Exact Medical Manufacturing, Inc. Corona Virus Status Communication 2

HIGHLIGHTS:

• • • 15:10 HOURS 7 FEBRUARY 2020 THE CHINESE GOVERNMENT GIVES SPECIAL PERMISSION TO EXACT MEDICAL TO OPEN THE MANUFACTURING FACILITY EARLY
    • 07:30 HOURS 8 FEBRUARY 2020 EXACT MEDICAL WILL RESUME NORMAL PRODUCTION AT OUR CHANGZHOU CHINA FACILITY
    • 7 FEBRUARY 2020 THE CHINESE GOVERNMENT EXTENDS THE MORATORIUM FOR GENERAL FACTORY OPENING FROM 10 FEBRUARY TO 17 FEBRUARY. THE GOVERNMENT IS WAITING FOR THE CORONA VIRUS DAILY NEW CASES TO PEAK AND BEGIN TO SUBSIDE BEFORE THE COUNTRY IS OPEN FOR GENERAL BUSINESS. THERE IS NO GUARANTEE THE 17^TH DATE WILL NOT BE EXTENDED FURTHER.

As I am sure each of you are seeing the News Reports, the situation here in China on the Corona Virus is changing rapidly.

In an effort to stop the spread of the disease China has implemented numerous travel restrictions on individuals and has also delayed the opening of Manufacturing Facilities originally planned for February 10^th until February 17^th.

Fortunately, Exact Medical has received an exception approval from the government to open our facility and begin manufacturing starting February 8^th.

When we start production tomorrow, we will have present 48% of our normal work force. During the Lunar New Year Holiday many of our workers traveled to visit family and/or tourist locations and now due to the personal travel bans they are unable to return to Changzhou and start work. We do not have a confirmed date of when such travel bans will be lifted.

However, since so many factories remain closed there is a large potential work force available locally for hire and we have already begun that process. We are forecasting that we will be fully staffed by March 1^st and running production needs at full force in March.

In regards to raw material items needed for our production; adequate inventories are available in our facility to support our production for approximately 1 month.  Because we are a special case approved to open company, our raw material suppliers are also designated as critical and approved. As a result, we anticipate no major shortfalls of raw materials.

While the current situation is positive, we regret to inform you that shipments of product will be delayed due to the initial reduced labor force and we will not be able to meet all of the requested ship dates on customer orders. Next week each of our customers will receive a report detailing specific items and orders with anticipated available to ship dates. We expect that shipments and deliveries will return to normal around April 30^th. We ask you to please work with us via communication of specific and particular product needs that priority can be placed on those needs.

Again, please wait until you receive the report of your particular items and orders with expected ship dates and then communicate with us from that report the high priority items you need to keep operating.

Additional information will be published as it becomes available and we thank you for your support.

David Power

President

Exact Medical Products, Inc.