ZALEMARK HOLDING CO INC (PINK:ZMRK) is’s Diamond in the Rough

ZMRK.pngWith Valentine’s day approaching, it’s time for the gentlemen from all over the world to start thinking about gifts for their significant others. ZALEMARK HOLDING CO INC (PINK:ZMRK) are aware of that and there has been quite a lot of activity going on around them recently. also took it as their responsibility to raise some awareness around ZMRK and they sent out some emails where they say that the company is a potential gold mine. Their words are not enough to convince us, though, so we decided to have a look.

First, let’s discuss what ZMRK do. They are a company that specializes in designing and selling massively expensive jewelry that only Hollywood stars and millionaires can afford. Recently, there has been a lot of commotion around them and they say that they have signed contracts with world-renowned designers, as well as opened a website, through which the rich and famous can order their adornments with just a few clicks of the mouse, and various other pieces of news that sound encouraging. All this is very good, but is it enough to make you invest in their shares? As far as we are concerned, it isn’t, so we went on to do a proper research.

As always, we wanted to check on the financials first and we found out that ZMRK are listed on the Pink tier of the OTCMarkets. Not a good start, we thought, but at least their latest quarterly report wasn’t uploaded that long ago. Sure enough, we clicked on it and although at first things might not seem so bad, the second impression is quite different. You can have a look through the figures below and we’ll be sure to explain exactly what we mean:

  • cash: ($4,573)
  • total assets: $5.8 million
  • total liabilities: $323 thousand
  • sales for the period January-September 2012: $7,293

ZMRK_logo.jpgObviously, they have pushed their bank accounts into overdraft, and yet, the more enthusiastic among you will probably say: “Yes, but they do have $5.8 million in assets and their liabilities aren’t that much and they have generated some sales (not a lot, but there is some)”. We are here to answer.

Let’s start with the assets. Apart from investments and inter-company transactions with other ventures, they have nothing. That’s not the only problem – we couldn’t find any information about most of these investments, and the one that we did find something about is Zalemark, Inc. What did we find? That it’s a subsidiary of ZMRK, but we had already guessed it. It all seems to us like an artificial way of making the company look more prosperous than it really is.

As far as the sales revenue is concerned, we wondered: “Is $7,293 really enough to cover the operating costs for the whole nine months?”. Of course it’s not. When you crunch the numbers you will see that the net loss for this period is $271 thousand. This in turn means that the liabilities are not at all as little as they might first appear.

7SUNB.pngMaybe forgot to read through the report more carefully. After all, they are relatively speaking, a newcomer to the promotional business and we have yet to see how they will get on, although we are pretty sure that ZMRK is not the best of starts. We still wanted to give you a fresh example of how risky it is to invest in promoted companies with little to no financial records. Yesterday we wrote about SUNBELT INTL CORP (PINK:SUNB). They are also a Pink sheet company and yesterday they were promoted as well. Sure enough, they lost 33% in one session alone.

All in all, it’s pretty clear that ZMRK will need something more than just press-releases and promotional email to make us believe that they are indeed a gem waiting to be discovered.

You may also like...