BUSINESS MODEL

Historically, Senetek derived substantially all revenues from royalty based licensing arrangements.  This business model was principally predicated upon the limited availability of capital resources.  Our improved finanical position has allowed us to implement a superior business model that has been developed to increase revenues and create brand recognition for Senetek.

Under this business model, Senetek will grant collaborative marketing partners exclusive product licenses for designated market channels while retaining the licensed trademark to the product.  Our partners will now be responsible for sales, marketing and order fulfillment during the life of the agreement and Senetek will actively participate in the product marketing strategy.  Senetek will be responsible for the production and the supply of products and all product packaging will prominently display the Senetek name.  Senetek will participate with our partners in the success of our products through structured revenue sharing covenants.

This business model positions the Company to realize greater product profitability and financial growth.   By maintaining control of production and product distribution, Senetek is able to track product deliveries and sales, which is not always possible or practical in a royalty based arrangement.  Such agreements allow Senetek a greater share in the success of our products and greater insight into future revenues and cash flows.   By leveraging partner resources, Senetek creates a sales, marketing and distribution system across key channels of distribution and designated geographies while transferring full financial, regulatory and marketing responsibility to our respective partners.   Senetek’s financial resources can therefore be better utilized to leverage further development and growth.   By maintaining control of the licensed trademark and having the Senetek name on all product packaging, the Company will be afforded greater visibility in all markets.

With a strong balance sheet in place the Company has transitioned from a licensing model to Revenue Sharing with Brand Equity, delivering an increased revenue stream with higher margin potential, and creating long-term value for our shareholders.