Capital Raising / Level Playing Field

By: Robert Grosshandler | May 19, 2020

We’ve begun to seek out additional growth capital. We’re in the very earliest stages of that effort. We’re sharing with prospective investors some of the changes that the pandemic has brought to our business, our responses to the pandemic, and our outlook on the ecommerce sector.

Because our stock is publicly-traded, and the prospective investors are not prohibited from trading on the knowledge we’re sharing, we want to make sure (and the SEC wants us to make sure) that we maintain equal access to this kind of information.

We’re sharing that our revenues are up, on some days 400% better than immediately prior to our “pandemic pivot“. We don’t know what they would have been without the pivot, but we believe the pivot made the difference.

Our new member acquisition rate (which you can see publicly on our site) is up, generally double or better from where it was prior to the pivot. New members are being acquired at a cost similar to our cost pre-pivot. They appear to translate into shoppers (generate revenue) at the same rate as pre-pivot.

Our gross profit percentage is down since we pivoted to a 95% cash back (plus stock back) model. We continue to have negative cash flow. At some point we believe we will be able to pivot back to our traditional model, but we are not forecasting a date for that.

We have reduced certain operating costs, thus lowering our cash flow break even point.

Several major retailers have stopped marketing (or reduced the commissions they pay) through our channel. If and when those retailers return, we expect that to have a positive impact on our results.

The travel category has essentially evaporated. We do not forecast its return in 2020.

The SEC has indicated that they have no comments on our next offering, so we expect to be able to continue to offer our stock for sale to unaccredited investors using Reg. A for the next year. This also means that we will be able to continue to reward shoppers with our stock (an uninterrupted continuation of the current business model). We will seek qualification of that offering before the June 13, 2020 deadline.

As always, our disclaimer / safe harbor statement accompanies this post.


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