SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 8, 2020
ROCKY MOUNTAIN HIGH BRANDS, INC.
(Exact name of the registrant as specified in its charter)
| Nevada | 000-55609 | 90-0895673 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
|
9101 LBJ Freeway, Suite 200; Dallas, TX |
75243 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 800-260-9062
______________________________________________________
(Former name or address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Section 1 – Registrant’s Business and Operations
Item 1.01 Entry Into a Material Definitive Agreement
On April 8, 2020, our Board of Directors approved our entry into a Consulting Agreement (the “Agreement”) with Eagle Processing & Distribution, Inc. (“Eagle”). Under the Agreement, Eagle has agreed to assume responsibility for all of our operations on a best-efforts basis for an initial term of three (3) years. Eagle’s responsibilities will include financing or assisting in arranging for financing of all production, purchase orders and inventory; sales and distribution; marketing; logistics and order fulfillment; production of all of our products; inventory management and coordination; customer service; risk management, and other matters as set forth in the Agreement.
As compensation, Eagle was issued 50,000,000 Rule 144 restricted shares of our common stock for services to be rendered during the initial eight (8) months of the Agreement. Compensation for the remainder of the term of the Agreement will be negotiated and agreed upon prior to the expiration of the initial eight months. The Agreement will allow us to eliminate or reduce certain of our overhead costs relating to wages, contractors, insurance costs, rent, storage, and logistics, as these costs will be borne by Eagle under the Agreement. We are still assessing the dollar impact of these savings.
Section 3 – Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities
Issuance to Eagle Processing & Distribution, Inc.
As discussed above, we issued 50,000,000 Rule 144 restricted shares of our common stock as the initial compensation paid to Eagle under the Agreement. These shares were issued in a private transaction to a single entity, and we did not engage in any general solicitation or advertising in connection with the issuance. Accordingly, the stock issuance to Eagle was exempt from registration under Section 4(a)(2) of the Securities Act.
Compensatory Issuances to Officers, Directors, and Employees.
On April 13, 2020, our board of directors approved the issuance of a total of 23,500,000 Rule 144 restricted shares as compensation to a total of seven officers, directors, employees, and contractors. These issuances were made, in part, to compensate for delays in remitting cash compensation due and owing. The share issuances to our named officers and directors were as follows:
| Dean Blythe | 750,000 | |||
| David Seeberger | 7,000,000 | |||
| Jens Mielke | 7,000,000 | |||
| Michael Welch | 7,000,000 |
These shares were issued in private transactions to our officers, directors, employees, and contractors, and we did not engage in any general solicitation or advertising in connection with the issuances. Accordingly, these compensatory stock issuances were exempt from registration under Section 4(a)(2) of the Securities Act.
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Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
| Exhibit No. | Description |
| 10.1 | Consulting Agreement with Eagle Processing & Distribution, Inc. |
| 3 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf of the undersigned hereunto duly authorized.
ROCKY MOUNTAIN HIGH BRANDS, INC.
Date: April 14, 2020
By: /s/ Michael Welch
Michael Welch
Chief Executive Officer
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ROCKY MOUNTAIN HIGH BRANDS, INC.
CONSULTING AGREEMENT
EAGLE PROCESSING & DISTRIBUTION, INC.
THIS CONSULTANT AGREEMENT (“Agreement”) entered into effective April 7, 2020, between Rocky Mountain High Brands, Inc., together with all its subsidiaries (hereinafter collectively “RMHB” or ''Company'') and Eagle Processing & Distribution, Inc. (hereinafter the "Consultant").
| 1. | Term of Agreement. |
| (a) | The term of this Agreement is three (3) years, commencing April 7, 2020. The parties hereto will, prior to the expiration of said term, meet to determine if the parties desire to extend the term or enter into a new agreement. |
| 2. | Duties. |
| (a) | General Duties. The Consultant shall consult with the Company and its subsidiaries on all matters relating to the Company's business operations and sales strategy or any other business matters related thereto. The Consultant shall be responsible for and assume all operations of the Company, to be performed on a best effort's basis, including but not limited to: |
| 1. | Financing or assisting in arranging for financing for all production, purchase orders and inventory for the Company. |
| 2. | Transfer from the Company to Consultant all contractors and two employees of the Company, to be paid by Consultant. |
| 3. | Sales, distribution, and ensure that revenue recognition rules are followed so that the maximum amount of revenue on all transactions flow through the Company. |
| 4. | Marketing, social media, website maintenance, and Amazon site maintenance. |
| 5. | Logistics and order fulfillment. |
| 6. | Production of all Company products. |
| 7. | Inventory management and coordination, including costing, safeguarding, determination of reorder levels, storage, inbound and outbound freight coordination, relationships with shipping and freight vendors (e.g. UPS, FedEx), and weekly reporting of inventory levels and inbound/outbound inventory to accounting. |
| 8. | Customer service including all website, Amazon, email and telephone inquiries made to the Company. |
| 9. | Risk management, including but not limited to, maintenance of all records that ensure that the Company is in compliance with DEA and FDA regulations, merchant services agreements, and insurance policies specific to Consultant's duties. This includes the maintenance of Certificates of Analysis and production samples in accordance with Company policy. |
10. G & A shortfall financing, or assisting in arranging of the financing, of the Company.
| (b) | Devotion of Time. The Consultant shall devote such business time and energy as is reasonably necessary to the fulfillment of its duties under this Agreement. |
| Rocky Mountain High Brands, Inc. |
Consulting Agreement
Eagle Production & Distribution
April,2020
| 3. | Compensation. |
| (a) | Consultant shall be compensated as follows: |
| i. | For the first eight (8) months of the Agreement, 50,000,000 shares of Rule 144 common stock of the Company, to be delivered in fifty individual share certificates of 1,000,000 shares, all in the name of Consultant. |
| ii. | The compensation for the remainder of the Term shall be negotiated prior to the end of the above eight months. |
| 4. | Nondisclosure of Confidential Information. |
| (a) | The Consultant acknowledges that during its association with the Company it has learned and will learn and has had access and will have access to confidential information regarding RMHB and its affiliates, including without limitation (i) confidential or secret plans, programs, documents, recipes, agreements or other material relating to the business, services or activities of RMHB and its affiliates and (ii) trade secrets, market reports, customer investigations, customer lists and other similar information that is proprietary information of RMHB or its affiliates (collectively referred to as "Confidential Information"). The Consultant acknowledges that such Confidential Information as is acquired and used by the Company or its affiliates is a special, valuable and unique asset. |
| (b) | All records, files, materials and Confidential Information obtained by the Consultant during its association with the Company are confidential and proprietary and shall remain the exclusive property of the Company or its affiliates, as the case may be. The Consultant will not, except in connection with and as required by its performance of its duties under this Agreement, for any reason use for its own benefit or the benefit of any person or entity with which it may be associated or disclose any such Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever without the prior written consent of the Company's Board. |
5. Consultant's Representations.
Consultant represents that it is not a party to any agreements or contracts, or employment agreements, or anything of similar nature, whether written or otherwise, including but not limited to non-competition agreements or non-disclosure agreements, with any person, company or entity of any nature whatsoever, which relate to or which in any way or manner prevents it from performing the duties contemplated by this Agreement Consultant further warrants that by entering into this Agreement it will not be breaching any fiduciary duty, usurping any corporate opportunity or other opportunity of any nature, which is owed to any entity or person.
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| Rocky Mountain High Brands, Inc. |
Consulting Agreement
Eagle Production & Distribution
April,2020
| 6. | Assignability. |
The Consultant's obligations herein, or portions thereof, may be assigned by the Consultant with written agreements detailing such assignment or partial assignment, not to be effective until such is signed by both parties hereto..
| 7. | Acknowledgment of SEC Disclosure Obligations. |
Consultant acknowledges that, as result of receiving the shares of common stock of the Company to be issued as compensation under this Agreement, the Consultant may incur the obligation to make certain disclosures to be filed with the SEC pursuant to applicable laws. In addition, Consultant acknowledges that, pursuant to applicable securities laws and regulations, the content of this Agreement, the Consultant's stock ownership of the Company, and certain other information may be subject to required public disclosure by the Company in filings to be made with the SEC.
| 8. | Notices and Addresses. |
All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by eJectronic mail, by Federal Express or similar receipted delivery, by facsimile delivery or, if mailed, postage prepaid, by certified mail, return receipt requested, as follows:
| To the Company: | Rocky Mountain High Brands, Inc. | |||
| 9101 LBJ Freeway, Suite 200 | ||||
| Dallas, TX 75243 | ||||
| To the Consultant: | Eagle Processing & Distribution, Inc. | |||
| P.O. Box 822232 | ||||
| Dallas TX 75382 |
Or to such other address as either of them, by notice to the other may designate from time to time. The transmission confirmation receipt from the sender's facsimile machine shall be conclusive evidence of successful facsimile delivery. Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.
| 9. | Counterparts. |
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.
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| Rocky Mountain High Brands, Inc. |
Consulting Agreement
Eagle Production & Distribution
April,2020
| 10. | Governing Law. |
This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, and the obligations provided therein or performance shall be governed or interpreted according to the internal laws of the State of Texas without regard to choice of law considerations, and sole and exclusive venue and jurisdiction shall be in the Courts of Dallas County, Texas.
| 11. | Entire Agreement. |
This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof, save and except for any prior signed non-disclosure agreements. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against whom enforcement or the change, waiver discharge or termination is sought.
IN WITNESS WHEREOF, RMHB and Consultant have executed this Agreement as of the date and year first above written.
Rocky Mountain High Brands, Inc.
| By: | /s/ Michael R. Welch | 4/8/2020 | ||
| Date | ||||
| Michael Welch | ||||
| President and CEO |
Consultant:
Eagle Processing & Distribution, Inc.
| By: | /s/ Brice Wunsch | 4/7/2020 | ||
| Brice Wunsch | Date | |||
| President |
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