The Q report doesn't pass the smell test.
The numbers just don't make good financial sense.
Starting from the beginning but the "juicy" stuff comes later.
4) Issuance History. You can purchase stock direct from ZMRK for what looks like under market prices. These shares are restricted but for how long. Debt Conversion to two employes...why...not enough cash on hand to pay them so give them stock. Who is Russell Brown and what services did he perform for his 250,000 shares.
Results of Operations...
BTM is Beyond The Morgans, Infinite Love. This paragraph and the next are very confusing. The value dropsl over 2 mil. The end result states plus ten mil but isn't that reversed with actually 2014 being 10 mil approx and this year under one mil.
Off Balance Sheet Arrangements:
What is this all about. Why did office/stockholder pay a vendor directly? Who was that and didn't they submit documents to be reimbursed. Very shady w/o an explanation. And who proof reads this report prior to releasing it...arraignments instead of arrangements. Sloppy.
6)...in going over websites and press releases, I counted 21 entities that were licensed or creatively acquired...but minimal,minuscule sales. ZMRK knows how to get the licenses but doesn't know or can't sell product. Especially at a profit. I'll get to that shortly.
And now they are telling us that they are rolling out to Tier 1 accounts; Bloomongdales, Macy's, Saks, Nordstrom, Neiman Marcus and then Tier 2 roll outs to Kay Jewelers, Helzberg and Zale. Show me an accual substantial asset order. And BTW speaking of Zale. Steven Zale stated in one of the articles I read today that he is not a member of the Zale Corp. Family. The last names are the same...that's it.
7) Describe Issuer's Facilities
600 sq ft. How do you do substantial business with 21 brands out of such a tiny space. And with only 15k of inventory. Which is not mentioned under assets on the balance sheet.
8) B. and B. again when it should have been C. This company has poor execution except when it comes to acquiring licenses.
The Balance Sheet:
Too many numbers need serious explanations:
The A/R of 300k this year but no A/R last year. Are these receivables from sales or what?
Other Current Assets of close to 500k becomes close to 41k this year...why?
Also where is the current inventory that was previously mentioned?
And last years Total Other Assets of almost 9.5mil drops to 690k. And 339k of Total Other Assets shows up this year. Both need detailed explanations.
Liabilities and Equity:
A/P of 525k and Other Current Liabilities of $305k...need an explanation on these.
All in all the assists dropped and the liabilities went up.
Retained earnings (looks like a sinking ship) of close to 8 MILLION....NEGATIVE!!!
Now onto Profit and Loss:
Marketing income of $230k...where did that come from?
Sales of $142k but cost of goods (COGS) were $137k...big explanation needed here.
Allowance For Bad Debt...$483k on no sales and no allowance this year???
Two more things as my kids are calling me.
Professional Fees for the quarter of $160k this year and last. Who is getting that money? Usually it's legal and accounting. Who else?
Net other income last year was close to $3,000,000 for last year for the quarter...giant red flag here.
Much more but that's it for now. I am not going to proof read this so make fun of me if you want.
And look in the notes below that:
(1) blaming that amount and the BANKRUPTCY on prior management. Well wasn't Mr. Zale and Mr. Ruiz part of that management?
AI
