They paint a rosey picture. Just like the letter they released after the last R/S. Any of this sound familiar?
What was the PPS then? What is it today?
January 16th, 2008
An open letter to our valued shareholders,
Looking back on 2007, it has been a year filled with some wonderful “firsts” as well as some significant lessons learned. It seems appropriate for us to take some time to share with you our thoughts about this past year and plans for the coming year.
This year we took some big steps: we established our primary supply chain, manufactured our first product lines, established our initial distribution network, began selling product, completed an audit, and began the process of completing our SB-2 registration for filing, which we will complete in the very near future. Additionally, we partnered with an outstanding investment consulting firm that has worked closely with us to provide adequate capitalization and market related advice.
We also had our share of manufacturing delays and logistic issues – challenges for any start-up. While our sales numbers were not what we would have liked thus far, we have prepared ourselves well for strong sales in 2008.
We have matured the supply chain, sharpened our logistics management, and have brought on a new sales director, David DeAvila, who has tremendous knowledge of this industry.
Another challenge is managing investor questions and calls. Our management team wishes that we could spend unlimited time answering each investor question we receive. With a current investor base of just under 3,000, one can appreciate that this is next to impossible. Yet, we know we can improve our communication with you and are working on ways to do so in 2008.
In that spirit, we would like to share a little of what is going on ‘behind the scenes’ here at Eternal Image.
Some shareholders ask, “What do you do all day?” Looking at our calendars, most of the management’s time is spent on two fronts:
1) Building the core business to drive sales: finding suppliers and building a supply chain; logistics management; distributor development; marketing, advertising and promotion
2) Preparing our business to become a fully reporting company through the filing our SB-2 registration – which will provide us with access to capital markets.
As you might well imagine, either one of these tasks can be all-consuming, requiring countless hours of time. But working on both at the same time? Well, let’s just say that the Eternal Image team is not getting a lot of sleep or vacation time these days!
We’re not complaining. We share this information with you not so you will feel sorry for us, but to illustrate how passionate we are about this company and this business. We could have taken a different route which would have slowed our entry into the market. We have purposely chosen this two-fold front approach to obtain and maintain a first to market competitive advantage. In addition, since this is a capital intensive business, we wanted to make sure we had access to the proper capital markets to secure funding for our long term growth and profitability.
We continue to see long-term potential in this market. With 60,000,000 baby boomers just now starting to retire, coupled with the fact that there is a significant trend toward ‘themed-arrangements’ (in which our products are prominently integrated), plus market research indicates that most baby boomers associate themselves with three or four major brands over the course of their life … we believe our concept and products are a natural fit - which translates into our company being able to meet the needs of an un-served market which means long-term and profitable growth.
Building the infrastructure of a company to support this goal takes time. We believe we are moving from a development stage company to a company that has solid sales and growth potential into 2008. Time will tell, but we are optimistic about our prospects for profitable growth.
To insure we have enough capital reserves to fund our operations, we have made the decision to become a fully reporting company and apply to be listed on the OTC:BB. This has been our goal from the very start. But to become a fully reporting company so our stock can be traded on the OTC:BB is no small feat. The process, procedures and requirements to reach this goal have changed tremendously over the past few years. This is due to the scrutiny on the public markets brought to bear because of the corporate collapses of companies such as Enron, WorldCom, and Tyco.
Therefore, we are being very careful to perform our due diligence and put a record keeping process in place that meets and exceeds SEC standards. Unfortunately, we do not have the financial resources to employ full time SEC attorneys, CPAs, and Auditors on staff. We have to outsource that work. Because these professionals have other clients and different schedules, we cannot move as quickly as we would like on getting some of these tasks completed. We simply work within our means and control what we can control, and then we work very hard to meet or exceed our timing goals.
We have worked very hard in developing our SB-2 registration – a document that is about 200 pages including exhibits. Our goal has been to develop the registration to a level of excellence in order to reduce the number of questions or comments we receive back from the SEC. One of the strategies we felt very strongly about was getting our share structure more in line with other OTC:BB companies, and what the SEC would expect.
This is the main driver in the decision to implement a reverse split of our common stock. It is crucial that we reduce the number of outstanding shares.
We want to be clear: we did NOT raise the authorized number of shares. We did not take these steps lightly. As a balance, we have put in place several price support strategies to help peg and stabilize our share price.
The Eternal Image management team owns more than one third of the outstanding shares and we are keenly aware of how our approach will impact our stock price. The vast majority of our compensation is in stock, and no officer makes over $75,000 a year in salary. Additionally, no officer has sold any significant portion of their ownership.
The moral of the story is that we are right there with you, the investor. We understand your concerns and are working very hard to build a profitable business to boost share price. We do this by building our brand, securing the best licenses for this business, developing the highest quality product we can, and serving our customers to the best extent possible. We have tremendous faith that as we take these steps, our sales and share price will take care of themselves.
We plan on having more investor conference calls and chats in the New Year. We are looking forward to sharing what we are doing to drive sales and profitable growth.
The entire Eternal Image team would like to thank you for your support, encouragement, and understanding. We wish you all a very prosperous New Year!
Thank you all for your continued investment support
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