Winning Brands Corporation (WNBD)

[just_an_ant]

From Eric - Various emails addressed

From: Eric Lehner [mailto:[e-mail]]
Sent: Wednesday, August 18, 2010 2:28 PM
To: Paul Knopick ([e-mail])
Subject: WNBD - Questions

For the Moderators –

As I review questions from shareholders, a theme emerges that would be helpful to clear-up – the difference between an expense and an investment. The continued attempt by a (very few) obvious bashers to turn every business development into something alarming reveals a lack of understanding by them about some of the core processes at work in the development of a brand and is attempt to distort things that are normal into things that sound alarming.

Rather than dignify bashers’ mischaracterizations by repeating them, there are a few basic facts which the bashers downplay, but are highly important for normal people to remember:

• Winning Brands owns and manufactures products. The current emphasis is on a lead product, Winning Colours Stain Remover, but it is not the only product. The products are very good, they are appreciated by those who use them and are gaining ground. Point: Our proprietary products are not only prototypes – they exist and are being produced.

• Winning Brands has good customers. Our high-quality commercial accounts are not fictitious numbered companies that are impossible to find. Our commercial customers and their consumers are in towns and cities across the country and beyond. Point: Our commercial customers and retail consumers are not only prospective – they exist and are growing in number.

• Winning Brands has an easily understood and plausible business plan. Our goal is to replicate success stories that have happened before and will happen again in America for spirited independent companies – brands that come out of “nowhere” to become iconic. Point: The model to which we operate has shown itself many other cases to be highly beneficial to early investors. It’s actually the thing that most speculative investors look for – the possibility of sudden, massive growth.

• Winning Brands consistently improves its filings. We have risen in the ranks from a “No information” tier, to a “Limited Information” tier, to a “Current Information” tier. Through this commitment to continuous quality improvement we have left behind the majority of our former peers. There are approximately 1,319 companies with the “Current Information” designation, but 4,149 companies in the “Limited Information” or “No Information” tier. Point: Winning Brands is now far ahead of its junior public company peers in the important matter of governance stature.

• Winning Brands does not inflate its value with arbitrary figures. The conservative policy of showing intellectual property, such as trade secret formulations and trademarks at a nominal $1 on the balance sheet is remarkable. It is by far more typical for companies to attempt to improve the appearance of their balance sheet by assigning high values in this category. Point: Financial statements that disclose outlays clearly and adopt a conservative view of assets are an exception amongst our peers.

• Winning Brands does not pump its shares. Many people have made trading profits on the ups and downs of our share price, including bashers by their own admission. But the upside for a company’s share price when it has never been subject to an awareness building program is far greater than a company which has already exhausted itself in stock promotion. Point: When the day comes that a concerted effort is launched to broaden awareness of Winning Brands amongst new investors through a formal program because of business developments that are so substantial that a much higher share price can be sustained, then Winning Brands’ long term shareholders will have high liquidity and very attractive capital gains – not merely disappointing spike.

• Winning Brands applies its resources responsibly. People in the organization are compensated normally, marketing investments create expanding awareness of the brand(s), facilities are appropriate. Our overhead costs exceed our revenue currently because we are building an organization that is able to handle the future. Rather than scrambling when things take off, making massive mistakes due to a lack of experience, a capable team is forming now to handle much greater volume effectively. “Preparation” may not be glamorous, but it is the mark of realism. Point: There is much more than meets the eye in preparing for a consumer brand success story. Our continuous operational disclosure reveals focus and positive action.

• All Winning Brands outlays are not “expenses” – some are investments. Persons who merely recite a daily, weekly or monthly burn rate, without distinguishing between outlays that are investments in success do the discussion a disservice. For example, the outlays for the DRTV campaign are not merely spent and gone. There is valuable filmed material for future DRTV content, there is a good inventory of finished kits ready for sale, there is a fulfillment team and call centre operations group that is trained, with deposits in place, on-line direct ordering platform in place (that continues to generate sales of DRTV kits), and more. Point: Simplistic negative characterizations by anonymous posters with hidden agendas are filled with inaccuracies.

• Winning Brands is a speculative security. This is a company that has the self-confidence and responsibility to declare that fact honestly on its website Investor Page. We state in plain language that this level of speculation may not be suitable for most investors. The most vocal bashers act as if Winning Brands has been sold to a pension fund on the basis of being a blue chip security. It is a speculative security for strong, self-assured risk takers that want the chance of being in on the ground floor of a steep business success one day. The weakness of bashers in failing to understand or be honest about the “no risk, no return” reality of life speaks volumes. Our shareholder base is a small, well informed and smart group of risk takers that see the big picture. A chance to make 100% to 1000% gain or more in stocks is more likely to occur when a company goes from being a former “nobody” to becoming the “next big thing”. Point: Bashers’ efforts to demean the company’s stature actually point out the opposite – the upside is terrific because so much that is positive can happen and is increasingly likely to happen.

I do not have the time during the working day to answer every e-mail from individual shareholders because I have a great deal of work to do. I thank you for understanding that it may take days or even weeks to reply in some cases. The notes above apply generally to the majority of enquiries by putting forth some necessary reminders about the basic issues. The fact that the company takes its communication with shareholders so seriously is by itself remarkable amongst our peers. It reveals through actions, not just good intentions, the respect that Winning Brands has for its stakeholders. The history of great companies shows that this simple fact may be one of the most important of all predictors of success.

Eric Lehner, CEO
WinningBrands.com