Winning Brands Corporation (WNBD)

[Tiburon99]

ERIC's MEMO- Sunday night 10:30PM
Hello Moderator Team,



Not all shareholders follow developments on a daily basis, but some do. I can understand that for these individuals it can be painful wondering about the status of certain things as “event horizons” approach.



Therefore as a courtesy, a quick note about the status of a few things that are of special interest at the moment.



Grocery Chain Start:

I am providing this update now because in our applicable news release the term “summer” was used to approximate the event horizon. For some people summer ends in August, for civic officials it usually ends with labour day and the weatherman will give us to the 3rd week in September. The exact status of this matter as of August 31st is that we have completed our EDI registration work and the system is working fine. We have received “test” material through the system from the grocer. We have inventory ready and available to fulfil. Our Key Account rep for that chain has spoken live with their buyer for the category this week and was told that details were still with the Planogram Committee. For people who are not familiar with Planograms, I provide this link: http://en.wikipedia.org/wiki/Planogram The bottom line is that we have done our part to be ready, and have satisfied their data department as far as the EDI process is concerned. As an executive, I don’t usually like too many “committees” involved in things, especially not in decision making. However that’s a fact of life in any meaningful organization. So, quite frankly, we are waiting for that committee to complete its task.



Lowes:

Whereas in the last conference call I was able to refer to electronic documentation, we have advanced to the stage of having paper documentation pertaining to the operations previously discussed, but according to that documentation, I am not permitted to comment on details at this time. Despite these constraints, I feel that I have the moral, legal and ethical right to confirm that nothing has reversed and we are still looking forward to a positive operational start. This comment is informal and provided as a courtesy only. You can appreciate that it would be a serious matter if I made these comments without them being true. Therefore it can be taken as fact. However it would also be a serious matter if I were to go beyond this and violate the spirit of stand-still in disclosure of anything operational. The bottom line is that we must be prudent in our conduct at this moment. When the first product is on the shelf, a News Release will be drafted for review and approval by the retailer’s executive(s) designated for approval purposes. I cannot guarantee what will be approved. However, the presence of the product on the shelf will be a sufficiently concrete development that something suitable will no doubt be possible.



Lancaster:

This is shaping up to be a positive association. All is happening according to plan. Goods will be on hand in the regional warehouses according to schedule, training of sales reps is taking place on the dates specified in the News Release (plus one day additional because the News Release dates included a “set-up” day). Lancaster has already developed marketing flyer material for their accounts to disseminate in concert with the launch and we have agreed on wording of advertising in the industry that describes their involvement. We appreciate their enthusiasm and their emerging leadership stance toward the product for the sector.



Italy:

The Italians who have been experiencing Winning Colours in the informal market trials are liking the product, but the exposure is still limited. We are still ascertaining the best price points both on the retail level and at the distributor level and are in negotiation with the first suitable commercial distributor around these issues. Thus, the main work of the Ambassador to find for us the initial relationships with suitable parties is emerging from explorations to active business. Bear in mind that a new brand in any developed market must create a name for itself and requires a different/new approach to the market to be distinguished from competitors, irrespective of those competitors’ shortcomings (and strengths).



Australia:

New stores being added, product experiences positive, good long term direction



New Zealand:

Product delivery taking place according to plan for initial launch at the home show that was described in the News Release. A new label was designed for Australia/New Zealand that is specific to that region, rather than merely being a shipped version of the U.S. label. This allowed us to adjust some of the ideas a bit and provide local response telephone numbers, etc.



ISK:

Terrific group. We appreciate their willingness to really roll up their shirt sleeves and help us overcome obstacles. I am being honest in saying that there are obstacles. For example, one buyer for a national banner is skeptical about Winning Colours because they had not heard of it before. They are not prepared to take a chance yet. So ISK is arranging to work with a group of stores in that banner around the Chicago area to put product in on a local basis and prove the point of what stores can do if they are given the chance. This is the type of special effort required in the early days. We are cooperating to make it happen.



Summary of the above:

An indicator of a company’s prospects is that management does not behave like an ostrich and bury its head in the sand to hide from problems. Instead, the firm that is resourceful, responsive and reliable in making its way through headwinds is likely to survive and prosper. We already have beat the survival odds because it has been said many times that 90% of firms in this stage of development fail within the first 36 months. We are now past this critical zone, as our first 36 months are behind us. We have wrestled with the challenges, are overcoming them, laying a foundation, communicating with shareholders about these efforts in a realistic tone. As the CEO and a shareholder I am confident that 2010 will shape up nicely.



There are more topics, however these key items are all very “timely” at the end of the month. I wanted you to know that we are monitoring the situation on all fronts very carefully.



Eric Lehner

CEO

Winning Brands Corporation



P + 1 [phone] ext 101

F + 1 [phone]

W www.WinningBrands.ca