QUESTION
Eric, I got to say these Q3 sales numbers and the recent amount of volume coming in have me pretty worried about the future of wnbd. I read through the report and realize with the 25k we did have an increase yoy, but its just the amount of volume that concerns me. It feels like we will end up like Q##P soon or another no name penny stock. I was just hoping perhaps we could get more information regarding the DTC status and how registration with the sec is coming a long. /we could really use a big 4Q. I am just curious about how you feel right now on the companys prosperity. Thanks.
ANSWER
My understanding is that the DTC is being communicated with right now by one and perhaps two brokers on behalf of Winning Brands/shareholders to permit electronic deposits again. I will provide updates fast when/if a concrete development emerges.
It is looking more likely that the Form 10 route to registration is more suitable for us than S-1. Detailed planning of the required budget and professional service team, including sequence of events in our case, is underway. What I like about the Form 10 route is that after filing, the change in status is certain. In the S-1 scenario, the registration only becomes effective after a final approval. My view is that our shareholders would appreciate the certainty associated with Form 10.
The YOY sales activity remained comparable, despite a reduction in Advertising and Promotion between the two Quarters of over $70,000. In fact, between the two nine month periods in 2010 and 2011, nearly $300,000 less was spent in Advertising and Promotion of all kinds. Yet, the sales results are comparable in the more recent year. This is a very healthy sign. It is an indicator of repeat business in Canada, where most of the sales have taken place. Up to now, the USA was largely untapped. Yes, we’ve tried to make in-roads, but did not make the breakthroughs that are predictive of a major change in scale. Now, with the most recent U.S. partnerships, including the 4,000 member Do it Best hardware store cooperative and the U.S. GSA, sales can improve significantly between 2011 and 2012, on a comparative basis, because the mechanism exists. We are entering a stage in business development in America that is less characterized by trying to get appointments, and more characterized by actually building success with our new business associates. It’s important to remember that we did not have powerful allies until know. So, unless the world as we know it comes to a sudden end, it is only natural that the addition of a 4,000 store organization to work with and the entire United States government procurement apparatus, will be felt. It has only been 5 weeks since the official launch of our lead product at Do it Best, and we are already in 207 additional stores.
Furthermore, a key aspect of the GSA relationship (which has a contractual basis of 5 years plus 15 years in renewal periods), 3 of our brands are present, not just our lead brand, 1000+.
Let’s you and I (and the other shareholders) go through this quick reality check. If Winning Brands did not have interesting products, and if Winning Brands was not the sort of company that could be counted on to perform satisfactorily in mature corporate relationships, would Walmart Canada have signed on for a reinvigorated relationship? Would we have been granted a Walmart USA vendor number? We are now receiving cheques directly from Bentonville pertaining to Sam’s Club. And speaking of Sam’s Club, why would they bother with us? If our product was over priced, or lacking in value, or unremarkable, would their professionally trained, world class buyers not have noticed? Would we have been granted an approved vendor number by Walgreens, America’s largest drug store chain? Would New York’s pre-eminent drug store operation, a division of Walgreens, then have put us in twice the number of stores originally planned? Would a 4,000 member organization hardware buying cooperative with a top drawer credit rating and reputation of excellence, that can buy every cleaning solution in the world (but doesn’t) have invited us aboard for the benefit of its members? Would the United States government itself, the world’s largest customer with a purchasing budget of $450 Billion, have bothered with us? Don’t those organizations have anything better to do with their time?
The reality is that these are some of the world’s finest organizations in their fields. They know that we are small, but they like what they see anyway. They know that our products are not recognized, but they like them anyway. They know that we have work to do, but they are willing to give us the chance to do that work, together.
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This is the point that bashers conveniently leave out of the equation. Their opinions are less relevant than the opinions of the significant organizations who are interested in us; organizations who know what they are doing, and could do so with any partners they want in the world. Whose assessment of our potential carries more weight – an anonymous basher who genuinely does not have anything better to do with his/her time than complain about our determination to achieve something together or professional, world class corporate professionals who failed to notice that we were as pathetic as the bashers insist/wish/pretend?
I am devoted to the noble cause of developing and building a public company. It began small – that’s why it has growth potential. Our shareholders are my partners, not merely anonymous numbers. I invest the time to communicate with such detail and conviction to my partners because we, together, have a lot to gain from applying our collective intelligence, resources and goodwill to the tremendous goal of becoming successful together. We will overcome the obstacles that deter most people because we are profoundly determined. We will deal with each challenge, including the challenge of share price, share issuance, share clearing, share structure, etc on a case by case basis in accordance with my many detailed notes on the subject, always taking into account the constructive contribution of our shareholders.
Every single person and company in history who became successful, had a stage of development that preceded their acclaim. Winning Brands is merely more transparent in its aspirations and journey than most. This is why it is such a fascinating study, from a future perspective, of what went right and wrong along the way toward accomplishment. Winning Brands is the “Reality TV” experience of a brand emerging from obscurity toward becoming a household name with products that are favourites amongst consumers who discover them. When this day comes, it will not be Eric’s accomplishment. It will be OUR accomplishment – the collaboration of shareholders, management and staff and our business associates – all in the service of our customers.
That’s how I feel about the company’s future prosperity – terrific!
