Marani Brands, Inc. (OTCMKTS:MRIB) Brought Back to Life
Looking at the chart on the right, you might think that Marani Brands, Inc. (OTCMKTS:MRIB) is a new ticker to the OTC Markets. You might also assume that it became the subject of a paid promotion. You’d be wrong.
The company has been around for quite a while and three years ago, it was reporting its financial situation with the SEC. The latest 10-Q covers the first calendar quarter of 2010 and it shows that back then, MRIB had around $1 million in cash and quarterly revenues of approximately $25 thousand. A few more documents followed after that but then, the management team simply decided to stop filing their reports with the Commission. Not surprisingly, investors’ interest withered and the share price dropped to $0.0001 where it stood for quite a while.
It would appear, however, that MRIB‘s management team have been hard at work restructuring the company and preparing themselves for a second attempt at capturing a part of the lucrative premium vodka market. A couple of months ago they announced that they are going to give it another go and that, along with other press releases saying that the company is about to take part in some high-exposure events, drew investors’ interest back to the ticker.
A major piece of news hit the wire around noon yesterday which triggered an absolute trading frenzy. By the end of the day MRIB had shifted more than 65 million shares meaning that the dollar volume stands at nearly $700 thousand, which is a lot for a $0.01 stock. The price also jumped by 33% and closed the session at $0.01 for the first time in more than a year.
Considering the announcement, though, this is somewhat understandable. Apparently, MRIB have signed a $40 million distribution agreement with a term of five years. Indeed, a great piece of news, but it doesn’t give us the details about the start of the shipments. The wording of the press release suggests that the contract is already in effect, but on the other hand, in an interview for Money TV, Ms. Margrit Eyraud, MRIB‘s CEO, said that the Mariani Vodka should be back on the shelves during the first quarter of 2014.
Investors didn’t seem to mind the lack of more details, but you should probably bear in mind that the ticker might be in for a bumpy ride if, for some reason, the results fall short of traders’ expectations.
There’s another problem, too. MRIB don’t file their reports with the SEC anymore, but luckily, they are using the OTC Disclosure & News Service. They published the quarterly statement for the period ended September 30 and it’s fair to say that things are not looking very bright. Here are the figures:
- cash: $564
- current assets: $135 thousand
- current liabilities: $1.8 million
- no quarterly revenue
- quarterly net loss: $194 thousand
Ms. Eyraud said in the aforementioned interview that about $1 million worth of debt was satisfied, but she didn’t say if it was done before or after the end of the third calendar quarter. And it’s pretty clear that they’ll need to raise quite a lot of money if they want to stick to the distribution agreement. Once they do that, of course, they’ll need to think about a positive bottom line – something they failed to achieve on their first attempt.
On the whole, there are quite a lot of unknowns around MRIB which is why considering all the risks very carefully is absolutely crucial when before your investment decision.
On the bright side, there doesn’t seem to be any paid promotions currently running for MRIB. Two other OTC tickers, Life Stem Genetics Inc (OTCBB:LIFS) and Endeavor IP Inc (OTCBB:ENIP), have been the target of such campaigns and they both plummeted yesterday. LIFS lost a fifth of its value and registered its first red session in almost a month while ENIP wiped out around 17% and it looks like it’s in for its second drop.
