CEO Letter February 16 , 2012

Let’s take a look back at what has transpired at ZEOX since July of 2010, when the former directors and officers left the Company and took our properties with them:

A group led by the original founder of the Company was assembled to assume the functions of management.

I became a member of that group with the mandate to liaise with the TSX Venture Exchange to get ZEOX back trading again. As you will recall it had been halted for some time pending documentation of the planned merger between Imagin and ZEOX.

Somewhere along the way it became apparent that the immediate issues facing ZEOX were more of the corporate finance and legal variety than industrial minerals and I gradually took over the management functions of ZEOX.

I negotiated with TSX Venture Exchange staff to resume trading of ZEOX and allow it to continue trading on the TSXV for approximately 90 days or until we could show that it met Continuous Listing Requirements.

ZEOX resumed trading on August 4, 2010 and traded an astounding cumulative volume of 20,057,081 shares until November 4, 2010 or about 30% of its then existing public float.

Financials 2010 and Cease Trade Order

On November 4, 2010 trading in ZEOX was suspended due to the issuance of Cease Trade Orders by the Alberta and British Columbia Securities Commissions for the failure of ZEOX to file its audited financial statements by the required date. As you will recall, a major reason the financials were not filed on time was that the former directors had possession of the corporate records of ZEOX and despite demands for the return of same, only certain records were returned at a very late date.

Former management had not paid for the prior year’s audit which made it particularly difficult to have our auditors work on our behalf. Even when some of the financial records of the US subsidiaries were returned, it took very much more time than expected to finalize the audited June 30, 2010 financial statements for a number of reasons including ZEOX did not have contact information for the appropriate person at various customers and vendors necessary to provide independent verification to our auditors.

In a lot of cases this meant that we had to trace the customer/vendor down through internet searches and then contact a number of sources within the organization to find the person who had sufficient information to provide the verification.

The appropriate accounting treatment of our financial position at that time was examined in detail. Following filing of the statements, as well as the subsequent interim financial statements we were also subject to a number of continuous disclosure reviews both by provincial securities commissions and the TSXV compliance department, which led to interminable delays in getting ZEOX back trading again.

Listing on NEX (Part of the TSX)

The listing of ZEOX was moved to the NEX which is an advantage for ZEOX at this time as the costs of maintaining a listing on the NEX are significantly lower and accordingly the savings can be put towards the cost of the litigation. As you know the suffix to the symbol for ZEOX was changed to ZOX.H

The circumstances the former directors and officers left ZEOX in last July were unique. Not only were there large payables and no money, but there was no large shareholder to take control of the company and fund the company. The largest single shareholder owned less than 7% of the company. Normally in situations such as these, there is either one or a small group of shareholders who have large holdings and who are willing to work to bring value back to those holdings, and accordingly would charge low management fees. In this case, ZEOX needed to bring in someone from the outside that could get the company reorganized.

Low cost structure now

Now we have a reasonable cost structure going forward and there are other cost savings at the present time such as reduced audit costs and exchange filing fees which will help us conserve cash. As part of the compliance review by the Alberta Securities Commission I agreed to defer the granting of my options until after June 30, 2011. In the TSX Venture review I agreed to cancel the options entirely so as to allow ZEOX to start trading again.

Legal side and recovery of assets

On the legal side we had advice from counsel in Arizona that led us to believe that pursuing the return of the assets through the Arizona courts would be relatively easy, quick and inexpensive. We found out the hard way that it would be difficult, slow and expensive. Accordingly we put a stop to the litigation there. Essentially we had believed that we only needed to prove that Arizona law was not followed in the seizure of the properties. While the properties were listed in the documents that Imagin claimed that they were entitled to, they then claimed that the lease from GSA was terminated due to non-payment of certain amounts to Dan Eyde, the majority of which were dubious and in any event within his control while COO of ZEOX.

Accordingly we are planning to pursue legal action in Canada to pursue the return of the properties, our accounts receivable, breach of fiduciary duties and the break fee of US $250,000 to which ZEOX is entitled.

I have had a number of conversations with a lawyer in New York City that some of the shareholders had engaged to pursue action against certain former directors and officers of ZEOX. There have been some discussions about who would finance this action and who would benefit from its result. I have maintained from the outset that it would appear that the shareholders have a much better chance at success and therefore we would like to support them if at all possible. More recently I have been contacted by a lawyer in Germany who represents one of the larger shareholders of ZEOX and I am sending him information for his file.

We will be pursuing the former directors and officers as well as the return of the assets through the Canadian courts. Some of the funds from the proposed private placement will be earmarked for that purpose. We are under no illusions that this will be quick and easy process, but we are confident that in the end we will prevail. The major focus to date has been to get ZEOX stabilized and at this time it is in much better shape than it was at this time last year and our shareholders are able to trade their shares. We believe that with funds on hand to pursue the legal action, we will be in a much better position in this litigation.

New Financing 2011/2012

We announced a private placement in the final days of September and closed $168,000 in the first tranche of the financing. The offering is a unit financing at $0.05 per unit, with each unit consisting of one share and one warrant exercisable at $0.10. We are using the proceeds of this financing to reduce the liabilities in the Canadian parent company. As we press released on December 6, 2011, “Management anticipates considerable improvement to the liabilities of the Canadian parent company, as the accounts payable are worked out and payments are made as private placement funds are received.” Accordingly, we expect continued improvement to our balance sheet as additional funds are received. We also will need to provide a retainer to our lawyers in order to commence our legal action.

While we assemble the appropriate legal counsel to pursue the return of our properties and seek damages, we have been considering how best to introduce a new venture into ZEOX, which would add to the value of ZEOX while the legal avenues are being followed. There have also been some discussions about utilizing the skill sets that have been assembled within ZEOX to help companies in similar situations.

Reviewing all Opportunity within Zeox now

We are open to reviewing any opportunity within ZEOX. However, we believe that the best option for ZEOX is to look for projects within the Industrial Minerals marketplace, and in zeolites in particular. To this end we have signed non-disclosure agreements and have been talking to a number of parties within the zeolite business about potential prospects. There are significant opportunities, ranging from purchase of existing zeolite producing properties with sales agreements in place, both within North America and abroad, to companies with significant sales and distribution networks in place. We would like to leverage our historical capabilities in the high margin zeolite product segments with some existing channels.

ZEOX traditional strengths in product development and operations will be of great value as we move forward.
ZEOX has a large shareholder base, most of whom are very knowledgeable about zeolites and understand the value of it in the marketplace. We maintain some intellectual property, as well as a number of product lines which can be utilized if we are able to assemble the appropriate distribution channels. We also have the benefit of tax losses arising from non-capital losses (~$11.8 million) and capital losses (~$3.665 million) which were valued by our auditors KPMG in excess of $3.1 million in our June 30, 2011 statements. That means for the right transaction in the industrial minerals space, we have a tangible cash value of at least $3.1 million. All of these factors mean that we can provide a significant upside going forward.