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BUSINESS MODEL
Housey Pharmaceutical Research Laboratories, an affiliate of HMI, Inc. (Cayman), is a private corporation whose business model has been carefully designed and implemented toward a long-term, conservative growth strategy. Together with our Business Advisory Board and other pharma industry Consultants, we have worked hard to develop the next generation business model for creating and developing cost-effective patent-protected new medicines and nutritional products. Our model is fundamentally changing the manner in which pharma products are created and developed. We utilize private funds to grow the Company and to fund our research laboratory activities in order to further the development of our new technologies and for new pharmaceutical product discovery. We also receive grant funding for certain projects. By focusing on our business model to produce consistent cash flows, we are able to remain internally funded to sustain our operations.

Although this business strategy is substantially more difficult than pursuing traditional venture capital sources, we believe that it is and will continue to be a key element of our success and an asset for our company that provides several important benefits. First, it allows us to retain our long term focus on important but often very difficult pharma research projects and concentrate our efforts on new drug discovery and creation, as well as technology development, while being minimally affected by frequently volatile world economic conditions or irrational fluctuations of the public equity markets. Second, it allows us to attract and retain outstanding individuals who wish to develop their careers within an innovative atmosphere that is conservatively run from a financial perspective. This enables us to take substantial scientific risk in order to achieve formidable advances in medical research.

The Company or its affiliated entities aggressively pursue patent protection for all new drugs or research technologies created or discovered in its laboratories. These patent-protected drug discoveries may then be commercialized using one of two general approaches. In the first approach, applicable in certain instances, such as when a therapeutic market potential is so large that it is not feasible for HPRL to develop the product alone, a patent-protected HPRL compound will be offered under license to another pharmaceutical company in exchange for up-front payments and subsequent on-going royalty payments based upon reasonable estimates of the potential new drug’s annual sales. This is a standard structure within the pharmaceutical industry. However, unlike other biopharma and biotechnology companies, HPRL can be highly flexible in such arrangements.

In the second commercialization approach, the Company may choose at its discretion to further develop a potential new medicine or nutritional supplement without a partner. In this instance, the Company (rather than a licensee) would sponsor clinical trials of the potential new medicine. If approved, the Company would then market the medicine by entering into a collaborative marketing agreement with a larger pharmaceutical company partner with an existing world-wide sales force.

We fully intend to continue our strategic long-term focus as a private company.

MEDICINE FOR THE WORLD'S WELL-BEING

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