Replies to post #50467 on Hemp Inc (HEMP)

[Det_Robert_Thorne]

The Kenaf was about cash flow

The big deal about the Kenaf is that it was supposed to provide actual cash flow to HEMP, instead of just the restricted shares received from customers for consulting.

Here is the list of HEMP's consulting clients from the most recent PR:

Thus far, the public companies include: Dewmar International BMC, Inc. (DEWM); Resource Ventures, Inc. (REVI); Webxu, Inc. (WBXU); Green Concepts, Inc. (LKEN); Global Links Corp (GLCO); Strategic Global Investments, Inc. (STBV); Liberated Energy, Inc. (LIBE); Hollund Industrial Marine, Inc. (HIMR); Cloud Medical Doctor Software Corp (NSCT); View Systems, Inc.; and, PPJ Enterprise (PPJE), which have all mutually benefitted from the network.

In every case, the stock prices are down significantly from when HEMP signed the contracts, which is why HEMP wrote down the value by more than $3M in the 2Q/14 report and will likely write them down more in the 3Q/14 filing.

Looking at a few of those companies:

1) In about two weeks, it will be one year since DEWM filed with the SEC, and today, the stock is at $0.0016, down about 90% since when the deal was signed.

2) REVI is down about 75% from the announcement of it as a client, and in Sept, REVI's CEO canceled the consulting contract. BTW, HEMP's Sept 25 PR was issued after the contract with REVI was cancelled, so why was this company still in the list?

3) WBXU was suspended by the SEC, went to the grey sheets, and the SEC has scheduled a hearing in order to delist it completely.

4) HIMR performed a 1:5000 reverse split, taking the stock from $0.0001 to $0.50. Today, it closed at $0.0462, the equivalent of $0.00000942, down something like 97% from when HEMP signed the contract (this is the company that's supposed to harvest wood from a lake in Panama and then raise tilapia.)

5) LKEN is now basically a multi-level marketing company selling ink refill systems and something like bitcoin ink futures. It closed today at $0.0004, down about 98% from when the deal with HEMP was signed.

No new consulting contracts were announced in 3Q/14, so the only "revenue" will be from the ongoing quarterly payments (in shares) from the clients, along with a few tens of thousands of dollars from the sale of web store products.

So how will HEMP get funds to operate?

In the past, the following pattern seems to take place:

1) Perlowin sells a few million shares on the open market from this personal stash to raise cash

2) He loans the money to HEMP

3) He gets repaid in shares (sometimes preferred K)

4) Eventually, those preferred shares are converted to commons at 10 for 1

Every time he does this, the number of outstanding shares increases dramatically, as does his share of the company.

I think that in effect, the shareholders are buying the company for him. I don't think that this is illegal, BTW, just wrong.

And since he owns well more than 50% of the company, and maybe as much as 70%, he doesn't have to ask the rest of the shareholders for permission to do anything.