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An essential aspect of the Company’s business model is the introduction of additional proprietary OTC products. By restricting its line to a smaller number of unique products, and selectively outsourcing non-core activities, management intends to maintain robust profit margins. Proprietary OTC products also provide high margins for retailers, who thus have added incentive for stocking GelStat products and encouraging consumer purchases instead of competing (lower margin, commoditized) product offerings within any given category.
Management is focused on establishing and expanding its intellectual property rights as an important means of ensuring that its proprietary products do not become commodities, thereby protecting its high margins and sustaining its competitive advantages. On February 6, 2007, the Company received notification that its first patent was awarded. The patent is currently held by High Alpha Partners, Inc. d/b/a GelStat Direct. GelStat Direct granted GelStat Corporation exclusive rights to this patent.
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