GENEX PHARMACEUTICAL (GENX)

[DigiTech]

Thanks for your comments. I am aware of the issue and there is not much we can do but trust the CEO. I seem to have a good relationship with the company and I do no see any sign that they are trying to screw anybody. All of the issues have been due to lack of attention to the details of running a public company. They are really running a private one with some public investors. Since we are all interested about an exit strategy it is a problem. However if they succeed in their plan of multiplying the company size by 10 then success will cover a lot of sins.

Concerning the use of funds. The money was loaned to companies in the Golden Group. All of them (I think) are owned by Mr.Song. A bit incestus but that's China for you. The 6% is actually better that what a bank would give them. My problem is that the interest is added to the loan and not really paid.

The good news is that the funds where used to build the new factory and put GENX in a position to get the production increased 10X. If they do they could even write the loans off and we would still be OK.

This is a very risky investment but I think it will pay off in a big way.

I am trying to go back to Tianjin but I am not sure when I will be able to. I am in Europe in June and my next possible trip is to Shanghai is in July for a trade show. If I do not make July then I will be there in September.

They invited me to come back so it is a good sign.

Good luck.

BG