I have taken a few hours to analyze the Annual Rep
Post# of 75002
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Posted On: 10/12/2017 4:45:11 PM
I have taken a few hours to analyze the Annual Report and thought I would share a few observations that may be of interest to some here. Do with them as you will.
First I will chart the sales figures reported in in of the four reports filed pertaining to fiscal year 2017:
Sales Cumulative Sales
1st QTR. FY 2017 $295,587.00 $295,587.00
2nd QTR. FY 2017 $ 24,751.00 $320,338.00
3rd QTR. FY 2017 $117,814.00 $438,152.00
4th QTR. FY 2017 ??? $401,974.00
As one can readily see, accumulated sales in the annual report (10K) fall short of what was reported in the first 3 qtrs. of the year, which assumably, was the result of a non reported adjustment of prior figures. Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure, offers no explanation as to how the sales figure for the year was decreased form one quarter to the next. Until I understand the discrepancy, its a bit of a red flag for me.
In looking at the Consolidated Statements of Shareholders’ Deficit
it is revealed that there were 786,525,118 shares of common stock issued and outstanding at the time of the 10K filing. The difficulty I have with this is how it relates to the Market Capitalization valuation. RMHB, at this moment, has a Market Cap of $18.68 million, which calculates out to 46 times its annual sales. In my opinion, that valuation is too high. An optimistic valuation, again my opinion, would fall somewhere between 15>20 times revenues. At the upper end, then, I would place an appropriate Market Cap valuation of RMHB at $8,039,480.00 which would result from a PPS of $.01.
Further, I expect the coming dilution of the announced funding package being worked on to adversely affect the PPS.
I sold my "house shares'" quietly during the last half of Sept., so I don't expect many here to give credence to my thoughts. That's okay, a few here appreciate the read. BTW, I'm keeping a close eye on things and expect an opportunity to bring my profits back into the company after I a get a feel for the dilutive affect. However, I will not fall prey to the notion that if I don't buy now, I will be left behind and my opportunity for riches will be lost. That is the call to action presently being made by shareholders sitting on losses. They are looking for the buying power of new money to support the share price. They are grabbing straws given the coming financing package induced dilution. The pps is likely to halve from current levels due to the large issuance of shares needed to attract financing. From there, the downward trend we've experienced since January highs will continue until verifiable, measurable revenues are achieved. Bear in mind, RMHB has, not only, NEVER made any profit, but has sustained losses in the tens of millions of dollars.
On another note, I see nothing in the 10K that solidifies, or even makes mention, of Lily Li as having control authority. You can read my thoughts on the apparent coup d'etat in my post #38144. Consider this: If Ms. Li was on board for a huge increase in the A/S, there would have been no need to create the Preferred E shares to make it happen. She obviously knew that major dilution would jeopardize her control block. Pretty slick move by Mr. Welch. He created enough shares to assure he got what he wanted. I am very interested in how this plays out. It well could be he was left no choice; either sit quietly with no funding and watch the company go down, or take definitive, although somewhat devious action to ensure he had the means to get funding.
First I will chart the sales figures reported in in of the four reports filed pertaining to fiscal year 2017:
Sales Cumulative Sales
1st QTR. FY 2017 $295,587.00 $295,587.00
2nd QTR. FY 2017 $ 24,751.00 $320,338.00
3rd QTR. FY 2017 $117,814.00 $438,152.00
4th QTR. FY 2017 ??? $401,974.00
As one can readily see, accumulated sales in the annual report (10K) fall short of what was reported in the first 3 qtrs. of the year, which assumably, was the result of a non reported adjustment of prior figures. Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure, offers no explanation as to how the sales figure for the year was decreased form one quarter to the next. Until I understand the discrepancy, its a bit of a red flag for me.
In looking at the Consolidated Statements of Shareholders’ Deficit
it is revealed that there were 786,525,118 shares of common stock issued and outstanding at the time of the 10K filing. The difficulty I have with this is how it relates to the Market Capitalization valuation. RMHB, at this moment, has a Market Cap of $18.68 million, which calculates out to 46 times its annual sales. In my opinion, that valuation is too high. An optimistic valuation, again my opinion, would fall somewhere between 15>20 times revenues. At the upper end, then, I would place an appropriate Market Cap valuation of RMHB at $8,039,480.00 which would result from a PPS of $.01.
Further, I expect the coming dilution of the announced funding package being worked on to adversely affect the PPS.
I sold my "house shares'" quietly during the last half of Sept., so I don't expect many here to give credence to my thoughts. That's okay, a few here appreciate the read. BTW, I'm keeping a close eye on things and expect an opportunity to bring my profits back into the company after I a get a feel for the dilutive affect. However, I will not fall prey to the notion that if I don't buy now, I will be left behind and my opportunity for riches will be lost. That is the call to action presently being made by shareholders sitting on losses. They are looking for the buying power of new money to support the share price. They are grabbing straws given the coming financing package induced dilution. The pps is likely to halve from current levels due to the large issuance of shares needed to attract financing. From there, the downward trend we've experienced since January highs will continue until verifiable, measurable revenues are achieved. Bear in mind, RMHB has, not only, NEVER made any profit, but has sustained losses in the tens of millions of dollars.
On another note, I see nothing in the 10K that solidifies, or even makes mention, of Lily Li as having control authority. You can read my thoughts on the apparent coup d'etat in my post #38144. Consider this: If Ms. Li was on board for a huge increase in the A/S, there would have been no need to create the Preferred E shares to make it happen. She obviously knew that major dilution would jeopardize her control block. Pretty slick move by Mr. Welch. He created enough shares to assure he got what he wanted. I am very interested in how this plays out. It well could be he was left no choice; either sit quietly with no funding and watch the company go down, or take definitive, although somewhat devious action to ensure he had the means to get funding.
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(1)Rocky Mountain High Brands, Inc. (RMHB) Stock Research Links
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