HENDERSON, NV--(Marketwired - Oct 12, 2015) - Rx Safes, Inc. (OTC PINK: RXSF) the developer of autonomous fingerprint healthcare security products designed to combat drug abuse and diversion, today released a shareholder letter, outlining the Company's growth plans for the future.
Dear Valued Shareholder:
As your CEO, I understand the importance of communicating with you regularly and as such would like this letter to serve as an update on the efforts we have made over the last several months to reorganize the Company with an eye to attract more sophisticated institutional lending, as well as to eventually apply for listing on a national exchange such as the NASDAQ. The Company continues to demonstrate its ability to move the business forward, develop new products, build its IP portfolio and create new opportunities, all while facing continuing financial constraints. Our past experiences are serving us well in helping us put a plan of action in place to best overcome these types of challenges.
The OTC Markets provide a great platform for us to introduce the Company and its story to the investment community. However, recent shorting activity has negatively affected our stock price to the detriment of the Company and our shareholders as a whole. Over the last several months there appears to have been a concerted effort to put pressure on the Company's stock and it has been impossible for us to raise money from equity investors. This has forced the Company to seek interim funding through convertible debt financing, placing additional pressures on the balance sheet and making the company look financially weaker. Fortunately, through our rebranding initiative, we have begun to attract new shareholders who believe in our strategy and support the long-term vision for the Company. We recently paid off the remaining balance of a Convertible Note, which had partially converted. This was done to prevent further immediate dilution, which may have negatively impacted our stock. We have also taken steps to clear the balance of all outstanding convertible debt through the provision of a less dilutive $1,000,000 equity line. As of the date of this letter we have not completed the steps necessary to secure the equity line and as such, we may still be subject to one additional conversion before the end of the year and cannot control how this affects the market. However, we hope the steps we are taking will limit the pressure on the stock and will serve to increase shareholder equity.
The biggest change you may have seen recently is our new website which serves to re-brand and re-position the Company as we now focus our efforts on the lucrative professional healthcare marketplace. We intend to seek out and secure new distribution, manufacturing and sales relationships in the medical device and equipment marketplace. Based on the high profit margins attainable in this market, we hope this strategy will make the Company financially secure in the near future. In addition, the Board has been busy strategizing and outlining a plan for the Company to meet the requirements for listing on a national exchange such as the NASDAQ. We believe that the NASDAQ will offer a more friendly, professional, stable and welcoming market for our Company. While we currently do not meet the listing requirements for the NASDAQ exchange, we are now positioning the Company to start the process of meeting those requirements.
As part of the Company's goal to up-list, the Board and a Shareholder majority has approved a 200 for 1 reverse split of our common stock. You will have seen our pre-14c filing on Friday October 9, 2015 indicating this. Once approved, this means we will go from approximately 270,000,000 shares issued and outstanding to about 1,350,000 shares outstanding, with about 250,000 shares in the public float. The Board believes this is necessary step and in the best long-term interest of all of our shareholders, to weed out the game players and to improve our stock price so the Company can begin to meet the listing requirements for NASDAQ and create greater opportunity for our shareholders in the future. There could be some turbulence in the stock after the split and there will be those who will continue to criticize the Company and this move. However, as stated earlier, we feel the Company cannot raise equity capital outside of its supporting shareholders without such a move and we hope that the more seasoned shareholder will support our efforts and will help lift the Company over time.
As mentioned previously, this restructuring is necessary to make the Company more attractive to institutional lenders whose investment strategies include working with Companies to secure listing on the NASDAQ. The reverse split is our first step towards this. While we are moving through the administrative steps to facilitate the split, our Board has already begun developing and articulating a new business plan to attract seasoned investment bankers to assist the Company in raising equity capital as well as up-listing. This process will take time and is not guaranteed, but we believe with hard work and the right partners, it is extremely achievable. We have already begun speaking with several sophisticated Investment Banking firms with a focus in healthcare and the medical device space. These firms care more about the fundamentals of our business and understand the long-term value of our company, our technology and our products as they apply to an enormous underserved market suffering huge economic and social losses attributable to drug theft and diversion. While we have not yet entered into any agreements, we expect to announce a new investment banking relationship shortly.
We are committed to the success of this Company and are certain that the wait will be worthwhile for our supportive shareholders. We aim to prove that we are not the typical OTC Company and that a reverse split will makes us stronger as a Company not weaker.
In the meantime, it's business as usual!
We are presently in the process of re-energizing our efforts to secure sales for our newly enhanced Rx DrugSAFE product, having taken a 4-month hiatus to reposition and rebrand the Company and improve our core technology. We have re-engineered the product to incorporate an additional layer of security by adding an administrator, who is required to be present to authorize the enrollment of additional users. We have taken this step to demonstrate our continued commitment to the level of security offered by our products and as a stepping stone towards additional functionality we plan on integrating over the next several months to target the needs of the professional healthcare community.
We will be going live with a major retailer partner online and shortly thereafter will be announcing a pilot program for the Rx DrugSAFE product with this same partner, who is one of the largest national retail pharmacy chains. The program will be launched in 2 key strategic geographic markets initially, with the hopes that the results will warrant a national rollout in 2016.
We have recently identified several grants that could fit our community support model to help local community groups acquire Rx DrugSAFEs as part of educational and services based programs to combat drug abuse in certain communities. We will provide more information publicly as we get closer to those grant filing deadlines. With our new focus in this area, our Director, Dr. Susan Kutzner, will be heading our community-focused grant initiatives. Dr. Kutzner has over 25 years of government grant writing experience and will be instrumental in shaping this program for the Company.
On the professional healthcare side, the company will be filing for FDA 510K pre-market certification on 2 new products, the Rx SafeDOSE (PCA Pendant) and the Rx MyDOSE (Needleless Injection System). The SafeDOSE application will be filed this quarter and we are working on securing distribution relationships with leading manufacturers in the PCA market, in parallel with the FDA filing. Meanwhile, the Company is engaged in discussions with several major pharmaceutical companies to join in the FDA application for the MyDOSE product. The FDA requires that needleless injector certification be packaged along with a particular pharmaceutical formulary, and we are specifically targeting companies who offer controlled substances such as morphine, where security and authentication is of the utmost importance, in line with our overall business model of utilizing our fingerprint technology to improve the security of products which store and dispense controlled substances.
We are also in development of several other professional healthcare products designed for hospitals, healthcare facilities and EMS and as we move further along with those development projects, we will release news when appropriate and required. The integration of our autonomous fingerprint technology into various medical devices and products that store, dispense or regulate controlled substances is a game changer in healthcare. We are able to make these products more efficient and secure and the tighter controls our technology offers will reduce the unauthorized access to, and the diversion of, controlled substances.
We have revamped and have started to implement new sales initiatives in both the consumer and professional healthcare markets, but just like any new application of technology, establishing a footprint in these markets takes time and money, so we are busy securing the resources to do so. We are actively interviewing individuals to lead our sales efforts in all three industry categories, consumer, professional healthcare and government, and we will announce the appointment of these key personnel once secured. The company hopes to see initial results of these programs as early as the 1st quarter 2016.
The Company continues to work on expanding its offerings, but its progress, while blistering in some areas, is held back dramatically because of its current inability to attract real capital. In order to succeed with our product roadmap, the Company is taking the steps identified above to attract equity investment while positioning itself to move up to the NASDAQ exchange. We believe we have a great story to tell, led by an experienced management team who have a proven track record of partnering with the biggest names in industry and who have developed and sold autonomous biometric security products through some of the country's largest retailers. We are taking the successful aspects of that prior model, and have now focused all of our attention narrowly in the healthcare market that is suffering both financially as well as socially from theft, misuse and diversion of controlled medications.
Healthcare stakeholders are experiencing the negative impacts and are being held accountable and paying the price for the many issues caused by drug theft and diversion. Consequently, the industry is heavily investing in measures to address this drug diversion issue and we are presently the only company focusing 100% of our efforts to provide solutions in broad compliance of the Controlled Substance Abuse Act (CSA) which governs the handling of controlled substances and requires strict controls of the very same drugs which are the target for theft and diversion. This places us in a very strong position to take advantage of the investment being made in this area and to provide real solutions to address the issue.
The company continues to appreciate the strong support of its current shareholders, and we ask you to be patient as our strategy is designed for long-term growth and success. It is our goal to be the leader in the development of efficient and cost effective autonomous, fingerprint medical security solutions. Our objective is to positively impact what has become a national epidemic costing $484 billion dollars and 38,329 lives annually. To achieve this we will utilize our proprietary technology to develop medical devices, which integrate seamlessly into existing healthcare infrastructures, to improve the security of storage, transportation, monitoring and delivery systems for controlled substances. The Company's technology and products are positioned to prevent loss and reduce liability within the healthcare industry and to reduce the potential loss of life. We know the opportunity is there, we believe our products and technology can make a difference and we hope that our shareholders will see this also and support our long term plan to eventually leave the OTC Markets for a national exchange which we hope will deliver a greater return on investment for all.
Thank you for your continued support.
Lorraine Yarde, CEO
About Rx Safes, Inc.
Rx Safes is an emerging leader in the personal and professional healthcare drug security market. Our products incorporate proprietary autonomous fingerprint technology to provide drug security solutions for use in homes and healthcare facilities. Prescription drug misuse, skyrocketing insurance and pharmaceutical treatment costs and increased regulatory pressures create an unfortunate, yet necessary opportunity for Rx Safes to expand our reach and offerings in this growing market, valued at over $50 billion annually. Annual spending on healthcare technology products exceeds $34.5 billion. In addition, the market is being driven by ongoing Government support for successful drug abuse prevention initiatives, with a financial commitment of $25.4 billion in 2015 alone.
For more information, please visit www.rxdrugsafe.com
Forward-Looking Statements for RXSF:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectations, as of the date of this press release, and involve certain risks and uncertainties. Forward-looking statements include statements herein with respect to the successful execution of the Company's business strategy. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Such risks and uncertainties include, among other things, our ability to establish and maintain the proprietary nature of our technology through the patent process, as well as our ability to possibly license from others patents and patent applications necessary to develop products; the availability of financing; the Company's ability to implement its long range business plan for various applications of its technology; the Company's ability to enter into agreements with any necessary marketing and/or distribution partners; the impact of competition, the obtaining and maintenance of any necessary regulatory clearances applicable to applications of the Company's technology; and management of growth and other risks and uncertainties that may be detailed from time to time in the Company's reports filed with the Securities and Exchange Commission.