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.
