Winning Brands Corporation (WNBD)

[doogdilinger]

Of interesting note...the Reverse Split answers have changed dramatically on the corporate site since the 500 to 1 R/S as follows...notice in Q16 there's no longer any carrot dangling bs about share buybacks or grandiose statements from mgmt about his belief that any pre reverse split share price of under 1 cent being under-valued or cautionary statements/suggestions/insinuations that any longs who sell risk losing potential long term gains bwahahahahahahah:


ORIGINAL REVERSE SPLIT ANSWERS>>>


Q16: What is the policy of Winning Brands toward Reverse Splits?

A. One common question on the mind of investors of public companies of any size and stature is the outstanding share count. Variations of this question have to do with the size of the float and the number of authorized shares. The reason this is of interest is that the “worth” of a company is generally calculated or “distributed” among its shareholders – thus it follows that a larger number of issued shares may cause a lowering in the valuation of each individual share.

This question is of particular interest to holders of securities in junior public companies because some such firms generate share dilution through financing without there being a corresponding growth in the “worth” of the firm to compensate for the dilution. This is of greatest concern where the firm is a shell company or not engaged in an active business that can be monitored through its actual activities. In such cases, investors worry about the company issuing shares as a “printing press” for the enrichment of the controlling owners/managers without any reasonable prospect of a translation of the financing activity into a growth of the value of the company for the benefit of shareholders in general, particularly “retail investors”; ie. those who purchase shares in the open market through self directed accounts or their brokers.

A companion worry on the part of such shareholders is that the consolidation of the outstanding shares through a reverse split will perpetuate a cycle of increasing dilution followed by reverse split, repeatedly – all with the feared net result of declining net value in the holdings of the retail investor, rather than a significant speculative growth in value that holders of junior public companies seek as compensation for the risk that they take. This is because there is a risk that the new higher share price that follows a reverse split may fall instead of rise, leaving the shareholders with lower net value for their investment following the reverse split.

The policy of Winning Brands Corporation on this subject has several elements. The first is to ensure that persons who take risks have accurate information on which to assess their risk. For this reason, comments for public attribution pertaining to the securities of the company are made, in the case of Winning Brands Corporation, by its C.E.O. Eric Lehner. This prevents confusion and ensures that there is accountability by the senior spokesperson. The company’s website is the most easily accessed source of information on this subject, and in particular the FAQ section of the Investor Page. For this reason, investors are cautioned about comments made by 3rd parties of a speculative nature, as such comments may be based on a misunderstanding, partial information, mixed motives or otherwise be of an unreliable nature. The second is to ensure that the mutual responsibility of the company and its shareholders be acknowledged. The firm is clear and consistent in stating that its shares are speculative. The firm cannot be reasonably responsible for a growth in the value of its shares except as represents reasonable best efforts of the company to conduct its business for the benefit of its shareholders in general. The company has no control over the share purchases and sales made by 3rd parties on the market nor the effect that same has on its price per share on any given day.

The third is to operate the firm as a going concern for the purpose of generating a profit where possible and where profitability is not yet possible then operating according to a business plan whereby a profit and growth in the value of the firm is contemplated. For the sake of clarity, this means treating the company as a business vehicle for the benefit of shareholders in general by normal standards.

With these elements as guiding principles, there is a broad range of circumstances by which it is beneficial for the firm, and by this it is clearly meant beneficial for the shareholders that the company avail itself of on-going financing opportunities so as to continue to advance the company’s presence in its consumer marketplace. A reverse split is definitely one of many steps that the firm could take. However Winning Brands is conservative in the utilization of any measure that is structural in nature in order to increase the likelihood of long term benefit. Simply put, the firm would only undertake a reverse split if in the opinion of qualified advisors who have a demonstrated track record of professional competence in this arena feel that on balance such a measure would be beneficial to the shareholders in general. This may include, but not be limited to, the ability of the firm to expand the scope of its financing activities in European capital markets (where Winning Brands shares already trade albeit with still underdeveloped support), achieving a minimum price per share to qualify for a stock exchange, being able to achieve reportable events over a reasonable “per share” basis, reducing the number of “notional” shareholders – those holding a single share or sub-board lot quantity – by substituting a cash amount for fractional shares, or many other technical considerations.

There are many public companies with several billion issued and outstanding shares. The view that a low outstanding share count leads to a high price per share is incomplete because it does not adequately take into account the nuances of liquidity, such as the fact that different share price ranges are associated with different volume trading ranges.

The share price performance of Winning Brands Corporation since becoming public in April 2006 is poor. There is no question about the fact that the firm is not an attractive buy if the historic share price direction is the only criterion of the investor. However, Winning Brands has consistently disclosed that its growth plans involve passage through predictable phases and that the company was more likely to yield attractive returns to investors who consider the firm a long term proposition. The share price should therefore be considered in the context of a process that is only underway rather than finished. By this standard, a market valuation of the firm below 1 cent is considered by management to significantly undervalue the company’s current and future possible “worth”. This is mentioned in order to caution shareholders that pre-mature sale of the shares at historic lows also carries the risk of unnecessary loss in the present should future internally generated cashflow permit the company to buy-back its shares on the open market, or as part of a formal offering, as an alternative to dividends for the benefit of common shareholders.

The advantage to common shareholders of a share buy-back is that the funds invested by the firm in this manner have lingering benefit for the remaining shareholders, rather than the “one time” benefit of a dividend. No promise is being made that the firm will be in a position to do this. It is an illustration that if/when the company is successful to its plan, there is a mechanism favoured by management to diminish the outstanding share count in future to offset the earlier growth in the number of outstanding shares during the early stages of the company’s capitalization.

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Q17: If the company has reverse split stock before (2004), will it happen again suddenly?

Winning Brands Corporation as we know it today is the result of a reverse merger between Global E Tutor and Niagara Mist Marketing Ltd (also known as The Soap Factory) in 2006.

At the time of the reverse merger, Global E Tutor had become dormant in its educational work - and Niagara Mist Marketing Ltd was a small but stable Ontario operating company that manufactures environmentally progressive cleaning solutions.

The purpose of the transaction was to let Niagara Mist’s (The Soap Factory’s) environmental products grow more rapidly in distribution and consumer awareness by providing access to suitable capital and new management at Niagara Mist.

The reverse merger was accomplished by issuing shares of Global E Tutor (now renamed Winning Brands Corporation) to the shareholders of Niagara Mist Marketing Ltd for which the shareholders of Niagara Mist Marketing Ltd in turn transferred their shares of Niagara Mist Marketing Ltd to Winning Brands Corporation. The result of the transaction was to provide Winning Brands Corporation, a public company, with an operating subsidiary that was doing active work thus making the public company a growing company again. In the transaction, the shareholders of Niagara Mist Marketing Ltd of that time retain a combination of common shares of Winning Brands Corporation (which were restricted according to Rule 144) and a preference share entitlement to provide voting continuity until such time that certain earlier capital cost recovery conditions are met for the asset vend-in. Structurally, the transaction was normal for exercises of this nature and was the subject of the company's first news release in April 2006. The FAQ section of the Investor Page at www.WinningBrands.ca provides substantial information about the company’s current share structure.

All persons associated with the public company, without exception, are new to Winning Brands since 2006. No former Global E Tutor personnel are involved.

Decline of a share price after consolidation is exactly the situation which Winning Brands Corporation would like to avoid. Winning Brands management has been conservative in all matters pertaining to capitalization. We therefore invite interested parties to carefully peruse that FAQ and in particular the comments regarding dilution and reverse splits. This will help the reader understand our policies in respect of these issues.

Ultimately, it is the goal of the management of Winning Brands Corporation to earn the confidence of the investment community through decisions which are responsible, even if they cannot be entirely without risk. The effect upon retail investors currently holding shares of Winning Brands Corporation is an important criterion by which management evaluates the benefit of financing strategies. It is one of several criteria, but a very important one. The long term goal of all Winning Brands financing is to obtain capital for the advancement of the total worth of the organization. This may involve the utilization of new capital sources for the realization of opportunities – some of which may involve risk. However the operating parameters of the company are better disclosed than for many junior public companies, and in particular better than the majority of Non-Reporting Issuers. This means that a reverse split is possible at a suitable time, but will be handled responsibly, with an eye on preserving shareholder value.



REVERSE SPLIT ANSWERS NOW>>>



Q16: What is the policy of Winning Brands toward Reverse Splits?

A. The company has carried out a Reverse Split on Thursday April 25, 2013 consistent with its policy of associating such an action with the intention to uplist to a higher level within the regulatory hierarchy. Accordingly, work has begun on an application before the Securities and Exchange Commission to become registered and thereby to qualify for quotation at the higher OTCQB tier. It is impossible to state from this point forward what subsequent restructuring events will be required to optimize the company’s financing opportunities. The guiding principle is that forward momentum is the most important aspect of the company’s value. Failure to capitalize adequately interrupts momentum and ultimately deprives shareholders of the basis for the company to grow in value.

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Q17: If the company has reverse split stock before (2004), will it happen again suddenly?

A. The company avoided a “sudden” reverse split. The company has carried out one reverse split between 2004 and 2013. It has been stated many times that uplisting initiatives would be grounds for such a development. Uplisting initiatives are now underway. Reverse splits present and future (if required) are only carried out in connection with logical rationale that ensure the company’s viability and long term capacity.