Additional Update 4/17/08
Dear Fellow Stock Holders:
In one of my earlier e-mails, I outlined some information concerning the direction in which we are heading and also our exit strategy. At this point I will like to update you on what has transpired so far.
We have decided not to pursue joint venture agreement with the parties that we were in negotiation with concerning the pharmaceutical products. This decision came about after I felt that I will not be able to run this company efficiently under this arrangement as I do not have any previous experience in this line of business. I also am beginning to experience exponential growth selling DCM Systems and I would not like to share our success with a project that might likely impede our growth. In this short period I have sold over 20 systems worldwide and continue to increase the number of installed-bases. I don't think I want to dilute my resources but rather do what I do best. I have another 40 systems in the pipeline. There are many reasons why it cannot move as fast as we want. Hospitals require planning and there are lots of system integration issues that will require time to work to implement. The outlook for 2008 looks very bright to complete these 40 systems.
Our first option is to create a huge installed-base. When this happens, we will definitely come under the radar of the big players. Companies like Siemens, GE, Philips and Toshiba tend to acquire companies that have large installed bases because they can use these bases to sell their equipment. What is the number?. I think if we can achieve 400 bases we will be looking good.
The second option is to list the company at an exchange. We have identified the Hong Kong Stock Market. Hong Kong Stocks that have Chinese content tend to be more favored than those without. People tend to buy your shares when you say you sell and generate revenue in China. In years past it would be disastrous if you ever said this because American analysts ruled out companies doing business in China saying that these companies are high risk companies. Today it is a dream to do well in China. I have a very good contact in China and we are in the process of drawing out an exclusive distribution agreement for the Chinese market. There are over 51,000 hospitals in China of which not less than 10,000 would qualify to purchase the DCM System. The procurement process is time consuming. If we can penetrate 1% of the Chinese market we will be able to achieve the 400 bases. Almost 99% of the hospitals are State Owned. So if you sell to one you sell to all.
We have carefully laid out our strategy and from now on we only need to execute it. We have to continue to generate revenue both within and out of the US and particularly in China. I also mentioned about investment from Silverdale and Goldman Sachs. An agreement with Silverdale has already been signed and the funds have become available. Goldman Sachs has not signed.
In the coming months we have only one thing to do - Generate Revenue. I will be travelling again at the end of the month. My first stop is in Dubai where we are installing a system. Then we moved on to Mumbai to install another system. It was lucky we opened an office in Philippines because we now are able to provide support to our customers in Asia. We have an office of 18 people - many of them are sales persons and technicians. Support is not an option but a requirement.
We continue to grow in financial strength and this has carried us thus far and towards our next level. This also led to hire a top notch National Sales manager who now will be able sell our product in the US. We will continue to invest in training technicians so that we are able to support our growth in the Chinese Market.
Edward Tan
President & CEO
eFotoXpress Inc.
Fremont CA 94538, USA
