FrankSpeech Network Inc (FSBN)

[go1hawkeye]

During the past quarter, the Company has re-designed its distribution network so that it now makes use of seven United States Postal Service ("USPS") centers located in California
(2), Florida, Maryland, Massachusetts, Texas, and Washington. These USPS postal drop centers, which have been developed with the cooperation of the United States Postal Service, are strategically located to service the subscriber base in each of their respective regions. There are two warehousing centers located in Colorado and Kentucky that house the inventory of video games and DVD titles for shipment. During the previous quarter, this system underwent testing and the distribution network achieved its goals of 100% order fulfillment on a daily basis, 100% processing of returned mailers on a daily basis and overall success upgrading the integrity and rental ability of the inventory. The results of this re-design have allowed the Company to reduce its employees by 31 and reduce related warehouse expenses.