Foreign investments as a source of financing sectors of the economy Plan

2018	2019
2020 January-december
investments in fixed assets, total in billion sums	124231,3	195927,3	202000,1
percent of the investments in fixed assets in GDP	30,6	38,3	34,8
total area of households	13398,6	15501,5	12677,4
Secondary schools, the number of the students	80,4	114,1	112,3
High schools	-	-	-
Hospitals	6,1	7,4	4,1
Policlinic institutions	20,0	20,7	5,1
Construction	51129,3	71156,5	87823,8

Table:3

In the table, the exact numbers of the investments are given and we can see there was an upward trend in the overall volume of the FDI. However, there was no change in the investments into education, especially in high schools. This might be the nearest reason why high school graduates lack lots of skills needed for the tertiary education. This may also affect long-term behaviors of the future candidates which might affect the pace of the development in the spheres such as management, industry, manufacturing, education, medicine and so on.

Whenever the investors and foreign international organizations are aiming to put money into specific project or give it to some country they will absolutely speculate every single aspect of the project such as rate of return, payback period, profitability, rentability, debt ratio, trade payables period, debt to equity ratio, trade receivables period, return on equity, earnings growth ratio, interest coverage ration, liquidity of the company, moral values, corporate culture, political and environmental changes. In the following lines, I will describe the ratios and define whether it is a good idea to invest in the projects in Uzbekistan.

Fundamental analysis uses ratios gathered from data within the financial statements, such as a company's earnings per share (EPS), in order to determine the business's value. Using ratio analysis in addition to a thorough review of economic and financial situations surrounding the company, the analyst is able to arrive at an value for the security. The end goal is to arrive at a number that an investor can compare with a security's current price in order to see whether the security is undervalued or overvalued. Technical analysis uses statistical trends gathered from trading activity, such as moving averages (MA). Essentially, technical analysis assumes that a security’s price already reflects all publicly-available information and instead focuses on the statistical analysis of price movements. Technical analysis attempts to understand the market sentiment behind price trends by looking for patterns and trends rather than analyzing a security’s fundamental attributes.

I decided to look through the financial results of foreign company located in Uzbekistan. This is a parent company of more than 10 companies.

MJ Holdings, Inc. is a head company of Icon Management, LLC, Farm Road, LLC, Condo Highrise Management, LLC, Farm Road, LLC, Red Earth Holdings, LLC, Red Earth, LLC, HDGLV, LLC, Alternative Hospitality, Inc. and MJ International Research Company Limited.

Revenues were $897,696 for the year ended December 31, 2019 compared to $8,150 for the year ended December 31, 2018. The 2019 revenue was derived from the Company’s Agreement with a Licensed Operator and rental income from its THC Park.Direct cost of revenue was $1,187,723 for the year ended December 31, 2019 compared to $10,000 for the year ending December 31, 2018, resulting in an increase of $1,177,723. The increase was largely attributable to labor costs, cost of materials, product testing, and professional fees.

 

General and administrative, marketing and selling expenses were $6,790,564 for the year ended December 31, 2019 compared to $4,680,769 for the year ended December 31, 2018, resulting in an increase of $2,109,795. The increase was largely attributable to the following: increased legal, accounting and other professional fees, cultivation consulting services and corporate advisory services inventory reserve on Q-Cups and accessories.Depreciation and amortization were $371,512 for the year ended December 31, 2019 compared to $123,256 for the year ended December 31, 2018, resulting in an increase of $248,256. The increase was largely attributable to the Company purchasing equipment, furniture and a 10,000 sq. ft. office building.Other income/(expense) were ($819,749) for the year ended December 31, 2019 compared to ($202,053) for the year ended December 31, 2018, resulting in an increase of $617,696. The increase was largely attributable to loss on impairment of investment in the amount of $1,110,356.Net loss was $8,271,852 for the year ended December 31, 2019 compared to loss of $5,007,928 for the year ended December 31, 2018. The increase in net loss in 2019 is attributable to planned expansion of the business.

The Company had cash of $22,932 at December 31, 2019 compared with cash of $56,656 at December 31, 2018²²

Chart:10

Operating Activities: Net cash used in operating activities for the year ended December 31, 2019, was $4,622,155 versus $5,792,542 for the year ended December 31, 2018. The decrease in cash used in operating activities in 2019 included a net loss of $8,271,852 offset by an impairment of investments of $250,000, impairment of notes receivable of $160,356, impairment of inventory of $1,271,402 and stock-based compensation of $796,236.

Investing activities: Net cash used in investing activities during the year ended December 31, 2019, was $1,516,643 as compared to $2,734,672 for the year ended December 31, 2018. The decrease in investing activities in 2019 is attributable to the decrease in purchases of fixed assets.

Financing activities: Net cash provided by financing activities during the year ended December 31, 2019, was $6,105,074 as compared to $6,070,007 for the year ended December 31, 2018. The increase in financing activities in 2019 is attributable to the issuance of common stock sold through the Company’s Regulation D offering.During 2019, the Company raised $6,165,000 from the sale of 12,330,000 shares of the Company’s $0.001 par value common stock. Those shares sold were shares resulting from the February of 2019 return, by the Company’s then largest shareholder, Red Dot Development, LLC (“Red Dot”), of 20,000,000 shares of the Company’s common stock to the Company for cancellation in exchange for a payment of $20,000. Beginning in March of 2019, pursuant to the filing of a Form D with the SEC, the Company offered for sale 15,000,000 of these shares at a per share price of $0.50 per share.During 2018, the Company raised $5,621,001 from the sale of 7,809,174, shares of the Company’s $.001 par value common stock, which includes $2,500,000 from the sale of 2,500 shares of the Company’s Series A Preferred Stock (“Preferred Stock”). Each share of Preferred Stock was convertible into 1,333 shares of the Company’s $.001 par value common stock. Additionally, the Company issued a Convertible Note in the Amount of $250,000 bearing an annual interest rate of five percent (5%). The Note was converted into 500,000 shares of the Company’s $.001 par value common stock at $.50 per share on July 15, 2019.

MJ HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETSXCurrentassets
Cash		$	22,932			$	56,656
Accountsreceivable			11,675				-
Inventory			-				1,587,852
Prepaidexpenses			476,742				481,216
Marketable securities – available for sale			150				-
Othercurrentassets			156,229				-
Prepaidinventory			-				337,56