Winning Brands 3(a)(10) Debt Settlement Process Details
New York, NY – May 12, 2014 - Winning Brands Corporation (US OTC: WNBD) (“the Company”) disclosed in its filing of Q3 2013 results with OTC Markets November 20, 2013 that it intended to facilitate settlement of its liabilities by means of Section 3(a)(10) of the Securities Act. This disclosure of intention was made in advance of the application to the court. The Company further disclosed in its CEO Weblog www.WinningBrandsCorporation.com/blog on March 18, 2014 that this would occur and that share dilution would result. In the 2013 Annual Report filed on March 31, 2013 a “Subsequent Event” is described wherein court approval for the process is reported. As additional disclosure, the company provides the following details.
On January 9, 2014, the Circuit Court in the Second Judicial District for Leon County, Florida entered an order approving the stipulation of the parties (the "Stipulation") in the matter of ASC Recap LLC ("ASC") v. Winning Brands Corporation (the "Company"). Under the terms of the Stipulation, the Company agreed to issue to ASC, as settlement of certain liabilities owed by the Company in the aggregate maximum of $3,665,662 (the "Claim Amount"), shares of common stock (the "Settlement Shares") as well as $183,283 in value of common stock as a fee to ASC (‘Fee Stock”). ASC had purchased the liabilities from the Company’s creditors with a face amount of $3,665,662 as a maximum cap reflecting cumulative accrued interest and entitlements. All creditors are non-affiliates. Winning Brands CEO Eric Lehner exercises greater than 10% voting control of the Company. No repayment of loans to the company by its CEO, Eric Lehner, or any other entitlement to him, were applied for or included in the 3(a)(10) settlement.
Pursuant to the Stipulation entered into by the parties, the Company agreed to issue to ASC, in one or more tranches as necessary, that number of shares of common stock sufficient to generate net proceeds (less a discount of twenty five percent (25%)) equal to the Claim Amount, as defined in the Stipulation. The parties reasonably estimated that, should the Company issue Settlement Shares sufficient to satisfy the entire Claim Amount, the fair market value of such Settlement Shares and all other amounts to be received by ASC would equal approximately $4,948,644. Notwithstanding anything to the contrary in the Stipulation, the number of shares beneficially owned by ASC shall not exceed 9.99% of the Company's outstanding common stock at any one time.
In connection with the issuance of the Settlement Shares, the Company may rely on the exemption from registration provided by Section 3(a)(10) under the Securities Act. To date, no Settlement Shares issued to ASC have been sold. As such, the full Claim Amount remains outstanding and payable to ASC. Based upon the reported closing trading price of the Company’s common stock on May 9, 2014 of $0.0013 per share, if all $3,665,662 worth of liabilities were satisfied pursuant to the Stipulation through the issuance of common stock, the Company would issue an aggregate of 2,819,740,000 shares. However, under the provisions of the Claim Purchase Agreement between ASC and individual creditors, creditors may withdraw from the process if certain conditions of performance are not satisfied, thus reducing ASC’s settlement amount due.
Mr. Lehner maintains a CEO Weblog for the benefit of shareholders at www.WinningBrandsCorporation.com/blog. It is a journal of the company’s mission and provides answers to shareholder questions. It is a regular source of public information pertaining to the company pursuant to SEC Fair Disclosure guidelines.
ABOUT WINNING BRANDS CORPORATION: Winning Brands is a manufacturer of record for advanced environmentally oriented cleaning solutions such as KIND®, 1000+™ Stain Remover, World’s Most Versatile Cleaning Solution™, and others through its subsidiary Niagara Mist Marketing Ltd. It’s best known product is 1000+ Stain Remover; an alternative to conventional cleaning solvents with unique desirable properties. www.1000Plus.ca. 1000+ is available coast-to-coast in Canada in some of that country’s largest retailers including Walmart, Home Depot, Lowe’s, Canadian Tire, Home Hardware as well as a number of U.S. outlets. TrackMoist and ReGUARD4 are examples of industry-specific solutions from Winning Brands.
1000+, KIND, ReGUARD4 and TrackMoist are trademarks of Niagara Mist Marketing Ltd in connection with indicated uses. Safe Harbor: Statements contained in this news release, other than those identifying historical facts, constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions as contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relating to the Company's future expectations, including but not limited to revenues and earnings, technology efficacy, strategies and plans, are subject to safe harbors protection. Actual Company results and performance may be materially different from any future results, performance, strategies, plans, or achievements that may be expressed or implied by any such forward-looking statements. The Company disclaims any obligation to update or revise any forward-looking statements.
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