Royalty Management (RMCO) - 2025 Q1 - Quarterly Report

Part I – Financial Information This section presents the unaudited interim financial statements and management's analysis of financial performance for Q1 2025 Item 1. Interim Financial Statements The unaudited statements for Q1 2025 show significant revenue growth but a net loss due to higher costs, with total assets increasing to $15.7 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Total Current Assets | 1,452,754 | 753,196 | | Total Assets | 15,723,265 | 15,040,664 | | Total Current Liabilities | 1,326,085 | 989,936 | | Total Liabilities | 1,741,896 | 1,414,940 | | Total Stockholders' Equity | 13,981,369 | 13,625,724 | Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended Mar 31, 2025 ($) | Three Months Ended Mar 31, 2024 ($) | | :--- | :--- | :--- | | Total Revenue | 923,223 | 162,100 | | Cost of Revenue | (669,900) | (2,693) | | Gross Profit | 253,323 | 159,407 | | Total Operating Expenses | (364,533) | (145,609) | | Net (Loss) Income from Operations | (111,210) | 13,798 | | Total Other Income | 52,455 | 139,958 | | Net (Loss) Income | (58,755) | 153,756 | | Basic and Diluted Net Income Per Share | 0.00 | 0.01 | Summary of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2025 ($) | Three Months Ended Mar 31, 2024 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (327,120) | (285,309) | | Net Cash Used in Investing Activities | (5,722) | (36,329) | | Net Cash Provided by Financing Activities | 351,243 | 261,000 | | Net Change in Cash | 18,401 | (60,638) | - Key activities affecting stockholders' equity in Q1 2025 included issuing 381,243 preferred shares for debt purchase, 56,250 preferred shares for services, and repurchasing 40,000 common shares for $30,000[24] - The company's business model is to invest or purchase assets with near and medium-term income potential, such as natural resources, patents, and emerging technologies, to generate accretive cash flow[30] - The company has investments in FUB Mineral LLC (41.75% ownership) and Ferrox Holdings Ltd (9.9% ownership), totaling $10.24 million as of March 31, 2025[71][72][74] - A discretionary stock repurchase program for up to $2.0 million was approved; as of March 31, 2025, the company has repurchased 71,777 shares of its common stock[104] - Significant related party transactions exist with entities like American Resources Corporation (ARC); in Q1 2025, the company settled a $381,243 liability with ARC by issuing preferred stock[111][115] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes revenue growth to a new contract, while the net loss resulted from increased costs and public company expenses Comparison of Operations for the Three Months Ended March 31 | Metric | 2025 ($) | 2024 ($) | Change Driver | | :--- | :--- | :--- | :--- | | Total Operating Revenues | 923,223 | 162,100 | New environmental services contract | | Cost of Revenues | 669,900 | 2,693 | Costs associated with new contract | | Total Operating Expenses | 364,533 | 145,609 | Increased G&A and professional fees | | Net (Loss) Income | (58,755) | 153,756 | Higher costs and expenses offsetting revenue growth | - The company has positive working capital of $126,669 and a cash balance of $132,539 as of March 31, 2025[143] - Management believes existing liquidity is sufficient for the next 12 months but acknowledges that additional capital will likely be required to execute growth plans[143] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exempt from these disclosures as it qualifies as a smaller reporting company - As a smaller reporting company, the registrant is exempt from providing disclosure under this item[146] Item 4. Controls and Procedures Management concluded disclosure controls were ineffective as of March 31, 2025, due to insufficient accounting staff - Management concluded that disclosure controls and procedures were not effective as of the period ending March 31, 2025[149] - The reason for the ineffectiveness was identified as an insufficient number of staff in accounting and reporting roles[149] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[151] Part II – Other Information This section covers legal, risk, equity, and other disclosures, noting no significant reportable events for the period Item 1. Legal Proceedings The company reported no legal proceedings during the period - None[152] Item 1A. Risk Factors The company is not required to provide risk factor information as it is an Emerging Growth Company - The company is exempt from this disclosure requirement due to its status as an Emerging Growth Company[153] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - None[154] Item 3. Default upon Senior Securities The company reported no defaults upon senior securities - None[155] Item 4. Mine Safety Disclosures This item is not applicable to the company - N/A[156] Item 5. Other Information The company reported no other information - None[156] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance and certification documents - The exhibits filed include corporate governance documents, specimen certificates, a list of subsidiaries, and required certifications under Sarbanes-Oxley (Rules 13a-14(a)/15d-14(a) and Section 1350)[157]