You want a PR:
The Major Plan In Layman's Terms
kcmholdings | August 25, 2011 at 11:50 pm | Categories: Uncategorized
Dear Investment Community,
I am currently taking a family week off with my wife and two boys. But having seen enough comments come in from our website, I felt a quick blog post was appropriate.
Many of you have been asking me to explain what is happening in layman's terms around when something major will happen for the stock price.
I am going to share a clear plan in layman's terms shortly. But I am also going to rant first as should be expected by now. So if you don't want the rant then just skip to the bullets.
Let me start by saying that I cannot tell anybody when to buy or sell our stock. Too many CEO's play that game and get burned. I fully recognize and validate that many investors have lost a lot of value in their portfolio of KCMH. However it is only a financial loss when one sells. And putting pressure on us to pump a stock without proper business fundamentals is absolutely ridiculous and contrary to my convictions. Now some investors will say that I am not taking my responsibilities seriously to shareholders, but my argument is that being focused only on share price and using typical "awareness tactics" that get shoved in my face every week is what got us all in trouble in the first place. Would you rather have a company shut down by regulatory bodies or a team of directors working night and day to turn the ship around despite our lack of experience (which is growing leaps and bounds) and resources?
I apologize for my cranky approach here but I have only made it this far by being brutal with the truth. I invite anybody to try taking over a public company that has been under criminal investigation in one of the worst economic recessions in recent history. So as much as I appreciate the financial losses of several thousands of dollars by investors, I simply ask you to consider that my entire family's livelihood, my professional reputation and entire net worth are wrapped up in this venture.
If this sounds personal, well it's because it is.
With all that being said, for those of you still with me, here is the plan as simple as I can make it. If we can get this done, we will all be looking back at this time with smiles on our faces thankful for the experience.
STEP 1) I need to navigate some legal issues to move forward from the situation around former CEO Donald Klein. Our legal counsel is working with the SEC prosecutor on this and it will not be resolved until Donald Klein's individual trial is concluded. This should be done by end of September. I need to impress upon you how serious this has been. The entire company could have been shut down or wrapped up in legal issues for years. We have so far avoided the worst, however this is the main reason why I have been unable to take any clear steps so far. Once this is done I won't have to worry about any legal issues preventing progress midstream. And out of respect for Mr. Klein and his family, I will not comment on his personal trial.
1A) Let me address putting out press. Our legal situation is why we are not doing it right now. In the midst of a legal case around stock fraud and manipulation, and the SEC asking you as a new CEO some pointed questions, would you put out press? I have personally spoken with Jim Carlson, the prosecuting attorney and I am doing everything I can to comply and respect his process. Our first press release will come when our legal situation has been resolved. And even then Mr. Carlson has asked to have a say in how any news is communicated. So I want to make this very, very clear. No press until we are clear of any legal implications. Period.
STEP 2) Once legal issues are concluded, we are going to change the name and structure of the company completely. This includes a new board and leadership. Right now there are people who won't do business with us until this is complete. Yes I will issue press here.
There are some things investors need to understand:
2A) I am attempting to do this without raising any capital and diluting our stock. This is hard for us but good for investors. And with cash-flow being assumed by legal expenses and investment into our new revenue models, this has been extremely difficult.
2B) Every investor will be able to keep their shares. At that point I believe our new story and revenue models will have a positive impact on share price.
2C) All current assets such as our insurance, retail and other incubations will be moved to the new model under different terms and strategic alignment. If the asset does not properly align with our focus and strategy, it will be sold and/or cut.
2D) A note on GEENIUS. Their S1 was filed last year but all this has been put on hold because their funding has been very delayed. There is no point in going public if the company has no funding. GEENIUS gets closer to funding every week and the outlook is positive. I have agreed to negotiate with GEENIUS around our new model when funding occurs. I fully plan to be involved in making GEENIUS a success. In what official capacity I do not know and won't make assumptions. The founders of GEENIUS and I have agreed to speak when funding is in. There is no point on wasting energy until then. The good news is that their promised funding is double our initial expectations. This is why GEENIUS is delayed. We must all follow fundamental principles to make sure GEENIUS is a success. This means being patient for now.
2E) This step includes getting us current on Pinksheets and publishing our financials and business plan. There is no point in me publishing financials under the old company when we are just going to have to re-do them for regulatory bodies again under a new name. This is not about wanting to hide anything. This is about smart resource management. I assure you there will be complete financial transparency when the time comes. We are still debt free and will be. Again, all this costs major amounts of money. This is cash-flow I am trying to manage properly. Here is another great opportunity for the right press when complete.
STEP 3) I will complete M_DNA 2.0. Right now everything you see is in beta or 1.0 format. Response has been phenomenal but our weaknesses have also been revealed. Especially in market delivery and competitive positioning. For those of you who are unfamiliar with our IP or even doubt its viability, go to www.iamsynchronized.com and take your own M_DNA evaluation. Some of our investors have done this and the response has been encouraging. Also make sure you check our the article base and the consulting/workshops tab. I can assure you that not a day goes by where I am being asked to share the benefits of our IP to companies and individuals in all industries.
STEP 4) We focus on revenue, revenue, revenue. By this time all our R and D will be complete and products for multiple vertical markets will be in place centered around intellectual property incubation. Here are some highlights:
4A) We are developing channel partners to sell our IP. We have three currently being formalized. Licensing intellectual properties is not simple. I will just leave it at that. But we have already landed contracts with invoiced payments.
B) I will head to China in the new year based upon some business development accomplished by some social projects we have sponsored. Right now at the request of potential clients, we are working on translating our materials into Cantonese and Mandarin. As much as people have questioned my social responsibility strategy, it is the only reason we have an open door to China right now without having to spend thousands going there cold. Doing business in China is all about relationships. And combining social media and social responsibility is the quickest and most cost effective way to get there.
C) I have developed a very advanced social media strategy to empower our business model that bypasses the current clutter on sites like Facebook. My opinion is the social media bubble has run its course and is no longer effective as a mass marketing tool. The stats right now are proving me theories correct. Our goal is to reach 1 million people that will generate on average $77 in revenue each. This is very achievable using social media and you can do the math on the potential. We are taking the guesswork out of social media ROI by attaching the ROI directly to social media. For example, one of my experimental Facebook pages has only 16 friends and has led to generating approximately $1,500 in revenue. This is an average of $93.75 per social connection. This may seem small now but the advantage is it can now scale without having to do any more work. The same work required to support 1 user with content is no more or less than doing business with a million users. One final note on this: Selling IP using digital channels has virtually NO OVERHEAD. It requires one person (me) and an admin team to create the IP. Technology that is free (like Facebook) takes care of the rest. No overhead means bigger net profits which equates to better earning per share / stock value.
STEP 5) We are going to be leaving the microcap world as soon as possible. If we hit even 25 percent of our target this is possible. My vision is that this is accomplished in 24 months. We just aren't taken seriously enough at these levels. This means if investors stick around long enough, pennies invested will turn into dollars.
What does this all mean to you the investor? So what?
Let me offer a practical perspective:
1) KCMH in its current form is done. Investors hoping that somehow things magically turn around need to read this post and all my previous posts again. KCMH is going to be re-booted shortly. Donald Klein is not the CEO and I am not Donald Klein. I have to follow my own path of conviction and not what others expect me to be. IP is a business model I can drive and I have made money with. This means you should be looking at your investment in terms of being an IP based business start-up. Because the only way past our historical reputation is to start from scratch.
2) Like any start-ups, this process takes time. And this time will also naturally shake the wrong investors out and keep/attract the right long-term investors we want anyway. Every investor has a right to hold, buy or dump the stock. I fully expect the markets to be impatient, but now is not the time to respond to this. Solid business first. Solid share prices will follow.
3) If this role has taught me anything, it is to have a thick skin and soft heart. I have been called every name in the book. Before people even took time to learn the whole story I have been questioned and accused. At the same time I have been supported by shareholders I have never met. Regardless of your position, please don't mistake my candidness for a lack of concern. Nobody is more concerned about the state of this company more than I am. I hope read every post and comment on the web about us and try to respond as best as possible and will continue to do so.
I will offer as many updates as I can over the next month. However again, until Donald's Klein personal situation and our settlement with the SEC is resolved in September, there will be no major developments other than we will be working on our revenue models.
Thanks for your patience and time,
Ed Kang
