*** MEMO FROM ERIC
(Doesn't quite cut and paste cleanly.)
Memo to Investment Forum Moderators
From Eric Lehner, CEO
Winning Brands Corporation
I have received many queries recently from shareholders and people who follow the forums generally about the status of our product listing in the USA with a “national” banner. At the heart of these questions is a desire for confirmation as to whether such a listing will happen, and if so, when. I will answer this in the forum environment for three reasons; to ensure accuracy, even handedness and for efficiency in the use of my time.
People who have followed the company over the past 18 months will have noticed the straightforward communications emanating from the company. Our comments for attribution are conservative and cautious. Such comments are careful to not misrepresent that status of the company and always emphasize the risks involved. I have been criticized for not being more promotional, no doubt because shareholders generally would like promotional activity to increase demand for our shares and thus provide the easiest and fastest possible capital gain. The time has come for me to make some policy statements to clear up these issues once and for all.
Firstly, on the subject of an opening listing with a major national banner. We have been in serious negotiations with a major national banner for the better part of this year. Discussions with additional banners are now also opening up too. The negotiations involve many details because it is a risk for the major banner to take our (relatively unknown) product in to replace better known products. Stores of the type we are talking about seem large, but the shelving space is still very carefully managed and finite in the available number of product placements; the shelves are not elastic. If our product goes on, it is likely that something else is coming off. This is particularly true at a time when the U.S. economy has been seeing a contraction of the housing market, creating a domino effect. In other words, the business climate is more risk-adverse than before and professional buyers and category managers do not want their organizations stuck with poor listings choices.
Despite this challenge, we have made continuous progress in our discussions because Winning Colours Stain Remover is unique in its category and has the “right stuff” to become a household name because of its special qualities. The most recent of our face-to-face meetings with the prime prospect took place yesterday and was very satisfactory in tone and content, apparently for all participants. There is a little bit more work to do on our part, but we are told that a concrete decision about whether we will commence operations with that firm will be made on November 11th. I am sharing what we understand the situation to be, not making a promise. Please note also that I am not mentioning names or even hinting. There is no way whatsoever to infer from my comments above with whom we are discussing the listing. I am not being coy; it must be this way for reasons of business courtesy and confidentiality toward our discussion partners.
If such a listing materializes, it will be a tremendous boost to Winning Brands because it will provide us with unprecedented efficiency to advertise our product to the entire country and be available to consumers easily wherever they live. The scale of such operations would put us into a new position to succeed more quickly and on a larger scale. However, Winning Brands is not putting all of our eggs into this one basket. Therefore even if the decision in November is not favourable, then we will carry on growing. But it is nonetheless obvious that such a development would be highly beneficial to shareholders.
By having been so forthright in my comments above, a situation has been created whereby people will now be effectively able to decide while share prices are low whether they wish to speculate on whether we will, or will not, receive that listing. Some may leave the family of shareholders feeling that the risk is too great, or the time frame is too long for their tastes. On the other hand, there will be people who feel that the current valuation of the shares at these prices makes Winning Brands undervalued relative to the impact of such a listing on our viability. Simple arithmetic shows that the current share price multiplied by the float gives the company a valuation of less than what the annual revenue could be from the one account - as if no other accounts will exist, no other Winning Brands products exist and no other countries exist. In other words, they will feel that our company (and any company with these circumstances) has more up-side potential than down-side.
I will not try to persuade anyone. Our team is on a mission to keep growing from our humble beginnings as a new “Pink” to a national brand in Canada, and ultimately into the USA – a market that is more than 10 times larger than Canada. It is our goal in the process to become a substantial, profitable and respected brand whose shareholders benefit as the point of the exercise. That is what I am focusing on.
Shareholders need to accept the fact that the price to be paid for the enormous capital gains inherent in speculation is the risk of uncertainty. I cannot make the uncertainty go away and it is this uncertainty which provides the potential for the enterprising and ambitious amongst us to earn substantial returns over time. Many shareholders benefited enormously from the rise of our shares from 000 territory last December. It will be obvious to watchers of Winning Brands that we have real products, they are on sale in real stores, with real customers and a growing following. Other brand success stories in our generation may have appeared to come out of nowhere when they finally hit the limelight, but those “overnight” successes were actually struggling and uncertain during their own formative period until key events became tipping points catapulting them onto the national stage. This is what I expect will happen to us.
For this reason, I am not willing to hire stock promoters to artificially increase the price of the shares based on a frenzy of promises being made by such promoters to prospective share purchasers. Instead, the time to engage a professional awareness building team is when the actual, concrete, undeniable business developments of the company will justify a sustained higher share price for technical reasons. We are still in the preceding stage where interested speculative investors operate on experience and instinct alerting them to an emerging success before it has come to the attention of the market in general. This is commonly known as ‘getting in on the ground floor”.
In conclusion, those of us who are currently shareholders are a tougher breed than conventional investors because we are dealing with high perceived risk. However we also perceive high potential. My point in the above remarks is that I am not in a position to remove that risk at this time. People who would sell their current holdings now in the face of what they believe to be uncertainty have thus been brought up to date as to the status of the key event that we are all waiting for. Those who would wish to purchase our shares have also been given confirmation that the aspiration for a game-changing national account listing is not merely a rumour but based on fact – such discussions are underway on a best efforts basis, with no setbacks to report at this time.
Eric Lehner, CEO
Winning Brands Corporation