AI
Thursday, July 31, 2014 2:16:37 PM
"What about the GREEN flags? Can't we discuss them too?"
Absolutely. DD should be objective. It would serve us all much better to remember that good DD is confirming the Green flags through factual discovery and uncover any red flags in the same manner. Echoing PR from the company, interpreting vague suggestions by same and giving photos of the product consideration are meaningless and certainly not any form of DD.
Ok. Here's some real DD, No pics, not just a regurgitation of company pics and PR. I've been quite successful in the venture cap market but have to admit I've gotten burned a few times. That was because I believed the hype and drank the Kool-Aid. Hasn't happened for a long time because I now look hard and long at the facts, not the company offerings and hype.
Real Product
Ok, the green flags. Marani has real product. Yes, without a doubt. You see it, taste it feel it, touch it. The consensus seems to be that it's a very good product as well. I can't attest to that having not tasted it but everyone seems to think so. Big plus. The only question there is even a great product will never make it without the proper branding and there is some doubt as to whether appropriate steps are being taken to accomplish that.
Sales
Yes. Big plus. Sales are good. Hi-Times isn't exactly a player in the distribution business and I doubt they sell much but you need distribution points and they are definitely such. Restaurant Depot is strictly a wholesaler but you need those too. Another plus. Costco is great. Big name, huge presence. But we must remember this is a test, most likely a paid for co-op which is usually the way Costco does it. Also to consider as far as "multiple" stores go, the coverage amounts to less than 2% of Costco stores and after two months of coverage has not been expanded. Taking away from the green flag a little here is the almost 20% discount applied recently. You don't lower the cost of a product selling through, period. Never.
Tastings
Let's get it straight. There will be no tastings. It will be a single promotion over the next few days using a "dry demo" whatever that is. But, still an in store presence is always a good thing and positive. I'm not sure I understand what they will be doing in the store as the product is already discounted so no need to pass out coupons, Maybe they are instate rebate flyers, who knows. Hopefully someone here will visit and let us know what the presence is/was. Again, have to take away a few points because I know just about every one of these events are paid for co-op, not Costco's interest in the product. Discounts given out during the demos? As stated, if they were selling through there would be no need to discount so steeply but maybe it will increase sales a little even at a slimmer margin.
Container Stateside With More on the Way?
This is totally unsubstantiated. There is nothing to confirm anything's even been ordered. I'm sure Marani would have been the first one's to scream this out on Money TV. IF it were true it would be a green flag indicating product sell through. Unfortunately the lack of such implies the opposite. Can't give this one even close to a green flag.
International Contracts
Huge revenue projections and huge sales... if true. Remember that this company and exact same management promised EXACTLY the same thing five years ago and not a single deal came through or materialized but the announcement ran the stock up to $2 before tanking terribly. Nice green flag in theory but track record and lack of any execution to date speaks otherwise. Let's not count these eggs before they hatch. The company's credibility with respect to these supposed contracts is more than suspect.
Three Varieties of Brandy, Port Wine
Personally I think they should be focusing on one variety of Vodka. But, if there was a market and they could create synergy with Vodka sales another product line is nice for a salesman calling on a distributor. But, again, remember, this was also an announcement and promise back in 2009 which never came to be. They never even imported any nor did they import any beer or wine which were also announced and promised. Another believe it when I see it deal. Until then it's all vapor. Sorry, no green flag there just wishful thinking and rationalization for optimism of revenue which may never materialize.
Marketing Campaign Along With TV Spots
This is a huge green flag. Finally some effort at branding. A national TV spot is significant. But, I have to call BS on the announcement and details, hence no green flag here. Broadcast West was created in 2014 from the shell of another tanked SMT provider. They published a website with a bunch of fictional clients who they've never worked for (their predecessor may have bought time on some of them but that's it) and promised national commercials would be complete more than two weeks ago. Furthermore, as far as I can tell the body of work for the company represents zero national ads. Just infomercial productions and SMTs. Running national ads without retaining an ad agency or branding firm tells me we should get ready for some more Money TV type stuff, just run on TV instead of the internet. But I guarantee you it will be sandwiched between the Wonder Mop and the Bacon Cup on early morning paid programming remnant space on HGTV or something of the like. Another item that turns this from a green flag to a red flag is Margrit's past announcements of working with Zodiac which we now know she was a past officer and president. That's just really bad.
Company Follow Through
This is totally subjective and dependent on interpretation. I'd have to make this interpretation as a green flag red right away. There's little if any follow through other than vapor announcements with virtually no execution. But, she'll have her chance. He said the company would be profitable by next financials. Let's see. I don't know how. They've spent so much more money that even that one container at gross margin could cover I seriously doubt they'll show anything better than a $300,000 loss for the quarter by my calculations. Contract announcements months ago and no updates. Financials coming but they remain non-reporting. Dilution galore without explanation or detail. Deals with themselves unexplained when pressed for answers? I don't see much follow through. Sorry green flag gone red.
Ok. Time to look at some of the red flags.
History
We have the same company, same management, same employees (bar Dan for Paul but basically the same) same advertising and marketing strategy, same dilution, same announcements, same expanded product line ideas, same board and lack of governance separation... there's really nothing different from a company that blew through $25 million on what appears to be little to no sales. What would make one think that the same people executing a carbon copy of a plan that tanked miserably five years ago would work a second time. Guess that depends on who benefitted five years ago, eh? I've been told they learned from past failure. Doesn't look like it. I'd really like someone to come up with anything that's being done differently?
Relationships and Connections
Some of these are huge red flags. No one can deny a few of them. ECO Investments one of the largest shareholders with tens of millions of zero cost basis stock and domiciled at the same address as Marani with the same BOD as Marani up until the big dilution when they changed the domicile to a residential address a few miles away? HUGE red flag. There are a number of other business domiciled there as well. Large Investments, Inc, National Investments, Inc., NBR, Inc. It certainly looks like a lot of inside deals are being transacted. Looking into these companies the same names come up time over time along with Margrit and family. Charlie Owen, Deborah Ridge, Charlie Griffithe and all are tied to Marani with Charlie Owen and Deborah Ridge listed as both directors and officers of ECO and Marani. That's the biggest red flag you could ever come up with.
And how about the money paid to Zodiac for third tier PR and event sponsorship. She's a former officer and president! Is she starting a bunch of PR and media firms and just paying herself? Sort of looks like it. And one note here as it has been poste this information is untrue. If you check with the Nevada Secretary of State the historical information confirms all of this. Just make sure you check the box for historical information/inactive officers. The fact that the box was unchecked (it defaults to checked) and then screenshot posted is a significant attempt to mislead. She was president of Zodiac, ECO Investments was at Red Hill Road suite 201 in Tustin, CA and at least two other investment companies at the Marani address.
Corporate Structure
This is a red flag only because the reverse merger and company structure is so confusing. I think it was meant to be. MEI, Marani Sprits, Inc. and Marani Brands, Inc. I wish someone could explain it to me. Marani Spirits is a California Corporation, not the public entity operating actively. Marani Brands is a Nevada corporation with a forfeited license in California. It's a web of corporate manipulation which always gets my spidey sense going.
Management Largesse
Big salaries, big expenses. The family and probably more get $700 a month just for their cars. Another $8000 plus each in medical. I think I saw that one sibling got $16,000 Almost $200,000 each and more for salary. None of this includes stock compensation and there's been a lot. Let's not forget that the company paid Margrit over $400,000 for severance, her car and medical and gave her millions of shares of vested stock only to come back to the company at full salary in addition to that severance, paid in full, eight months later. Basically she did the deal with herself and her siblings. Cost the company well over two million dollars.
No Skin in the Game
This is a little subjective but a pet peeve. It appears to me that the family and siblings have never put a nickel into the company. But based on accumulated loss and cost of sales they've taken out over $20 million. WOW! Every single last share of their stock was acquired for zero basis or close to it. Even Margrit's options were discounted and vested as part of her severance which it really looks like she manufactured all on her own.
Financials and Financial Resources
This is straight math. $2500 in sales for the first quarter? Ok... everyone rationalized it but the fact remains that only $200,000 in gross margin product has even been imported and delivered to Marani. We have no idea how much of that has been sold. From the look of things it looks like not much. Was it paid for as she said? Probably, with your money. The value of that single container doesn't even cover the monthly operating costs. Not even close. The exact same setup as 2009 was reported in their 10K as being over $200,000 a month. Given one container a year, that would amount to a $2,200,000 loss for the year. I'd say they're right in line for that number. Mark my words. I doubt anyone has dug through the financials and DD on same the way I did.
Marketing and Advertising
It's pretty much lame. A consumer product and brand takes millions of dollars to launch, especially one that has to dig themselves out from a bad track record and history of miserable failure. What has been done so far is meaningless. All of it is third tier, regional cheap stuff. I actually think it's going to family and friends of Margrit. Spreading the wealth so to speak to her friends without spending to much. An esoteric boat race with virtually no attendees? An almost totally unknown Armenian charity? A regional Mall promotion? A pre pre party for the ESPY awards where they probably provided a case of vodka for involvement? Money TV? A sad excuse for advertising on a second rate web site with an audience totally untargeted? Sorry this is a huge red flag. Then there's the apparent impression of impropriety with Margrit's possible interest in the companies getting this sub par coverage through companies like Zodiac.
Resources
Really simple one here. Financial and human. How can a company with eight or nine employees come anywhere close to doing this considering their burn rate? They need to do Grey Goose type numbers to support the O/S and that's not going to happen with nine people. They also do not and will never have the capital to launch a consumer product/brand to achieve those numbers. Do you have any idea what Grey Goose spends on advertising? Do you how many employees and sales folks they have? What you have is sole proprietor Main Street Hardware with no capital posing as the next Home Depot. Ain't going to happen. You san wish and pray all you want. You can rationalize all the red flags. You can fantasize about 15 containers a month which is what they need to turn a profit but there is no model in the world that makes that happen with what they have.
Dan Senters
This one is purely speculative and my personal opinion. I think he's gone. The lack of his presence on Margrit's rumbling, bumbling, buffoon appearance on Money TV was significant. That spot could have been shot anytime. Why not have him there. He's the only voice of and presentation of credibility whatsoever. On vacation? Get real. He's history. He knows what's going on just like Paul did and is running far and fast whiting out Marani from his resume looking for a job before the whole thing collapses. I actually thought he was quite good as a presenter but not beng able to confirm his background and finding descrepancies in his CV I had to question. He's never been with any of the companies that were listed and appears to have been a middle manager at LaVeche at best. A far cry from Paul his predecessor who had doubled sales at Skyy and has since wiped any record of Marani from his record. I almost feel bad for him because I'm betting Margrit and family are impossible to work with and only interested in the stock deal and not building a business. But the fct remains he has sort of disappeared and depending on Margrit and family alone to pull anything off? I'd say we have less than two months... If they publish financials in August as promised, less than a month but I expect you'll get no financials ever again.
I'd also take this opportunity for Dan Senters to tell us he's solidly in place and staying. I'm sure he reads this thread. Unfortunately, I don't think we'll ever hear from him again. Let us know Dan...
And just a reminder... The type of PR and brand coverage Marani should be in to and that I've been speaking of can be seen on Sunday at 12PM EST on FOX Sports 1. I won't say what I paid for it but it was a lot less than Marani has spent... probably by a hundred fold. BTW, I'm the tall guy holding the driver's helmet at the end of event interview with FOX commentator Brian Till... if it made the edited broadcast. I only saw the live feed. Point is we got over five minutes of national TV coverage. How much did the bogus boat race get? The ESPY party? The Armenian charity? The regional Macy's promotion? Some random bar in Antelope Valley? And I'll bet they paid more than I did for each of those because Margrit was on the other side of the deal sucking up money.
Real DD. No pictures. No hype. No echoing company PR as fact. Just the facts ma'am.
Absolutely. DD should be objective. It would serve us all much better to remember that good DD is confirming the Green flags through factual discovery and uncover any red flags in the same manner. Echoing PR from the company, interpreting vague suggestions by same and giving photos of the product consideration are meaningless and certainly not any form of DD.
Ok. Here's some real DD, No pics, not just a regurgitation of company pics and PR. I've been quite successful in the venture cap market but have to admit I've gotten burned a few times. That was because I believed the hype and drank the Kool-Aid. Hasn't happened for a long time because I now look hard and long at the facts, not the company offerings and hype.
Real Product
Ok, the green flags. Marani has real product. Yes, without a doubt. You see it, taste it feel it, touch it. The consensus seems to be that it's a very good product as well. I can't attest to that having not tasted it but everyone seems to think so. Big plus. The only question there is even a great product will never make it without the proper branding and there is some doubt as to whether appropriate steps are being taken to accomplish that.
Sales
Yes. Big plus. Sales are good. Hi-Times isn't exactly a player in the distribution business and I doubt they sell much but you need distribution points and they are definitely such. Restaurant Depot is strictly a wholesaler but you need those too. Another plus. Costco is great. Big name, huge presence. But we must remember this is a test, most likely a paid for co-op which is usually the way Costco does it. Also to consider as far as "multiple" stores go, the coverage amounts to less than 2% of Costco stores and after two months of coverage has not been expanded. Taking away from the green flag a little here is the almost 20% discount applied recently. You don't lower the cost of a product selling through, period. Never.
Tastings
Let's get it straight. There will be no tastings. It will be a single promotion over the next few days using a "dry demo" whatever that is. But, still an in store presence is always a good thing and positive. I'm not sure I understand what they will be doing in the store as the product is already discounted so no need to pass out coupons, Maybe they are instate rebate flyers, who knows. Hopefully someone here will visit and let us know what the presence is/was. Again, have to take away a few points because I know just about every one of these events are paid for co-op, not Costco's interest in the product. Discounts given out during the demos? As stated, if they were selling through there would be no need to discount so steeply but maybe it will increase sales a little even at a slimmer margin.
Container Stateside With More on the Way?
This is totally unsubstantiated. There is nothing to confirm anything's even been ordered. I'm sure Marani would have been the first one's to scream this out on Money TV. IF it were true it would be a green flag indicating product sell through. Unfortunately the lack of such implies the opposite. Can't give this one even close to a green flag.
International Contracts
Huge revenue projections and huge sales... if true. Remember that this company and exact same management promised EXACTLY the same thing five years ago and not a single deal came through or materialized but the announcement ran the stock up to $2 before tanking terribly. Nice green flag in theory but track record and lack of any execution to date speaks otherwise. Let's not count these eggs before they hatch. The company's credibility with respect to these supposed contracts is more than suspect.
Three Varieties of Brandy, Port Wine
Personally I think they should be focusing on one variety of Vodka. But, if there was a market and they could create synergy with Vodka sales another product line is nice for a salesman calling on a distributor. But, again, remember, this was also an announcement and promise back in 2009 which never came to be. They never even imported any nor did they import any beer or wine which were also announced and promised. Another believe it when I see it deal. Until then it's all vapor. Sorry, no green flag there just wishful thinking and rationalization for optimism of revenue which may never materialize.
Marketing Campaign Along With TV Spots
This is a huge green flag. Finally some effort at branding. A national TV spot is significant. But, I have to call BS on the announcement and details, hence no green flag here. Broadcast West was created in 2014 from the shell of another tanked SMT provider. They published a website with a bunch of fictional clients who they've never worked for (their predecessor may have bought time on some of them but that's it) and promised national commercials would be complete more than two weeks ago. Furthermore, as far as I can tell the body of work for the company represents zero national ads. Just infomercial productions and SMTs. Running national ads without retaining an ad agency or branding firm tells me we should get ready for some more Money TV type stuff, just run on TV instead of the internet. But I guarantee you it will be sandwiched between the Wonder Mop and the Bacon Cup on early morning paid programming remnant space on HGTV or something of the like. Another item that turns this from a green flag to a red flag is Margrit's past announcements of working with Zodiac which we now know she was a past officer and president. That's just really bad.
Company Follow Through
This is totally subjective and dependent on interpretation. I'd have to make this interpretation as a green flag red right away. There's little if any follow through other than vapor announcements with virtually no execution. But, she'll have her chance. He said the company would be profitable by next financials. Let's see. I don't know how. They've spent so much more money that even that one container at gross margin could cover I seriously doubt they'll show anything better than a $300,000 loss for the quarter by my calculations. Contract announcements months ago and no updates. Financials coming but they remain non-reporting. Dilution galore without explanation or detail. Deals with themselves unexplained when pressed for answers? I don't see much follow through. Sorry green flag gone red.
Ok. Time to look at some of the red flags.
History
We have the same company, same management, same employees (bar Dan for Paul but basically the same) same advertising and marketing strategy, same dilution, same announcements, same expanded product line ideas, same board and lack of governance separation... there's really nothing different from a company that blew through $25 million on what appears to be little to no sales. What would make one think that the same people executing a carbon copy of a plan that tanked miserably five years ago would work a second time. Guess that depends on who benefitted five years ago, eh? I've been told they learned from past failure. Doesn't look like it. I'd really like someone to come up with anything that's being done differently?
Relationships and Connections
Some of these are huge red flags. No one can deny a few of them. ECO Investments one of the largest shareholders with tens of millions of zero cost basis stock and domiciled at the same address as Marani with the same BOD as Marani up until the big dilution when they changed the domicile to a residential address a few miles away? HUGE red flag. There are a number of other business domiciled there as well. Large Investments, Inc, National Investments, Inc., NBR, Inc. It certainly looks like a lot of inside deals are being transacted. Looking into these companies the same names come up time over time along with Margrit and family. Charlie Owen, Deborah Ridge, Charlie Griffithe and all are tied to Marani with Charlie Owen and Deborah Ridge listed as both directors and officers of ECO and Marani. That's the biggest red flag you could ever come up with.
And how about the money paid to Zodiac for third tier PR and event sponsorship. She's a former officer and president! Is she starting a bunch of PR and media firms and just paying herself? Sort of looks like it. And one note here as it has been poste this information is untrue. If you check with the Nevada Secretary of State the historical information confirms all of this. Just make sure you check the box for historical information/inactive officers. The fact that the box was unchecked (it defaults to checked) and then screenshot posted is a significant attempt to mislead. She was president of Zodiac, ECO Investments was at Red Hill Road suite 201 in Tustin, CA and at least two other investment companies at the Marani address.
Corporate Structure
This is a red flag only because the reverse merger and company structure is so confusing. I think it was meant to be. MEI, Marani Sprits, Inc. and Marani Brands, Inc. I wish someone could explain it to me. Marani Spirits is a California Corporation, not the public entity operating actively. Marani Brands is a Nevada corporation with a forfeited license in California. It's a web of corporate manipulation which always gets my spidey sense going.
Management Largesse
Big salaries, big expenses. The family and probably more get $700 a month just for their cars. Another $8000 plus each in medical. I think I saw that one sibling got $16,000 Almost $200,000 each and more for salary. None of this includes stock compensation and there's been a lot. Let's not forget that the company paid Margrit over $400,000 for severance, her car and medical and gave her millions of shares of vested stock only to come back to the company at full salary in addition to that severance, paid in full, eight months later. Basically she did the deal with herself and her siblings. Cost the company well over two million dollars.
No Skin in the Game
This is a little subjective but a pet peeve. It appears to me that the family and siblings have never put a nickel into the company. But based on accumulated loss and cost of sales they've taken out over $20 million. WOW! Every single last share of their stock was acquired for zero basis or close to it. Even Margrit's options were discounted and vested as part of her severance which it really looks like she manufactured all on her own.
Financials and Financial Resources
This is straight math. $2500 in sales for the first quarter? Ok... everyone rationalized it but the fact remains that only $200,000 in gross margin product has even been imported and delivered to Marani. We have no idea how much of that has been sold. From the look of things it looks like not much. Was it paid for as she said? Probably, with your money. The value of that single container doesn't even cover the monthly operating costs. Not even close. The exact same setup as 2009 was reported in their 10K as being over $200,000 a month. Given one container a year, that would amount to a $2,200,000 loss for the year. I'd say they're right in line for that number. Mark my words. I doubt anyone has dug through the financials and DD on same the way I did.
Marketing and Advertising
It's pretty much lame. A consumer product and brand takes millions of dollars to launch, especially one that has to dig themselves out from a bad track record and history of miserable failure. What has been done so far is meaningless. All of it is third tier, regional cheap stuff. I actually think it's going to family and friends of Margrit. Spreading the wealth so to speak to her friends without spending to much. An esoteric boat race with virtually no attendees? An almost totally unknown Armenian charity? A regional Mall promotion? A pre pre party for the ESPY awards where they probably provided a case of vodka for involvement? Money TV? A sad excuse for advertising on a second rate web site with an audience totally untargeted? Sorry this is a huge red flag. Then there's the apparent impression of impropriety with Margrit's possible interest in the companies getting this sub par coverage through companies like Zodiac.
Resources
Really simple one here. Financial and human. How can a company with eight or nine employees come anywhere close to doing this considering their burn rate? They need to do Grey Goose type numbers to support the O/S and that's not going to happen with nine people. They also do not and will never have the capital to launch a consumer product/brand to achieve those numbers. Do you have any idea what Grey Goose spends on advertising? Do you how many employees and sales folks they have? What you have is sole proprietor Main Street Hardware with no capital posing as the next Home Depot. Ain't going to happen. You san wish and pray all you want. You can rationalize all the red flags. You can fantasize about 15 containers a month which is what they need to turn a profit but there is no model in the world that makes that happen with what they have.
Dan Senters
This one is purely speculative and my personal opinion. I think he's gone. The lack of his presence on Margrit's rumbling, bumbling, buffoon appearance on Money TV was significant. That spot could have been shot anytime. Why not have him there. He's the only voice of and presentation of credibility whatsoever. On vacation? Get real. He's history. He knows what's going on just like Paul did and is running far and fast whiting out Marani from his resume looking for a job before the whole thing collapses. I actually thought he was quite good as a presenter but not beng able to confirm his background and finding descrepancies in his CV I had to question. He's never been with any of the companies that were listed and appears to have been a middle manager at LaVeche at best. A far cry from Paul his predecessor who had doubled sales at Skyy and has since wiped any record of Marani from his record. I almost feel bad for him because I'm betting Margrit and family are impossible to work with and only interested in the stock deal and not building a business. But the fct remains he has sort of disappeared and depending on Margrit and family alone to pull anything off? I'd say we have less than two months... If they publish financials in August as promised, less than a month but I expect you'll get no financials ever again.
I'd also take this opportunity for Dan Senters to tell us he's solidly in place and staying. I'm sure he reads this thread. Unfortunately, I don't think we'll ever hear from him again. Let us know Dan...
And just a reminder... The type of PR and brand coverage Marani should be in to and that I've been speaking of can be seen on Sunday at 12PM EST on FOX Sports 1. I won't say what I paid for it but it was a lot less than Marani has spent... probably by a hundred fold. BTW, I'm the tall guy holding the driver's helmet at the end of event interview with FOX commentator Brian Till... if it made the edited broadcast. I only saw the live feed. Point is we got over five minutes of national TV coverage. How much did the bogus boat race get? The ESPY party? The Armenian charity? The regional Macy's promotion? Some random bar in Antelope Valley? And I'll bet they paid more than I did for each of those because Margrit was on the other side of the deal sucking up money.
Real DD. No pictures. No hype. No echoing company PR as fact. Just the facts ma'am.
Glidelogic Corp. Announces Revolutionary AI-Generated Content Copyright Protection Solution • GDLG • Jul 26, 2024 12:30 PM
Southern Silver Files NI43-101 Technical Report for its Updated Preliminary Economic Assessment for the Cerro Las Minitas Project • SSV • Jul 25, 2024 8:00 AM
Greenlite Ventures Completes Agreement with No Limit Technology • GRNL • Jul 19, 2024 10:00 AM
VAYK Expects Revenue from First Airbnb Property Starting from August • VAYK • Jul 18, 2024 9:00 AM
North Bay Resources Acquires Mt. Vernon Gold Mine, Sierra County, California, with Assays up to 4.8 oz. Au per Ton • NBRI • Jul 18, 2024 9:00 AM
Nightfood Holdings Signs Letter of Intent for All-Stock Acquisition of CarryOutSupplies.com • NGTF • Jul 17, 2024 1:00 PM
