Shareholder Question: Uplisting and Reverse Split?

QUESTION

  • “You mentioned up-listing?  Doesn’t this mean a R/S?”

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ANSWER

Although a legitimate use of a Reverse Split is to qualify for quotation/listing in some environments that have minimum price levels that we do not currently satisfy, it is actually not necessary to perform a Reverse Split in order to become a fully reporting company, with the SEC.   Furthermore, although registration with the SEC (i.e. waiving our current exemption and satisfying the application process) is somewhat burdensome in terms of cost in money and time spent on compliance, it is not unattractive to a company with the culture of Winning Brands – and has benefits.  Winning Brands already discloses its financials and provides quarterly reporting.  It already accurately reports its outstanding shares.  The company already goes to great lengths to communicate with shareholders.  Winning Brands already has maintained Current Information status successfully in OTC Markets.  Therefore, by some measures, we are already 80% there and could take that final step more easily than many. 

As a fully reporting issuer, i.e. registered with the SEC, even prior to being listed on a more “senior” exchange, the firm would gain access to capital on terms that were more attractive to the company, such as “patient capital” from institutional sources that have an interest in emergent, registered public companies.  Companies with a great consumable product that is  affordable for anyone,  has universal usefulness,  is guided by dedicated management, enjoys plausible large scale growth internationally and has earned a track record of commitment to success – such companies are not typical.   In their early stages, they are a real “find”.  Registration with the SEC would be more viable if/when we secure certain key accounts that would make Winning Brands self-sufficient, because the ongoing costs associated with registration would then be feasible.

In summary, the benefit to shareholders of our securing the senior business under discussion is that it would position the firm well to becoming suitable for registration with the SEC and thus achieve greater legal/financial credibility for all subsequent steps relating to its share trading environment.

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