Still waiting on those press releases that they said were coming:
So I actually just read the latest 10q for the first time in a few years:
I have zero clue how they keep the lights on other than maybe it's just a front. (sorry but that looks like a possibility)
50k a month rent-
The lease terms are spelled out in the filing: $50,691 per month for the Plano facility, a 7-year lease signed March 2023 with annual escalators. That's roughly $608,000 a year in rent alone.
Now put that next to what the business actually generates:
Quarterly revenue: $26,280 (so ~$105K annualized at this run rate)
Quarterly cost of sales: $96
Cash on hand: $7,450
Quarterly cash used in operations: only $2,190
A few things in the filing strongly suggest the rent isn't actually being paid the way the lease says:
1. The G&A number is impossibly small to contain the rent. Total general & administrative expense for the quarter was $24,928. Rent for three months at $50,691 would be $152,073 by itself. You cannot fit $152K of rent inside $25K of total G&A. That's the single clearest tell the income statement does not reflect the lease payments being expensed at contractual rates. Either rent is being deferred, accrued-but-unpaid, renegotiated, or the space isn't really being paid for.
2. Look at what's piling up in accounts payable. "Accounts payable and accrued expenses" sits at $2.52 million. When a company stops actually paying its bills but keeps operating, unpaid obligations accumulate here. A landlord that isn't getting paid shows up as an accrued liability, not as a cash outflow. This is very likely where unpaid or partially-paid rent is parking.
3. They have a track record of exactly this and got sued for it. This is the most telling part. In the Contingencies note, there are two separate landlord disputes:
Angel 3540 Investments LLC v. Rocky Mountain Productions the landlord is suing for ~$327,000 claiming RMP "breached a lease agreement," with RMHB alleged to have guaranteed it
The going-concern discussion also references settling a "heavily disputed lawsuit with their former landlord," which they resolved by having "existing investors taking stock in exchange for payment versus increasing the Company's debt"
So the documented pattern is: sign a lease → fall behind on rent → get sued → settle by issuing stock. That's not a company affording $50K/month rent. That's a company accumulating rent obligations it can't pay and resolving them later through dilution or litigation.
4. Notice what the accounting stopped doing. Depreciation went to $0 this quarter (was $9,233 a year ago), and every fixed-asset and liability line is frozen identical to the prior period. That suggests the books aren't being fully "trued up" each quarter which is consistent with rent expense not being fully run through the P&L either.
One other thing besides the copy and paste from older reports and the many many mistakes that drive me absolutely crazy:
They have a PPP covid loan on the books still.
Every single person / company got that forgiven.
What the filing actually says
From the SBA/PPP note, there were two loans:
PPP Loan #1PPP Loan #2IssuedApril 29, 2020April 5, 2021Original amount$150,100$150,100MaturityApril 29, 2022April 5, 2026Interest1%1%Balance at 3/31/2026$150,100$26,917
So Loan #2 got $123,183 forgiven (back in 2023 you can see the "Debt Forgiveness" line), leaving a $26,917 stub. But Loan #1 the full $150,100 — was never forgiven and is still sitting there at its original balance. Combined, $177,017 in PPP debt remains outstanding, and it hasn't moved a dollar in over two years (identical balance at 12/31/2023, 12/31/2024, 12/31/2025, and 3/31/2026).
Why this is genuinely strange
Here's what should jump out at you:
1. Loan #1 matured on April 29, 2022 and it's still outstanding four years later. The maturity date has come and gone by nearly four years, the loan wasn't forgiven, and it wasn't repaid either. It's just frozen on the balance sheet at $150,100. A matured, unforgiven, unpaid loan is technically in default and PPP loans were federally guaranteed, which means the SBA can step in.
2. Why would one PPP loan get forgiven and the other not? This is the real puzzle. PPP forgiveness required the borrower to actually apply and show the money went to payroll, rent, and utilities during the covered period. The likeliest explanation for the split: they applied for forgiveness on Loan #2 and either didn't apply, were denied, or couldn't document the spending on Loan #1. Given everything else we've seen near-zero staff, minimal operations, sloppy recordkeeping it's very plausible they simply couldn't produce the payroll documentation to support forgiveness on the first loan, or never completed the application before the window effectively closed.
3. Interest should be accruing and it's not visible. Both loans carry 1% interest. On $150,100 over roughly six years, that's real (if small) accruing interest. The balance never changing suggests the interest either isn't being accrued properly or is buried elsewhere consistent with the same pattern you already spotted on the rent: the books aren't being fully trued up each period.
So how are they "getting away with it"?
Same underlying answer as the rent, really nobody is actively forcing the issue:
The SBA is a notoriously slow and passive creditor. Unlike a bank with covenants and a collections department, defaulted small PPP loans often sit in bureaucratic limbo for years. The SBA guaranteed these loans to the lender, so the originating bank already got made whole by the government guarantee. Now it's the SBA's problem to chase and a $150K defaulted PPP loan against a sub-penny, insolvent OTC shell is very low on the SBA's priority list. There's essentially no cash here to collect ($7,450 in the bank), so pursuing it aggressively would cost the government more than it recovers.
It just sits as a static liability. Like the due-on-demand insider loans, this is another obligation parked on the balance sheet that nobody is pressing. It's part of why the company can be $3M insolvent and still "operating" — most of its liabilities are non-pressing: 0% insider loans due-on-demand, accrued-but-unpaid payables, and now a defaulted-but-dormant government loan.
What a mess...
So I actually just read the latest 10q for the first time in a few years:
I have zero clue how they keep the lights on other than maybe it's just a front. (sorry but that looks like a possibility)
50k a month rent-
The lease terms are spelled out in the filing: $50,691 per month for the Plano facility, a 7-year lease signed March 2023 with annual escalators. That's roughly $608,000 a year in rent alone.
Now put that next to what the business actually generates:
Quarterly revenue: $26,280 (so ~$105K annualized at this run rate)
Quarterly cost of sales: $96
Cash on hand: $7,450
Quarterly cash used in operations: only $2,190
A few things in the filing strongly suggest the rent isn't actually being paid the way the lease says:
1. The G&A number is impossibly small to contain the rent. Total general & administrative expense for the quarter was $24,928. Rent for three months at $50,691 would be $152,073 by itself. You cannot fit $152K of rent inside $25K of total G&A. That's the single clearest tell the income statement does not reflect the lease payments being expensed at contractual rates. Either rent is being deferred, accrued-but-unpaid, renegotiated, or the space isn't really being paid for.
2. Look at what's piling up in accounts payable. "Accounts payable and accrued expenses" sits at $2.52 million. When a company stops actually paying its bills but keeps operating, unpaid obligations accumulate here. A landlord that isn't getting paid shows up as an accrued liability, not as a cash outflow. This is very likely where unpaid or partially-paid rent is parking.
3. They have a track record of exactly this and got sued for it. This is the most telling part. In the Contingencies note, there are two separate landlord disputes:
Angel 3540 Investments LLC v. Rocky Mountain Productions the landlord is suing for ~$327,000 claiming RMP "breached a lease agreement," with RMHB alleged to have guaranteed it
The going-concern discussion also references settling a "heavily disputed lawsuit with their former landlord," which they resolved by having "existing investors taking stock in exchange for payment versus increasing the Company's debt"
So the documented pattern is: sign a lease → fall behind on rent → get sued → settle by issuing stock. That's not a company affording $50K/month rent. That's a company accumulating rent obligations it can't pay and resolving them later through dilution or litigation.
4. Notice what the accounting stopped doing. Depreciation went to $0 this quarter (was $9,233 a year ago), and every fixed-asset and liability line is frozen identical to the prior period. That suggests the books aren't being fully "trued up" each quarter which is consistent with rent expense not being fully run through the P&L either.
One other thing besides the copy and paste from older reports and the many many mistakes that drive me absolutely crazy:
They have a PPP covid loan on the books still.
Every single person / company got that forgiven.
What the filing actually says
From the SBA/PPP note, there were two loans:
PPP Loan #1PPP Loan #2IssuedApril 29, 2020April 5, 2021Original amount$150,100$150,100MaturityApril 29, 2022April 5, 2026Interest1%1%Balance at 3/31/2026$150,100$26,917
So Loan #2 got $123,183 forgiven (back in 2023 you can see the "Debt Forgiveness" line), leaving a $26,917 stub. But Loan #1 the full $150,100 — was never forgiven and is still sitting there at its original balance. Combined, $177,017 in PPP debt remains outstanding, and it hasn't moved a dollar in over two years (identical balance at 12/31/2023, 12/31/2024, 12/31/2025, and 3/31/2026).
Why this is genuinely strange
Here's what should jump out at you:
1. Loan #1 matured on April 29, 2022 and it's still outstanding four years later. The maturity date has come and gone by nearly four years, the loan wasn't forgiven, and it wasn't repaid either. It's just frozen on the balance sheet at $150,100. A matured, unforgiven, unpaid loan is technically in default and PPP loans were federally guaranteed, which means the SBA can step in.
2. Why would one PPP loan get forgiven and the other not? This is the real puzzle. PPP forgiveness required the borrower to actually apply and show the money went to payroll, rent, and utilities during the covered period. The likeliest explanation for the split: they applied for forgiveness on Loan #2 and either didn't apply, were denied, or couldn't document the spending on Loan #1. Given everything else we've seen near-zero staff, minimal operations, sloppy recordkeeping it's very plausible they simply couldn't produce the payroll documentation to support forgiveness on the first loan, or never completed the application before the window effectively closed.
3. Interest should be accruing and it's not visible. Both loans carry 1% interest. On $150,100 over roughly six years, that's real (if small) accruing interest. The balance never changing suggests the interest either isn't being accrued properly or is buried elsewhere consistent with the same pattern you already spotted on the rent: the books aren't being fully trued up each period.
So how are they "getting away with it"?
Same underlying answer as the rent, really nobody is actively forcing the issue:
The SBA is a notoriously slow and passive creditor. Unlike a bank with covenants and a collections department, defaulted small PPP loans often sit in bureaucratic limbo for years. The SBA guaranteed these loans to the lender, so the originating bank already got made whole by the government guarantee. Now it's the SBA's problem to chase and a $150K defaulted PPP loan against a sub-penny, insolvent OTC shell is very low on the SBA's priority list. There's essentially no cash here to collect ($7,450 in the bank), so pursuing it aggressively would cost the government more than it recovers.
It just sits as a static liability. Like the due-on-demand insider loans, this is another obligation parked on the balance sheet that nobody is pressing. It's part of why the company can be $3M insolvent and still "operating" — most of its liabilities are non-pressing: 0% insider loans due-on-demand, accrued-but-unpaid payables, and now a defaulted-but-dormant government loan.
What a mess...
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