Winning Brands Corporation (WNBD)

[satter]

From Q4 filing

We have developed financing plans to revitalize GestureTek without driving WNBD dilution for this purpose. The arrangement described below will bring net free cashflow to Winning Brands.

GestureTek operating capital will be obtained by means of Regulation A issuance (or similar instrument) from a minority offering(s) out of a new GestureTek subsidiary of Winning Brands, to be majority owned by Winning Brands. The new GestureTek subsidiary equity instruments will trade in their own secondary market, not in the OTC Markets. The financing policy thereby allocates most proceeds of future issuances of Winning Brands common stock to WNBD debt reduction instead.

To reiterate - GestureTek working capital requirements in years to come will not drive the issuance of Winning Brands common stock. The primary driver of Winning Brands share issuance going forward is the retirement of legacy debt in order to improve the balance sheet. This is beneficial for WNBD shareholders. This was not possible before the arrival of a subsidiary with its own value base.

The new GestureTek subsidiary will be designed to qualify for a Tier 2 offering in all U.S. states, and international jurisdictions where permitted. The new GestureTek subsidiary will have a significant valuation. This permits a U.S.$5 Million GestureTek financing out of the minority position. The new GestureTek subsidiary will provide WNBD with a combination of advance royalties and pari passu profit sharing. It will receive in return intellectual property commercialization rights, granted by Winning Brands via license. The Regulation A offering (or similar appropriate instrument) will be implemented by a proven specialist organization. Discussions have begun with suitable parties. For illustration only, an example of a suitably qualified organization is provided below. No inference should be made that a binding relationship is yet in place. The example is provided to describe the form and function of the intended financing mechanism, and to introduce sample candidate specialists. Readers are encouraged to explore examples of completed financings for illustration at the website below. They are comparable to the proposed GestureTek funding mechanism.

SAMPLE CANDIDATE GESTURETEK FUNDING ORGANIZER: www.ManhattanStreetCapital.com

This is really headache material. Does he really expect people to understand this.


So he plans on bringing his new subsidiary to another secondary market, not OTC, yet WB will be the majority owner. Further to that, it was not possible to reduce the WB legacy debt, but now with the arrival of the new subsidiary it will be, did I get that right.


And the new GestureTek subsidiary will have a significant valuation. How did that happen.


To boot the GestureTek subsidiary will provide a combination of royalties and pari passu profit sharing. That's wonderful. From what ? there are no sales.


So what is the costs to get listed on this secondary market ? How long does it take ? What is the costs for a Regulation A tier 2 and how long does that take ?


Tier 2 is much more challenging than tier 1. Lets look at your sample candidate you provided


https://www.manhattanstreetcapital.com/faq/for-fundraisers-for-investors/what-are-tier-1-and-tier-2-regulation-a-plus-offerings

https://www.manhattanstreetcapital.com/faq/for-fundraisers/what-kind-audit-needed-for-tier-2-regulation-a-offering

How Tier 2 is more challenging than Tier 1;

The required upfront audit - (US-GAAP level) goes back up to two years, and the audit is for the period since the company was started for new startups. The many Tier States require 1 offering company to provide audited financials, so this one is often moot.
The reporting requirements after the offering put some CEOs off. Management financial statements are required 6-monthly and an annual US-GAAP audit.

What Kind Of Audit Is Needed For Tier 2 Regulation A+ Offering?
In the case of a Tier 2 offering, issuers must provide audited financial statements for their prior two years (a one - year old company files a one year audit) in the offering statement and annual reports.

All filings with the SEC have to be prepared in accordance with GAAP, and Reg A Tier 2 requires an audit opinion.

The SEC will be looking for statements like this in the audit opinion; "The consolidated financial statements referred to above present fairly, in all material respects, the financial position of Example Company as of December 31, 20xx, and 20xx + 1, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States."

The most likely consequence of filing non-GAAP financial statements is that the filing will be bounced immediately, with the filer being told that no review is possible until correct financial statements are produced.

Now maybe I am missing something here but this indicates an audit of two years if required for Tier 2 Regulation A offering, and your proposing this for a new subsidiary company that does not have 2 years.

If I did not miss anything, then what is this. This would show Eric is slapping things to the wall hoping they will stick, has not done any DD, not even basics. I hope I am missing something because if not, this is not good.