This update is intended for shareholders who are following operational specifics and would appreciate a status report. In order to be fully understood, the information needs to be read in the context of earlier posts regarding these specific project files.
JV – Nutraceuticals
I am pleased with the pricing and quality quotation from our proposed contract producer of the proprietary male vitality supplements that we will be making available through Winning Brands (by means of a new product specific website that will be announced). We are just awaiting final quotation from a second alternative contract manufacturer. We want to ensure that we will not be hamstrung by sole-source problems. There has been no backsliding, no unforeseen problems and no disappointments. This is still moving forward.
JV – Online Gaming or e-Sport or Online SaaS (Software as a Service) Product
I am pleased with the fact that negotiations are inching forward, closer and closer – just not at the finishing line. There are no insurmountable issues. Just negotiations that need to take into account the interests of various stakeholders.
JV – Food
I am pleased to report that the attitude and desire by all parties to get going is still strong. There is a very technical issue to resolve as the last piece. I want to obtain default insurance on a $200,000 accounts receivable facility that we already have with an accounts receivable agency in order to service our target supermarket chain for a good practical reason. If a supermarket chain customer were not to pay our 3rd party A/R factor after 60 days, then Winning Brands would need to cover the deficit through recourse. This is not desirable. However, if the A/R is specifically insured, then a possible recourse event (of supermarket non-payment for perishable goods after terms) would be covered as a planned-for-contingency. I realize that it would be satisfying to just take the chance and proceed now without the A/R insurance, but such haste could be the difference between an event that is merely inconvenient vs a complete disaster. It’s worth the effort to get this right. The insurance company wants comfort through extensive documentation from the supermarket chain(s), but the supermarket chain(s) want to minimize what they pledge irrevocably. It boils down to things like how many people need to sign-off on the delivery of perishable goods (that have no enduring existence for re-possession purposes), or the seniority of those persons, and the reconciliation of what is ordered vs what is delivered (which in the case of natural products is more difficult than for standardized manufactured goods with serial numbers and perfectly replicated components). I realize that this kind of detail is boring and tedious to read about – and even more so to go through. However, it is exactly this type of effort that represents a barrier to entry for casual competitors. Taking into account our nifty supply chain concepts for the specialty food products in question, and this advance preparation of sufficient operating resources with cooperating financial institutions, we are doing things that less determined aspirants would not bother with. In the end, the rewards will go to the contenders with who have the most perseverance, creativity and quality of execution. That will be Winning Brands.
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Cleaning Products
We continue to supply fine commercial customers. I post about these from time-to-time to illustrate that there is a foundation of high-quality relationships that has been earned over the years and is still in place. While the volumes are not yet sufficient to deal with all our objectives, these are relationships that validate our bonna fides in business. This is something that many OTC sub-penny stocks don’t have. It’s a reminder to our shareholders that Winning Brands is not a shell, and therefore could thrive under the right conditions.
Capitalization
I will know by the end of the month what the timing will be on the “booster shot” from a shareholder that we will receive from the closing of a real estate transaction. This will be used to engage the accounting and legal team to bring all our governance filings up-to-date. It’s not a question of “if”, just a question of “when”.
What sets the current era of Winning Brands’ operating history apart from our earlier times is that our overhead costs are much lower, we have been more conservative in acquiring and converting convertible debt instruments than ever before and we have the legitimate possibility of deriving supplementary income flow from joint venture partners through efforts that add value to those partners by means of problem solving for them, and partnership of effort. Such additional revenue is not dilutive to Winning Brands shareholders – it will not be cash coming from stock sales. It will be earned profit sharing, royalties and consulting fees. These all go straight to the bottom line. Therefore, in purely technical terms, Winning Brands is probably now the best investment it has ever been because it has established stability in a low cost operational mode, with a low burn rate, and genuine growth opportunities.
I do not blame anyone for being skeptical. However, paradoxically, logic dictates that this is our best ever “pre-growth” time. If a person is in a position to follow the developments as set out in great detail in the Winning Brands CEO weblog, they will see that the information is coherent, verified and consistent. The possibility of Winning Brands moving from its present market cap of below a million dollars to at least several million or a few tens of millions of dollars is real. This would represent a significant capital gain for shareholders who acquired their positions in the triple zero range, especially the low triple zeros. This is feasible because we would be earning our way to the double zeros or higher. It would not be driven by stock promotion campaigns. It would be value-driven.
Thank you for your continued interest, kind thoughts and shared ambition.
Eric Lehner, CEO
Winning Brands
