Re: Renewal license #44875, annual bottled water report, as a condition of licensure as defined in subdivision

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1 KOYO USA CORPRATION (Water bottler/license #44875) Queen Ka'ahumanu Highway, Suite 124, Water Bottling Plant Location Kailua-Kona, Hawaii Phone: , Fax: , web: Consumer questions: State of California Health and Human Services Agency California Department of public Health Food and Drug Branch, PO Box , MS 7602, Sacramento, CA Re: Renewal license #44875, annual bottled water report, as a condition of licensure as defined in subdivision Dear Consumer: As a condition of Kayo USA Corp.'s renewal licensing as an "Out of State Water Bottling Plant", Kayo submits this required Bottled Water Report for ) Source of the Bottled Water: The source water used by Kayo USA Corp. comes from the Pacific Ocean on the western side of the island of Hawaii, located in the Hawaiian Island chain. The source water is delivered to Kayo's water bottling plant via the pipelines system operated by the State of Hawaii Natural Energy Laboratory of Hawaii Authority (NELHA), a semi-private entity, funded by the State of Hawaii. NELHA designed and installed the private water system, which provides deep ocean water, drawni nto the pipeline at a depth of 3,000 feet. The State of Hawaii, Department of Health has formally approved the water source. The food and Drug Branch of the State Department of Health, which is the jurisdictional agency, is issued the Source Approval to Kayo. In addition, also, the State Department of Health's Safe Drinking Water Branch (SDWB), which approved the treatment train (reverse osmosis desalinating system) to Kayo, that converts the raw ocean water into a "potable water source", fit and safe for human consumption. 2) Definitions: 2-A: Statement of quality:

2 The quality standards of bottled water provide the maximum legal limits for a variety of substances that are allowed in bottled water, along with their monitoring requirements. The substances include microbiological contaminants, pesticides, herbicides, inorganic contaminants, organic contaminants, radiological contaminants, and others. The standards have been established by the United States Food and Drug Administration (FDA), based on the public drinking water standards of the United States Environmental Protection Agency (USEPA). CDPH and the Hawaii Department of Health, both adopt the FDA regulations pertinent to the quality standards of bottled water. Kayo is a firm believer in these standards and follows all specific regulations in the processing and bottling of its water. 2-B: Maximum contaminant Level: In 1974, the Safe Drinking Water Act (SOWA) gave the federal government the responsibility to establish national drinking water regulations to protect public health. Chemical, physical, radiological and bacteriological substances in drinking water which pose a health risk to the public are regulated by the Environmental Protection Agency (EPA) under the SOWA. EPA has established maximum contaminant levels (MCL) for drinking water contaminants. 2-C: Primary Drinking Water Standard: The Safe Drinking Water Act, as noted above, was set up to establish basic standards to insure that all water systems protected the public health. These primary drinking water standards are revised and added to as needed. 2-D: Public Health Goal: A Public Health Goal is a goal defined by an entity which represents the general public, such as the Food and Drug Administration of California, which over-sees, licenses and set all guidelines concerning water sources and water bottling products delivered and sold to the general public. These two agencies set all of the goals to achieve a safe and healthy product derived from water. 3) Brief Description of the Treatment Process: Kayo USA Corporation uses a desalinating reverse osmosis system, to remove virtually all of the salts found in its source water, derived from the deep ocean. The reverse osmosis membranes separate the molecules of water from those of salt, effectively removing the salt from the water. The process water first transit through Purge System multi-media sand filters. This system filters relatively large particles and residues down to 50 micron size. The next step for the process water is the Purge System ultra filter. This system filters very small particles such as organic matter, small residue, bacteria and etc. down to 0.01 micron. Then, as noted above, the process water is pumped through the 1st Stage R/O membranes. This system desalinates up to 99% out of the sea water. The R/O system consists of two combinations of membranes (1st R/O stage and 2nd R/O stage). Each system reduces

3 (desalinates) the water up to 99%. The combination of the two systems makes drinkable (portable) water out of the deep ocean water (sea water). Before packaging (bottling) of the water it is pumped through a set of Purge System ultra filters for past filtration. The filter bore size is 0.01 micron, it filters bacterial matter, which may happen to be generated in the storage tanks. The last treatment stop involves the Purge System Carbon filters. The filter takes odor and gas out of the process water before sending the drinking water to the filler. 4) United State Food and Drug Administration (Recall) Address: Food and Drug Administration 5600 Fishers lane, Rockville, Maryland Phone: Web address: 5) Address: Koyo USA Corp Queen Ka'ahmumanu Hwy. Suite 124, Kailua-Kona, Hawaii Phone: Web address: 6) Statement #1 "Drinking Water" including "bottled water", may reasonably be expected to contain at least small amounts of some contaminants. The presence of contaminants does not necessarily indicate that water poses a health risk. More information about contaminants and potential health effects, can be obtained by calling the United States Food and Drug Administration, Food and cosmetic hotline ( ). 7) Statement #2 "Some persons may be more vulnerable to contaminants in drinking water than the general population. lmmuno-compromisedpersons, including, but not limited to, persons with cancer, who are undergoing chemotherapy, persons who have undergone organ transplants, persons with HIV/AIDS or other immune system disorders, some elderly persons, and infants can be particularly at risk from infections. These persons should seek advice about drinking water from their health care providers. The United State Environmental Protection Agency (EPA) and the centers for disease control and prevention guidelines on appropriate means to lessen of infection by cryptosporidium and other microbial contaminants are available from the Safe Drinking Water Hotline ( )". 8) Statement #3

4 "The sources of bottled water, includes rivers, lakes, streams, pounds, reservoirs, springs, and wells. As water naturally travels over the surface of the land or through the ground, it can pick up naturally occurring substances well as substances that are present due to animal and human activity. Substances that may be present in the source water include any of the following: 1) Inorganic substances, including but not limited to, salts and metals, that can be naturally occurring, or result from farming, urban storm-water runoff industrial or domestic wastewater discharges, or oil and gas production. 2) Pesticides and Herbicides that may come from a variety of sources, including but not limited to, agriculture, urban storm-water runoff, and residential uses. 3) Organic substances that are byproducts of industrial processes and petroleum production and can also came from gas stations, urban storm-water runoff, agricultural application, and septic systems. 4) Microbial organisms that may come from wildlife, agricultural livestock operations, sewage treatment plants, and septic systems. 5) Substances with radioactive properties that can be naturally occurring or be the result of oil production and mining activities." 9) Statement #4 "In order to ensure that bottled water is safe to drink, the United States Food and Drug Administration and the State Department of Public Health prescribe regulations that limit the amount of certain contaminates in water provided by bottled water companies." 10) Nitrates (No3) There are no nitrates in Koyo's Bottled Water. 11) Arsenic: There is no arsenic in Koyo's Bottled Water. 12) Full Disclosure of any exemptions: Koyo does not have any exemptions regarding its bottled water that have been granted by the State Department of Public Health. Koyo USA Corp. complies with all set guidelines and standards of Good Manufacturing Practices described in Part 129 of Title 21 of the Code of Federal Regulation. The process water is subject filtration, and effective germicidal treatment via Reverse Osmosis (R/O) -two stages, and ultra-violet exposure. (Refer to the section describing the water treatment process). The source and product water are certified by the responsible authorities within the State of Hawaii. These authorities include the State Department of Health's Safe Drinking Water Branch (SDWB) as well as the Food and Drug Branch. Both Branches

5 comply with microbiological standards at least equal to the standards of this article. The bottled water product complies with the microbiological standards of this article. Sanitary operations, equipment, procedures, and process controls used in the treatment, storage, transfer, transport, or dispensing of the product water, complies with the good manufacturing practices described in the following provisions of Part 129 of Title 21 of the Code of Federal Regulations: subdivisions (a), (c), (d), and (h) of section Kayo's water bottling Plant #3, does not package any other food product (beverage) except its own MaHaLo water product. Koyo does have a sea salt Plant located in a separate building and operated by a separate independent company. Neither Plant interacts with each other. All Process lines, including storage tanks and associated equipment, are used exclusively for the production of bottled water, including all filling equipment. The filling equipment, manufactured by the Sidel company of France, has the following cleaning processes, which consists of CIP (clean in place) system: a) The CIP system is preformed every morning (AM) before any bottling takes place. First, all plumbing lines including the fill valves are rinsed with an ozonated water bath. The ozone level is maintained at 0.6ppm or higher. The rinse cycle is last for 15 minutes. b) The second step involves a hot water rinse at 180 degrees F for 20 minutes. The hot water rinses all water lines, filler valves and the holding tank. c) The third step involves a 10 minute rinse with ozonated water at 0.6ppm or higher. d) The final step involves flushing the entire system with the product water until bottling begins. Kayo's bottled water does not meet or exceed all maximum contaminant labels se for public drinking water that the department determines are necessary and appropriate so that the bottled water may present no adverse effect on public health. Koyo has attached all required test completed on Kayo's PET preforms do not contain the maximum contaminate levels of the following two chemical compounds: RESIDUAL METHYLENE CHLORIDE and MONOCHLOROBENZENE. Koyo has attached the chemical tests on these Polycarbonate Resins. These tests were provided by Kayo's perform suppliers.

6 Koyo USA Corp. does not store, distribute or sell its' bottled water product in water vending machines as noted in parts: /111105/111110/ Koyo does have its quality control and maintenance records available for inspection if required. Section : Koyo does hold an out of state water bottler's permit issued by the California state Department of Health. Koyo has paid the mandatory fees for its permit, and will continue to pay the required fees in order to maintain its California Permit which allows it to sell its MaHalo bottled water in California. As noted above, Koyo does not use or have any water vending machines. Section : Koyo has performed all required FDA and EPA testing, and has attached those test results for its source water, first and second R/O waters. Koyo also performs (in house hourly) all bacteria and coliform tests. All test results are kept on file for inspection by any local health officers who may request them. All waters are continuously monitored for Ph, TDS (Total Dissolved Solids), temperature, conductivity and turbidity. All results are recorded by computer. Section : Koyo has performed all required testing, including testing for all volatile organic compounds. Those test results are attached to this Bottled Water Report as required. All testing was performed by MWH Laboratories, a certified testing agency in California. All test results for Volatile Organic Compounds show that all compounds are Non Detectable (ND) in the source water and the first and second pass R/O waters. Section : As referenced earlier, Koyo has attached the complete test results for all compounds as required. Reference the attached test results. Section : Koyo USA Corp. agrees to all conditions of this section, pertaining to its source water and finish waters. Section and : The Department has reviewed and approved Kayo's water bottles label, which incorporated all of the required information as specified under this section. Section : Kayo's bottled water is referenced as a "desalinated deep sea drinking water" Section : Kayo's Bottled Water (noted as MaHalo-Desalinated deep sea drinking water) meets all quality requirements set by this article, so Koyo is not required to label

7 its water with a statement of substandard quality, as prescribed by subsection (b) of Section of Subpart B of Part 165 of title 21 of the Code of Federal Regulations. Section : Kayo does not add any flavors, extracts, essences, minerals or juice products into its' Bottled drinking water known as MaHalo desalinated deep sea drinking water, so this Section has no bring on Kayo or its labeling aspects. Section : Kayo's only direct consumer sales of its bottled drinking water are done via the internet and every invoice identifies Kayo as the bottler (manufacture), with all contact information as required under this Section. Section : Kayo has no agreement to supply its drinking water as emergency water, so this Section is not pertinent to Kayo's Water Bottling Report. Koyo would consider the opportunity if asked. Currently, Kayo has not reserve inventories of its bottled water available in California. Section : Kayo submitted all of its bottled water levels for review by the Department when it first applied for the Out of State Water Bottler's Permit, which was issued to it in June This concludes Kayo USA Corp.'s annual Bottled Water Report as required. The report is signed by the following parties: Kayo USA Corp. By:~ LarIYV:k~ Plant Manager

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