Borislav Tonev

Rewards Nexus Inc (OTCMKTS:ERNI) Gets a Promotional Boost

by Borislav Tonev January 23, 2015

A promotional campaign for Rewards Nexus Inc (OTCMKTS:ERNI) started yesterday. The ticker has been pumped in the past, but the promoters have never really been able to get the word out properly. Until yesterday, that is.

ERNI started off with a small gap up at $0.018 and began climbing almost immediately. Just a few minutes into the session, it peaked at over $0.04 for the first time since August 2014, but sadly, remaining at these levels proved to be impossible. The ticker started shedding large chunks of its value and it was literally saved by the closing bell which stopped it at $0.023. Not exactly the performance people were hoping for, but the green close of about 27% and the $454 thousand dollar volume means that it's certainly a lot better than the ones displayed during the previous pumps. So, who managed to finally lure investors in?

Small Cap Crowd and its sister newsletters received $2 thousand and sent out a few emails. Epic Stock Picks, however, got the biggest piece of the pie. Their fine print reads that a third party has splashed out $20 thousand on the pump.

$20 thousand is not much for a promotion, but it is quite a lot more than what ERNI have in the bank according to the latest financial statement. Here's what the report for Q3 2014 looks like:

  • cash: $2,725
  • current assets: $12,563
  • current liabilities: $198 thousand
  • net quarterly revenues: $20 (that's right, twenty US dollars)
  • quarterly net loss: $49 thousand

ERNI's EarnIQ system has been up and running for quite a while, but it would appear that they simply can't get it off the ground. The best year for the company since launching the dining rewards program was 2013 and during it, ERNI logged sales of $32 thousand and a net loss of more than $460 thousand. But is the company doing something to change all this?

Yesterday, in a press release that was suspiciously well timed with the promotional emails, ERNI's management team said that the revamped version of EarnIQ's website is finally up and running. They announced that the changes should make the user experience far easier, and that this should draw a lot more attention to the service.

Whether that will happen or not is for time to tell, but we should note that the promises in ERNI's press releases don't always turn into a reality. On April 16 of last year, for example, the company announced a letter of intent which was supposed to result in a joint venture with an entity called HotDeal Limited. The JV was going to help ERNI enter the heavily populated Hong Kong market, but sadly, no word about it has been spoken ever since.

So, taking the management team's words with a little bit of salt might not be a bad call sometimes. Even if you decide to give them the benefit of the doubt, you should bear in mind that the promotional spike from yesterday doesn't mean that the long-term stock performance is going to be great. The people who lost more than 70% of their investments on Cardinal Resources Inc (OTCBB:CDNL) are painfully aware of this.

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