VendTek's Opportunity

There is an Enormous Market for Prepaid Services
As a developer and commercializer of transaction automation systems and software for the retail distribution of prepaid services, VendTek finds itself with an opportunity to capture a significant portion of a multi-billion dollar market serving at least 100 million people using prepaid cellular and long distance services in North America and China. And that is only their telecom business.

VendTek's proprietary and market proven e-Fresh software gives the company the edge it needs to be a market leader in delivering prepaid services.


So What's the Problem?
Historically, delivery of prepaid services has been achieved through physical cards (often called "vouchers"). Retailers of prepaid card services are faced with high cost inventory (i.e., multiple face values from multiple provider companies), theft risks, space requirements, and inventory management.
Cellular and long-distance service providers need new business solutions that lower risk and distribution costs for retailers.

How Can VendTek Help?
VendTek's opportunity lies in making the traditional distribution paradigm of physical cards completely electronic.
VendTek has spent several years developing an electronic distribution software package for prepaid telecommunication and financial services called e-Fresh. It is proprietary, vendor-neutral, customizable, and secure. It allows for the secure transfer of information through electronic POS terminals, self-serve kiosks, WAP enabled phones, ATM machines, and web browsers. It is state of the art and eliminates costly physical cards.

How Does VendTek's Solution Work?
VendTek commercializes e-Fresh under license to companies that create distribution businesses in the telecommunication and financial services markets. The Company's markets are global, but initial installations are in Canada, the US, the UK and China.
Typically, e-Fresh enabled POS terminals are sold to a third party that uses them to distribute prepaid airtime via electronic inventory that is stored on a central server rather than in the form of physical cards. The usage is similar to paying a bill by debit card where a keypad is used to select airtime minutes or dollar values. The purchased product is delivered in real time via the POS terminal in the form of a secure PIN number from VendTek's secure server. A printed receipt containing the unique PIN number enables the service activation. Since the PIN number is downloaded in real time, is single use, and doesn't need to be inventoried by the retailer it couldn't be more user friendly and cost effective. Easy!
The e-Fresh system creates significant value through markedly improved efficiency. The physical cards are gone and consumers using e-Fresh terminals benefit from improved convenience and product selection.
VendTek's system reduces shrinkage and inventory requirements while improving consumer access to prepaid services.

The VendTek Advantage - Intelligent Growth
In order to create sustainable and recurring revenues in addition to third party licensing, the Company's own subsidiaries, Now Prepay Corp. (North America) and VendTek Systems Technologies (China), are using e-Fresh software to build electronic, prepaid services networks.
With several multi-billion dollar market opportunities, VendTek is racing to capture market share by deploying e-Fresh enabled POS terminals and kiosks. With a focus on steady, systematic growth the Company is poised for success.
VendTek's Canadian subsidiary, Now Prepay, has agreements with most major Canadian telecommunications companies including Bell Mobility, Fido, Rogers AT&T Wireless, and Telus Mobility to distribute the electronic PINs that are convertible to prepaid telecom services such as cellular airtime and long distance. The Company believes there are only a few companies in Canada who have these agreements in place and Now Prepay is proud to be one of them.
In China, VendTek's joint venture subsidiary, VendTek Systems Technologies, is working with UFO Group to replicate the Now Prepay business model in a much larger and faster growing market.

Winning With Service
It is just so simple. VendTek offers a simple solution to a complex and expensive distribution channel. The physical card form of prepaid services is in the mode of planned obsolescence. Going electronic is so much easier for retailers and consumers that adoption as the preferred method of purchasing prepaid services is almost a given.
VendTek's e-Fresh system is second to none for electronic delivery. It is easily modified to allow the provision of all types of prepaid services such as movie tickets, e-Cash, lotteries, transportation tickets and subscriptions - and that should keep the Company competitive in a market going through transition for many years to come.

Creating Shareholder Value
VendTek wishes to penetrate all levels of the prepaid market. Management has been aggressive in securing agreements with ISOs (Independent Sales Organizations), vendors and retailers. To that end, deals are being finalized and announced on a regular basis.
The numbers add up quickly. With only 5000 terminals averaging a few dollars of net margin per day, gross profit potential quickly exceeds $4 million annually.

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