Organic Plant Health, Inc. (fka OPHI)

[imiloa]

V6, re: "NO REVENUE, NO GROW STACKER PROJECTED REVENUE AND THE FALSE INVESTMENT AWARENESS PROGRAM!
What is it that you just don't seem to understand?"


just for kicks, let's look at the actual timeline of events.

here's a 2-year chart for OPHI, going back to the Acumed (pre-OPHI) 2011 era:
http://bit.ly/10Pq3fO


prior to May 16, 2012, the price oscillated in the $6-$10 (post-RM prices) range.
after mid-May, it sagged to $3-5 range, where it lingered summer 2012.
fall 2012, starting end of Sept, it crashed like a rock down to 0.50, then $0.165 before the RM.

so what happened in mid-May 2012?
and what happened in late Sept 2012?


re: "NO REVENUE"

actually, revenue was positive and fairly consistent for all of 2012, and up a bit for each quarter from 2011:

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8631173
Revenues $251,169 -- For the three months ended March 31, 2012
Revenues $225,215 -- For the three months ended March 31, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8784051
Revenues $219,618 -- For the three months ended June 30, 2012
Revenues $216,515 -- For the three months ended June 30, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8925721
Revenues $251,792 -- For the three months ended September 30, 2012
Revenues $241,830 -- For the three months ended September 30, 2011


re: "NO GROW STACKER PROJECTED REVENUE"

when was the Grow Stacker product announced?
answer: Nov 13, 2012, when the stock price had already tanked to 0.56:
11/13/2012 0.56 7,540
http://www.prnewswire.com/news-releases/organic-plant-health-inc-announces-roll-out-of-its-newest-product---the-grow-stacker-179092951.html

so that couldn't be the reason for the drop from $10, right?
i know that Grow Stacker is one of your main battle cries, but given the timeline, it doesn't really make sense, yes?


re: "FALSE INVESTMENT AWARENESS PROGRAM"

there you might have something, if you articulated it more clearly and spun the following to suit your purpose:

per financials, OPHI started paying out large sums of non-cash compensation for "business advisory services" which greatly increased their net loss, despite steady revenue:

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8925721
"The significant increase in operating expense during the nine months ended September 30, 2012 was primarily attributable to the non-cash compensation, which were $558,111 for the nine months ended September 30, 2012, of which $315,000 resulting from the issuance of 2,500,000 shares of common stock for business advisory services in a term of 6 months effective from April 1, 2012 through September 30, 2012, $215,880 resulting from the issuance of 4,000,000 shares of common stock for business advisory services in a term of 1 year effective from April 1, 2012 through March 31, 2013, and $27,231 resulting from the issuance of 750,000 shares of common stock for marketing services in a term of 6 months effective June 4, 2012 through December 3, 2012."


so how did those 500k expenses affect the bottom line?
let's go back to the 10-Qs:

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8631173
Revenues $251,169 -- For the three months ended March 31, 2012
GrossProf $170,525
Expenses $174,898
Net Loss $28,979

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8784051
Revenues $219,618 -- For the three months ended June 30, 2012
GrossProf $104,969
Expenses $520,754
Net Loss $467,805

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8925721
Revenues $251,792 -- For the three months ended September 30, 2012
GrossProf $122,095
Expenses $477,990
Net Loss $411,530


wow. that's pretty significant.
and the June 30 10-Q was filed Aug 20, 2012, 5 weeks before the massive end-of-Sept sell-off.

we must be on to something.

going back to the chart, we see a sag from $4 to $3 after the Aug 20 filing.
but oddly enough, the price then rose to a new 3-month high of 5.50 on Sept 17.
(historical data below for ref)

how is that possible? after initial 25% sag, the price rose again after the announcement of major increased expenses on biz dev.

if you review the postings here on this board last summer, you'll see that the general public take on those expenses was that OPHI was investing in it's future, working with Corpotool, hiring a national sales mgr to grow distribution, etc…

despite moaning about Guardian being generally useless, we, the public, generally felt the overall expenses were potentially positive for future growth, and none of us were selling based on those expenses. we were hoping the expensive relationship with Corpotool would be a net positive in terms of national distribution contracts.


but then, after peaking to a 3-month high on Sept 17, a month after the filing, suddenly a massive sell-off started, crashing the price from $5.50 to $0.165 over 3 months.

who was dumping large volumes of shares at fire-sale prices, and why?


http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8784051
(6) On March 9, 2012, the Company entered into a convertible promissory note (Asher Note I) in a principal amount of $42,500 payable to Asher Enterprises Inc. (“Asher”), which bears an interest rate of 8% per annum and is due on December 9, 2012. Pursuant to Asher Note I, Asher has an option to convert all or any portion of the accrued interest and unpaid principal balance of Asher Note I into the Common Stock of the Company or its successors, at 58% of the market price, no sooner than September 5, 2012. The conversion price associated with Asher Note I was determined based on the facts that the Company had nominal trading volume for its stock, and had negative shareholder equity at the time of issuance.


so Asher, starting Sept 5, 2012, was able to convert debt owed to them into shares, which they could sell on the open market to compensate themselves for their debt installment.

but if Asher was selling shares, why would the dump aggressively dropping the price?
ah, because the number of shares they get depends on the current price at the time the installment is due.

so the lower the price, the more shares they get to dump, which drives the price lower.
thus the term "toxic debt spiral."

wow. what if Asher discreetly shorted OPHI while dumping those shares, ensuring a significant profit on their short position.

that could never happen, right?
http://en.wikipedia.org/wiki/Death_spiral_financing



but what about the slump in May down to $3-5?
that was over a month before the June 30 quarter ended, and 3 months before the June 10-Q went public.
and long before the Sept 5th date at which Asher could start converting debt to shares.

maybe the increase biz dev expenses had leaked?
or maybe something simpler.

let's go back to the March 31, 2012 10-Q:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8631173

that 10-Q was filed May 21, 2012.
May 14-16, OPHI stock price was $8.50.
May 17, it dropped to $5.
May 18, back up to $6.50.
May 21, down to $4.06, on 10-Q filing.

looks like something in the March 31 10-Q deflated investor confidence, and leaked to someone early on May 17?


looking at that 10-Q, revenues were still solid, up from 2011.
net loss was only $28,979, as this was 3 months before the large summer 2012 biz dev expenses splashed.

so what was announced in that 10-Q that was materially different from prior quarters?
ah, the first mention of the Asher toxic financing:

"(6) On March 9, 2012, the Company entered into a convertible promissory note (Asher Note) in a principal amount of $42,500 payable to Asher Enterprises Inc. (“Asher”) …"

but why would a toxic debt spiral scare veteran pink investors like yourself?

maybe they knew what the concept entailed?
http://en.wikipedia.org/wiki/Death_spiral_financing


having invested 40 minutes compiling this detailed, data-driven response to your brief shrug off of my points, i'd appreciate your reply to address the data and my interpretation.

and, given that grow stacker wasn't even announced until the price had already tanked to 0.56, can we finally agree it wasn't a factor in the October price crash?



--- HISTORICAL DATA:
http://www.nasdaq.com/symbol/ophi/stock-chart
(click on the chart to get this data in a pop-up)

09/27/2012 2.70 9,303
09/26/2012 3.575 2,201
09/25/2012 3.50 525
09/24/2012 4.00 24
09/21/2012 3.80 330
09/20/2012 4.00 510
09/19/2012 4.925 3,969
09/18/2012 4.87 7,128
09/17/2012 5.50 3,940
09/14/2012 4.55 6,687
09/13/2012 4.10 10,450
09/12/2012 3.75 4,468
09/11/2012 3.30 717
09/10/2012 3.25 0
09/07/2012 3.25 320
09/06/2012 3.75 118
09/05/2012 3.25 4,018
09/04/2012 4.00 0
08/31/2012 4.00 230
08/30/2012 3.80 0
08/29/2012 3.80 50
08/28/2012 2.745 2,925
08/27/2012 3.00 440
08/24/2012 3.00 600
08/23/2012 3.00 838
08/22/2012 3.00 500
08/21/2012 4.00 379
08/20/2012 4.00 123
08/17/2012 4.25 2,205
08/16/2012 4.00 115
08/15/2012 4.00 57
08/14/2012 4.00 1,271
08/13/2012 4.25 25
08/10/2012 4.25 30
08/09/2012 4.25 20
08/08/2012 4.25 33
08/07/2012 4.25 156
08/06/2012 4.50 28
08/03/2012 4.50 600
08/02/2012 4.70 112
08/01/2012 4.75 542
…
06/04/2012 4.00 19
06/01/2012 4.00 511
05/31/2012 4.90 80
05/30/2012 3.75 0
05/29/2012 3.75 1,126
05/25/2012 5.50 20
05/24/2012 4.10 200
05/23/2012 4.50 746
05/22/2012 5.00 1,319
05/21/2012 4.06 1,672
05/18/2012 6.50 348
05/17/2012 5.00 46
05/16/2012 8.50 0
05/15/2012 8.50 0
05/14/2012 8.50 0