MOUNT PLEASANT, Utah, May 14, 2014 (GLOBE NEWSWIRE) -- Green PolkaDot Box Incorporated (OTC:GPDB) ("GPDB" or the "Company") announced today that it has entered into an agreement with three of its shareholders, none of whom is an officer, director, or 10% shareholder, to participate in a funding strategy to raise up to $1.9 million dollars for the purpose of increasing inventory and meeting development capital needs for its first Living Produce Growing Center ("LPGC") to be erected in central Utah.
The funding plan contemplates that this group of Investors will pledge to sell a total of 700,000 shares of their unrestricted common stock holdings at a price not less than $3.50 per share and then re-invest a major portion of the after tax sales proceeds into GPDB's Perpetual Inventory Fund ("PIF"), which pays 18% (APR) on a two-year note. After the loan term ends, these Investors will have the opportunity to purchase common stock up to the value of their loans with interest back at a 20% discount to the then current market price.
One of the three Investors has also agreed to reinvest his net proceeds from the sale of 200,000 shares into the Company's Series A Preferred Convertible stock to support operations and provide funding toward Phase I of the Living Produce Growing Center, scheduled to commence construction this summer conditioned on this funding.
GPDB CEO, Rod Smith, explains the value of the Perpetual Inventory Fund and impact on sales and profitability: "With these proceeds from the investment in the PIF, when received, we can increase inventory levels to match the expected increase in product sales from the growing membership base and achieve profitability sooner."
The Company plans to fund its growth through this innovative funding strategy that also helps to minimize shareholder dilution. Smith continues: "We are fortunate to have investors who believe in our future and are willing to sacrifice their potential gains to help increase inventory levels and meet the anticipated demand for new memberships and products."
Affiliate Marketing Strategy
Since commencement of operations, GPDB has developed its core competencies and refined its product offering to the public. Now GPDB is poised for growth, ready to expand a tried and tested marketing strategy using several affiliate network organizations.
In recent weeks, GPDB has entered into marketing agreements with some of the nation's most prolific affiliate network organizations, including LinkTrust, ShareASale, Performance-Based, Rakuten LinkShare and Commission Junction. These organizations combined serve and market to several million consumers. They each are working with GPDB to promote and sign up new members in GPDB and promote product sales.
The Company provides incentive to affiliate organizations to promote GPDB membership by paying a $15 referral fee for each referred member, plus $2 per order for the lifetime of each membership. In other words, in addition to receiving the referral fee, referring affiliates can get paid an estimated $25 to $50 per year on the recurring orders of each and every member they refer to GPDB. The Company believes this is an extraordinary compensation opportunity that motivates referring affiliates to direct their contacts to GPDB membership benefits.
Commencing this week, GPDB will post on its Web site masthead, in real time, the level of and increases in memberships every day. Investors who visit www.gpdb.com or www.greenpolkadotbox.com will be able to watch membership growth as it occurs, minute by minute.
Smith elaborates: "We have already proven that affiliates are very effective in referring health-minded consumers to membership in GPDB. We anticipate that our new partnerships with these powerful organizations will lead to the establishment of thousands of marketing relationships with referring affiliates and sharp increases in memberships and product sales. Our goal is to achieve at least 15,000 total active members—an increase of more than 300% in memberships—and more than $1,500,000 in monthly sales by September 2014."
Smith also explained: "The projected sales will be achieved without increasing fixed general and administrative overhead until the fourth quarter of 2014; that with current facilities and staffing the Company can hit these growth targets." When asked why GPDB is not fully reporting he said: "We have engaged auditors and plan to be fully reporting to the Securities and Exchange Commission before the end of this year."
Living Produce® Growing Center
Smith also reported on the progress for Phase I of the Living Produce Growing Center, scheduled to commence construction this summer conditioned on the receipt of funding. Approximately 15% of the $2.6 million LPGC-Phase I project has already been funded. Land has been purchased, the construction site has been graded, and a building permit has been secured. The balance of project costs will be funded through bank financing backed by Utah Farm Service Agency or USDA loan guarantees.
In addition to developing its first Living Produce® Growing Center, GPDB's plans this year include proprietary shopping technology innovations, including On the Dot™ auto-ship subscription software and the My Shopping List™ order system, while expanding its product line and leasing a second distribution center in the eastern United States at a projected set-up cost of approximately $300,000.
"We want our shareholders to know," assured Smith, "that we are on a fast track to accelerated membership growth and profitability, and to strengthen the value of their ownership. We are also preparing to up-list the Company's stock to a major stock exchange later in the year."
About Green PolkaDot Box
Green PolkaDot Box is America's premier online membership club for organic and non-GMO natural foods at wholesale pricing. It is the only major online store that refuses to carry any products or ingredients containing Genetically Modified Organisms (GMO). The Company leverages proprietary technology with its dynamic, interactive website and member relationship management software to provide a unique shopping and membership experience. Green PolkaDot Box plans to grow membership with individuals and families looking for natural non-GMO products and organic choices for up to a 60% discount off retail prices. For more information on Green PolkaDot Box, please visit: www.greenpolkadotbox.com.
Safe Harbor Statement
This release 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.