Replies to post #55376 on Hemp Inc (HEMP)

[Det_Robert_Thorne]

Because it wasn't a great annual report

The press release tried to give the impression that the annual report was great, but it really wasn't.

The only reason the company has more cash on the balance sheet is because Perlowin loaned about $260K to the company during the fourth quarter, which now owes him $1.2M

The 2014 revenue was mostly shares received from consulting clients, and the company wrote off another $1.7M of the value of those shares in the fourth quarter. What was once valued at over $7M is now claimed to be worth (at the end of 2014) less than $2.5M. Those shares are worth even less now.

I've calculated that the 4Q/14 revenue was about $80K, but there appears to have been no Cost of Goods Sold (Cost of Sales) for that revenue (no increase in COGS from the first nine months of 2014). It's impossible to know if the $80K was sales of hemp products, stock received from Vaporbrands, or simply an accounting adjustment.

The company paid out nearly $4.8M in stock-based compensation, and over $1.5M in consulting fees.

Outstanding shares increased to 2.74B. The increase wasn't as much as I expected, as I thought that Perlowin would convert more of his preferred to Commons and take some repayment of his loans in new preferred K shares, but that didn't happen in Q4.

Finally, on paper, the company lost $905K in FY2014.