Update to Shareholders Regarding Rapid Fire Marketing’s

Update to Shareholders Regarding Rapid Fire Marketing’s Business
admin | February 28, 2013


It has been awhile since I updated shareholders on what is happening at Rapid Fire Marketing, so over the last couple of weeks, I have put together the following comprehensive update on our business including the corporate side as well as the products side along with our strategy going forward with respect to the business and the capital structure of the Company.

Points to be Covered:

Fully Reporting Status
Removal of the DTC Chill
Funding
New Product
Growth Strategy as a Fully Reporting Company
Stock Structure
Management Team/BOD
So, as of now, this is where everything stands:

Fully Reporting Status

The order of events that we had to go through to become a fully reporting Company is as follows:

Complete the 10K to file with the SEC
Audited financials to accompany 10K
File a Form 10 with the SEC
File a 15c211 with a market maker to move to the OTCBB
I have put a lot of time and effort into the “getting fully reporting” process because this is the single biggest thing that we can do to add substantial value to this Company in the short term.

The 10K is complete ([color=red]with the notable exception of the audited financials[/color]). We have made adjustments to the 10K as we have moved along to have a current document to send to the SEC. Once the audit is complete, [color=red]we will file the 10K and send the Form 10 immediately thereafter.[/color]

The audit for the purposes of the 10K has to be for a two year period. Since 2010 was too much of a challenge to complete due to changes in previous management, we had to wait until 2012 ended, compile all the numbers and go to audit again with 2012 to satisfy that two year period. Significantly for the future, we have built all of our 2010-2013 records into our Netsuite system which makes the audit a lot easier for our consulting firm as well as the auditing firm.

When will the audit be completed and the 10K filed? I am hopeful it will be very soon. I have also discussed (in detail) the timing of getting to fully reporting status with our auditors and consulting firm and they believe the entire process, (10K and Form 10) could be complete within 60 days. Understandably, there has been lots of emphasis on the 10K filing, but this is only the first part of the process to getting to fully reporting status.

By once again assigning an expected timeline, it is not to say that more obstacles will not appear and have to be overcome. I realize this has been a long and frustrating process for shareholders. I, too, have been frustrated by the pace of movement as well.

The upside of this long process is that today, Rapid Fire Marketing has cleared many of the documentation hurdles of the past and now sits, in my opinion as a well-organized Company. While this is not “visible” to shareholders, it is certainly visible to me. Many hundreds of man hours of work have gone into rebuilding the corporate and administrative part of this Company. I truly appreciate the efforts of those people responsible for turning Rapid Fire Marketing into this well organized Company. [color=red]Every piece of information regarding Rapid Fire Marketing is at my fingertips now[/color]. Everything from contracts and invoices, to financial statements, correspondence, and a database of all documents to and from the Company and so on is in electronic form easily accessed through Netsuite. [color=red]And, we have one person who is a Netsuite expert that maintains the system daily and alerts me to any problems or issues so we can resolve it immediately and keep everything current.[/color]

Removal of the DTC Chill

On February 17, 2012, Rapid Fire Marketing was designated Trade for Trade and exited from the DTCC’s Continuous Net Settlement System (CNS). Additionally, a few trading firms restrict the purchase of our stock and only allow sales. Since we have clearly maintained excellent liquidity in our stock, my strategy was to get the Company fully reporting and reapply for DTC eligibility.

In 2010 and 2011, I followed the problem of DTC Chills with quite a few companies. It was clear that companies that were doing short term funding were seemingly automatically chilled. It was also clear that the DTCC was targeting non-reporting companies. In some cases, those few companies that did get their chill lifted were chilled again shortly after regaining their eligibility.

Rapid Fire Marketing does not have an infinite money supply. I chose to get the Company fully reporting first as well as ending the short term funding that the SEC and DTCC target companies for. To spend tens of thousands of dollars getting the chill lifted only to be re-chilled made little sense to me.

So, to that end, we are close enough to completing the process of getting this Company fully reporting that we are in the process of getting the chill lifted now. We have the attorney engaged in the process of removing the DTC chill. I cannot give any timelines but we will get it done as soon as we possibly can.

Funding

Aside from being a non-reporting Company, Rapid Fire Marketing’s biggest issue was funding when I took over as CEO. The only means of funding the Company had in place at that time was through the 504- which is a short term funding usually done at a significant discount to the market price. Every time a 504 funding was done, the stock would take a beating. I was determined to get away from this destructive practice.

We completed the $2.2+ million funding with IronRidge Global, as announced on 25 September. This funding enabled us to pay for a large inventory of products and provide us with capital to grow this Company. [color=red]However, the terms on that funding for the cash (capital) part was done with preferred stock which had to age 6 months and is also contingent on the Company becoming fully reporting.[/color]

The last short term funding we did with Rapid Fire Marketing was in early August of last year. We ended the 504 funding which was so hard on the stock and our shareholders.

Thus at this time, I have never been more confident in the strength of Rapid Fire Marketing. I am confident that this Company will re-emerge as a much stronger Company once we are fully reporting and we will have access to the capital with attractive terms needed to grow aggressively.

New Product

We are seeing steady sales of our vapor inhalers. It has sustained the Company for months with no outside funding.

There is a huge demand for a dry herb vaporizer. To that end, rather than take delivery of the second half of our order from [color=red]HexCorp of Cumulus and CANNAcig vapor inhalers[/color], we are going to production with our new vaporizer (yet to be named) that will be made from scratch which we will file a patent for. This is going to be a much more sophisticated unit than the CANNAcig/Cumulus. A lot of time and effort by HexCorp is going into this unit. We expect the final product to work better than any other dry vaporizer on the market and it will be priced competitively.

It is time that this Company created its own line of products and we are actively doing so now.

A representative from HexCorp is now in Hong Kong to oversee the creation of the molds and to finalize the electronic configuration of this new unit. I am involved in getting photos and drawings of the prototype and will post that info as soon as it is available.

Growth Strategy as a Fully Reporting Company

T[color=red]he medical marijuana industry is growing rapidly[/color]. Yet the industry is still dominated by small players. The medical marijuana industry is far more than just vaporizers. There are hundreds of small companies making great products. The problem is, in such a fragmented industry, accessing capital and the tools needed to grow are not readily available. Nearly all of these companies have to rely on private investors because financial institutions that will fund a company in the “marijuana/cannabis” sector are few and far between.

I have made the decision that in addition to creating our own products, we are going to put our best foot forward and be aggressive to acquire products from other companies and in some cases acquire part of or all of those companies that will be immediately accretive with regard to revenues and profits. Organic growth is one strategy, but adding acquisition targets to the mix, if completed successfully, could show immediate gains in all of the financial key indicators for Rapid Fire Marketing.

Stock Structure

One thing that makes Rapid Fire Marketing is the liquidity of our stock. The market cap is usually between $2 and $2.5 M but the value is in the liquidity of our stock. We have no near-term plans or desire to reverse split the stock. We can accomplish all we want and need right where we are. A reverse split would be counterproductive.

Management Team/BOD

I wanted to wait to get the 10K filed before any management team additions and board members were announced. We are close enough to getting the 10K off to the SEC that I will start making announcements regarding management team additions and board members within the next few weeks. We will bring in management that complements our dual pronged strategy of organic growth and accretive acquisitions.

Regards,

Tom Allinder
CEO