Update to Shareholders 17 April 2012
Tom Allinder | April 17, 2012
First of all, I want to say thank you to all our supportive and loyal shareholders. We are working through a very busy time here at Rapid Fire Marketing. The Company is beginning to transition from a Company of ideas for products and services to a Company with actual products and distribution.
As you are aware of, last week we initiated a $100,000 funding for the Company which resulted in an issuance of 47M shares into the marketplace. This was a difficult decision for me because I hate short term funding. However, at this point we have only one way to finance ourselves which is via the short term funding solution always used by this Company.
Here is Why:
Rapid Fire Marketing is a NON-REPORTING OTC Company. Being non-reporting essentially means we have no “credit rating” with growth funders. Having no credit rating means the only funding we qualify for is highly collateralized which means selling stock to an investor at a 50% discount to the market price.
In the month or so since I became CEO, I have looked at many funders and have been contacted by many funders. None offer a better solution than what we have right now for a non-reporting OTC Company. We are stuck in this circumstance. So… we need to change our circumstances.
Knowing the non-reporting status of this Company, I started taking steps to fix this problem on day one as the new CEO.
In order to get a better funding deal, we must start the process of becoming fully reporting. This is a big process; none of it is going to be easy or particularly pleasant to go though. However, it must be done.
We have a number of funders interested in giving us the long term growth funding we are looking for IF: We initiate the process of becoming fully reporting.
Over the last several weeks, I have talked to a number of firms that perform the process of audits and filing the S-1. We have to work with the right firm in order to do this in a cost effective and expeditious manner. I have narrowed the field down to one firm in California. I am expecting the proposal from them any time now.
If their proposal is reasonable, and I do expect it to be after all of the conversations we have had back and forth, we will engage this firm to initiate the process of getting Rapid Fire Marketing to fully reporting status.
Once this firm is engaged, we can then go to several funders and get a deal done with regard to the long term growth funding we are looking for to grow Rapid Fire Marketing for not just a month or two but indefinitely.
Going back to the $100K funding we did, here is how we are spending the money:
CannaCig 2nd round production: $30,000-50,000
Retain Firm to Become Fully Reporting: $10,000-20,000 (estimate)
Fund and get Sales Office in Los Angeles operational: $8,000
Clearing Investor Debt: $11,000 (this is the last of debt the Company owes to previous investors that funded the Company)
Start R&D of the Pocket Puffer and Power Pocket Puffer; initial outlay is $1,500…
As you can see, we are spending a lot of the $100K on things this Company needs to do RIGHT NOW.
We do expect to have a reasonably quick turnaround with a 100%+ margin on the 2nd round of the CannaCigs because most of them are going to distributors. Once that money is in, we will go to a third round and use all of the proceeds and profits to continually increase the order size.
Additionally, we are working with our producer to decrease the production costs of the second round. Any reduction in costs will add to our margins… Also bear in mind that we had some minor issues with the first production round; all of these issues have been resolved and when the 2nd round of CannaCigs come in, they will be ready to ship off to distributors without delay.
Obviously the CannaCig is a major part of our business here at Rapid Fire Marketing. I am so thankful to have Judah Neiditch to work with at Otherside Health Management. His hard work, 7 days a week, has made this whole business possible. I cannot say enough about his efforts and the results he has produced for this Company.
If we are able to retain a firm to begin the process of getting fully reporting and if we are able to get a long term growth funding, it will completely change timelines and strategy of this Company. I am confident we will achieve both objectives.
With regard to moving toward getting fully reporting and getting long term growth funding, it does not happen overnight. I have been working every day including weekends to realize these two objectives. While there are some investors that think I am a Genie and all I have to do is cross my arms over my chest and make funding and fully reporting status appear instantaneously, most of you understand what a big endeavor this is.
As long as I am the CEO of this Company, I will continually work to turn this into a REAL COMPANY. I have been in the micro caps for well more than a decade and I am sick of the micros. Once we are in the process of becoming fully reporting, the next process will be to file the 15c211 to move to the OTCBB.
Another part of being a real company is having a management team and board of directors. I have talked about this before. In order to be viewed as a real company, we need to be structured like a real company. The days of having one officer and one employee will soon be a thing of the past.
I am interviewing individuals for management positions as well as board of directors appointments. I have already made the first appointment to the board of directors. The name of the individual will remain undisclosed for now; reason being that publication of names of management team members and board of director appointments will complicate and delay the S-1 filing. Be assured that anyone that I select will be highly qualified and will have the same vision that I do which is substantial growth of this Company.
Within the next few months Rapid Fire Marketing will undergo substantial changes and begin to look and run like a real company.
Becoming fully reporting having a growth funding in place, having a management team and a board of directors will greatly ease the process of getting our full DTC eligibility back.
We have much work in front of us… But, we are going to work through every task and get this Company where it needs to be.