Hemp Inc (HEMP)

[Det_Robert_Thorne]

Looks like Dave and Bruce telling tall tales

Clearly, the SEC complaint has forced Bruce's hand, and now he has to try to provide some concrete info, but I find it wanting.

Some excerpts from this PR, with commentary:

Schmitt and IHM's Director of Operations, Philip Boyer, were in Chicago, Illinois from June 21 - 22, 2016, to oversee the install of the new parts in one of IHM's two mills. "The manufacturer of the mill is located in Chicago, so we sent our mill there to have it completely rebuilt to ensure there are no problems whatsoever. All the work has now been completed on one of the mills and is now in transit back to Hemp, Inc.'s multipurpose hemp processing facility in Spring Hope, North Carolina."

The mill, that is now complete, will be used to make Hemp, Inc.'s LCMs (loss circulation material), DrillWall(TM). The other mill has already been rebuilt and is also in the process of being installed.

First mention of the milling equipment in awhile, and the first public announcement that both units had to be completely rebuilt. Why weren't they rebuilt in 2015 so they could be installed as soon as the Silo pad was completed in Feb or March?

On June 27, 2016, David Schmitt traveled to Wichita, Kansas, with the company's engineering firm to visit the supplier of the air handling equipment needed for both of the mills. Per Schmitt, all of the engineering has been complete and the needed components are being manufactured. "We are expecting delivery in approximately thirty days."

Shouldn't this have been completed months ago?

On June 28, 2016, Schmitt then traveled to Oklahoma to do a trial run for a potential new customer who is interested in Hemp, Inc.'s (OTC PINK: HEMP) Kenaf material. The test also included a trial run with raw hemp which was very successful according to Schmitt. "Once the material is shipped back to Hemp, Inc.'s facility in Spring Hope, North Carolina, we will perform a complete analysis on the material to confirm that it meets the customer's specifications. The potential for this one product could be in excess of one hundred million pounds per year." [emphasis added]

Per Schmitt's statements in the past about the decorticator being able to process 2 - 3 tons/hour, even with three shifts running 365 days per year, the total amount of kenaf input is 35M to 53M pounds per year, and the output will be a mix of fiber and core. Assuming a 50/50 mix of core and fiber, how can 18M - 27M pounds of core (or the equivalent amount of fiber) be turned into 100M pounds of final product?

Earlier this month, IHM executives sent material to Volvo Trucks for analysis. The interior, of Volvo's trucks, contains numerous components that can be made from hemp fiber. The auto industry has been using natural fiber in the production of automobiles for several years.

Oh, they sent a sample of hemp fiber to Volvo. Big whoop-de-do. Where did Bruce get the hemp? Or by "material", is he saying that he sent kenaf fiber, but wants people to think he's capable of growing and processing hemp at the plant right now?

Industrial Hemp Manufacturing, LLC also contracted with local Spring Hope farmers to plant 420 acres of Kenaf. "When this is harvested (later this year), the crop will yield over 4,000,000 pounds," said Schmitt. He expects to replace Kenaf with hemp next year.

If they're going to change to hemp for the 2018 processing season, why would anyone buy the kenaf?


Still no mention of the decorticator equipment itself being operational.

I don't think that the plant will be fully operational in 3Q/16.