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into acquiring a system of their own just to be able to compete. Several years ago, EPS sold just a few Scene Machines a month. Today, EPS ships nearly one Scene Machine per day. Thus far, EPS has shipped approximately 1,500 machines. The US market, however, will absorb a minimum of 10,000 and a maximum of 20,000 Scene Machines. There are now enough successfully operating Scene Machines systems throughout the country to push reluctant buyers into making a purchase in the near future. In addition, there is now a growing trend in the portrait industry toward producing portraits with a contemporary background that can only be easily created with a Scene Machine. EPS can take the majority of credit for starting this nationwide trend. Every Scene Machine sale generates a long term relationship with the owner that in turn results in the sale of numerous other related products. The one hour portrait industry will continue to rapidly expand. There are two kinds of one hour portrait studios... small operations located as a sub business in an already established one hour amateur processing lab and stand alone operations that do nothing other than take portraits and process their own work on location. EPS president, Dr. Henry Oles, is a co-owner of one the most advanced one hour stand alone portrait operations in existence. It is known as Portraits Now. Portraits Now has three stores in operation in major shopping malls in Ottawa Canada. Two of the stores are now franchised. Portraits Now plans to expand throughout Canada and intends to open operations in the United States. EPS is the prime equipment supplier of Portraits Now including both all studio equipment and lab equipment. EPS expects to develop very significant growth in the area of specialized quick service professional processing equipment. EPS predicts that many professional photographers will eventually return to producing much of their own color work. At one time, all photographers processed their own work. However, starting approximately 30 years ago, large regional processing labs began to handle much of the work produced by professional photographers. These labs, however, are very slow. Photographers have to wait one to five weeks to get their completed work. The development of the one hour lab industry with its associated one hour portrait studios is, pushing photographers to reconsider the processing of their own work in order to compete. In addition, the equipment today is much more automated and simple for the photographer to use. EPS is in the best position to sell to both groups, the one hour processing lab that has a studio and wishes to install specialized equipment to handle the portrait work and to the traditional professional photographer who wishes to compete with the one hour lab studio such as Portraits Now. Essentially, EPS is assisting two competing groups within the photographic profession and serving both groups with their equipment needs. Each processing system will sell for between $17,000 and $100,000. As such, the potential for sales growth in this area is almost astronomical. EPS expects this area to develop rapidly over the next several years. The principal hindrance to growth in this area is a lack of adequate work space. E. and F. COMPETITION