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If they do have money the big question is where are they getting it from. From their own published financials given total inventory, if the sold through everything they had and latest shipments there would be gross sales of roughly $330,000 to date of their last statement. Their monthly expenses are around $100,000 and they show no cash on the balance sheet in that same statement. They only show a small amount of receivables and a subscription fee (love to know what that's all about). Bottom line is they can't have any money from anything other than new loans or some other kind of financing. That's what you need to worry about. Anyone who can read a balance sheet should be able to see this and extrapolate. A simpler way to look at is just potential maximum sales to date at $330,000 and expenses of at least $600,000. Cash to pay employees, expenses, ret, et. al. has to be coming from somewhere and it can't be sales or profits.
Excellent point Veronica. Payroll taxes are a totally different animal especially in smaller companies where bookkeeping is being handled by an employee versus ADP or an outside CPA. I have seen many small companies go under because payroll taxes are often the first place they skimp and it can escalate rapidly. The temptation to put off payment and use the cash for operations is significant when cash is tight. The other problem is that we're not talking about just the IRS and 941s. They also have to deal with the Franchise Tax Board and in California they are very aggressive. And you are also correct about collection. It's not like income taxes. The services have no tolerance nor sympathy for non payment of these taxes and because of the fiduciary responsibilities involved the company is often threatened in far more significant ways including criminal action. I can also tell you that $250,000 is certainly an amount they will pursue swiftly.
Just to give you an example, I had a self employed payroll tax underpayment of $147 in 2003 to the FTB that went unknown to me for years. Last year I got a notice from B of A that FTB seized $6,895 from my checking account for payment of the $147 + penalties and interest! Absolutely nothing I could do about it. It was non negotiable. And they didn't lien or freeze it. They simply took it.
Based on this being a crap shoot, not a company value based play, I put this company at a .008 value before we see the next financials. I think that's a fair valuation. If they perform we can revisit value but right now that's actually far more than they're worth. There are still major issues. My biggest concern is outstanding taxes which can put a kabash on the whole deal. If they don't pay the outstanding 941's they will be shut down within the next 120 days. Both the state and the FED have no tolerance for failure to pay these taxes and will lien everything. They need to come up with that $250,000 tomorrow or it's all over.
DJ, I see what you are saying with reference to reporting but you have to understand that you are beating a dead horse. The company released an interim report to satisfy those questioning the company in the hope it would appear as an official filing. It wasn't and they continue to be an unreporting company, I think in violation of SEC guidelines but regardless. The sites you're looking at don't get updated without an official filing. And that's where people go to do their DD. Last thing they want people to see is they have 470M shares out there let alone 120M they've basically given away in the past 18 months.
All we have is a Word document churned out internally by Marani. They don't even have certification from a CPA. It's no better than an email from Magrit saying "We're good!". Probably couldn't get a CPA because as I read the financials and the sales claims I don't think there's a CPA or CPA firm in the world that would touch this company with a ten foot pole for fear of recourse.
This is a little family operation masquerading as a public entity that has sucked $30 million out of the public in the last seven years. Nothing new going on. As soon as they report, if they do, my numbers will be proven true. Actually, I don't think that will ever happen to tell you the truth. I think they'll just close the doors again like they've done at least four times prior. They'll gas it as long as stock can be sold and converted. Another couple of million, maybe even just a couple of hundred thousand as it looks like the market is drying up and it will be over. Already seeing the bids die. The Costco ship has sailed. They'll need something with real meat next to convince me it's anything but a reverse merger cash out deal.
Fair reply Tape. Let me give you a little advice having done this for many years, and usually I don't play with pennies, mostly for fun because a good friend is in to it and $20K isn't going to change my life. But I have learned to read financials and fundamentals as well as anyone I know including Mr. Cramer. Let me tell you what he would say about this company with less than a one minute glance at the P&L, balance sheet, IS and proposed sles deal with foreign countries... RUN! RUN! RUN!
Bottom line is people lie and mislead. Numbers don't. Most people are in the pennies as a form of gambling not wealth building. There are too many red flags on this one to remain optimistic and I did the play no differently than if I had placed a bet on the craps table. I took out my principal plus 10% out at $.03 and let the rest ride. No risk. But I'm totally convinced this company cannot survive. Too much debt, too much overhead, no brand, no capitalization and a track record for tanking public entities after cashing out millions of shares at shareholder expense. Good luck to you but keep an eye on the numbers and try not to be distracted by the fluff and deals and revenue that cannot possibly be supported. You have 120M shares of zero basis stock out there and it's being unloaded. By whom, I don't know but it is. It's pure profit and it's the intention of the reverse merger. With more debt than can be handled, meager distribution, no branding and no resources human or financial, this company can go nowhere. Who knows, maybe you get a pop that allows you to get out with a nice profit but that's all it is. A game of gambling. The music is off and there are few chairs left. They'll start the music from time to time with announcements, PR, Money TV and uncheckable foreign contracts but in the end of the day the music will stop for good. Look for a chair. Take care.
Tape, again your enthusiasm is compelling but have you given this much thought? A buyer is going ape shi*? Did it occur to you that very possibly, and most likely, this is a holder of any given portion of the 120 plus million shares of zero and almost zero cost basis stock distributed in the last 12 months and they are collecting 100-200% profit unloading to to some poor fool(s) who believe the company's lofty claims thinking they're going to get rich because the thing was at four cents a couple of months ago?
If I got 10-20 million shares to wipe out a $40,000 loan and three to nine months later I could turn around and get $170,000-$340,000 I wouldn't think twice about share price or the company. This is why it's called toxic financing. I wouldn't have waited one more day than necessary because the company is so overvalued anyway and has nowhere to go but down. I'd be far more worried why someone would be willing to unload such large amounts of stock if in fact the company were undervalues. I think it's smart people realizing they're going to get their chair before the music stops. They have nothing to lose an much to gain.
While I applaud your enthusiasm in light of contradicting financial and operational data I find it difficult to comprehend a stock price of $.10. What do you base that on? You're basically saying this company will increase its market cap by 5X in the next three months which is a very lofty claim. Since you're telling everyone we will make $6,000 for every $1,000 invested, I assume you have some empirical and real data to back it up. The thing is that the fundamental don't support any such move, the opposite actually as a total sell out of inventory at this point or even over the next three months will not only result in a net loss but will do nothing in reference to a million dollars in debt, payables, taxes, etc. not to mention what looks to me to be a minimum of around $100,000 a month nut. I'd just like to hear what you're basing this phenomenal forecast on.
One other thing to mention is a looming problem that has been swept under the rug and generally ignored. That is the back payroll taxes. This is a VERY serious issue that could land the company in very hot water in short order. They're not like income taxes that you can dance around for a while and then send some tax attorney in to settle at a steep discount. They will shut you down in a New York minute for the full amount and slap a lien and garnishment on you without appeal or any other resolve until the full amount is paid. Keep it in mind because that $250,000 listed in the interim report last month (and growing much larger every day with penalties and interest) is now more than their entire listed inventory and shipments for the year. So theoretically, pretty much every nickel in vodka sold from that one container could go straight to the taxman as well as any new shipments until the tax is paid. This would leave Marani with $0 in sales, $1M in debt and no money to pay that $100,000 a month nut. It would be difficult to see that as a company with a pps of $.10 and a market cap of $47,000,000.
Again, not to beat a dead horse but how do you arrive at this kind of valuation? $.25 a share? That's close to $120M. They'd have to sell over 50 containers a month just to get to that numbers in gross sales. Even $.04 would require an additional 86 containers to justify. Considering we've seen just one this year it seems more than far fetched that any of these wild price forecasts are credible or based on reality.
I continue hearing that this company is undervalued. How is anyone arriving at that conclusion because it certainly isn't based on any financial information. As a matter of fact, going by the numbers and facts we have the company is significantly overvalued, under capitalized and over leveraged. I'm also a little shocked that BIG who claims to be a finance and numbers guy with 20 years plus at P&G considers this a gem when looking at the fundamentals. BIG, can you expand on and cite what financial elements could possibly make this company an undervalued "gem"? Perhaps I'm missing something. The way I see it is just a few basic facts defy all of the optimistic forecasts and predictions for a viable entity let alone a mega success story.
The company has shipped 1600 cases of vodka that we know of in the last six months and mor likely since 2009 but let's just look at this year. Those cases represent gross sales of only $217,000 while expenses are easily double that over the same period. There's red ink galore and more debt than when they went belly up last time in 2010 and may I add around half the sales claimed in 2009 and so far no other shipments on the horizon. My question is how anyone is objectively valuing the company? There's no other data or basis for guidance other than what's been shipped and sold. Even If they've sold it all as they claim and had zero expenses the PPS value is still $.004 at 100X earnings making the current price 500X before expenses. In all reality you simply need to go back and look at the recent financials they published to see just what bad shape this company is in and not rationalize management's softening of the blow prior thereto along with delusional sales claims. And just so you know, Costco and most distributors will provide weekly sell through numbers to the vendor so. I'm sure management knows exactly what has sold through. The fact they haven't said anything is nothing but bad news. Regardless, they should have solid confirmed sales numbers by next week and if they don't report, it's not good news. Bank of it.
They've shipped 1600 cases in a year. How can you possibly talk about 10 times that volume? And I'm going to bet their sell through is less than 10%. You guys are dreaming. Six containers a month? A little too much Marani while doing the DD. Bottom line is you have to look at what they've done not what you wish they could do. Facts are facts and numbers don't lie. Six containers a month is just not going to happen. You're putting them in a league wth the like of Grey Goose and Smirnoff. They have like four employees and no capital. You're being unrealistic. Even the company doesn't claim to be able to meet the numbers you're proposing. The problem is that even the numbers being presented by the company suggest a company that will soon be insolvent. It's the dreaming and wild forecasts by investors that keep it going. All that time, management is somehow financing themselves wich is the real concern here. 1600 cases can't pay the bills but that's all they have. By multiplying that supply without support or confirmation you only perpetuate a potential fraud. Where is the next shipment? I've checked the shipping logs and there's nothing coming. To average six containers a month I'd think you'd need to start shipping more than one container a year. And I'm not going to give the company the benefit of the doubt anymore. 1600 cases is $217,000. Expenses are at least double that. That makes the stock worth $0. Just a matter of time as to when they do what they did five years ago and close the doors. The zero cost holders will be out and a whole bunch of you will be holding worthless stock in a company that failed once and will have failed again for the very same reasons. And the sad part is it was totally intentional both times.
If they've sold through anything but 100% of what they shipped and shelved they won't be on the shelves for very long. Costco calculates everything based on sq. inch prices. They want to see product turned over, and over... and over. For stock to stay on the selves for a month is not part of their game plan. Furthermore, even if they did sell 48 bottles per store at 46% gross margin, that's something like $9,000 IF they sell out. Guess what they're one third of the way to paying two employees base salaries! Or just another $5,000 away from paying for another Money TV stint.
I think a lot of folks don't think to scale and just look at sales with blinders on. Just because they sell a dozen bottle here and there doesn't indicate success. Look at the expenses and cost of doing business as it relates what's been sold or could be sold. Just to pay the $27,000 for those two employees they'd have to sell over 1,800 bottles. That doesn't include any other expenses. Which brings me to something said on the last infomercial. Margit said they brought in 1600 cases (all paid for). If so, using her claimed gross margin, that would amount to only $217,000 in gross sales. Take away just those same two salaries and you get something around $50,000 (let's ignore the fact they'll need to put up $65,000 up front for their next shipment). Now let's say they bring in 1600 cases every month and sell out every month for the year (will never happen but a good illustration of why this is such a pipe dream and most likely scheme to sell zero basis stock). $600,000 in sales after taking out the salaries which comes to a share value $.0012... BEFORE expenses, other salaries, rent, payroll taxes, workers comp, T&E, sponsorships, Money TV, legal and professional, admin, payables and interest not to mention paying down any of the million+ they've accumulated in debt.
Bottom line is there is no way this company can survive let alone command a PPS of over $.001 for much longer because very simple factual math shows it's all vapor.
Here's the scarier part. I don't know how they're financing this but I hope it's not the typical reverse merger stuff although I fear it probably is. For those unfamiliar with the practice which is rampant in penny reverse mergers, is selling stock out the back door. Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5 are supposed to protect against such but are commonly violated.
What it involves is a scheme to sell common stock directly into the market without having a registration statement in effect as to those securities, and thereby circumventing the registration requirements for sales of securities to the public. In order to raise working capital, the company sells shares registered on Forms S-8 registration statements to third party investors through employee and consultant nominees. My thought immediately turns to Bodie as one of these nominees or form thereof which might even question the legality of any deal he had with Marani. Regardless, The nominee(s) are how the company distribute the Form S-8 stock, and there could well be many others acting as nominees. By acting as a nominee and participating in the scheme, any participant violates Sections 5(a) and 5(c) of the Securities Act.
This is of course speculation on my part but it's based on a ton of experience in the arena. Looking at all the facts and figures, watching the continual flow of fluff marketing, infomercial and PR, looking at the experience of executive management and track record... it sure doesn't look good. It looks just like one of these penny deals where stock is moving out the back door at close to zero basis or at least deeply discounted and is compounded by a ton of zero cost basis owners already on the roster who are probably selling as soon as they can. It's a house of cards and musical chairs. Where will you be when the music stops? Theoretically, no member of management can sell, buy or otherwise dispose of or acquire stock without filing 4Ks. None filed so I can't say. For their sake I hope they haven't sold or transferred a single share because then we're talking BIG and very real trouble. There is definitely a stink about this one. My spidey sense tells me watch out for this one because there's a lot, and I mean a lot of mystery money and some major problems coming that cannot be covered up with fluff marketing and management double talk.
DD on MRIB
I have to chuckle a bit when I look at the different DD claims. Maybe I'm tougher on this process coming from an M&A background but pictures of product, copies of press releases, quotes and claims from management, non documented forecast and mysterious unpublished contracts and supposed orders... are not DD. DD is exactly the opposite. It's a matter of ignoring what the company releases or publishes other than legally required financial disclosures and seeking the truth about the viability of the company without subjective influence of the company or its management. Company fundamentals such as balance sheet, income statement, confirmed non-recourse purchase orders, cash flow, SEC filings, management experience and track record, education, past success AND failure. The whole nine yards of OBJECTIVE analysis... that's the meat of due diligence, not fluff pieces released by the company regarding sponsorships, management opinions, pretty pictures and company issued PR and infomercials. All that tells me is the true components for god DD on MRIB are extremely weak and so far that's exactly what I've seen which brings me to my next point with two major questions.
One question is general and one is technical. Let's flash back five years. Looking at what little financials we have this company looks a lot like it did in 2009-2010 when it went belly up. You have the same executive management, same corporate structure, same business plan for the most part and not much different. They're approaching payables around the same as they're final published quarterlies in Q1 2010. Sales are roughly the same and loss is roughly the same, actually a little bit more this time around. Cash resources are considerably less now and human resources, inventory and assets are about the same. What's different this time? It seems almost identical to me which makes me think it will end the same way and relatively soon. It's a sea of red ink and having read the lawsuit I guarantee they're going to lose or have to settle with Bodie. The next question I have is one of curiosity and it makes me question the honesty of reporting from what is the exact same people as five years ago. We've already seen "mistakes" on the financials which to me is a red flag but I find one extremely disturbing (and this is a good example of why DD must employ financial statements). Look at their next to last filing in Q4 2009. Almost $5M in profit. Yes. And it's very odd that it appears to be some form of recovery or something I don't get because it's a credit on selling and admin. That's very fishy. What's even more fishy is that $5M net, net, net disappears in their next and final statement before the shut the doors. Payables did not change but accumulated and there were no write offs. No notes to the financials. But the $5M was apparently gone. Furthermore, the income report and balance sheets from the Q4 2009 filing don't even match. I'm just trying to figure out if they had a really bad bookkeeper or $5M did disappear. Their books and reporting are so shoddy and questionable I just can't see much of it as dependable and their failure to be more communicative in this respect is a HUGE red flag. Anyway, that's DD, not fancy pictures. Finding out the real story requires one to get over the promotional material and dig down into the truth through real numbers. Would also love for someone to explain the 2009-2010 accounting and if they can fins out where that $5M went before the doors were abruptly shut in Q1 2010. My personal opinion is there is not one honest intention in this company operation and it is a typical reverse merger stock play for profit of the zero cost basis principals. It should not be a public company and it is not behaving like one.
BTW, the sales Magrit claims based on her own $136 per case price means that they sold (and I DOUBT its been paid for)would not be enough to cover company operations to date just based on salaries, payroll taxes and WC. Unless another container arrives next week and is fully sold out by mid July, they're broke unless they're raising money some other way which I fear is the case. This is not to mention they will have to go almost another $100k into their pocket for another shipment. The numbers just don't add up folks. Magrit talks a good game but my feeling is that very little of it could be substantiated if put to the test. I'm sure you would find things like recourse purchase order being considered paid for sales and again what I fear, private placements and other non-documented raises. There is simply not enough revenue to support the company claims.
Granted, but ANY new company let alone a public company which this one clearly shouldn't be, must either have profits immediately or some other form of capitalization. 99% of company failures come as a result of under capitalization. Furthermore, it's very hard for me to grasp your concept of "new company" given their big company habits like big salaries, sponsorships, infomercials, stock promotions, etc. If they were working out of their garage with belts tightened grinding it out I'd give them a chance but they're not. They're living large, spending like drunken sailors and you've got to question the fact they're sitting on millions upon millions of zero cost basis stock. In a true small company start up the stock should be all they get, period. These guys are playing it like they're the next Diagio or LVMH. Additional product lines, huge contracts, promotions. It just doesn't add up and I simply can't see anything that signifies it can survive.
To add, there was some math posted that was just not thought out that inferred far more product resource than could possibly exist in reference to inventory and subsequent gross sales based on the only container shipped this year. Let's look at that. The shipment math is just wrong and misleading. Given the gross weight, if the shipment weighs 30,000 pounds as stated the bottle count would be a maximum of 6000 bottles. A 750 ml bottle of vodka weighs 3.5 pounds so conservatively I'd estimate a 1.5 l bottle would come in at no less than 5 pounds. Ok, 6000 bottles at gross sales of $30 bucks a shot is $180,000. Gross margin at the ridiculous stated 46%, but whatever, is $80,000. After expenses, salaries, taxes, etc.? Well over $50,000. You're looking at a very iffy $30,000 in profit or an annual run rate of $360,000. This is not even taking into account loans, existing payables, back payroll taxes, etc. let's give it the benefit of the doubt, double it and call it $720,000 in net profit which would amount to a share value of $.002 per share. And let's not forget that I'm making the far fetched assumption they sell through everything in 30 days. From the looks of the true math based on facts and conservative assumptions and giving the benefit of the doubt to the company on each issue, I'd say the latest sell off of stock is pretty astute and most likely an indication of things to come. There just aren't enough resources to pull off anything more significant. So the bottom line is with no money, no product, big expenses and no other resources it can't be done under any existing common sense business operation. What I actually think is that the shipment in question will last the whole year and this years sales will be in the 200-300k region with a loss over a million leaving the company close to 2 million in debt with no capital or resources at the start of Q1 2015. Mark my words and we'll take a look at it again Q4.
Yes the best case scenario is 31,000 in gross sales. That's also less than $15,000 in gross margin not including co-op fees and expenses. Take out just the two employees making $27,000 a month and you're at $3,000 a month before paying the other employees, rent, payroll taxes, etc. so the awesome scenario is obviously a money loser. If Costco is a money loser and it's being touted as some kind of incredible happening I think you need to look at this company that is currently insolvent as unable to pull the rabbit out of the hat. There's just nothing here. It's nickels and dimes with no relief of huge debt, payables, legal fees, etc. how can you run a company with no money? I assure you they are burning rough more than ten times what they're bringing in. And let's not forget that they're already known to owe more In back taxes than 200 months of sales at the "awesome results" level. This thing is most definitely a pipe dream. Actually I take that back. Anyone on the inside perpetuating this must know its a stock play for insiders and the owner of the zero basis stock. It will go away when the money runs out. Should be in just a few months.
Unfortunate. into pushing the stock than the product. Unrealistic forecasts and no possible ability to fill orders represented in their dealYea. This is unfortunate. IT's about investors not understanding the market and becoming euphoric base on company promotion of their stock. To exist on any ongoing basis at places like Costco you need sell through and I doubt they have any. No real advertising or marketing. Far more effort s they say they have. It's a terribly crowded space and no place for a three or four employee company with no cash, legal issues and 120 million shares of stock that came on a zero cost basis. I would assume, as in all reverse mergers, the goal of the original folks getting out with most of their money back or even significant profits was and remains the goal. This product can never make it. No horsepower to do anything of significance. Just a matter of time now. I'd say this stock is sub .01 inside of six month if not BK. And just a note to those that view Money TV as real. They actually have a disclaimer that all information is scripted by the company and is paid for. It is an infomercial in an attempt to promote the stock for $12-18K. They clearly state that Money TV has nothing to do with the content. 100% is provide by the paying company You should keep that in mind in your DD. It's not CNBC. Also, the Costco placement is a paid slotting situation as well. Trust me, I've done it with an artisanal food company I invested with. You pay them, they stock you for a week or two. They don't really care who you are or what you're selling as long as it won't negatively affect them for the two weeks you get. If you sell through in two days you may get a reorder. Sounds like that's a long way from happening. My buddy in LA checked out a store down there and they had sold through nothing in five days. Doesn't look good.
Why would someone not sell 1.3 million shares at .019 when they got them for nothing? The cost of those shares was probably $130 and the sale price was almost $26,000. Considering when the company exchanged all their debt for stock someone probably made a 200 % return in a matter of a few months. Keep in mind that there are at minimum 120 million plus shares out there that were given away in lieu of debt. If I were one of those creditors and saw those published financials I'd be selling for whatever I could get! The company is clearly insolvent and accumulating more debt by the day with no revenue. I would wager that the majority of sales at this point is the result of mrib investors buying a bottle here and there.
I'm a little shocked at the optimism given those financials. There are so many red flags. First and foremost is that it looks to me as thigh almost a quarter of shares outstanding we're issued for free supporting the zero cost theories. They basically gave away 120 million shares to pay some relatively minor debts. Second is by accounting standards the company is obviously insolvent. Third are some ticky tack but real issues. How is a company with $540 in computer equipment doing all they say they're doing? It just doesn't add up. And I've said this before... Inventory and launch are big issues. They don't have any inventory but they say they've sold $115 million in vodka? There's also one huge red flag that people may have missed and I mentioned this a month ago and it proved true. Unpaid payroll taxes. This is a biggie, especially in California. You don't pay those and you are shut down in a New York minute. This company looks horrendous on paper and most likely is in reality. It's a train wreck praying for a miracle of some sorts or just trying to suck as much out of it before it tanks. Thinking back to the zero cost basis groups I'd think the latter is the course being taken. Probably just a matter of time and looking at the cash position and the rest of the balance sheet I'd say a BK before the end of the year is imminent or perhaps they'll just go silent again like they did in 2009.
Not that I put much credibility into anything said on Money TV but I did see this one and was curious... there was no mention of what was being said that was false. What's been said that is patently false and/or actionable? It sort of seems to me that it's just a little more of the "pay no attention to the man behind the curtain" routine. Does anyone know what the falsities referred to were/are?
Newswire is also a pay service. Just a way to spread the hype.
Money TV is a paid for infomercial. It is entirely scripted. They should add an order of Ginsu knives or a Wonder mop if you buy 1000 shares of MRIB stock... There is absolutely nothing objective about it.
I doubt that's true. Do you have proof of that because I can tell you that's simply not the traditional practice. Here's how it usually works. The distributor receives a pro forma invoice from Marani and then decides whether or not they are going to participate. If so, they issue a 90-day non-recourse purchase order that takes effect only after delivery of the full order when the clock starts running. Once all the product is delivered, and not before, Marani issues an invoice for whatever was delivered. After 90 days the distributor sends Marani a check for whatever sold through and sends back what wasn't or hopefully places a new order. Doubt the second situation will occur given the brand support and volumes claimed. But be well aware, there is no up front money coming from the distribution channel. It just doesn't work that way.
Ok... I'll ask again. How are they going to finance the Brazil contract sales? No one is going to front a recourse sale and no distribution channel is going to be non-recourse. Where will the money come from to fulfill the contract? I'm in the business. It's all recourse unless you're are a very special commodity like Diageo or LVMH and even then most distributors are just not in a position to finance anything. They work on small margins and marginal cash flow. They make more money on floating their payables than anything else. They're just not big enough to fund anyone let alone an upstart non-branded, unadvertised vodka from a 4 or 5 person crew 4000 miles away with no assets and questionable capitalization and track record.
Let's do some math...
Let's say there are $105 million in contracts which numerous folks have claimed are closed and "already sold". Let's extrapolate what that means in expenses. At an overly generous 50% gross margin that would equate to 766,000 cases. I don't know what it costs to produce almost 800,000 cases of Vodka but let's say COG is around $70 or 50% of the $140 case price I've seen. Cost of goods, just for the booze is around $53,000,000. Then you've got import/export duty and tariffs, packing, local and international shipping and freight, holding and warehousing costs and probably a whole bunch of other expenses. Let's call it a measly $10M (10%) although I'm sure it would be much more than that especially considering the international aspect (the import duty in Brazil is astronomical. As much as 80%) I would bet the cardboard alone for the boxes will run more than a million dollars and these are all up front costs. Really doesn't matter for the point I'm going to make.
The $64 million question is how does a company with no cash reserves, no branding, advertising or marketing to speak of, three or four domestic employees and no inventory as of their last published financials launch and fulfill these international contracts they claim to have let alone COSTCO et. al. domestically? The numbers do not add up. It's business 101. Simple math to boot. No one is going to front the launch. No one is going to factor the paper because there isn't a distributor in the world that will do so which is the same reason no one would be willing to back the paper. So if these contracts are real Marani would have to come up with one HUGE pile of cash.
Here's my bet and it is of course pure speculation. The company has no real sales contracts. All hype. They've got enough, by the skin of their teeth, to produce a couple hundred cases and buy a bunch of paid infomercials targeted at promoting not the product, but the stock. They throw around contracts worth a supposed $105M and names like COSTCO which by the way is not hard to get into as some have said, and the no cost basis the principals have turned their hundred millions of shares of stock into currency. They pull out a couple of million in stock sales while they keep the thing on life support, keep the financials a secret as long as possible and continue to pump it for all they can until the poop hits the fan than close down shop, disappear again and perhaps take a slap on the wrist from the SEC three years down the road and maybe pay a small fine if anyone files suit.
Bottom line is just do the math and look at the metrics. The entire prospect of they're proposing is preposterous both in the math and basic business operations. So I ask again, where is the $50M plus, at minimum needed to pull this off going to come from and where has the money for the current production and activity come from. Even more basic, How is Dan Senters and Magrit and family getting paid? You guys really need to look at the business proposition at this point not the stock play because the stock play has a short shelf life. When the facts and truth come out, the play is over and real financials will be the only driving factor as it is in any public company and the "pay no attention to the man behind the curtain" strategy becomes obsolete.
Any of you guys know what the "family" was doing both before Marani was formed and after the initial failure? I do. I checked. I hope you guys did your DD and checked because for anyone to call the management team "great" you've obviously never seen a successful company. Poor Dan Senters (or maybe not) seems a good industry guy but many times that's what happens. They bring in an industry guy with a resume and boost the scam. Funny thing and maybe good for him, he'll land something else when it falls apart because of that experience whether he knew about the impossibilities of what's being presented or not.
Exactly. Zero cost basis and freedom to issue registered shares. It's a printing press for the insiders and I think it's being used extensively. When the shit hits the fan and it's discovered that 8k's, 4Ks and all sorts of other filings were not done people should be led off in handcuffs. Won't happen though because no one cares enough at the SEC to do anything about it. It's too small a deal and a large bunch of day traders trying to make $400 a day off of what amount to legalized gambling doesn't interest the US attorney nor the SEC. I've seen it happen so many times and it is terribly frustrating. If it's not front page news it's not worth chasing. Hat to see people fooled and convinced to buy based on voodoo math, impossible dreams and unsubstantiated hype from people trying to suck out that $400 a day but they keep falling for it.
Ok. It's time to call BS on some of this hyperbole and clearly misleading euphoric optimism without substance or basis...
First, let's say they have $105M in contracts. What does that mean? Some folks here have claimed they are "already place orders". That's an outrageous comment because it just ain't true. At best they are LOI's to become a distributor with some outrageous sales forecast with which comes no recourse or commitment by the distributor. Second, these "contracts" are both vague and without detail which leads me to believe all they are are boiler plate agreements to sell product as long as it is delivered, freight and duty paid and guarantee of sell through or return of product expense free less anything sold at slim margins for Marani. That's the way distributors work. No distributor is going to front a sale. So here's my big question... how is Marani going to fund the infrastructure, inventory needed and operational resources to fulfill $105M in sales. It's absolute nonsense. Do you know the cost for the cases alone? If you extrapolate the $105M in sales even at an outrageous 50% margin they'd need to front over a million dollars just in cardboard. I know, I buy a lot of it. Freight, import/export fees and duty, actual production, packing, container service, etc... Where's the money coming from? It's all going to have to be up front because no manufacturer is going to do it without the money up front and the paper means nothing to them. They've all been around. No tickie, no washy. Smirnoff is #1. They sold 26 million cases last year with huge marketing and advertising, multiple bottling plants, hundreds of employees and a well know brand actively promoted internationally at significant cost. At 50% margin Marani's claims would represent close to 1 million cases. They don't have the money to produce that, Where's it going to come from. IF, and big IF here, they find a way to sell anything they're going to need start up money and it won't be for $105M in sales it will be for a couple tiny POs from regional distributors. If it's anything of substance the dilution will be tremendous because they will need so much up front money to get rolling it would astonish you. It's a crowded space and they have no brand, advertising, marketing, staff, known inventory or track record to do anything other than promote the stock and sell a couple hundred cases on contingency distribution deals over the course of a year. Then it's over because sooner or later they will have to come clean on the financials and then everyone will know and see all of the above is true.
Of course the Costco deal is real. That said, anyone can do that deal with the right spiff and suitable slotting/promotional fee. I worked with a small specialty food company the last few years and the deal was easy. Pay them, give them full recourse stock for a dozen regional stores and set up a booth on Saturday morning. Our was actually very successful but the margins were destructive and lack of national branding just could merit a specialty product in a chain like Costco. That's the rub here. The only reason for Marani to do a deal with Costco is to create hype because there will never be sufficient sell through and the margins and terms Costco requires will smother them but I think they know that and as I said it's just a ruse to get a pop in the stock to generate a little more cash through insider stock sales. One other thing in relation to branding... do you really think the average Costco shopper is part of the MoneyTV audience? There's a total disconnect there. It all points to nothing more than an amateur stock promotion.
The video is fluff not reality. You don't seem to understand that. If the product doesn't sell through in a day or two they're gone. Costco will not tie up their lucrative shelf space with a product that doesn't return immediately and with no advertising other than to investors to promote stock and who are probably the only ones making any purchases, it will end quickly. I would bet very big that Marani will not be in Costco by the end of next week. Anyone know what they're trying to retail at? If it's still $31.95 for a 1L bottle they won't see Saturday this week. Costco customers are not their crowd. The Costco name is just being thrown around to promote interest in the stock for the suckers who believe all of the sudden this nobody Vodka will sell millions of bottles. Not going to happen.
Of course it's arriving. They paid the slotting and promotion fees. They have a full recourse PO and if they don't sell out in a day they'll be gone forever. That's the way it works. With no advertising or marketing outside of stock promotion I strongly doubt they will sell through and I'd bet Marani doesn't believe they'll sell through either. It was a good stock promotion though and that's all it was ever meant to be. Who are they going to displace? Grey Goose? Smirnoff? The other hundred vodkas paying millions in advertising in promotion with proven sales and commitment to such? They have no chance. It was nothing more than a $15K investment through insider stock sales to get investors excited and buy stock and make an extra $50,000 in the stock sales to pay for Magrit and family for another three months.
All they have to do is report. Until then they are hiding something. No doubt in my mind and it would be no doubt in the mind of any astute investor. Stop the hype, show some real progress and figures and prove me wrong. As I said months ago I knew they'd figure out a way to NOT report... and they did. Interestingly enough, a form 15 is a twist. For those who aren't familiar with it it is of course a form filed in contemplating a BK. If not so, it is filed because they do not meet the SEC needs to file such as number of shareholders or sales. But in this case, even if they meet the test of shareholders their sales claims would not allow the form 15. My thought is that they did meet the lack of sales test and therefore could file as such but that's not what they're telling the public. They're making it look like they have lots of sales. Very simply if that was true they would not meet the tests for a form 15 filing. So, wither they are contemplating a BK, they don't have the sales they claim or they are planning on re-characterizing their stock which could be the biggest dangerous to existing shareholders.
That would be illegal which is why I'm concerned.
They're not in financial distress? How do you know that when they don't report? You don't know if they have a million dollars in sales or a ten million loss. That's the point. We're not being told because they don't want to say. They're the ones rolling for a hard ten and bringing you along for the ride. Maybe they believe they can pull a rabbit out of the hat here but I don't see it. Under capitalized, super competitive market, no infrastructure, little experienced personnel. There are no sales. Just hype and most likely cashing out by those burned the first time around. Otherwise you'd see reports on real sales not proposed sales and distribution contracts and nonsense about licensing. Do you have any idea how easy it is to get an import license for alcohol? 65 days tops according to the FTC as long as you meet guidelines and you can do it for free online. They've had over a year and a half and still talk about it like it's the holy grail. It's far more difficult to get a retail license.
All words saying nothing? Ok, tell me why they refuse to report financials. Why are they so afraid to do so? As I said, any company with such dynamic sales, as they claim, should want to tell their stockholders. Two, where are they getting their operating cash? This is the mystery that bothers me most. I have yet to see any significant reported non-recourse sales or sell through results from a retail operation (anyone can stock a store with a spiff and/or stocking fee on a recourse PO. I have significant experience in this area). So where is the money coming from to pay Dan Senters, Magrit and family? All they have to do is publish their financials and tell me how they're financing $100 million plus in contracts for inventory and report current sales and I'll recant if it lives up to the hype. But they haven't and I think if they did the whole thing would collapse like the house of cards that it appears to be. Just more infomercials to come aimed at investors not potential clients.
All I'm saying is that if their "sales" were real and their contracts and such were real, non-recourse and fullfilable they'd have no problem reporting such. Heck they should be chomping at the bit to do so. Instead they choose to hide any real data in favor of distributing misinformation through paid advertisements intended to look like real financial news and reporting when in fact they are scripted promotions aimed at unsophisticated investors playing in pennies mostly due to the fact they can't afford to buy real stocks and they've been convinced that it's a get rich quick method of trading. Real companies with real product and real sales report constantly working on the company and growing shareholder value. Scams keep it all quiet and concentrate on the hype hoping to boost stock price so the can get higher value off of the insider held shares they use as currency for salaries for the principals. From the outside I'm not sure I can see any other funding other than stock sales that could be sustaining them. So, they are wither selling private placements without saying anything or they are outright selling unrestricted insider shares for cash. Funny thing is I haven't seen a single 4K and given the daily volume I have a VERY hard time believing that no insider shares have changed hands. It also adds to my suspicions about lack of reporting. If they have the inclination to do any financial reporting it wouldn't surprise me to find out they're ignoring the regulations for insider sales as well. Too many red flags here.
One thing I've noticed with many of the penny investors is the ability to totally ignore facts with false and almost euphoric optimism. Not only that, but to interpret paid puff pieces like Money TV as anything other than an attempt to promote the stock price is silly. My assumption is they are simply gamblers hoping some fool will buy his shares at twice what he paid.
Fact remains that they have not reported anything of substance including financials. That immediately tells me they have something to hide. Big SALES would be good news and they should be more than anxious to report it asap. But they don't because honestly I don't think they have it. I don't think they have POs, inventory, operating cash to speak of or any of the resources needed to fulfill any of the grand plans being thrown out there.
Bottom line is that if the company continues to report anything of substance and keeps their financials a secret, they're hiding something. If it walks like a duck...
The question is will sales Q1 be anything? I think not. This is a ruse. They can't sell nor produce product. This will be sub .01 in six months regardless of Money TV infomercials.
Keep this in mind. Someone(s) was willing to sell close to 8 million share today at whatever they could get. Why if everything's so great? The broke day traders looking to make a hundred dollars or two her and there are not part of the equation. Magrit is broke, the company is broke and she's using stock to convert to operating expenses to pay bills and pay herself and her family from what see. Prove me wrong and publish financials. Why hide? There is absolutely no doubt in my mind they are hiding reports because all they hype is exactly that. There are no sales. If there were sales they would be publicizing them like crazy. Sales are zero and they don't want to report. If they did the stock would drop well below a penny.
Ok GQ, I'll do some math with you. The last time they reported they had no cash. They've run 5 infomercials at let's say $10,000 each over the past year. They've also sponsored five events. Let's call that another $5,000 per. That's $75,000 in promotion alone. They've had to gear up for $110M in production. I can't even imagine the cost there. Now let's look at salaries, insurance, WC and expenses for employees for a year and a half not to mention a monumental initial debt. Do you have any idea what it take to support five employees, let alone all high level, in the the state of CA for two years? I'm sure we're talking about well in excess of a million dollars. I just want to know where all this money is coming from. It sure looks to me like it's coming from selling stock at significant profit. If I was president and had 100M shares at .0001 I wouldn't mind selling some to keep the paycheck coming. It's free money. Unfortunately I think you'll see this one going down and like most pennies that go that route nothing will happen. The principals will disappear and lots of folks will lose their money and down the road it will be again reverse merged into something else. Off the top of my head I'm trying to think of a reverse merger that actually worked and nothing comes to mind. Few do. But go ahead and do your math and tell me how they're paying the operating expenses and while you're at it tell me why they continue to delay reporting and why if everything is so ducky and sales are robust?
I think we really need to look at the possibility that insiders are using stock acquired at fractions of a penny to keep this thing going for the benefit of those same insiders at the expense of outsiders convinced by false hype with no real factual information or real financial data which they continue to delay to report. Why? If you're selling so much let everyone know. They'll be ecstatic! Good news is great for the stock. And big sales is great news! I fear there are none. Just hype to keep the ruse alive and turn insider stock into currency. Old debts are probably being paid off.
I've seen it many times before and more often than not in pennies and reverse mergers. I'm just concerned about where they are getting money to operate and do all these huge deals with no confirmed sales and even less info than they had at their last filings five years ago. How about payroll taxes? Is Magrit and family working for free or two years? Do you have any idea what the import taxes and duty are on $110M given the more than probable possibility that these contracts represent recourse sales? Do any of you have any idea what the import duty is in Brazil? I sell there and it's close to 75%. So much we've stopped selling there and our Brazilian clients import to Mexico under NAFTA and then as far as I know move the merchandise to Brazil. Maybe it's different for liquor but I doubt it.
Money TV is an infomercial. It is a paid for advertisement. And if the product is selling itself why have we not seen any financials, purchase order announcements, production numbers, sales confirmation or anything else other than hype about "agreements"? Furthermore, all this nonsense about licenses is a smoke screen. you can apply for a wholesale import/distribution license through TTB online for free and the max time it takes is about two months. They've been at it for over a year and a half touting it as some kind of big deal. It's harder to get a retail liquor license. They appear to be spending tons of money and still refuse and/or put off filing legit financials. As I calculate, given the number of shareholders, claimed value and sales (if indeed the product is paying for itself) and other qualifying tests they are clearly in violation of reporting rules. Now, if they really don't have the sales they say or the contracts and value they say they're ok and don't need to report. So which is it?