Shareholder Question: Reverse Split?

From time to time shareholders will ask about the likelihood and timing of a reverse split.

The straight answer is that it is not really a question of “if” but rather of “when”.  What I want to avoid is a consolidated share price falling to pre-split levels again.  I have therefore exercised caution and discipline and have not yet taken such a step.  This is because it matters what happens after the split.

A post-split return to current price-per-share would happen if the company does not have new and substantial reasons for bottom line success, i.e. profitable new business activity that is either realized or foreseeable in practical terms.  Furthermore, such new business activity has to have a major upside, i.e. activity or deals that will make a profound positive impact on Winning Brands.   A second potential cause of a post-split share price returning to current levels would be if the company uses share issuance cash to merely pay overhead expenses, rather than using new funds mostly for new project purposes and building-up the company’s fundamental value; its real value based on what it has, what it is doing and its capacity to generate cash.

Those are the real facts of life that need to be stated plainly.

Therefore, the logical time to have a reverse split is when the company’s operational advancement justifies a higher valuation, objectively, in connection with verifiable major developments of a positive nature, that are substantial enough to make Winning Brands worth more after the reverse split than it was pre-split.

I know that the price of our stock could have increased over the past few months if I had declared that there will be “no reverse split”.  But that is not realistic and is even an insult to the intelligence of the many traders who are watching Winning Brands presently.  They need to be able to trust what I say.  That’s why this straight answer is important.  Anyone making an investment decision regarding Winning Brands should assume that there will be a time, sooner of later, when a share consolidation is necessary and desirable.  But they can also have confidence that it will take place in connection with developments that make Winning Brands much more valuable, inherently, and thus make Winning Brands stock price sustainable (and liquid) at new higher levels.

There are criticisms that could be made of how long it has taken for Winning Brands to reach its potential, but it is obvious and proven that Winning Brands is a legitimate enterprise, managed with proper motivation, with real products and terrific customer relationships.  In other words, the company has a good character and can be relied upon in matters of integrity.  What has been missing is the excitement and business action that public shareholders need to see in order to justify a solid, active stock,  whose price has the potential to reach and sustain increasing values.
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Winning Brands’ Innovators Community is a giant of a concept, that is going to deliver operational activity soon.  www.InnovatorsCommunity.com  It has been carefully vetted by some very smart professionals who recognize its originality and its role in solving a real problem for inventors who fall between the cracks of the Shark Tanks of the world and conventional crowd-funding.  Innovators Community meets a need that is widespread and extremely valuable.  I know because inventors have been reaching out to me with a keen desire to become part of Innovators Community.  We have a waiting list of projects to commercialize through an adaptive network of experts.

In addition to this, our PINK Current Information tier is back.  Our operating losses have continued to decline year-over-year and our original core environmental cleaning products business is making a comeback.  There are now many positive factors at work for Winning Brands, possibly more than ever.

Investors have their own personal appetite for risk, and you place priority on differing aspects of a company’s circumstances.  I am proud and enthusiastic about our turnaround momentum and the good things that are coming.  Investors have a variety of ways in which to participate and positively influence the company’s success. Winning Brands thanks all interested parties for their contribution to this success, in their own way.  I am always glad to hear from you with questions, comments and suggestions.

In the meantime, I will keep building the business operationally and look forward to being able to make the announcements about substantial developments that will give us a steep growth curve and put us on our way to being a significant company, that will be widely known, and respected.

Eric Lehner, CEO
Eric@WinningBrands.ca

 

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