Our shareholders have asked for a clearer definition of our business and our future. Hopefully, this Q & A will help.

Q 1. How will VendTek be affected by the obsolescence of physical cards?

The phase-out of physical cards presents an opportunity for VendTek to deliver all prepaid services electronically through e-Fresh enabled terminals and kiosks. Without requiring inventory of physical cards, services are delivered on demand allowing retailers to offer a wider selection of service providers and denominations with significantly reduced risk and costs.

Q 2. What is the demand for prepaid services?

Somewhere in the neighborhood of 120 million prepaid cellular and long distance users in North America and China are projected to consume at least $10 billion of prepaid services and recharges in the next 12 months.

Q 3. What is the opportunity for VendTek?

VendTek is a software developer. We license and sell our software to our own subsidiaries and to other companies. Our proprietary software enables the electronic delivery of prepaid services on a secure network. Our delivery method decreases theft, inventory costs, and technology redundancy - while increasing product offerings.
Commercializing e-Fresh under license is VendTek's strategy to create sustainable and recurring revenues since we sell the "machines" and we collect commissions on a "per transaction basis".

Q 4. Why do you think this strategy will work?

The death of physical vouchers can be anticipated. Service providers and retailers need new solutions.
Electronic delivery is the only viable answer. e-Fresh has been tested and proven. The software can be incorporated into any POS device, kiosk or ATM machine. In the near future, WAP and Internet-enabled mobile phones will also have the potential to be e-Fresh enabled.
As a licensor of software, we are able to collect recurrent revenues in a growing and perpetual market. We are ready to add new offerings to the
e-Fresh mix, as consumers are ready. Also, VendTek has the business partnerships that will facilitate deployment and growth.

Q 5. Tell me more specifically what e?Fresh "looks" like?

VendTek and its subsidiaries are joining forces with POS terminal distributors and transaction processing organizations to integrate e-Fresh software with debit card and credit card processing software. The combined application will provide a compelling value-added service to the channels presently served by physical cards for prepaid telecom services. To the consumer, the software is no different that selecting an account and a dollar value for a retail purchase.

Q 6. Who is your competition?
Our competitors are two-fold. On one level, our competition is mainly channel partners who supply prepaid cards to the retailers. However, we are working with some of them to provide POS terminals that include our software so that their retailers can still sell prepaid services and adapt to a changing marketplace.
On another level, we compete with other electronic distribution software manufacturers. We believe that e-Fresh is the most adaptable, secure and user-friendly software application available. We are constantly reviewing our technology and striving to stay ahead of other developers.

Q 7. Where do you see the company 18 months from now?
Our continued focus going forward is business expansion in Canada, the US and China. Cellular and long distance prepaid services are our primary market opportunities but we remain aware that evolving markets such as financial services are part of our future, as consumers and distributors start to realize their potential.
As physical cards are phased out, the demand for electronic PIN delivery of prepaid services will increase. We hope to capture 5% of the multi-billion dollar market opportunity that stares us in the face every day.

Click here to see pdf format.TOP