The dip has nothing to do with Sessions. The reali
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Posted On: 01/04/2018 12:02:07 PM
The dip has nothing to do with Sessions. The reality of the open letter from the CEO is becoming clear. RMHB has no current product and the CEO, Michael Welch, in his open letter just admitted that it will be late first quarter or early second quarter before any product heads to Mexico. This he stated with the caveat: According to Reuters Health News on December 20, 2017, Mexico will legalize marijuana-based product sales in early 2018, which will pave the way for our products to be distributed and sold in Mexico (https://www.reuters.com/article/us-mexico-marijuana/mexico-to-legalize-marijuana-based-product-sales-next-year-idUSKBN1EF022.)
Further, Welch stated that the reformulation of of RMHB flagship brands will not take place in Febuary as previously PR'd, but rather not until the second quarter. Interestingly, no mention was made of when the re-launch might be attempted.
So, 1st QTR 2018 is already being painted as a "lost" quarter, by no less than the CEO. The only revenues will, once again, come from the diminishing, and expiring, inventory remaining from last springs small production run they have been unable to sell. There will, therefore, be 3 to 4 months of the company, in large part, living off of the Equity Funding Agreement.
When/if they actually move product to Mexico and/or launch new products, they will do so under an inflated share structure. Don't be fooled by those who claim all the dilution has been the result of the Meadows lawsuit settlement and that it is now out of the way. RMHB didn't get any money from the Meadows dilution so, how do you think they're going to meet their General & Administrative costs during the "lost" quarter? According to 10K filings, those have averaged $986,000.00 per quarter for the past 2 fiscal years. That's over $300,000.00 per month and they haven't sold that much product during the last year. Even a full advance payment of their projected margin on the Master Manufacturing Agreement amounts to only $400.000.00. And, the agreement specifically sets forth how that will be paid out (.02 cents, .02 cents, and .01 cents) so, there likely will be no salvation there.
There is a silver lining, and that is the recent bounce volume will have a positive impact on the Equity Funding Agreement. You see, under the agreement, put notices could not be for an amount greater than 2 times the ten day average daily trading dollar volume. It will now be possible to issue Put Notices to GHS for the maximum $400,000.00 thereby insuring they have the cash to operate.
Further, Welch stated that the reformulation of of RMHB flagship brands will not take place in Febuary as previously PR'd, but rather not until the second quarter. Interestingly, no mention was made of when the re-launch might be attempted.
So, 1st QTR 2018 is already being painted as a "lost" quarter, by no less than the CEO. The only revenues will, once again, come from the diminishing, and expiring, inventory remaining from last springs small production run they have been unable to sell. There will, therefore, be 3 to 4 months of the company, in large part, living off of the Equity Funding Agreement.
When/if they actually move product to Mexico and/or launch new products, they will do so under an inflated share structure. Don't be fooled by those who claim all the dilution has been the result of the Meadows lawsuit settlement and that it is now out of the way. RMHB didn't get any money from the Meadows dilution so, how do you think they're going to meet their General & Administrative costs during the "lost" quarter? According to 10K filings, those have averaged $986,000.00 per quarter for the past 2 fiscal years. That's over $300,000.00 per month and they haven't sold that much product during the last year. Even a full advance payment of their projected margin on the Master Manufacturing Agreement amounts to only $400.000.00. And, the agreement specifically sets forth how that will be paid out (.02 cents, .02 cents, and .01 cents) so, there likely will be no salvation there.
There is a silver lining, and that is the recent bounce volume will have a positive impact on the Equity Funding Agreement. You see, under the agreement, put notices could not be for an amount greater than 2 times the ten day average daily trading dollar volume. It will now be possible to issue Put Notices to GHS for the maximum $400,000.00 thereby insuring they have the cash to operate.
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(1)Rocky Mountain High Brands, Inc. (RMHB) Stock Research Links
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