Based on the provided financial report, the title of the article is: "ROYALTY MANAGEMENT HOLDING CORPORATION FORM 10-Q

Overview

Royalty Management Holding Corporation (RMHC) is a company that invests in and purchases assets with near and medium-term income potential to provide its subsidiary, Royalty Management Corporation (RMC), with accretive cash flow. These assets typically include natural resources, patents, intellectual property, and emerging technologies. The company was formed through the combination of American Acquisition Opportunity Inc., a blank check company, and RMC on October 23, 2023.

Financial Performance

RMHC’s total operating revenues for the three and nine months ended September 30, 2024, were $145,633 and $561,956, respectively, compared to $122,816 and $354,685 for the same periods in 2023. This increase was primarily due to an increase in RMC Environmental Services’ additional volume.

The company’s total cost of revenues for the three and nine months ended September 30, 2024, were $5,460 and $21,532, respectively, compared to $3,420 and $8,860 for the same periods in 2023. The increase was also due to the increase in RMC Environmental Services’ additional volume.

Total operating expenses for the three and nine months ended September 30, 2024, were $302,959 and $830,237, respectively, compared to $186,532 and $556,292 for the same periods in 2023. The increase was primarily due to higher general and administrative expenses and professional fees.

Total other income and expenses for the three and nine months ended September 30, 2024, were $50,315 and $207,412, respectively, compared to other losses of $184,189 and $593,836 for the same periods in 2023. The primary reasons for the increase were a positive gain on warrant fair value adjustment and less interest expense due to convertible debt being converted at the time of the business combination.

The company’s total net loss for the three and nine months ended September 30, 2024, were $112,471 and $82,400, respectively, compared to $251,324 and $804,303 for the same periods in 2023.

Liquidity and Capital Resources

RMHC has historically financed its operations and acquisitions from a combination of cash generated from operations and periodic borrowings under convertible and non-convertible note offerings. The company’s primary cash needs are for day-to-day operations, working capital requirements, growth strategy, including acquisitions, and to pay interest and principal on its indebtedness.

As a result of the business combination, the company only received $986,617 in proceeds from the trust account prior to expenses at the closing due to the redemption of 253,807 shares of American Acquisition Opportunity Class A Common Stock. RMHC’s ability to raise additional funds will depend on financial, economic, and other factors, many of which are beyond its control.

The company has no committed sources of additional capital, and if it is unable to raise additional capital in sufficient amounts or on acceptable terms, it may have to significantly delay, scale back, or discontinue its intended growth.

RMHC has issued 14,932,918 and 14,270,761 shares of Royalty Class A Common Stock as of September 30, 2024, and December 31, 2023, respectively, for the execution of its business plan and services. The company’s ability to raise funds through the sale of equity capital is likely to be impacted by the significant number of shares of Class A Common Stock that were issued in the business combination.

The company has historically raised funds primarily through the issuance of convertible notes, which carried an interest rate of 10% and offered a conversion feature to common equity at $6.50 per share. All convertible notes were converted at the time of the business combination, and the outstanding balance of the convertible notes amounted to $0 at September 30, 2024, and December 31, 2023.

As of September 30, 2024, there are a total of 9,154,191 outstanding Warrants to purchase shares of RMHC’s Class A Common Stock, each with a per share exercise price of $11.50. The likelihood that holders of Warrants will exercise any Warrants is dependent upon the trading price of the Class A Common Stock, and the company does not anticipate there will be any exercises of the Warrants until the stock price exceeds $11.50.

At September 30, 2024, cash and cash equivalents totaled $145,367.

Strengths and Weaknesses

Strengths:

• Diversified asset portfolio with potential for near and medium-term income
• Experienced management team with a track record of successful investments
• Ability to generate cash flow from its existing assets to fund future growth

Weaknesses:

• Reliance on external financing to fund growth and acquisitions
• Thinly traded Class A Common Stock, which may make it difficult to raise additional equity capital
• Uncertainty around the timing and likelihood of Warrant exercises, which could provide additional cash

Outlook

RMHC’s future success will depend on its ability to continue to identify and acquire assets that can provide accretive cash flow to the company. The company’s liquidity and capital resources will be critical in funding these acquisitions and supporting its growth strategy.

While the company has limited committed sources of additional capital, it is actively exploring various financing options, including the potential for additional equity or debt offerings. The company’s ability to raise funds will be influenced by market conditions and investor sentiment, which are largely outside of its control.

Overall, RMHC’s financial performance in the first nine months of 2024 has shown improvement compared to the same period in 2023, with increases in revenue, cost of revenues, and a reduction in net losses. However, the company’s long-term success will depend on its ability to effectively execute its investment strategy and manage its liquidity and capital resources.