GOOD HEMP, INC.

GHMP
Delayed Quote. Delayed  - 01/22 03:02:53 pm
0.8USD +2.56%

GOOD HEMP : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

11/25/2020 | 11:21am

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS



We believe that it is important to communicate our future expectations to our
security holders and to the public. This report, therefore, contains statements
about future events and expectations which are "forward-looking statements"
within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the
Securities Exchange Act of 1934, including the statements about our plans,
objectives, expectations and prospects under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations." You
can expect to identify these statements by forward-looking words such as "may,"
"might," "could," "would," "will," "anticipate," "believe," "plan," "estimate,"
"project," "expect," "intend," "seek" and other similar expressions. Any
statement contained in this report that is not a statement of historical fact
may be deemed to be a forward-looking statement. Although we believe that the
plans, objectives, expectations and prospects reflected in or suggested by our
forward-looking statements are reasonable, those statements involve risks,
uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by these forward-looking statements, and we
can give no assurance that our plans, objectives, expectations and prospects
will be achieved.



Important factors that might cause our actual results to differ materially from
the results contemplated by the forward-looking statements are contained in the
"Risk Factors" section of and elsewhere in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2019 filed on March 30, 2020, and in our
subsequent filings with the Securities and Exchange Commission. The following
discussion of our results of operations should be read together with our
financial statements and related notes included elsewhere in this report.



Company Overview and Product Brands



The Company was formed as a Nevada corporation on November 26, 2007. The Company
was involved in exploration and development of mining properties until September
30, 2013
, when it discontinued operations. In June 2017, the Company's creditors
filed a petition in the District Court of Harris County, Texas for the
appointment of a receiver. In August of 2017, the court appointed a receiver
(who was subsequently appointed as an officer and director of the Company), and
in February 2018, the receiver appointed William Alessi as a director of the
Company and then resigned as a director and officer of the Company.



On February 6, 2019, the Company acquired trademarks and intellectual property,
which includes all rights and trade secrets to the hemp-derived CBD-infused line
of consumer beverages sold under the "Good Hemp" brand. Since then, the Company
has been conducting operations under the "Good Hemp" trade name and through the
http://www.goodhemplivin.com/ website. Information on this website is not a part
of this report on Form 10-Q.



On April 30, 2019, the Company acquired from Mr. Spoone the "CANNA HEMP" and
"CANNA" trademarks including all rights and trade secrets and related inventory.
At September 30, 2020, the Company had not attributed any value to these
acquired trademarks.



The Company is now a North Carolina based company that is made up of industry
veterans focused on exploiting niche markets in the hemp industry. The Company's
Good Hemp® products include two lines of hemp-based beverages described below.
Good Hemp® products have been sold throughout the United States since 2016 via
Amazon.com, as well as local retailers.






Products




Good Hemp® includes two lines of hemp-based beverages, Good Hemp® 2oh! and Good
Hemp® fizz! sodas.



Good Hemp® 2oh! is a line-up of refreshing, all-natural, "good-for-you",
ready-to-drink waters in six flavors: blueberry-blast, island coco-lime,
kiwi-strawberry, lemon-twist, mango-fandango and Q-cumbermint. Each Good Hemp®
2oh! beverage is 16.9 fluid ounces infused with 10mg of hemp oil (CBD rich), 6g
of prebiotic fiber, has no sugar, contains no artificial sweeteners or flavors,
is gluten free, vegan, and contains no net carbs. Production of this beverage
began in May 2019.



Good Hemp® fizz is a line-up of carbonated refreshing, all-natural,
"good-for-you", "ready-to-drink carbonated beverages in three flavors:
blueberry-bam, mango-tango and citrus-twist. Each Good Hemp® fizz beverage is 12
fluid ounces infused with 10mg of hemp oil (CBD rich), 6g of prebiotic fiber,
contains no artificial sweeteners or flavors, and is gluten free and vegan.
Production of this beverage began in July 2019.



As of September 30, 2020, these beverages were being sold in over 600 stores in
the United States.






Overview and Mission




Our mission is to be one of the market leaders in the development and marketing
of natural and functional hemp-derived beverage products to a significant
segment of the population, with the products being convenient and appealing to
consumers. We have an experienced management team of beverage industry,
marketing and financial markets executives that have strong relationships in the
industry.







15

Table of Contents





Emerging Growth Company Status



We are an "emerging growth company" as defined under the Jumpstart Our Business
Startups Act, commonly referred to as the JOBS Act. We will remain an "emerging
growth company" for up to five years, or until the earliest of (i) the last day
of the first fiscal year in which our total annual gross revenues exceed $1
billion
, (ii) the date that we become a "large accelerated filer" as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the
market value of our ordinary shares that is held by non-affiliates exceeds $700
million
as of the last business day of our most recently completed second fiscal
quarter or (iii) the date on which we have issued more than $1 billion in
non-convertible debt during the preceding three year period.



As an "emerging growth company," we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public
companies that are not "emerging growth companies" including, but not limited
to:



• not being required to comply with the auditor attestation requirements of



section 404(b) of the Sarbanes-Oxley Act (we also will not be subject to the
auditor attestation requirements of Section 404(b) as long as we are a
"smaller reporting company," which includes issuers that had a public float
of less than $75 million as of the last business day of their most recently
completed second fiscal quarter);



• reduced disclosure obligations regarding executive compensation in our



periodic reports and proxy statements; and



• exemptions from the requirements of holding a nonbinding advisory vote on



executive compensation and shareholder approval of any golden parachute
payments not previously approved.





In addition, Section 107 of the JOBS Act provides that an "emerging growth
company" can take advantage of the extended transition period provided in
Section 7(a)(2)(B) of the Securities Act for complying with new or revised
accounting standards. Under this provision, an "emerging growth company" can
delay the adoption of certain accounting standards until those standards would
otherwise apply to private companies. In other words, an "emerging growth
company" can delay the adoption of such accounting standards until those
standards would otherwise apply to private companies until the first to occur of
the date the subject company (i) is no longer an "emerging growth company" or
(ii) affirmatively and irrevocably opts out of the extended transition period
provided in Securities Act Section 7(a) (2) (B). The Company has elected to take
advantage of this extended transition period and, as a result, our financial
statements may not be comparable to the financial statements of other public
companies. Accordingly, until the date that we are no longer an "emerging growth
company" or affirmatively and irrevocably opt out of the exemption provided by
Securities Act Section 7(a) (2) (B), upon the issuance of a new or revised
accounting standard that applies to your financial statements and has a
different effective date for public and private companies, clarify that we will
disclose the date on which adoption is required for nonemerging growth companies
and the date on which we will adopt the recently issued accounting standard.






Our Growth Strategy




Expanding our US distribution reach to service national chain stores; increase
awareness of our brand in the United States; securing additional chain,
convenience and key account store listings for all our brands nationwide and
internationally; -increasing our warehouse direct to retail channel; focusing on
full service Class "A" distributors; and focusing on placing our products in
produce, natural and cold sets as opposed to the grocery aisles.






Results of Operations




For the three months ended September 30, 2020 compared to the three months ended
September 30, 2019






Revenue




During the three months ended September 30, 2020, the Company generated $102,010
in net sales compared to $70,540 for the same period in 2019. The increase is
primarily due to increased sales of the Company's products.






Operating Expenses




The Company had cost of sales of $77,688 for the three months ended September
30, 2020
, compared to $71,656 for the same period in 2019. The increase was
primarily due to increased sales of the Company's products.



The Company incurred general and administrative expenses totaling $290,922 for
the three months ended September 30, 2020, compared to $86,208 for the same
period in 2019. The increase was primarily due to increasing professional fees
associated with being a public company and increasing operations.






Net Loss




The Company had a net loss of $149,944 for the three months ended September 30,
2020
, compared to a net loss of $86,406 for the same period in 2019. This
increase was primarily due to an increase in the Company's derivative
liabilities associated with convertible promissory notes which recorded a gain
on derivative liabilities of $119,848, as compared to $0 for the same period in
2019.



For the nine months ended September 30, 2020 compared to the nine months ended
September 30, 2019







16

Table of Contents




Revenue




During the nine months ended September 30, 2020, the Company generated $383,356
in net sales compared to $177,477 for the same period in 2019. The increase is
primarily due to increased sales of the Company's products.






Operating Expenses




The Company had cost of sales of $290,157 for the nine months ended September
30, 2020
, compared to $179,153 for the same period in 2019. The increase was
primarily due to increased sales of the Company's products.



The Company incurred general and administrative expenses totaling $456,511 for
the nine months ended September 30, 2020 compared to $125,821 for the same
period in 2019. The increase was primarily due to increasing professional fees
associated with being a public company and increasing operations.






Net Loss




The Company had a net loss of $991,166 for the nine months ended September 30,
2020
, compared to a net loss of $128,339 for the same period in 2019. This
increase was primarily due to an increase in the Company's derivative
liabilities associated with convertible promissory notes which recorded a loss
on derivative liabilities of $607,496, as compared to $0 for the same period in
2019.



Liquidity and Capital Resources



We had cash used in operations of $1,455,099 for the nine months ended September
30, 2020
, compared to $321,744 for the nine months ended September 30, 2019. The
increase in cash used in operating activities for the nine months ended
September 30, 2020 is attributable to the loss on derivative liabilities of
$607,496 and the net loss of $991,166 compared to $0 and $128,339, respectively,
for the same period ended September 30, 2019.



We had cash used in investing activities of $0 for the nine months ended
September 30, 2020, and $12,000 for the nine months ended September 30, 2019.



We had cash provided by financing activities of $1,443,151 for the nine months
ended September 30, 2020, compared to cash provided by $338,030 for the same
period in 2019.



As of September 30, 2020, the Company had cash and cash equivalents of $37,752.
We do not have sufficient resources to effectuate our business. We expect to
incur a minimum of $200,000 in expenses during the next twelve months of
operations. We estimate that these expenses will be comprised primarily of
general expenses including overhead, inventory purchases, legal and accounting
fees.



As of September 30, 2020, and 2019, the Company has primarily been funded by Mr.
Alessi
and Mr. Chumas. In addition, the Company has issued convertible notes to
unrelated third parties. As of September 30, 2020, and December 31, 2019,
related party notes totaled $400,575 and $252,608, net of discounts,
respectively, and third-party notes totaled $286,910 and $62,339, net of
discounts, respectively.



The Company does not know of any trends, demands, commitments, events or
uncertainties that will result in, or that are reasonable likely to result in,
our liquidity increasing or decreasing in any material way.



The Company does not know of any significant changes in expected sources and
uses of cash.



The Company does not have any commitments or arrangements from any person to
provide it with any equity capital.






Going Concern




The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As reflected in the financial
statements, the Company had a working capital deficit of $2,709,959 at September
30, 2020
, and had a loss of $991,166 for the nine months ended September 30,
2020
, which raises substantial doubt as to the Company's ability to continue as
a going concern for a period of one year from the issuance of these financial
statements.



Off Balance Sheet Arrangements



We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.







17

Table of Contents




Critical Accounting Policies




The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make a number
of estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. Such estimates and assumptions affect the reported
amounts of revenues and expenses during the reporting period. We base our
estimates on historical experiences and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions and conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements. On an ongoing basis, we evaluate estimates and assumptions
based upon historical experience and various other factors and circumstances. We
believe our estimates and assumptions are reasonable in the circumstances;
however, actual results may differ from these estimates under different future
conditions.



Reclassification of Certain Expenses



The results of operations as of September 30, 2020 were prepared on a consistent
basis with prior periods.

© Edgar Online, source Glimpses

© Acquiremedia 2021
Copier lien
All news about GOOD HEMP, INC.
12/17
11/25
09/18
09/11