Chairman's Letter

April 1, 2008

 

Our Growing Business

Many years ago, wet behind the ears and entering the world of business, I was given, what has turned out to be, the best advice I have ever received, Stop avoiding risk and start embracing it. The only thing that my advisor left out was a tutorial on how, at the same time, to handle the criticism that surely follows.

Med Gen management has had a long history of risk taking, beginning with the marketing of Snorenz®.  The biggest risk of all was changing our entire marketing strategy and reinventing our business plan. Then there was the uncertainty of getting financial backing to support the business plan.

What if the developing share dilution caused by the conversion of debt to equity, would not prove financially sound? Then there is the uncertainty that our financial statements would not improve at all. Debt conversions to equity are never without risk. Yet, there was never a real choice? Closing the doors was not an option.

The success of Med Gen’s two minute Snorenz® commercial during the first four weeks of airing from March 3- March 31, has produced 921 phone calls which resulted in 339 orders with a total estimated revenue of $22,986. This represents a whopping 36.8% conversion ratio, by all industry standards, a very successful run. We are doubling the airtime and expect to quadruple the orders in accordance with industry averages.

While the TV commercials mentioned above are only the result of a small test of our revised Snorenz® marketing plan, they do indicate that we have significant profit opportunities to pursue and that is exactly what we are doing. Over the next several weeks we are adding to our airtime and increasing our sales as we do so.

 More commercials will be produced to market our other products. The continuing process of shooting, airing and tweaking, is long, expensive and not without a certain amount of risk. I have stuck with the plan because I have always thought our products and our markets to be exceptional. When we turn the corner, sales will soar and we can reverse the trend and increase the demand for our shares. Case histories abound with huge success stories, all bear out the validity of this [our] approach. Most small pharmaceutical companies have followed similar paths; albeit with much more capital than we have had to work with. The Head-On® commercial (similar to our Painenz® roll-on) is a perfect example of an advertising blockbuster. But it took several millions of dollars, money we didn’t have, to get it there.   

In the months ahead we will be reporting on similar successes with Painenz®, Fab U Lust®, and Good Nights Sleep®.  Our Un Diet line is now being re-developed as a series of single sprays dealing with specific weight issues. It is important to recognize that we have now entered Phase 3 of our Business Plan. At this point it’s all about our ability to air our commercials and turn our money.

The timing of this message can’t be more appropriate, the beginning of Spring. We have plowed the fields and planted the seeds: it is now, as my title suggests, our growing season. 

Yours Truly ,

Paul B. Kravitz
Chairman/CEO