percent (Ref:  www.ruralisc.org/pdf/printable_versions/littledixie_pdf.pdf  ).  One function of this company is to provide work for qualified women and minorities, and in the process elevate workers to independent providers of services.  This is both natural and easy for us, because the proposed Principal Investigator for this program is a fluent speaker of both the Choctaw language and the Chickasaw language.

We noted above that our company has enrolled 9 distributors (listed on our web site) during our second year of operation.  We plan to continue to enroll regional and national distributors in the future, with a goal of reaching most national and international markets for our broad range of products within 5 years.

Our first anti-bacterial formulation for StaphWash has only one competitor.  Because of the urgent and growing need for effective anti-bacterial products, we expect growing competition for our products in this business segment.  StaphWash is formulated to kill staph bacteria.  Our next product, now in successful testing, will simultaneously kill staph, VRE, E Coli, and a range of other harmful bacteria, both Gram-positive and Gram-negative.  We expect our new-product introductions will sustain our ability to remain competitive during our business start-up and growth during the next 5 years.

Because of this background the company rapidly established a manufacturing capability for prototyping, low-volume production and full-scale manufacturing.  We have powder mixers, liquid loaders, purchasing functions, materials inventory, packaging, QC, shipping & receiving, invoicing and other functions that are currently operational.

We have been manufacturing products and delivering these products to distributors for more than a year.  We have never been late on a production delivery, and we have never had a production cost overrun.

Phillips Company is the first nonprofit manufacturing company to produce and sell low-cost anti-MRSA products.  We currently have the manufacturing capacity to deliver up to 50,000 units per month.  The manufacturing operation has been established as a just-in-time manufacturing operation to achieve low manufacturing costs and quick delivery of finished products.

We will be pleased to host a visit and tour of our facility and the regional area here within the Choctaw Nation of Oklahoma.

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