New Green Hemp Inc.

What they do

Galenfeha historically operated through its Fleaux Solutions subsidiary, which provided sewer rehabilitation and CCTV services to local governments and municipalities. After selling Fleaux Solutions back to its former owners in June 2019, the company is currently a shell with no active operations. Following a change in control in August 2023, the company intends to pursue hemp cultivation and sales, focusing on developing hemp-infused products.

Revenue drivers

• Sewer rehabilitation services — Provided manhole rehabilitation and CCTV services under municipal contracts; revenue was $1.12 million in Q1 2018 and $1.007 million in Q1 2019, but this business was divested in June 2019.
• Cosmic service lateral lining contracts — This was cited as a significant growth area in Q1 2019, though no specific revenue figure was provided; it was part of the Fleaux Solutions operations.

Recent performance

In the three months ended March 31, 2019, the company reported revenue of $1,007,082, a 10% decrease from $1,120,542 in the prior year. The loss from operations was $19,098 compared to operating income of $319,218 in Q1 2018. Net loss for Q1 2019 was $252,745, compared to net income of $328,184 in the prior-year quarter. The company recorded total other expense of $233,647, primarily interest expense and losses on derivative instruments. Cash and cash equivalents were $20,644 at March 31, 2019.

Strategy

The company's stated plan of operation includes exploring investments in private and public companies, developing new technologies for product development, engineering, and manufacturing, formulating applications for new products, and commercializing new technology. Following the sale of Fleaux Solutions, the company intends to pursue hemp cultivation and sales, focusing on developing hemp-infused products. The company has historically relied on equity issuances and bank financing to fund operations, and management stated that it would continue to do so until positive cash flow is achieved.

Risks

• Going concern uncertainty — The company's ability to continue as a going concern is dependent on continued financial support from management and stockholders, as well as achieving profitable operations.
• Dependence on external financing — Management states that the company is dependent on sales of common stock and bank financing to fund operations until positive cash flow is achieved.
• Business pivot risk — The company is transitioning from sewer rehabilitation to hemp cultivation and sales, an entirely new business with no operational history or revenue.
• Limited liquidity — At March 31, 2019, the company had cash of only $20,644 and negative working capital, while at December 31, 2018, it had a working capital deficit of $748,804.

Outlook

Management believes it has adequate capital resources and liquidity to maintain current operations during 2019, but it still expects to need external financing. The company had no material capital expenditure commitments for the next twelve months. After the divestiture of Fleaux Solutions, the company's future operations will depend on its ability to execute the hemp cultivation and sales plan.