In 1984 James Hawkins, co-founder of Bodaco, Inc developed a re-closable wine pouch which was at the time both novel and exciting. Mr. Hawkins was invited to join the wine institute during a food and beverage show in Tokyo Japan. The wine pouch was a big hit and drew the attention of C. Itoh as well as Suntory and other major companies. Unfortunately the first re-sealable pouch of its kind in the world was not covered by international patents. This major invention is now freely used worldwide for refillable packages and one way sauce and beverage containers.
Mr. Hawkins soon determined that a rigid fitment for flexible packaging was not the optimal iteration of potential technologies for a re-sealable pouch. In speaking with a potential packager for the “Boda-Pac” wine pouch Mr. Hawkins was introduced by Ken Marchetti, now CEO of Olmarc packaging to a man named Mark D. Jamison. Mr. Jamison had invented a self-sealing flexible package with a tortuous path. It was Mr. Jamison’s contention that this tortuous pathway was required in order to create a self-sealing spout. Initially Bodaco, Inc. acquired an exclusive license to utilize this technology. In the first 6 months of operation Bodaco went from last place amongst US wineries to number 8 based upon volume of wine sold. This according to the Kiplinger reports and Packaging Magazine. There were though difficulties with the Jamison technology. The primary difficulty was that of “leakers” we noted that in transit up to 10% of the cases would be afflicted by package seals bursting due to the vibrations created by the transit of heavily laden trucks on the highways.
The secondary problem was that of “non-openers”, i.e., the tortuous or circuitous pathway in many cases prevented the fluid from exiting the flexible pouch or required an inordinate amount of pressure to initiate fluid flow.
The tertiary problem with the Jamison technology was that in many cases the “self-sealing closure” did not reseal.

Nevertheless this initial marketing proved the viability of the concept. Mr. Marchetti CEO of Olmarc Packaging and I concur that were we to have continued with this family funded venture it would now be a billion dollar venture. We will return to Olmarc Packaging later in this discussion as the primary packer for this technology. Bodaco became a victim of its own success. Very succinctly the family was unable to fund the venture and Bodaco closed. (There are other details surrounding the closure which are familial and private which can be discussed with parties who have completed their initial due diligence.)

Armed with the knowledge gained from the first venture Mr. Hawkins began to think about ways to solve the technological obstacles represented by the Jamison technology. Mr. Hawkins was also aware of ground breaking intellectual property law wherein certain patents such as three dimensional patents had been allowed by the US patent office. Mr. Hawkins realized that if the materials which created the pouch were properly configured they would in effect be capable of maintaining a stored energy in much the same way that a spring does. Furthermore it was evident to Mr. Hawkins that there was an interplay between the liquids and the interior surface materials wherein the right viscosity of fluid in contact with the proper material would act almost as a mastic. These basic understandings of physical laws and others led Mr. Hawkins to know that the circuitous or tortuous path “required” in all prior self sealing closures was not actually need to create a one way self sealing valve. By this time Mr. Hawkins had caught the attention of an investor group including members of the boards of Coca Cola, McDonalds and other major corporations. They agreed to fund Mr. Hawkins desire to actually patent the physical laws which created and maintained a self sealing closure or one way valve. In 1990 CTI was formed as a 50% – 50% corporation. Wherein the investor group had a 50% stake and Mr. Hawkins had a 50% stake in the corporation. The initial patent actually issued in 1991 after $300,000 was spent on legal fees alone. (This was the first patent of its kind in the world.) After very positive meetings with the CEO’s and CFO’s of:

1.) Bosch packaging in Stuttgart Germany, here we were offered use of a proprietary aseptic packaging machine.

2.) DRG Medical Packaging in Bristol England, here we were offered and investment of $2,000,000 to be a material supplier for the package.

3.) Tetra-Pak in Lausanne Switzerland, here we were also met by the son of Ruben Rausing who interestingly after Mr. Hawkins presentation told the story of the unveiling of the Tetra-Pac technology many years before. All of the investors had in fact journeyed to Lausanne for this auspicious meeting, so we all heard Mr. Rausing describe how his father, the inventor of the Tetra-Pak trying to 'prove' how easy they were to open ended up with milk on his shirt and egg on his face, all live on national TV. Following this, Mr. Rausing expressed his interest in Mr. Hawkins technology while illustrating by drawing two circles overlapping the difference between the Tetra-Pac technology and Mr. Hawkins invention. The very large circle was the packaging universe represented by Mr. Hawkins technology and the much smaller circle was that of Tetra-Pac.

Very succinctly, following this meeting Mr. Hawkins was sent on a one month tour of Europe while the capital partners went back home plotting with Mr. Hawkins’ patent attorneys to “surreptitiously compromise” Mr. Hawkins blocking interest in the technology. Fortunately or not Mr. Hawkins was secretly informed by one of the attorneys secretaries of the blind memo outlining the plot as between the capital partners and his patent attorneys.

When confronted with the memo and the facts Mr. Hawkins was told, “Who do you think you are?”… “you are merely the inventor”…”if you do not agree to a dilution we are cutting funding”, so it was that after 5 years of litigation Mr. Hawkins won, but was completely drained and he came to believe that the statement made at the time by one of the capital partners was at least mostly true, i.e., “you should be as happy as a pig in slop if you wind up with 10% of this deal”.

It is perhaps unusual or even bizarre to include this information in a business statement, but I believe that we all learn valuable lessons as we pass through life and one of the clearest to me is that it is far better to have a percentage of something than it is to have 100% of nothing. As we look at the potential for this technology both the capital partners and the developer of the intellectual properties have a role to play. Each must be afforded their due and each must concentrate on their area of expertise.

Now let us look to the future of this exciting technology with eyes wide open.

First after looking at the materials represented on http://www.selfsealing.net/ there will be questions which must be answered during due-diligence, but from my perspective there is one clear advantage to working with Mr. Hawkins and that is his experience. Mr. Hawkins was responsible for not only developing the technology, but for everything else from packaging materials development to the marketing efforts which led to the front cover of Packaging Magazine and Kiplinger reports as the most important packaging development in half a century based upon its stellar growth. There is no one in the world better suited to lead the ‘re-development’ of this technology.

Then too, there is Mr. Hawkins unique vision of what this technology represents. To most persons this is simply a packaging development, but to Mr. Hawkins it is much more. It is in fact a pressure actuated one way valve. This technology can be used for everyday items or items as diverse and complex as heart valves, irrigation valves or anywhere where there is a need for a pressure actuated one way valve.

Mr. Hawkins will freely admit that he is not going to be the man to create the business aspects of this technology in fact that has never been his desire or intent. This is why he is looking for business development/capital partners who share the vision of the potential for this and other developments which will flow from this technology and others proposed by Mr. Hawkins.

Due to Mr. Hawkins prior successes and failures Mr. Hawkins is acutely aware of the fact that the most deleterious factor in rolling out new and novel technologies is being under funded.

The most basic elements requiring funding are:

• Creating a “Chinese Wall” of internationally protected intellectual properties including a core patent with surrounding design patents. Based upon previous experience this budget amount is $500,000 for an improved core patent and @ $40,000 each 10 additional design patents covered internationally. Total of $900,000 with a 10% contingency of $90,000 as good business practice. Total all: $990,000
• Equipment resources. We need to work with a company like Bosh packaging. Packaging equipment development will require close to $3,000,000 for purchase and modification of existing aseptic packaging equipment. When we are ready to create a line of liquid fill machines there will be a need for several 10,000 gallon stainless steel tanks and all the pipes, pumps, fittings and electrical required for hooking the tanks up to the packaging equipment. The total budget for equipment will be $3,500,000 with a 10% contingency of $350,000 as good business practice. Total all $3,850,000
• We will be working with Olmarc packaging and they will be required to create packaging space and upgrade the area to aseptic standards. The total investment including building, personnel, lab facilities, and other development fees for this aspect of the project will be $850,000 with a 10% contingency of $85,000 as good business practice. Total all $935,000
• We will need to attract and hire the foremost fluid physicist to monitor and quantify the project needs. In addition there will be salaries for principals and assistants totaling a budget of $650,000 with a 10% contingency of $65,000 as good business practice. Total all $715,000
• One of the most critical features is the advertising and promotion of the technology. Most successful major roll-outs of new products require a huge capital investment. We are predicting the downstream need for a$5,000,000 advertising and promotion ‘war chest’ with a 10% contingency of $500,000 as good business practice. Total all $5,500,000
• Because this is a global venture the travel and entertainment expenses will be substantial. We project 50 “man-trips” during the course of development at an average cost of $5,000 per trip or a total of $250,000 with a 10% contingency of $25,000 as good business practice. Total all $275,000.
• Offices, office equipment and general office supplies will require an investment of of $12,000 per month totaling $144,000 for the first year with a 10% contingency of $14,400 as good business practice. Total all $158,400
• 5 Office personnel at an average of $35,000 per year per person comes to $175,000 with a 10% contingency of $17,500 as good business practice. Total all $192,500
• Miscellaneous costs including outside consulting, packaging material development, etc will require a budget of $500,000 with a 10% contingency of $50,000 as good business practice. Total all $550,000