So Orthogonal Thinker’s 2019 financial statements were published recently. The SEC requires any company who raises money via a crowdfund to publish annual financials, which is why they are forced to publish theirs. You can find them on the SEC’s EDGAR website if you’d like.
The TL;DR on the financial side: they raised almost $5 million last year by issuing convertible debt at some pretty rich valuations. But they only generated $15,000 in revenue while losing over -$700,000 in net income. And that was a big jump over the loss of -$260,000 in 2018.
There were some puzzling (troubling?) things that jump out in their financial statements:
- They have a loan outstanding to their officers for over $705,000, and this increased almost $500k from the year prior. Does this mean the company gave their officers that amount from the funds they raised? If so it’s pretty suspect.
- They have auto lease and expense of $23,000, which equates to $1,900 per month. Does the company pay for auto leases for the three officers? If so they must drive nice cars for a $650 per month lease
- For a company that claims to have great IP, they only spent $35,000 on product research, and they only value their IP at $25,000.
- The company claims to have great investments in companies like Airbnb, but the investments only have a total value of less than $400,000. Also, you can see on a different statement that the Airbnb shares specifically were bought on a secondary market. That means that the company didn’t invest alongside other VCs. Instead they bought them on a secondary share marketplace like EquityZen (like anyone can do).
I hope I’m wrong about some of this becuase its not a very good look