GPDB Update – Letter to Shareholders

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May 10, 2016

Disclaimer Statement

This letter includes forward-looking statements. These forward-looking statements generally can be identified by phrases such as GPDB or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” “Plans” or other words or phrases of similar import. Similarly, statements herein that describe the Company’s business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

Dear Shareholders:

The term “disrupter” for investing became popular in 2013.  Digital “disrupter” companies have business models which disrupt entire brick and mortar industries and can get to $10 billion valuations very fast.

UBER is the best known recent disruptor.  $10,000 invested into UBER in October of 2010 grew to $102 million based on its July 2015 valuation.  (Source: dynastywealth.com) Other disrupters that achieved over $10 billion valuations quickly include Airbnb, and Lending Club among others.

What is a Disrupter?  Clayton Christensen, a Harvard Business School professor and Disruption Guru, wrote: “A disruptor displaces an existing market, industry or technology and produces something new and more efficient and worthwhile.”

GPDB fits this description, exactly.  This digital platform created for “Health Merchants” will enable our company to introduce CLEAN foods at affordable prices to hundreds of millions of consumers over the next three years while causing a shift in consumer demand from GMO-contaminated foods to CLEAN foods, opening up a new $550 billion marketplace.  The disruption by GPDB will force well-established companies in the food and chemical industries to either change the way they do business or get out of business.

3 Steps from Start Up to Billion Dollar Valuations for Digital Disrupters

According to renowned Michael Markowski, named by Fortune magazine as one of America’s Top 50 Investors, the following traits or characteristics are common among the more than 50 digital disrupters that achieve billion dollar valuations quickly:

  1. Develop a digital application. GPDB has created a new digital platform for market influencers to use for monetizing the CLEAN food consumers within their reach and influence.
  1. Develop Business Model Offline. Having perfected and proven its CLEAN food provisioning, fulfillment and online marketing competencies while generating over $8 million in sales in its early history, GPDB changed direction to take advantage of a First Mover opportunity to develop a new digital marketing and sales application. It was developed offline over the past two years at a cost of more than $2,000,000. The “Health Merchant” digital platform has been beta-tested and perfected; it is ready for implementation.
  1. Move Business Model Online to Leverage Social Media. GPDB has entered into signed contract agreements with 278 Health Merchants to leverage their existing online social media distribution to more than 45-million consumers and their families, collectively. The Health Merchant model will be moved online in the summer of 2016 and continue to grow in size and scope.

Why Companies like GPDB—that qualify as a “First Mover”—have the potential to get to a $1 Billion valuation almost instantly.

A First Mover is a company that is the first to introduce a new product, service, or technology—that satisfies massive public demand—and has no competition from other companies.  (Source: Cambridge Dictionary, italics added)

For example, when Yahoo started to generate its first revenue dollars in late 1995 it qualified as a “First Mover.”  Even though Yahoo was unprofitable, it was able to launch an IPO and get to a $1 Billion valuation in April of 1996. (Source: dynastywealth.com)

Because GPDB is the first to put its stake in the ground with its new digital business model, it will dominate the potentially massive CLEAN food marketplace.  Through the Health Merchant model, GPDB has established a First Mover market position in the Internet space for a direct-to-consumer CLEAN food offering and selling system before any other competitors.  And, not only is the digital platform completed and ready for implementation, the Company has already established 278 Health Merchants that can reach 45-million customers, immediately; before competitors are even aware. They will never be able to catch up.

Without any competition, GPDB has ability to reach 45-million health-minded customers and potential to generate over $135 billion in CLEAN food sales, annually.  But consider the chart on the following page that shows GPDB’s potential for sales in 2016 at only minimal conversion-to-order rates; assuming an average $/order of $153 which GPDB has proven it can achieve consistently:

Conversion-to-Order Rates

(45-million potential customers)

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With only .005 conversions-to-order or 225,000 orders, with each order at an average of $153, GPDB can generate $34,425,000 in monthly revenues; or more than $413 million in sales, annually.  At projected 20% EBITDA, using a conservative PE ratio of 15 times annual earnings, GPDB would be valued at more than $1.2 billion.  Divided by 30,000,000 shares, $1.2 billion would yield a share price of more than $41 or about 137 times the current price!

Unrealistic Conversion-to-Order Rate

There is only one problem with the previous example.  A .005% conversion-to-order rate is not realistic. GPDB’s historical sales data from testing email marketing through influencers has consistently shown that a realistic conversion-to-order rate is about .032%, 6.4 times higher than the conversion-to-order rate in the foregoing example.

Another problem is that GPDB will have more than 2,000 Health Merchants reaching over 100,000,000 customers about the time it comes out with its IPO (spring 2017).  The more realistic conversion-to-order rate of .032% suggests that monthly sales could reach more than $489 million, monthly, on about 3,200,000 orders.

GPDB’s Advantage

GPDB is going to disrupt the current distribution system for CLEAN foods, leading a giant consumer shift that results in a dramatically expanding marketplace.  We do have and will maintain a significant advantage over competitors because of our First Mover position.  Any potential competitors do not have a business model or positioning to match GPDB’s digital Health Merchant platform and network of participating market influencers.  They will never be able to catch up.

And, I haven’t even mentioned our plans for vertical integration and how that will put our product offerings at 30% or more below our closest competitors and lock in customer purchasing loyalty.  More on that later.

The point is that we are not just a website selling CLEAN foods anymore.  We are emerging with a new digital business model that can serve the masses.  We are a disrupter.  We are a First Mover.   It won’t be long before we are the leading distributor of CLEAN foods in America through our exciting Health Merchant platform.

If you have any questions, please contact me at (801 478-2500, ext. 1000 or rsmith@greenpolkadotbox.com.

rodsmithsignature

 

 

Rod Smith
CEO
Green PolkaDot Box Incorporated
(801) 478-2500, Ext. 1000

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