Off the phone - Final Episode
Yesterday morning there was some posts asking if anyone had
contacted Eric with reference to the 504 recently filed.
At 11:02 I sent him an email, asking if he had time for a call.
2 minutes later the phone rang. It was Wife to Be. Needing ride.
Got back in office ~ approx 1:15, scanning emails found one from
Eric, time stamp 11:05. I called immediately. Got a answering system.
I thought this is new. Listened to instructions, Neat, have to Say
Names, not punch in ext. numbers. I waited for the sales pitch, including
the Production plant phone number is .....,said 'Eric Lehner' got,
transferring to E L', ring ring, Voice mail announcement, Pressed 0.
Got main menu. Pressed 0 again, ring,ring, Got someone else's voice mail.
Hung up, Send Email to Eric saying I had tried to call and got hung up.
I had also also adjusted my email rules to print the email, as well as play a sound
when mail comes from Eric. (Speakers were off at 11:00). Printer started.
Email from Eric, saying, 'New phone system, teckies installing right now.
Please try again. I did. He answered. An hour later, I see posts like,
'OK Tib, what's the scup'.... and so it goes.. (sorrrry, a bit of Eric
must have rubbed off). 2 more hours final said goodbye.
Now to the good stuff.
summary contains characterizations that are approximate
Questions I had from the forum.
1) Are you required to file 504 documents
2) what % discount would they get
3) fees paid, $ or shares
4) 504 was that an old one or a new one.
5) would/could you call them and ask them if they are selling.
6) Conference call
7) timing of news releases
8) Lowes
9) Italy, - All staff safe. - YES
10) Military
11) Kind, marketing plans
Questions coming to mind during call
12) use of CD's
13) use of A/R financing.
14) Do you have stock on hand for Lowes
15) Lead time at Surfil
16) Dirty bottle tops
Q & A From 3 hour phone call to Eric, April 8th, 2009
1) 'Are you required to file 504 documents?'
Yes - but, Old system Paper, New system On-line.
Rules for when to file have been in dispute. Suppose to be in 15 days from
an event. What is an event, Making the 504 plan, Starting to talk to people,
selling first share, Selling all planned $ in initial plan.
New rules seem to have been clarified to say, file online for every event.
2) 'What discount would private investors get?'
Well that depends on number and size of offer, and market conditions.
It could be anywhere from 10 to 50 %. 'So 15 - 30%?'
Well 15 is low, I try stay around 15%
'Offline calc, .006 * .75 = .0045' (reasonable)
3) 'where the fees paid for the 504 agent $ of shares?'
Dollars. But he earned them. His job is to vet the investors and ensure
they qualify as private sophisticated investor, and they understand
that it's in their best interest to behave responsibly.
I believe he did a good job of that.
4) 'Was this a new or old 504?'
Some how this one didn't get asked
5) 'would/could you call them and ask them if they are selling?'
Well I could, but then I might be influencing them, Or If I gave
them some inside information, it would compromise their position
to be able to buy and sell openly, (The right of ALL retail Holders).
I trust the Agent that put us together has picked responsible investors,
This has been the case in the past and I believe so this time too.
I have many potential investors calling and I tell them I am very selective.
And have no great need so I can be selective.
6) 'Would you be receptive to setting up a conference call?'
Yes - Conceptually I agree with that. The timing is a different issue.
I would like to do that in the near future and talk about and explain
Actual facts and events timings in the past, rather than right now
and talk around future events that are not in his immediate control.
7) timing of news releases - not on my list but came up, listed in wrong order.
Some complaints about the timing of news release can be dispelled by this little story.
'I sent a news release to the wire service one morning. Before noon, we received a email
saying that the attachment is PDF format and it has to be a JPG. We locate a converter
and send the corrected version. It got release at ~3:30. We have very little if any control
over this.' These all cost money too, right? "Yes, good point, annual subscription fee and per release fee"
8) I want to ask you, What can you tell me about LOWES, well really I want to ask,
WHAT CAN'T YOU TELL ME ABOUT Lowes? (This probably took 40 minutes)
[[Well first Eric wanted to talk a bit about last March's Memo, and the fact that the minor mention of
national account probably should have said Canadian national account, although discussions,
at that time were ongoing on both sides of the border, I should have realized that a large percentage
of board members are in the USA and would assume national account meant US, but Wal-Mart Canada
is a national account, and a big one and we are very happy to have them]]
'There are many decision makers inside an organization as large as Lowes. The upper management,
middle management, and local levels. There is usually a corporate culture, and in this case, the Upper level
likes to have a good buy in by the other levels and not seem to be railroading them.'
{My notes may be a bit out of sequence here}
Corporately there has been a freeze on change and new product introduction for some time now,
as you can imagine given the current economic issues. Some at that level see the benefit of bending
rules as do some at the local level and getting consensus on a concept is one thing, but then to get it
on the detailed plan to implement is another. During this period, we successfully, and it's rare, got
permission to use the Logo on our web site. Many issues need to be settles. Who is to warehouse the inventory.
Which stores will be allowed to Bend the 'Freeze' rules. The process of authorizing new vendors requires
documentation, Different levels depending on who is buying, local, regional, national.
All these issues are being worked on. (Me. "And you have to wrestle with the question, how often to I call and
check on how things are going for fear of getting the door shut, cause sometimes the client will just take that
easy route.) RIGHT, but C.E. Norman, Lowes account rep is great at figuring that out. He has such a great
relationship with the people he has been dealing with that he has even received a phone call on a Sunday, asking what
could be done from their end to help the process along. (Me, So if you got a call tomorrow saying, GO,
you have inventory ready, or would you have to call Surfil) We have inventory.
9) Italy, Earthquake.
I asked if our connections there were affected and he thanked me for the concern.
No, they were on the West coast and the issues on mostly on the East of Italy
10) Military?
We have made the connections to the right people and got approved for listing for orders
from the base's stores. This is step one. This may also start the ball rolling for full military
awarness, as soldiers knowledge of prducts used at home carries over to their work enviroronmnet.
It's a process and following logical steps will get you there.
11) Kind, marketing plans
To be honest, I asked this question, and did not get a reply. Either we had other thoughts
still in progress, I was not forcefull, ( I think WC is best to stay up front for now) or Eric
wanted to side step the issue, "I'm not sure which of these really applies"
Questions coming to mind during call
12) use of CD's - Perhaps Rocket can add something here.
My understanding that a CD 'Convertable Debenture' is a loan that can be converted to shares.
In rasining funds, one can use 504's or cd's. if the end game is to make lots of money and then do what,
a) pay dividents (Taxable)
b) buy back shares (Capital gains, better tax issue)
c) spend it, so shareholders as screws.
Erics plan is b. if a CD is used it defeates the purpose, as it converts back to shares again.
(These are long term issues and we didn't spent to much time on them.)
13) use of A/R financing. THIS WAS GOOD.
They have 1/2 million in place to fund A/R for Invoiceable product.
They have a good rep with Bibby and have had discussion on how and when this can be raised to 7 figures.
It can't be used to produce samples or speculative Inventory. They have recently contacted and arranged with suppliers
(bottles, labels, chemicals, etc.) that for invoiceable orders, WNBD does not have to pay their
vendors, untill WNBD recieves the money from the customers.
14) Do you have stock on hand for Lowes
I slipped that into the answer for q 8. YES
15) Lead time at Surfil
Good question. As much as it's great being able to get product produces fast, we have to deal with the fact that
they have other customers adn we can't make an order today and get it tomorrow. Good planning needs and is in place.
We also have to tread lightly with regards to maintaning a in-house production facility, so as not to make Surfil uneasy,
but still give us the fexiblity of rush orders, and custom orders, and a leg up in negoiation. (not all eggs in one basket)
16) Dirty bottle tops - I notices this last week-end at Home Depot.
Wings and Things(right?) reps have added that as a column on their report sheets.
Our bottle tops are relatively square - allowing dust to stay on.
Our bottles are white, dust show up more.
Back stock rotation habits, old stock at back finally gets to front.
basicly 'We are aware and addressing this'
..) A few other things.
Eric said he has been muling over the idea of a Stock promotion Plan, and that
it would be best to have it ready before needed, so it could be used at the most advantages time.
..) No pictures on office walls 'Look bare' Posts..
Staff should be looking at their work on their desk, not the walls...
'Right now, I can see a list of clients and internal Phone numbers pinned up
on Maggies work station wall. That would come down before a visitor with a camera came in.'
--- Can't think of anything else right now, Good reading. ---
That above is my best recollection, and personal opinions.
Dave
