Regeneca Releases Letter to Shareholders and Distributors
Highlights of the letter include:
"Our pre-launch was successful and resulted in a dramatic increase in sales in the months of February, March and April...As we were preparing to release RegeneSlim, we suffered our first major challenge, the recall of two lots of RegenErect. We handled the recall by offering an exchange or refund to all customers returning recalled product without negatively affecting awarded commissions. These returns caused a substantial hit on our resources. Soon after the recall, we released RegeneSlim and a new daily formulation of RegenErect. During this time, we were also completing a lot of technical work surrounding the integration of our direct response and network marketing programs. RegeneSlim has been well received by our distributor base. However, our second formulation of RegenErect did not have the same impact as our first formulation and was not a success. We learned from this experience that the market desires an impact male enhancement product rather than a daily pill.
Our next focus was on developing a new impact formulation for our male enhancement product. We developed a new formulation which has been well received by our distributor base. This product was released in late September leading up to our Launch Event in Las Vegas on November 11, 2011...
Given the initial success of our new formulation of RegenErect and the seasonality involved in the production process, we exhausted our inventory in mid-December, and, as a result, sales of RegenErect have been suspended temporarily. We are currently in the process of bringing the production of RegenErect in house. We believe we will have inventory available for shipment again in February 2012. This interruption in sales is causing another strain on resources and our sales momentum. Our new processes will ensure that we no longer have seasonality issues with our supply chain.
Given all the events of 2011, the Company has accomplished many things to set itself up for success in 2012. We have created a cost-effective online direct response campaign for RegeneSlim. Our back-end IT systems have been updated to fully support the merging of our direct response and network marketing activities. We have completed financial audits for 2009 and 2010 and filed all SEC-required financial filings to become fully reporting and current as of December 2011. We have begun work to bring production of our male and female intimacy products in house which will provide the Company with inventory stability and reduced costs. We have diversified our product offerings to include RegeneSlim, RegenErect, RegeneBlend and RegenArouse. We have also completed our professionally-produced Opportunity Video to provide our distributors with a key tool in their recruitment efforts.
As management looks to 2012, we are seeing explosive growth with our impact weight-loss product RegeneSlim. We are planning on a large increase in our direct response marketing activities. The Company has been able to integrate, both technologically and philosophically, the concept of creating customers via commercials and other types of direct response advertising, and then turning such customers into leads for and customers of our distributors. This model gives us a huge advantage over competitors both in network marketing and in direct response...The Company will expand its product line within the current categories of natural products for both wellness and intimacy, starting with building a line of complimentary products to go along with RegeneSlim. We also look forward to the international expansion of our business in both Latin America and Asia. Management feels it will be necessary to complete and continue financing throughout the year to support these objectives. To that end, the Company is planning a move from the Pink Sheets to the Bulletin Board which will make us available to a wider range of the investment community and new financing opportunities.
We look forward to a successful and rewarding year for our shareholders, our distributors, and our employees.
Sincerely,
Matthew Nicosia, President, CEO and Chairman and Dan Kerker, CFO
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