My comments regarding the financial report as comp
Post# of 56324
Posted On: 08/19/2014 10:21:49 PM
My comments regarding the financial report as compared to 3/31/14 results are as follows below. I welcome any and all comments/opinions from other’s perspectives. The most surprising aspect that I came across was in note 13 at the bottom of my comments – does anyone remember another report of us selling an 24.5% interest in a second facility for $1M?
Balance sheet
Cash position reduced by $2.6M, offset by value of plant, property and Equip as this increased by $6.6M. This makes sense as a significant portion of the building of bldg 2 and the purchase of site 2 happened in Q2. Overall, assets grew by $4.6M through the continued funding of the private investor.
I’m not sure what to make of the share details – it states 3.499B authorized, but 3.543B issued and outstanding (increase of 137M shares). I don’t know how the total figure could now be greater than the number of authorized shares.
Income Statement
Revenues of $4.9M, $250k less than Q1, though the main driver of this is the private investment and I don’t think any of us know the schedule of receipts regarding this funding. G&A expenses ballooned to $8.8M, but this is again likely associated with the construction of site 1 and purchase of site 2 and related improvement expenses. Result is a net loss of $3.98M vs. an income of $2.83M in Q1. This should not be surprising as the cash received in Q1 and then again in Q2 went to pay for the large expenses accrued in Q2.
Stockholder Equity
This is where the increase of 137M shares comes from – 122M for services and 15M for acquisition of subsidiary (Hemp Tech).
NOTES
Note 1 -The report includes the consolidated results from Hemp Technologies as indicated in page 6, but does not provide any detail in regards to acquisitions in note 3, pages 12-13, only citing SDN figures from 2012 as shown in the Q1 report. It appears that in Note 11 that 15M shares were issued for $644k for the Hemp Technologies purchase. This is in line with the guidance advised in the Q1 report (15M shares for 51% ownership).
Note 5 – The value associated with equipment is unchanged from the Q1 report at $56k. I would have thought that the pics of the lights, etc. would have resulted in an increase of equipment value, but this may have come through in July (I can’t remember when the pics were posted), or they have associated them with construction costs (which I wouldn’t agree with if that is the case).
Note 9 – there has been an additional $101k of loans from consultants over the last 3 months.
Note 11 – 122M shares issued for $6.6M and 15M shares issued for $644k for Hemp Technologies purchase.
Note 13 – Of the sale of 25% net revenue, 10.1% has been sold to date, up from 7.5% at the end of Q1. What is surprising though is there is a 24.5% interest sold “in a second facility it is building” for $1.06M. I was not aware of FITX selling another portion/area of company operations. I am not sure how the 24.5% stake will be recognized in regards to payout against this second facility. Also, it does not state who we sold the 24.5% interest to.
Regards,
-kbulldog.
Balance sheet
Cash position reduced by $2.6M, offset by value of plant, property and Equip as this increased by $6.6M. This makes sense as a significant portion of the building of bldg 2 and the purchase of site 2 happened in Q2. Overall, assets grew by $4.6M through the continued funding of the private investor.
I’m not sure what to make of the share details – it states 3.499B authorized, but 3.543B issued and outstanding (increase of 137M shares). I don’t know how the total figure could now be greater than the number of authorized shares.
Income Statement
Revenues of $4.9M, $250k less than Q1, though the main driver of this is the private investment and I don’t think any of us know the schedule of receipts regarding this funding. G&A expenses ballooned to $8.8M, but this is again likely associated with the construction of site 1 and purchase of site 2 and related improvement expenses. Result is a net loss of $3.98M vs. an income of $2.83M in Q1. This should not be surprising as the cash received in Q1 and then again in Q2 went to pay for the large expenses accrued in Q2.
Stockholder Equity
This is where the increase of 137M shares comes from – 122M for services and 15M for acquisition of subsidiary (Hemp Tech).
NOTES
Note 1 -The report includes the consolidated results from Hemp Technologies as indicated in page 6, but does not provide any detail in regards to acquisitions in note 3, pages 12-13, only citing SDN figures from 2012 as shown in the Q1 report. It appears that in Note 11 that 15M shares were issued for $644k for the Hemp Technologies purchase. This is in line with the guidance advised in the Q1 report (15M shares for 51% ownership).
Note 5 – The value associated with equipment is unchanged from the Q1 report at $56k. I would have thought that the pics of the lights, etc. would have resulted in an increase of equipment value, but this may have come through in July (I can’t remember when the pics were posted), or they have associated them with construction costs (which I wouldn’t agree with if that is the case).
Note 9 – there has been an additional $101k of loans from consultants over the last 3 months.
Note 11 – 122M shares issued for $6.6M and 15M shares issued for $644k for Hemp Technologies purchase.
Note 13 – Of the sale of 25% net revenue, 10.1% has been sold to date, up from 7.5% at the end of Q1. What is surprising though is there is a 24.5% interest sold “in a second facility it is building” for $1.06M. I was not aware of FITX selling another portion/area of company operations. I am not sure how the 24.5% stake will be recognized in regards to payout against this second facility. Also, it does not state who we sold the 24.5% interest to.
Regards,
-kbulldog.
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