ANSWERS TO YOUR EMAILS
Questions / answers are complied from the questions submitted to BRAVADA International on our "Contact Us" page. Question / answers are not posted if it is very similar to another one already answered or asks for information that has not been disclosed.
March 25, 2021
Some people are of the impression that there is or was a NASDAQ listing that the Company was working on, can you clarify?
I am not sure how this is confusing but I am happy to clarify. I will only discuss statements made in our Press Releases.
- The Company stated: "The Company is undertaking a reverse split so that it may begin a process of maximizing its ability to up-list to a senior exchange sometime in the future".
"Sometime in the future" means exactly that, "sometime in the future" and NOT at present.
The Company stated: "begin a process of maximizing its ability to up-list". It does not say "begin actively working on an uplisting". It states very clearly that the company is beginning a process to maximize its chances when it decides to actively try to uplist the Company sometime in the future.
- The Company has never stated "NASDAQ" except in today's press release where we stated; "we are not listing ourselves on NASDAQ".
The Company has stated very clearly that we are beginning the process of getting things in place to attempt an uplisting sometime in the future.
March 24, 2021
There's some noise being made that the a/s was semi-stealthily raised as part of the r/s announcement. Some are hopeful this leaves space for acquisitions which could be necessary to reach sufficient equity levels to up-list to NASDAQ, but others are leery of even more uncertainty. Should we be concerned about unrestricted common share dilution post r/s since the 100m a/s would allows significant room for this?
I made mention of this in a previous answer but let me expand on it a little. You should not place so much relevance in what the authorized share number is. That number can be changed within an hour for most companies. All that is required is a board resolution and a Certificate of Amendment. If a company wants to issue shares and the authorized does not allow for it, they just submit a Certificate of Amendment, increase the authorized and issue the shares, it is that simple. One should not get a sense of security if a company has 500,000,000 shares issued with 500,000,000 shares authorized. If a company would like to issue more shares, they submit a Certificate of Amendment increasing the authorized to 2,000,000,000 and once it is accepted and time stamped by the State, the Certificate of amendment goes in for a share authorization under the power of a board resolution. The authorized can be increased without much effort. It does not stop a company from issuing shares nor does it suggest a company is going to issue shares if it has a huge amount of authorized shares available. I think it is human nature to postulate and make an exaggerated explanation(s) about why something is the way it is and all of the possible permutations. It could also have nothing to do with anything and a big thing is being made about nothing? Just a thought.
March 17, 2021
What is the situation with Some Trademarks that were “sold” to the Company? I looked back and there was one about a “In the Raw” trademark?
Correct, it was for a trademark “In the Raw” in Canada and there was only one trademark, not plural. Originally it was vended into the Company by me (Danny Alex) as an intellectual property purchase due to value associated with litigation that was pending at the time. In time, the value was negligible, and a correction made to the original terms. So, the Preferred “A” shares (which are only now voting shares as shown in the disclosure statements since 2010) were originally issued with a common share conversion of 75 shares for every 1 preferred “A” share. The conversion was removed from the Preferred “A” shares since value was not received by the Company for the trademark. This was my decision. It was not a hard one to make as value cannot be given for no value, so that is what occurred. There are people who like to make it sound as if there were multiple trademarks and that “someone” received a lot of shares for nothing. There was one trademark and consideration was returned.
March 17, 2021
During the “D” interval, shares held in portfolios at the effective date are temporarily 'locked up' during a conversion period. This seems to be one of the primary reason’s investors fear reverse splits - it's scary not to be able to sell for a while and thereby free up my money if I want to! Will this happen to my shares here, or because the effective date is fairly far out, will they be immediately available? If they will be temporarily 'locked up,' how long will this period last? Is there anything that should reassure anxious shareholders that losing access to this money temporarily will be in any way worthwhile? where do those limited number of shares that trade during this interval actually come from?
The symbols that go through a reverse will have a “D” for 20 days. As for a "lock-up", it is not an actual "lock-up" but it can happen because the brokerage firm where you hold your stock is in the process of making the required adjustments during the reorganization. It varies firm by firm. This is my first reverse split as a founder and CEO of a company and I would like it to be my last. There is a new CUSIP issued to the Company, and the full reorg goes through the transfer agent, DTC and through to client accounts at brokerage firms around the world. Stock in your brokerage account is actually in "Street Name" meaning, the certificate is in the name of the brokerage but you retain ownership of the stock. It is impossible to be certain how long it will take your firm to complete the reorg, but there should be minimal interruption. If you have any issues, I suggest contacting your brokerage and they should have a better answer as they are the ones that process the reorg. I would like to think that with today’s software automation the process should be quick. As for the shares that actually trade trade, I would assume that some firms process very quickly. It is an electronic exchange of information and I would think that firms want to please their customers so they want to process things asap as well.
March 16, 2021
What is BRAVADA’s connection to Lululemon?
There is none. Ten years ago, almost to the day, BRAVADA’s main website was BravadaWomen.com that specialized in women’s athletic apparel. It was the Company’s first website and product line. On April 13, 2011, a press release was issued about the “BRAVADA – Lululemon Challenge”, a promotion designed to create attention for the women’s activewear products and website ... same idea as the "Pepsi Challenge" from the 1980's. It asked women to try BRAVADA Women’s Activewear or return it for a full refund. It was the only mention we ever did about Lululemon. In December 2010, I designed and developed OnlyLeggings.com and sales exploded to the upside in only a few months and WorldofLeggings.com came soon afterwards. We shutdown BravadaWomen.com shortly thereafter (December 2011) as the sales volume was a fraction to our legging websites. For some reason, a few people are fixated on Lululemon and this promotion from 10 years ago.
March 14, 2021
A poster on IHUB said “The super-voting preferreds were created when two shareholders (other than the CEO) owned a larger % of the company than he.” Is there a story here worth telling?
The Preferred ‘A’ shares were issued on October 5, 2009 for consideration provided not too long after I founded the Company. The statement of “two shareholders” owning a larger percentage is not legally or mathematically possible. The current board and CEO has always had control of the company since its founding. This statement is made by someone who is not well educated in SEC rules and regulations that govern public companies. If anyone purchases 10% of a publicly traded company, they would now be Affiliates and subject to Rule 144 (See SEC Rule 144) and would have to disclose to the SEC and to the company, their Affiliate status. The Securities Exchange Act of 1934 apply to 10% owners, and 10% ownership is sufficient to deem a stockholder a “holding company” under the Holding Company Act. Not disclosing 10%+ ownership in a public company (Affiliate) and then trading your position as a non-affiliate is a serious SEC matter. You can also just apply logical thinking, is there anyone who would actually decide to purchase over $4+ million dollars of a penny stock? If so, it must be a very valuable company.
March 14, 2021
Your feedback is great, thanks for taking so many questions! I noticed a line in the press release that I was not sure on. It said "The reverse split is expected to become effective on March 31, 2021. As such, if the reverse stock split is completed ..." Why does it say "if"?
That is a great question. There is so much erroneous information that is passed on as fact that I feel it is important to provide clarity as to this corporate event. The next question posted above will be a perfect example. As long as the questions are not material in nature, I am happy to clarify matters so that investors can make an informed decision, one way or the other.
Yes, it does state "if" and I will explain why. There are 3 entities that are a part of completing a reverse split; Delaware Secretary of Sate, the transfer agent and FINRA. Once the paperwork and resolutions are completed, a corporate action is filed with FINRA. There have been instances that a split was denied by FINRA and for which reasons I do not know, but it can happen. To ensure that BRAVADA represents the reverse split accurately to all investors, the action must be presented with an "if" to account for that situation.
March 13, 2021
Why do you talk about uplisting and then right after make it sound like it is just a maybe? You say "maximizing the Company’s ability to up-list to a senior exchange, however, there is no certainty that it will and/or can happen..." Would be better to just say it?
If a CEO states that an uplisting is going to happen and investors believe it to be a matter of fact when it is not, then he/she is making a statement to investors that they can consider an uplisting to be a material fact. This would be considered securities fraud, making a statement that is materially false. A CEO or an officer of a company cannot make definite statements and promises of an uplisting or to sell public or private securities on the promise of a listing on an exchange or the promise of an uplisting to a senior market. Unless the Company has been approved for an uplisting, an officer of a company cannot make the statement or promise investors that it will happen . There are laws that specifically deal with the sale of private or public shares on the promise of going public or being uplisted to a senior exchange. It would be the same as telling investors that you have a deal with Walmart ... is it true? The deal is signed? Not yet, but we are going to work towards getting a deal with Walmart. (Walmart is only being used as an example)
March 13, 2021
Why do a reverse split now? Are there other reasons for the timing of it?
There are 3 main reasons. First, as stated in the press release, for maximizing the Company’s ability to up-list to a senior exchange, however, there is no certainty that it will and/or can happen. Second, the minimum stock price for a listing is $2.00 / share which would mean that BRAVADA would have to have a market cap of nearly $1.5 Billion to qualify at the old share structure. Third, low priced penny stocks do not attract “Sophisticated Investors” such as small cap funds or larger capital pools.
March 12, 2021
Sorry to bother you again but I am really trying to understand everything and I know shareholders appreciate your prompt and clear answers. Someone had suggested that “The Company really had no choice with a close to maxed out structure and the CEO holding all those preferred, some conversion rights tied to revenue.” Can you tell me if this is accurate?
I do not mind helping people understand the process, so I am happy to add clarity. Shareholders have many questions with today’s news, and I am happy to answer them.
That is not accurate. It takes about 10 minutes to process a Certificate of Amendment with Delaware and you can authorize 100,000,000,000 shares or just authorize “Unlimited”. A Board resolution is all that is required and within an hour the corporate action is processed, and you have an endless amount authorized shares available. The authorized number is irrelevant … 1 letter, 1 signature and 1 email and you can change your authorized shares in Delaware. In today's press release, I explained the reason for the reverse split.
As for the restricted conversion rights on the Preferred ‘B’ shares, the restriction has long since expired as they were restricted for a maximum of 3 years and/or $5 gross revenue per preferred ‘B’ share which meant $5,000,000 in gross revenue releases them all. I know this because it was me who came up with the restriction and me who put that restriction on them, by choice.
March 12, 2021
Some people are thinking that you (Danny Alex) are looking to cash out which is why the stock is being converted. It does not make sense to me as to why you would, but is that why?
The first thing that I will say, as stated in today’s press release, is that the Preferred shares have an automatic conversion clause in the share agreement so with a reverse split, it was triggered. I also think that it is a good idea as it lifts the uncertainty around the possible conversion at any time which can easily scare some investors off from buying the stock in the first place. I know it would scare me off so I have to copy and paste that same concern to others as well.
Secondly, anyone who is making that suggestion is not very knowledgeable about these topics. Insiders and anyone who owns more than 10% of a publicly traded company are called “Affiliates” and non-insiders “Non-Affiliates”. For Affiliates, Rule 144 applies which states that an Affiliate of an OTC publicly traded company can only sell 1% of the total issued and outstanding per quarter which would be about 375,000 for a BRAVADA Affiliate post-split. There really is no easy way for an Affiliate of an OTC traded company to exit unless it is a change of control transaction. What I will say to that is that I love what I do every hour of every day.
If you would like to know more about Rule 144 and the specific rules and laws governing Affiliates and Non-Affiliates then go to this link. It is a good read to educate yourself on these matters:
February 10, 2021
Can you provide any more information on Q4 and full year filings? Is it still $5,000,000 for the 2020?
Full year 2020 projections of $4,200,000 - $ 4,500,000 - As per news release issued on August 20, 2020
The company has not made any subsequent comments on 2020 projections. The company has NEVER issued Net Income projections for Q4 or full year 2020. Any other numbers, apart from the company issued a full year 2020 gross revenue projection of $4,200,000 - $4,500,000, is speculation from non affiliated third parties.
The company urges caution to investors to only rely on projections and information that BRAVADA International has provided through official news communiques.
Has BRAVADA sent the information that OTC Markets needs in order to attain Current Status? It appeared the Nov 16th filings were all in order but perhaps this is not the case as OTC has not granted Current status yet. It would be much appreciated if I could have some understanding of what is needed in order for OTC Markets to move forward on this issue or a time frame of when you think this will be done.
Unfortunately, it took the OTC Markets 8 business days to review the Company's filings. On the afternoon of November 25, 2020, the Company was informed that it had to correct one date in the Q1, Q2 and Q3 filings in addition to an update in the Attorney Letter. This was completed and filed as requested by the OTC Markets. BRAVADA does not have any control over the time it takes OTC Markets to review and approve the filings. We can only make the changes as per their request and make the assumption that the filings are complete as required by the OTC Markets, however, there is no certainty until the filing(s) are approved and the Company is on the 'Current Filer' tier.
Are there any updates on the release of the 2019 financials and removing the stop sign on OTCMarkets?
BRAVADA has provided information on this matter on 3 press releases:
- April 9, 2020 the company disclosed:
"The Company expects to become a current filer sometime in 2020. Additional information shall be provided to shareholders via a conference call or press releases in the near future."
- August 20, 2020, the company increased its full year 2020 revenue guidance and reiterated:
"The Company previously announced that it is working to return the company to current filer status sometime during fiscal year 2020. Additional information shall be provided to shareholders via a conference call or press releases in the near future."
- September 2, 2020 the company disclosed;
Bravada.com was launched, a website specifically designed for shareholders and provides an enormous amount of corporate information and disclosure to shareholders.
Is the company planning a share buy back program? Since the stock seems to be very undervalued, trading at 60% of 2020 revenue. Are you planning to have a CC this year?
A couple things with regards to any share repurchase. A company must be a current filer to be able to make open market purchases of its stock. This is because all shareholders must be in possession of all material facts that the Board of Directors / insiders have so that shareholders may make the same determination as to the over or under evaluation of the company's shares. If the company is in possession of any potentially material facts that have not been disclosed to the public, the company must then disclose the material information or, if the disclosure cannot be made at that time, engage in any approved open market share repurchases at a time when the material information is disclosed. All market participants must make the same informed decision as to whether they would like to buy or sell the company's stock. If any share repurchase is going to occur, the company must make an announcement with regards to it and that it has authorized "X" amount for a particular time frame (1 year or a specific quarter).
The next issue is determining the ROI on any share repurchase relative to ROI of reinvestment into the company's expansion investments in such things as WorldofPets.com. Launching a website such as WorldofPets.com can be capital intensive with regards to seeding initial inventory. A determination must be made with regards to ROI on invested capital, whether it is better in a share repurchase or a new website launch. If there is not enough capital for seed inventory then the company must halt its expansion if funds are going to be funneled to a share repurchase. I cannot provide any insight into what our internal evaluations / expectations are or could be with regards to any of these matters but once we are a current filer then we can determine these things internally. One could conclude that the share price may be materially different from where it is now once everything is disclosed .... or it may not be, we shall see.
As for the CC, I have made mention of this possibility a couple of times in press releases. I leave the possibility of this open once we have all information disclosed. This new question / answer mechanism on the new Bravada.com has been working quite well as people seem quite eager to ask questions to dispel potential inaccuracies or gain clarification.
Why did BRAVADA not have an attorney letter with their previous financial releases?
An attorney letter is only required once a year, submitted after the annual return is filed OR for the most recent quarterly disclosure statement to return to current filer status. In BRAV's case it is the later. The attorney letter will be filed for our most recent quarterly release to return the company to current filer status.
Did BRAVADA issue any stock during the time it was not filing?
A Pink Sheet company cannot issue stock or release from restriction any stock during the time it is not a current filer. Hence, investors can be assured that the last disclosure statement filed in 2016 is accurate regarding the corporate share structure. An OTC Pink company must be a current filer to affect corporate stock changes or additions.
When will BRAVADA become a current filer again?
BRAVADA has stated in public press releases that it expects to be a current filer sometime in 2020.
Why did BRAVADA Stop Reporting its Financials from 2016 - 2019?
There were a number of circumstances that came together and culminated in BRAVADA taking a hiatus from reporting:
- Late in 2015, BRAVADA's Accountant and Bookkeeper, Alice Cherng, had asked CEO Danny Alex about moving the company's books from QuickBooks to Xero. Mr. Alex gave an unequivocal 'no' to Ms Cherng. He wanted the books to be kept in QuickBooks to ensure ongoing continuity.
- In 2016, Ms. Cherng had moved the company's books to Xero despite Mr. Alex denying the request. This placed the books in a distressed situation.
- The first draft of the financials were egregiously incorrect and Mr. Alex knew that Ms Cherng had used Xero to compile the quarter.
- Ms. Cherng gave Mr. Alex several additional versions of the Q2 financials that continued to be egregiously incorrect.
- The company terminated Miss Cherng on May 26, 2016. (Please Review the Alice Cherng Termination Report for details)
- The Company hired Michelle Ang in July of 2016 as Office Manager / Bookkeeper. Ms. Ang, had a familiarity with the company's books and suggested we finish off the quarter and year in Xero since time was now a major issue if the company was going to file on time and complete the 2016 financials.
- Ms. Ang then had a baby in November 2016 and did not return to complete the Company's books despite confirming with the company that she would resume her duties.
- The books were now half in Xero and half in Quick books and a highly qualified person would be needed to clean up what had transpired with QuickBooks and Xero.
- Early in 2017, BRAVADA embarked on its planned business re-orientation which included moving its entire business to the LA Fashion District and implementing a new business model and approach.
- Revenue was in decline in a business environment where hundreds of retailers were filing for bankruptcy, a period CEO Danny Alex calls the Great Retail Dying.
- The costs associated with moving the company's operations, re-orientating, and other expenses of maintaining its listing with OTC Markets resulted in burdensome cost structure that may have compromised the ability of the company to complete its plans.
- The costs of being public were very onerous and it was something that had to be cut so that BRAVADA could move forward into a growth position.
- The company's financials were now divided between Xero and QuickBooks and were 2 quarters behind.
- BRAVADA was looking for and interviewing qualified candidates for bookkeeper and hired Sandra Baughman who seemed overtly qualified.
- CEO Danny Alex had a timeline for Ms. Baughman to complete the financial quarters for the company.
- The deadlines passed without completion and Ms. Baughman was terminated early in 2018 when she did not produce the financials on time as instructed by Mr. Alex.
- BRAVADA then went on a very exhaustive review process for a bookkeeper to correct, resume and bring up to date the company's financials.
- The company hired Peter Talay, a highly qualified bookkeeper with nearly 4 decades of experience with years of experience in the fashion industry with companies such as American Apparel and a number of other mid sized operations in the fashion district. His exactness and competence has allowed the company to repair its books to a very high degree of accuracy.
- BRAVADA is confident that Mr. Talay has brought uncompromised accuracy to the reporting of its financials
- The company also hired Sohail Jerry Javaheri, CPA, MST of California Accountants Group, LLP as its Accountant in November 2017.
- The company's full year 2019 financials as well as Q1 and Q2 2020 will be released in short order.
- The company has stated that it expects to be a "Current Filer" sometime in 2020.
Why did BRAVADA give a projection for 2019 revenues in April and then increase it in August?
In April 2020, the company had provided a range of revenue for full year 2019 that was management prepared and not a final draft. It still had to be reviewed by the company's accountant and taxes filed. The Covid-19 pandemic had forced closure of many offices and our accountants were also affected for sometime even though they were working in a limited capacity from home. The IRS extended tax filings until July 15 during this time. Our accountants had completed our taxes and made some adjusting entries. When we had received our final draft for our 2019 financials, we provided a revised range to investors.
Why didn't BRAVADA give an exact revenue number instead of a revised projection for 2019 revenues in August?
The reason for the August news release was that we were increasing our full year 2020 revenue to a significantly higher range and this is a material change in the business. That was the reason for the PR. However, we also knew our 2019 revenues were slightly higher than previously disclosed so we decided to add that information into the press release as well. We only provide exact numbers on the actual releases of our full financial statements. Until they are disclosed, they will always be a range.
If the full year 2019 financials are finished, why are you not releasing them?
Fiscal year 2019 is our latest full year financial release so it requires the full disclosure statement that includes the 2019 financials. Once the 2019 financials are completed the full breadth of information must be compiled, verified and supplemental management discussion completed. Financials are only a part of the full year disclosure statement and it all takes time.