PLANO, Texas, Nov. 30, 2023 (GLOBE NEWSWIRE) -- Rocky Mountain High Brands, Inc. (OTC: RMHB) today summarized the many triumphs and challenges it has encountered this year and discussed some of the company’s future plans.
Triumphs:
- RMHB has successfully transitioned into the beverage copacking space through its wholly-owned subsidiary Rocky Mountain Productions Inc. which accounts for approximately 80% - 90% of RMHB revenue. The subsidiary was funded with a capital raised by RMHB. Rocky Mountain Production sales for the first quarter of 2023 were $2,378,000 with an EBITDA of $184,710. That was after only $360,000 in sales for January with a negative EBITDA of ($147,000). Gross sales for the whole year of 2022 were $3,635,428. The first quarter of 2023 marked the sixth straight quarter of increased sales since the fourth quarter of 2021.
- The Company relocated to a new facility with no production scheduled in the second quarter, which had a significant impact on revenue. The Company planned start up of production in the third and fourth quarter. The Company was able to maintain relationships with existing customers by producing extra inventory before the move and negotiating temporary longer terms.
Challenges:
- Relocating a factory is a challenging project with a high degree of uncertainty and ambiguity. Prior to moving, the Company was proactively communicating with the landlord in an attempt to stay in the existing warehouse. The Company was very clear about priorities and expectations during a negotiating process that went down to our last month of occupancy with the hope of coming to an agreement on basic terms that would be acceptable to both parties.
- Finalizing a lease is an arduous process because both parties work to ensure that their own interests are addressed in the final agreement. Ultimately, the RMHB had to walk away from the deal because of the financial burden it would have imposed on the Company. The final blow came when the owners of the former building stated that Rocky Mountain Productions would no longer be allowed to manufacture CBD products at that facility. This resulted in a move that was structured at the last minute and management working to break down each phase into smaller, more manageable components. Each iteration included planning, design, development, testing, and review with regular communication and feedback between team members. The goal was to find a new facility and complete modifications that allowed for smoother, more efficient production by the end of the third quarter of 2023.
- Due to lead times on movers / moving equipment and permits from the city, total completion has run in to the fourth quarter. Third party contractors responsible for supplying four fifteen-ton air conditioning units and three ten-ton air conditioning units were not only late in arriving, but their installation process resulted in a leak from the roof that caused startup of production to be shut down for a significant stretch of time that was not foreseen. To make matters worse, the Company also experienced a leak from sprinklers during system testing that resulted in additional delays as well as thousands of dollars in expenses.
- To recap, the Company has experienced significant additional expenses to cover moving to its 58,000 sq. ft. facility, and the loss of revenue and funds spent to retain employees during a shutdown.
Future:
- Production of the Company’s newest brand – ElectroSport Electrolyte has commenced. The Company earned shelf space in a large international grocery store chain. A purchase order was issued from a USA division and shipments began in the fourth quarter. The Company believes these drinks can be a disruptor in the electrolyte category and will continue to optimize its distribution and sales strategies to support the strengthening and growth of the overall ElectroSport Electrolyte brand. The sports drink category is currently at $11 Billion in sales and growing at a rate over 10%. Much of this growth is from new brands entering the market.
ElectroSport Electrolyte is available in four flavors – Grape, Tropical, Mango, and Strawberry.
- The Company has created amazing new products such as Rocky Mountain High 9.5pH Sparkling Water that will drive brand expansion over the coming years. This product will be a part of the “Zero Calorie Healthy Waters Category”. Many brands are experiencing a growth rate of 10% with sales numbers approaching $500 Million.
- The Company is completing SEC Rule 15c2-11. This will allow broker dealers to initiate or resume trading quotes on Over the Counter ("OTC") securities not listed on the NYSE or NASDAQ by filing Form 211 to the FINRA OTC Compliance Unit.
- The Company is working to remedy its Form 10-Q filings deficiencies for the 2nd and 3rd quarters of 2023. It is imperative that the Company timely files all of its periodic financial reports. It has taken the necessary steps to ensure timely reporting going forward.
- CBD Life Holdings, Inc. is still a strong client of the Company. Rocky Mountain NexBev, Inc., a wholly-owned subsidiary of RMHB, manages the current production of Rocket High energy drinks, California Black Tea and California Lemonade that is being produced by another co-packing facility. Plans call for the production to be relocated back to Rocky Mountain Productions, Inc. once the can line is operable.
- In short, the future of the Company is promising. The RMHB team has shown resiliency and adaptability in overcoming the challenges listed today. Stay tuned for further updates as new customers, contracts and projects are formalized.
Rocky Mountain High Brands, Inc. (RMHB) is a diversified and dynamic Company committed to making a difference by raising the quality and expectations in the beverage sector. Our DNA is rooted in innovation. We have built the teams and assets to ensure our growth continues. The Company is headquartered in Plano, Texas.
Rocky Mountain Productions, Inc., a wholly owned subsidiary of RMHB, specializes in cold and hot fill beverages, concentrates and ready-to-drink beverages, and is uniquely positioned to co-pack our brand drinks as well as private label with all the best-in-class services needed to get products ready for market.
Rocky Mountain NexBev, Inc., a wholly owned subsidiary of RMHB, specializes in non-alcoholic beverages, including energy drinks, custom drinks, CBD & hemp, and other specialty drinks. The Company is experienced in managing the development, design, and production of beverages for a variety of categories.
Information about Forward-Looking Statements: This release may include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involves risks and uncertainties including, but not limited to, the impact of competitive products, the ability to meet customer demand, the ability to manage growth, acquisitions of technology, equipment, or human resources, the effect of economic business conditions and the ability to attract and retain skilled personnel. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements do not guarantee future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the Company’s filings with the OTC Markets. The occurrence of any of these risks and uncertainties could have a material adverse effect on the Company’s business, financial condition, and results of operations. The Company is not obligated to revise or update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
Contact:
Paul Knopick
pknopick@eandecommunications.com
940.262.3584
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