Answer to Shareholder Question

Question:

” ...hate to bother you Eric but what the heck is going on????? no word on anything?”

Answer:

Over the past several months, increasingly detailed plans have been described in this CEO Weblog (“blog”) that would have a positive impact on Winning Brands, if implemented. These opportunities, or others like them, have the potential to be transformative by bringing operational cashflow to WNBD and broadening our scope. This will open us up to synergies that come from business relationships in which we share goals with partners.

I have risked discussing these things in the blog before they were operational purely as a courtesy to stakeholders. Silence is actually safer for two reasons. The first is that business arrangements can evolve. If there is too much variation between what is originally described and the eventual implementation, then skepticism arises. The second reason that silence is safer is that the more the company discusses its plans publicly, the more this affects the negotiating dynamic. If the other side feels that Winning Brands has boxed itself into a corner (by prematurely promising shareholders a certain outcome), then our negotiating flexibility is reduced.

Shareholder questions such as yours, above, are understandable. This is why I have provided comments and responses in many posts over the past few months. However, it is not in the company’s interest that I provide even more detail quite yet for the reasons above. Eagerness to provide operational details has its downside. This is why I am being conservative during this revitalization phase of Winning Brands, I am focusing on things that have already happened (rather than are expected to happen) or are very likely. There is much more that I would like to discuss – it’s just too soon.

I can say this – all proposed business relationships are intact. The three proposed ventures and relationships are still in the mode of advancing, behind the scenes. There are still some elements being negotiated, or requiring 3rd party approval, or being tested,etc. It would be inappropriate to provide a full description of all these ins and outs, but I will give you a practical example, to illustrate. In the case of one product we are planning involvement with, a possibility has emerged for launching under our own label, rather than a 3rd party supplier’s. There are pros and cons, and these are being considered, now that this positive option has even emerged (i.e. that the supplier is willing to consider it). However, making such a change after launch would be an enormous waste of time and money, and be an exercise in frustration. Accordingly, with such a positive new option to consider, it is better to consult with various wise parties to assist in making good choices, and to conduct some consumer testing to support assumptions. This takes time. There are several elements of the overall plan that are being refined to take Winning Brands shareholder interests into account. It would be a big mistake to expose ourselves to the world at large, that includes competitors or others who may not wish us well, in the midst of such negotiations.

As far as WNBD stock is concerned, If you are worried by the state of the bid/ask, my principle is that it is worse to try to influence it, rather than to focus on creating conditions in which the dynamic will be favourable for natural reasons. If a company is genuinely successful, the market market makers and retail investors will see it with their own collective intelligence, and will act accordingly. If the company is not yet genuinely successful, then any attempt to make things look better than they are is ineffective. It is impossible to conceal real success and it is equally impossible to project a facade over time (nor is it moral to do so).

For that reason, I have respected our shareholders by providing an accurate overview of my strategy to restore momentum to Winning Brands that can exceed all previous potential. This arises from creating joint venture relationships that are earned through problem solving effort on behalf of other firms, and then directing the (continuing) flow of compensation for these achievements to Winning Brands. I have established credibility and respect in a number of these behind-the-scenes efforts and am confident that Winning Brands will benefit handsomely from this strategy. This solution solves the “Catch-22” that Winning Brands was facing – namely – how to massively increase cashflow and stimulate business without carrying out a reverse split to raise more capital. With this strategy, it will be possible for Winning Brands to thrive by leveraging capitalization in other companies for the projects on which we are working, in order to shift dilution away from Winning Brands. Winning Brands overhead costs have been reduced substantially over the past several years. This makes a huge difference to WNBD future stock price growth because we will be genuinely profitable in cash terms, not only in accounting terms. In the OTC landscape, that is rare.

The bottom line is this – in my sincere assessment, the JV strategy will work to Winning Brands’ shareholders’ advantage. These are not traditional expensive JVs that Winning Brands has to buy into through dilutive financing. They are JVs earned as compensation for putting deals together that solve problems or open opportunities for other companies, with Winning Brands being a cashflow beneficiary from those deals put into place. The anticipated cashflow is much more than enough to meet our lower costs. I use the word “much” deliberately – these can be substantial sums when taking into account the aggregate effect of several projects, some of which I have not discussed yet for reasons described above.

I know and understand the itch to blast out of this transitional period and really soar. However, I would not be helping you or other shareholders by disrespecting the market makers or new investors with a premature “rosy picture”. Our prospects are terrific, but until these are implemented and the little issues ironed out, I’d rather be conservative.

Legitimate profitable cashflow from operations will cure anything that Winning Brands needs. Winning Brands’ stock price has shown that it has the capacity to jump much higher if there is real perceived potential. I am determined to avoid a “false start” to a major run by getting caught in a cycle of predictions and discussion of details that are still evolving. At our current price point in the low triple zero range, all current shareholders can make good money if this plan is handled correctly. The key is to not treat the situation as a stock play, but rather to deliver a real success in cash terms. I am confident that the market will then reward all current WNBD shareholders who are in at this price zone substantially. That’s the condition that can lead to a 5 or 10 times higher price, or much more. My objective is to make Winning Brands genuinely worth millions of dollars on its own merits. The share price will then respond accordingly, and we will become widely known as a success story earned through integrity, intelligence, hard word and respecting shareholder interests.

Eric Lehner, CEO