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Reflecting on things... I wonder if the company may have continued exchanging trading shares for cash.
We saw this in the LAST 10-K AT A FAIRLY RAMPANT RATE:
"On January 25, 2019, the Company extended its consulting agreement with Redstone Communications, LLC for an additional six-month term, and as a result, we issued 105,000 restricted common shares to Redstone Communications LLC and 45,000 restricted common shares to Mr. Marlin Molinaro...." Blah, Blah, Blah. RESTRICTED Shares, so not a factor.
"On January 27, 2019, the Company issued 1,000 shares of common shares to an unrelated party for the consideration of $5,000 cash to the Company.
"On January 28, 2019, the Company issued a total of 400 shares of common shares to two unrelated parties for the total consideration of $2,000 cash to the Company.
"On January 30, 2019, the Company entered into an Investor Relations Agreement with American Capital Ventures, Inc. (“American Capital”) whereby American Capital will provide, among other services, assistance to the Company in planning, reviewing and creating corporate communications, press releases, and presentations and consulting and liaison services to the Company relating to the conception and implementation of its corporate and business development plan. The term of the agreement is six months and American Capital was immediately issued 9,000 shares of common shares as compensation under the agreement. The common shares were valued at $10.80 on January 30, 2019 and resulted in an expense of $97,200 which was recorded in full on January 30, 2019.
"On January 31, 2019, the Company issued a total of 3,917 shares of common shares, priced at $6 per share, to an unrelated party for the settlement of trade payables in the total amount of $23,502. If at the time of potential sale of the shares, the listed price per share is below $6, the Company is required to purchase the shares back at $6 per share which results in a contingent liability of $23,502. The common shares were valued at $11.00 on January 31, 2019 and resulted in a loss on settlement of $19,585.
"On February 1, 2019, the Company issued a total of 1,000 shares of common shares to two unrelated parties for the total consideration of $5,000 cash to the Company.
....
"On February 4 through February 8, 2019, the Company issued a total of 17,800 shares of common shares to sixteen unrelated parties for the total consideration of $89,000 cash to the Company.
On February 10, 2019, $3,000 worth of trade payables were settled with 500 common shares of the company. The common shares were valued at $12.15 on February 10, 2019 and resulted in a loss on settlement of $3,075.
SIMILARLY FROM THE LAST 10Q... ADDITIONAL SHARES ISSUED:
"On May 7, 2019, the Company issued 50,000 shares of common stock as part of a settlement to an unrelated entity for the use of certain mining equipment. The stock price at the time of issuance was $3.65 resulting in a settlement expense of $182,500.
"On May 30, 2019, the Company issued 25,000 shares to an unrelated entity in conjunction with a short-term borrowing facility issued by the entity. The stock price at the time of issuance was $3.49 resulting in a stock interest expense of $87,250.
....
"On June 7, 2019, the Company issued 25,000 shares of common stock at $4 per share to an unrelated entity under an equity purchase agreement. The Company received $100,000 cash consideration for the investment. The stock price at the time of issuance was $2.10. If the Company, during the period in which the purchased shares are held by the original entity, issues or sells any shares of common stock for a price less than $4.00, the Company shall issue to the purchaser an additional number of shares of common stock, so as to provide the purchaser the benefit of the reduced price per share.
"On June 7, 2019, the Company issued 30,000 shares of common stock for consulting services to an unrelated party. The stock price at the time of issuance was $2.10 resulting in an expense totaling $63,000. The consulting agreement is for six months and the shares for services were deemed to have been earned upon execution of the consulting agreement on May 30, 2019. In addition to the shares issued, 75,000 warrants with three-year exercise period and $4.00 strike price were issued upon execution of the consulting agreement resulting in a expense of $139,500.
"On June 12, 2019, the Company restructured a series of warrants; C-1, C-2, C-3 and C-4, held by an unrelated party as part of the ARC business loan which resulted in an increase in the number of warrants issued from 1.6 million shares across four warrants to 3.0 million shares across four warrants; an increase in the term of the warrants from the date of the amendment from a weighted average of 297 days to 753 days, and a decrease in the weighted average exercise price from $7.665 per share to $4.325 per share. Fair value was determined using the Black-Scholes Option Pricing Model. The incremental value as a result of the modification is a one-time warrant expense totaling $2,545,360 as of June 30, 2019.
A LITTLE DISCONCERTING... INDICATES MUST HAVE AN GUARANTEED SHARE ISSUANNCE BUILT INTO THE LOAN-- POSSIBLY TOXIC? NOT SURE. :
"On June 13, 2019, the Company issued 28,000 shares of common stock under a consulting agreement to an unrelated party. The stock price at the time of issuance was $2.53 resulting in a stock-based compensation of $70,840. The term of the consulting agreement is 6 months with monthly payments equal...
IN CONCLUSION... WHAT I'M THINKING AT THE MOMENT.
My concern is that the company has continued issuing shares to help meet its cash-flow needs. With a stable and increasing stock price, not many complaints... but the volume and shares we've seen traded... I'm mystified.
Guess it proves the adage true... even if we don't... someone knows what the market is doing and why.
Does some of the debt the company has undertaken, have some value backed guarantees? If so, as stock price goes lower, their debt is guaranteed by additional shares and they in effect are entitled to own more of the company. If this is the case... I SUPPOSE IF THERE'S A BRIGHT SIDE... THEY'RE GOING THROUGH A LOT OF EXPENSE AND TROUBLE TO INCREASE THEIR OWNERSHIP. WHY WOULD THEY DO THAT UNLESS THEY THINK THE THERE'S MONEY TO BE MADE DOWN THE ROAD??
GRANTED... I'M JUST SPECULATING... BUT WHO THE HECK KNOWS.
I'm guessing things will become clearer in the week to come... after the current underwriting (financing) is priced.
It's hard to say. My best guess is that it's connected to the financing. The volume has been something... We've traded 1/3 to 1/2 of the public holiday in the last two days.
It's kind of scary but I bought more shares yesterday and today.
I would think that once the uncertainty of the financing is priced and comes out next week, we should establish a better trading range.
The company is primed to grow tremendously over the next 12 to 18 months. Unfortunately, to grow we need that investment capital to ramp up production.
In my opinion... the long game is a cinch. From my vantage point, if one can participate in the long term financing, it will be a win.
The short game has me a little baffled. Maybe the company ticked someone off or else a potential lender is playing hardball while negotiating.
I swapped some positions this morning with the sharp price decline and bought more AREC. If you'd asked me yesterday if the I thought the company would raise any capital below $2.00 a share, I would have said good luck with that. Current share price now says that's a possibility.
I would guess we will see a substantial uptick before the end of the day and tomorrow... but what do I know?
Big numbers on the bid... Totalling 18000 to 19000 shares.
I don't think we're going to trade any lower today.
Seems to be some downward pressure. So far price seems to be holding. Most shares have traded in the last hour.
Guess we don't get to know people motives... just there actions.
Seems to me to be a pretty safe buy at these levels. It'd be hard pressed to think of many or any who own shares at these levels.
Yes and I agree, Jim's continuing with the company is also a good sign.
I sent you a Private Message, BTW.
Televet...
This is one of those investments I probably should have walked away from a long time ago... but at this point, I'm committed till something happens.
One thing I didn't mention in my recent post... but have in prior ones... something that is perhaps as compelling a reason to continue holding a position in SPYR as any.
And it's the question: WHY? Why do they continue filing Quarterly and Annual Reports? They're basically spending a quarter of a million dollars a year to maintain their fully disclosed c211 status.... It's how they qualify for QB Listing on OTCMarket.com... which basically means they have Audited Financials.
WHY DO THIS.... unless they have plans to become something more than they are? Or perhaps to become something other than they are? Who knows?
Latest 10Q was filed on time after the close yesterday 8-14-2019
https://www.otcmarkets.com/filing/html?id=13594801&guid=r_cIUqGiKuzHYth
From my cursury reading, it seemed quite similar to the last one. Modest revenue with belt-tightening expenses.
In Management Discussion there was an explanation as to why the Steven's Universe Tap Together has had a bit of a hiccup. The company they had contracted with to design and development it went out of business:
"After the launch of the game, the original developer the Company was working with went out of business, but the Company executed a new development agreement, effective July 23, 2019, with a new developer to continue supporting, updating and expanding the game. Under this new arrangement, Company management believes that the game will begin to realize its potential and generate revenue."
On a somewhat optimistic note, they believe it may be necessary to hire additional employees yet this year:
"We anticipate we will need to hire additional employees during 2019 to help with the development and marketing of existing and future games and applications."
They've also disclosed they are in negotiations for the purchase of an acquisition target:
"The Company may also decide to expand and/or diversify, through acquisition or otherwise, in other related or unrelated business areas if opportunities present themselves. The Company has also identified an acquisition target, a mobile game, and the Company is currently negotiating with the owner for the purchase of the asset."
And if none of these things come to fruition, there is a Plan C:
"The Company may also decide to expand and/or diversify, through acquisition or otherwise, in other related or unrelated business areas if opportunities present themselves."
NEWS RELEASE 8-12-2019 American Resources Corporation Reports Second Quarter 2019 Financial Results
https://www.otcmarkets.com/stock/AREC/news/story?e&id=1415578
1. HEADLINES:
Reports Adjusted EBITDA of $1.8 million
Revenues grew over 33 percent to $9.34 million
Company records best quarterly production and sales volume of over 126 thousand short tons; a 30% year-over-year increase
2. ENCOURAGING QUOTATIONS:
"Operational Results"
"The Company produced and sold 126,977 short tons of coal in the second quarter of 2019, 30.3% more than the second quarter of 2018."
Compare production through the first two quarters of 2019 to what they expect to produce in 2020.
"Company Outlook"
"As previously stated, based on American Resources’ organic growth from its already owned infrastructure, controlled mining permits and its capital investment schedule, the company is maintaining its 2020 production forecast range of 2.2 to 2.8 million tons."
3. MY PROJECTIONS:
Using the price of $75 per short ton, this means that for 2020 they're projecting annual revenue OF between $165,000,000 and $210,000,000.
Check out this comparison Quarterly Results Six Months Results
Coal Sales 2019 (actual) $9,321,250 $16,315,526
Coal Sales projected $41.25 to 52.5 Million $82.4 to 105 Million
ON A QUARTERLY BASIS... THAT COMES A QUARTER OVER QUARTER GROWTH RATE OF BETWEEN 440% AND 563%.
Granted Quarterly revenue will most likely be ramping up, through the four quarters... but the projections should be illustrative of the revenue growth we're expecting over the next 12 to 18 months.
4. MY RECOMMENDATION
I don't know of many companies even thinking about making projections like we have set before us with American Resources Corp. If you're looking for an investment that you can sock and way and let appreciate over time? I don't know of a better one than AREC. They're a real NASDAQ fully reporting company with real revenue, earnings projections, and a Plan to execute. Get on board or wish you had. :)
I expect that over the next few months we'll see some analysts climb or board with these and similar "outlandish" sounding projections and expectations. By that time, I'm guessing the entry-level will be substantially higher than it is right now.
All FWIW.
Randy
So Who is this Dr. Robert "Bobby" Lararra?
Seems like a pretty solid guy. Obviously, major/controlling ORHB shareholders think do too.
They have:
1. First made him Chief Medical Officer:
https://www.otcmarkets.com/stock/ORHB/news/Renowned-Cardiac-Surgeon-and-Medical-News-Minute-Founder-Dr-Robert-Lazzara-Joins-ORHub-Team-as-Chief-Medical-Officer?id=232732
2. Next make him CEO:
https://finance.yahoo.com/news/orhub-inc-announces-ceo-123000758.html
3. Then made him Chairman of the Board:
https://www.otcmarkets.com/stock/ORHB/news/ORHub-Inc-Announces-New-Chairman-to-the-Board-of-Directors?id=236904
Who Is this guy? Will he be able to right the USS ORHB?
There's the question everyone wants to be answered.
AND>>> it seems that Dr. Lazarra is answering questions. He's not yet reached out to me (piddly small shareholder that I am)... but he has reached out to a number of my friends and acquaintances.
4. Here's a video of Dr. Lazarra introducing himself and talking about ORHB. ENJOY!!
I read the 10Q the other day and didn't see any surprises.
The company seems to have found a formula that works (acquiring or even consolidating the composting/soil management industry through a third party entuty, EPH) and it sounds like they expect to continue making progress through the rest of the year.
"Management anticipates facilitating additional acquisitions through EPH in 2019, and upon the completion of such transactions, expects that its management fee to oversee the operations of EPH and its subsidiaries may be increased. Further, management is pursuing other revenue producing contracts and opportunities for the Company including licensing or developing soil science and product brands that can generate revenue through sublicenses and soil sales either from EPH or other companies, and also utilizing its experience in completing acquisitions to help facilitate non-competitive transactions for third parties for a fee."
Additionally, I don't have the quotation handy, but they've also hired additional employees, which I'm guessing means they would have cost effective reasons for hiring.
We're still a developmental stage company, but seem will in track to becoming more than we were. If and once we get past the "going concern" aspect of being a start-up company, we will likely be trading at substantially higher levels... hence the reason we dabble in penny stocks that we think might have a future.
I was a little disappointed to hear that our related third party entity, EPH, didn't record a profit for the past quarters, but expect this reflects the seasonal nature of their revenues.
Also, it's not insignificant that we actually have revenues to report and that they are growing quarter over quarter.
We may not have a get rich quick company here, but from all appearances we have a real company that has found a viable growth strategy, with the added potential of an exclussive product marketing agreement that just might work out to become a viable steam of income.
Hey Derpo,
At present I'm thinking most the software engineering work is done by contract labor.
The team has been changing quite dramatically from what I can tell. As I had lost confidence in Colt Melby some months ago I hoping the current shake up will be a good thing.
There remains lots of unanswered questions...
1. Audited Financials. The investing public should receive full disclosure... the good, the bad, and the ugly.
2. Success in financing? From my estimates the company has to almost be out of money. Me thinks funders (if there are any) also had questions about prior management.
Funny how money walks and talks. I'd be surprised if any big money comes into ORHB without catching up on fillings. Imagine that. People actually want accountability ... They want to know what's going on.
3. Assuming the money matters can be taken care of, the next question of course is product implementation and acceptance. Since the earliest days, their technology and software have seemed impressive to me. From my glance at the website, it looks and like they're trying some pretty creative and aggressive marketing techniques. Test drive, pay as you go, pay company only when you save money.
It all sounds good to me... But we have a long way to go. As milestones are met investor confidence will grow and I assume big money will probably lead the way than follow.
So for now we can just watch how the stock trades in the weeks and months to come. There will likely be some speculative fluctuations, and probably some pot holes and dead ends. At this point I might be a buyer on dips, but you can be sure I'll be looking to take money off the table if share price goes up... at least till the filings are caught up and we all know where things are at.
And here I was getting discouraged. Seems cash flow is toward Bitcoin... almost 70% of all crypto.
I'm assuming the smaller coins will bounce back... eventually. :)
I agree Josey... from the chart it looks like higher ground is ahead.
Now if we could see the company get current on their fillings and then announce some real news, I think it could go alot higher.
We shall see.
Randy
It sounds to me like they're still waiting to hear whether their bid for the purchase of this property will be successful.
It shows the company is forward minded and still seeking to gather and develop metallurgical coal properties. They have a niche market that is looking quite promising and increasing their holdings just makes sense.
I'm confident the stock price will take care of itself as the company continues executing it's business plan.
News Release 8/4/2019 American Resources Corporation Files Updated Bid to Purchase Blackjewel, L.L.C. Properties in Eastern United States
FISHERS, IN / ACCESSWIRE / August 4, 2019 / American Resources Corporation (NASDAQ:AREC), a supplier of raw materials to the rapidly growing global infrastructure marketplace, with a primary focus on the extraction, processing, transportation and distribution of metallurgical coal to the steel industry, announced today that it has participated in the bidding process for the assets and operations of BlackJewel’s eastern (central Appalachian) division and will be submitting a revised bid. In relation to this process, the following statement is from Mark Jensen, Chief Executive Officer and Chairman of the Board of American Resources Corporation:
“On behalf of American Resources Corporation, we are disappointed to not be initially chosen as the successful primary bidder to purchase the assets of Blackjewel in Kentucky, West Virginia and Virginia. As the qualified backup bid, we believe that our bid is the most comprehensive and competitive as it is the only bid to include the full payment of pre-petition employee compensation of Blackjewel and Revelation Energy for those workers in the central Appalachian division, resulting in approximately $3.65 million being paid to these workers in an expedited structure that would otherwise go unfunded. Our bid also accepts responsibility for more than $200 million in reclamation liability, which prevents that liability from falling to the taxpayers of these states, whereas the other bid only addresses a fraction of this liability. Should our company prevail, we will continue to operate a number of the mines and between the current mines and the redeployment of equipment and infrastructure to existing American Resources / Quest Energy mines, we are confident that the job creation would result in a vast majority of Blackjewel’s workforce being given the opportunity to be employed by our company. We are in the process of revising our bid to increase the amount of our offer, which would further increase our funding of reclamation bonding to ensure environmental compliance. We are hopeful that at tomorrow’s 10:00 a.m. ET hearing in Charleston, West Virginia, the Court will recognize our commitment and the comprehensive value of our bid in finding the best solution and outcome to the employees, the operations, the environment, and stakeholders, and declare us the successful bidder.”
For more information regarding American Resource Corporation bid, please see:
https://cases.primeclerk.com/blackjewel/Home-DownloadPDF?id1=MTE3NDUyMg==&id2=0
For more information regarding the competing bids and also where you can compare the assumed reclamation obligations (ARO):
https://cases.primeclerk.com/blackjewel/Home-DownloadPDF?id1=MTE3NDUyOA==&id2=0
About American Resources Corporation
American Resources Corporation is a supplier of raw materials to the rapidly growing global infrastructure marketplace. The company’s primary focus is on the extraction, processing, transportation and selling of metallurgical coal and pulverized coal injection (PCI) to the steel industry. AREC’s operations are based in the Central Appalachian basin of eastern Kentucky and southern West Virginia, where premium quality metallurgical products are located.
The company’s business model is based on running a streamlined and efficient operation to economically extract and deliver resources to meet its customers’ demands. By running operations with low or no legacy costs, American Resources Corporation works to maximize margins for its investors while being able to scale its operations to meet the growth of the global infrastructure market.
Website:
http://www.americanresourcescorp.com
Institutional/Retail/Individual Contact:
American Capital Ventures
Howard Gostfrand, President
305-918-7000 - Office
hg@amcapventures.com
www.amcapventures.com
PCG Advisory
Adam Holdsworth
646-862-4607
adamh@pcgadvisory.com
www.pcgadvisory.com
Company Contact:
Mark LaVerghetta
317-855-9926 ext. 0
Vice President of Corporate Finance and Communications
investor@americanresourcescorp.com
https://finance.yahoo.com/news/american-resources-corporation-files-updated-010000500.html
Like everyone that invests, I buy shares that I think at going to increase in value and sell ones that I think are going to decrease.
Unfortunately, I'm not always right.
We'll, there is that.
Hopefully, I will be a step that will restore confidence to the investing public.
From the beginning, I've been impressed with ORHB's technology.
Time will tell.
Time will tell.
Vote with your feet. Scare mongering might get some cheap shares, but I doubt it.
The market seems to agree more with me than with you...
at least for the moment.
I've been on the road and wanting respond since I first read your post.
I think what you wrote this was fairly balanced, but not entirely accurate. Clearly here have been a lots of delays and a pretty long list of excuses. The bulk is my frustration has been with unrealistic expectations.
While some of those expectations have been impeded by circumstances beyond the company's control, others may well have been driven by concerns like excessive dilution and not entering a financing agreement that would not be for the long term success of the company.
I believe the management of Fortem has been laboring tirelessly for their own long term success and ours as shareholders. We're just along for the ride. The real question we need to answer is one that I've floated a number of times, "Do you believe the management will be able to do what they've stated they were intending to do?"
The obvious point is that you should invest accordingly.
Not that it particularly matters, but here's what I believe will happen over the next weeks and months.
1. All fillings will be brought up to speed in relatively short order.
2. After their fillings are brought current, they will proceed to the promotion of the company's stock.
3. Management will land a financing deal that will enable them to begin their drilling plan.
4. Subsequent to landing a financing deal they will be uplisted to the NASDAQ Capital Market.
5. We will then be on our way to becoming a growing and potentially profitable company.
I think this could be the turning point for ORHB, but we shall see.
Check this out: ORHub, Inc. Announces New CEO
https://finance.yahoo.com/news/orhub-inc-announces-ceo-123000758.html
I'm away this week... but I thought the projected numbers for the second quarter were lighter than I expected.
Quarter over quarter and year over year quarters were up 33% and 32%, which is pretty decent growth.
I would have liked to hear what are their current and projected annual run rates. Once the mine upgrades are completed and get into full production, we should get a better idea of the full year and next year's revenue numbers.
What I know for sure is that deployed investment dollars have been rolled into increased mine development and production.
The website has been updated to include additional mine properties. Here's the link to the current Investor Overview:
https://uploads-ssl.webflow.com/5aafef3a67150adc031ae667/5c9a7d2f4c23934d30b239e3_ARC%20-%20Corporate%20Overview%20Sprint%202019%20(public).pdf
No matter how you look at it, they're expecting a serious ramping up in production and revenue. The optimal levels will depend on some additional capital being raised, but with or without it the more revenue we can grow the more revenue and cash flow we will be able to use to fund additional growth.
What does this line from the company's press release mean to you??
"...and there is no other material information concerning the affairs of the Company that has not been generally disclosed."
The reason the trading of Fortem Resources' stock is for non-compliance.
What non-compliance? Their failing to file their 2019 10-K in a timely manner.
You might dispute that this is the reason for the halting or maybe you don't like it... but this is what has been disclosed.
The July 12, 2019 press release states
"As a result of the delay in filing the Annual Filings, and following an application by the Company, the Alberta Securities Commission granted a management cease trade order (the “MCTO”) on July 4, 2019 against the Company’s Chief Executive Officer and Chief Financial Officer, rather than a general cease trade order against the Company."
Yesterday's 8-K about the halting of the stocks trading in Canada by the Alberta Securities Commission says the same thing.
"On July 16, 2019 the Alberta Securities Commission (the “ Commission ”) revoked the management cease trade order (“ MCTO ”) issued by the Commission on July 4, 2019 and issued a failure-to-file cease trade order (" FFCTO ") against Fortem Resources Inc. (the “ Company ”) in connection with the delay in filing its audited annual financial statements for the year ended February 28, 2019,...."
I understand that there is a measure of uncertainty about what this halting of the stock trading in Canada means and what implications it will have for the future of the company.
From what I've read, the company is in these circumstances really through no fault of their own. I don't doubt that they have shelled out hundreds of thousands of dollars to maintain its QB and TSX-V listing statuses as a fully reporting company. The professionals are the accounts and auditors that they hired to audit and prepare their filings.
I think it stinks that their former auditor... which is in the process of being replaced, apparently gave them advice and has now changed their minds about how things should been reported. I think I read somewhere that they refused to confirm their own audit from Fiscal 2018. How dumb is that??
I think this shows that Fortem has made the right decision to replace them.
And remember, in their July 12, 2019 8-K and Press Release the company has assured the regulators and the investing public (of which I am one) that there are not insolvencies or issues beyond what has been disclosed.
"The Company confirms that as of the date of this news release that there is no insolvency proceeding against it and there is no other material information concerning the affairs of the Company that has not been generally disclosed. The Company would file, to the extent applicable, its next default status report on July 26, 2019."
You can question, doubt, or deny what the company has stated, but I take what they have stated as a pretty good sign.
On the flip side... and I don't want to impune anyone's motives, but if the stock price declines because of these and similar doubts, I think it becomes a decent opportunity to buy.
FWIW, I bought shares as recently as yesterday.
Check our my latest post.
This is a change from where we were yesterday. The Canadian Cease Trade is a pretty big deal, but one that the company believe will be remedied in the next few weeks. It's my understanding that this will not significant impact the US trading of the FTMR's shares.
Consider the following questions.
And how did this information become public?
The company dislosed it. They have been transparent from the very beginning of this issue. They switched auditing firms, and it seems to me, they've been following their guidance and have been reporting as they've been directed.
What is the issue?
They've already disclosed the issue. It's an accounting matter of how the acquired oil and gas properties were or should have been classified.
Why do all the different 10-Qs and the 2018 10-K men to be amended?
The accounting issues took place in Q1 of fiscal 2018 (between March and May 2017), when the listed properties were acquired. All of the subsequent filings include and rely upon the information from that original Q1 filing. As they are all downstream, they will each need to be corrected to reflect the changes to the Q1 filing.
Are there any other disclosed issues?
From what I've read the only other issue mentioned was the valuation of the shares issues for the acquired properties... whether they should be listed at the private placement price of $2.00 per share or valued by the then current trading price.
How significant or impactful are these accounting issues?
I'm not an accountant, so this is just my best guess. I believe this is a whole lot to do about nothing. According to the earlier press release, the company believes it will have the filings corrected and refiled before August 9, 2019
Actually, you are correct when you say that this is rare...
that's because very few companies willingly take on this extra burden of reporting and explanation of how things are going.
I think your "sky is falling" approach to these issues is exaggerating the seriousness of this accounting issue... which is essentially a disagreement how the acquired companies should be classified.
This is the Company's explanation in the July 12, 2019 press release:
"Following consultation with its financial advisors and former independent registered public accounting firm, DMCL, the Company has determined that it incorrectly reported that four companies, including Colony Energy, LLC, Black Dragon Energy, LLC, Rolling Rock Resources, LLC and City of Gold, LLC, which were acquired by the Company between March 1 and May 31, 2017, were not “variable interest entities”, when they should have been reported as such."
The Management Cease Trade Order is probably required for this alternative reporting provision:
"The Company intends to satisfy the provisions of the alternative information guidelines set out in NP 12-203 by issuing bi-weekly default status reports in the form of further news releases, which will be filed on SEDAR, until the Annual Filings have been filed."
As for additional concerns or worries that this issue affects the working and health of the company... the following quotation addresses that question:
"The Company confirms that as of the date of this news release that there is no insolvency proceeding against it and there is no other material information concerning the affairs of the Company that has not been generally disclosed. The Company would file, to the extent applicable, its next default status report on July 26, 2019."
Will I be glad when all filings are caught up and management can focus its time and energy on building and growing this company??
YES. ABSOLUTELY.
I'm not saying it's all great... but I am confident the company is dealing with the accounting issue and subsequently affected filings with openness and integrity.
You posted this PR last week:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=149659317
The headline reads:
"FORTEM RESOURCES INC. ANNOUNCES APPLICATION FOR A
MANAGEMENT CEASE TRADE ORDER"
Yesterday's PR Confirms that their application for the Management Cease Trading Order has been granted.
Headline:
FORTEM RESOURCES INC. ANNOUNCES UPDATE TO MANAGEMENT CEASE TRADE ORDER
https://www.sec.gov/Archives/edgar/data/1382231/000149315219010604/ex99-1.htm
"As a result of the delay in filing the Annual Filings, and following an application by the Company, the Alberta Securities Commission granted a management cease trade order (the “MCTO”) on July 4, 2019 against the Company’s Chief Executive Officer and Chief Financial Officer, rather than a general cease trade order against the Company. The MCTO restricts all trading in securities of the Company, whether direct or indirect, by the Chief Executive Officer and Chief Financial Officer of the Company until such time as the Annual Filings have been filed by the Company and the MCTO has been revoked. The MCTO does not generally affect the ability of shareholders who are not insiders of the Company to trade their securities."
All it means is that the Alberta Stock Exchange agreed to issue with the Management No Trade Order (MNTO) that FTMR management requested during this interim period.
The management of FTMR applied for it and received it. Until their fillings are caught up they've committed themselves to not trade the stock (which I highly doubt they were doing anyway) AND to provide bi-weekly shareholder updates. Yesterday's press release was one of these updates.
Other than a restriction on management's trading of this stock, the stock is trading normally for everyone else... so it's pretty much business as usual for them and everyone else.
Also, as I understand the filings there were no material misrepresentations (or lies). The issue at hand has to do with accounting and classifying the acquisitions that were made.
Yeah, this is not great but overall I don't think it's a very big deal. The whole matter pretty well all stems from the change in auditor (and accounting firm) and the complex accounting rules and regulations regarding the gas and oil acquisitions made in Q1 of Fiscal 2018.
THE CEASE TRADE ORDER
On June 28, 2019 we were told that management, because their filings were not going to be on time, applied for a cease trade order.
"The Company confirms that it will comply with the alternative information guidelines included in National Policy 12-203, Management Cease Trade Orders, for so long as it remains in default of a specified requirement."
In other words, the management of the company is going above and beyond to show that they are working with integrity and on behalf of the shareholders. Today's press release (linked below) is an "information guideline" update in fulfillment of that application. "As a result of the delay in filing the Annual Filings, and following an application by the Company, the Alberta Securities Commission granted a management cease trade order (the “MCTO”) on July 4, 2019 against the Company’s Chief Executive Officer and Chief Financial Officer, rather than a general cease trade order against the Company."
EXPLANATION OF FISCAL YEARS:
The 2018 Fiscal Year ran from March 1, 2017 through February 28, 2018.
The 2019 Fiscal Year runs from March 1, 2018 to February 28, 2019.
The down-stream effect of this accounting error or misattribution, becomes cumulative on each of the following quarterly reports. Each of them contains the information from the previous quarters and so all of need to be updated... hence the information in the subsequent 10-Qs and 10-K's needs to be updated.
THE ISSUE AT HAND
The disputed or "mis-accounted-for" acquisitions took place in between March 1 and May 31, 2017, so in the Q1 of our Fiscal 2018.
Some of you might recall when the company went through the process of getting listed on the TSX-V. At that time, they had to change their valuations for each of their acquisitions so it would show on the books, not the value of the stock at the time they issued the shares for each acquisition, but just the actual cash portion of the acquisitions.
FIXING THE ACCOUNTING OF THE ACQUISITIONS
Well, it looks to me that their new accounting firm (Davidson & Company LLP) OR perhaps in the old accounting firm (Dale Matheson Carr-Hilton LaBonte LLP) believe the acquisitions should have been accounted for differently. The July 12, 2019 Press Release states that the acquisitions and were not “variable interest entities” This doesn't yet tell us how they should have been accounted or will, but I'm guessing when they get the filings done, we'll find out. :)
https://www.sec.gov/Archives/edgar/data/1382231/000149315219010604/ex99-1.htm
Until the filings are caught up, the company has agreed to keep shareholders updated by updating them every two weeks via press releases. The next update should be July 26, 2019.
"The Company would file, to the extent applicable, its next default status report on July 26, 2019."
BESIDES THE ACCOUNTING MATTER AND FILINGS IT'S BUSINESS AS USUAL
"The Company confirms that as of the date of this news release that there is no insolvency proceeding against it and there is no other material information concerning the affairs of the Company that has not been generally disclosed."
Yeah, I suppose that could be a problem. :(
However, I would think that even the Democrats support rebuilding America's infrastructure... plus I think AREC's "space" has a bullseye on the worldwide export market of metallurgical (coking) coal. There just aren't that many sources for the quality is coal we're focusing on producing.
If I understand what I've read, the worldwide demand for high-quality coal is softening with the whole tariff war with China, but the pricing is still very high... Between $100 and $200 per ton.
http://uscoalexports.org/2019/07/08/analysis-us-export-met-coal-pricing-weakens-on-atlantic-steel-prices-trade-tariff-fallout/
If and when these disputes are resolved and the world economy begins reflecting greater long term growth, I think we could be in for a pretty long and sustained ride.
There's always risk... but the flip side is risk is reward.
If their projected numbers are reached... which by my calculations are $100-$150 Million in revenue this year, and 1.5x to 2x that number in 2020...applying the fundamental metrics, we could easily see a $20-40 stock price in 2020.
Plus, remember our outstanding shares and public float are quite low.
OTCMarkets says we have 23.3 million shares outstanding. By my estimates, there are somewhere around 2 million shares in the public float. The company has huge insider ownership... somewhere between 60 and 70%.
Bounced back to 10 cents.
The stock seems to be trading quite well.
I'm looking forward to seeing their 2Q financials. The 10Q won't be out for another month or so (it's due August 15). I'm pretty sure it will be encouraging.
Multiple mine renovations have come online during the first and second quarters. We will be good to see/hear some hard data. Hopefully, we will get some details on our current monthly and annual run rates, as well as a range of growth they expect through the end of the year.
From my perspective, I don't see much risk for those investing in American Resources Corp at this point. If we can meet our production goals, and especially if we can show that we are EBITDA positive... or getting close, then our long term success is just a matter of time.
Bigger and smarter money than mine is making this happen. I feel like we're in pretty good company.
Great video clip and also sounds like a pretty great executive order!!
Wonder if this is our new PR company getting into action.
https://twitter.com/FortemResources/status/1149407693930500096
@FortemResources tweets a Barrons.com article entitled
OPEC’s Latest Move Shows It’s ‘Drawing a Line in the Sand’ on Falling Oil Prices
In the second paragraph quotes our CEO Marc Bruner saying:
The output cuts will help stabilize the market and support prices as trade uncertainties persist. Given the demand concerns, “the only way to firm and stabilize oil is with cuts to production,” says Marc Bruner, CEO of natural-resource firm Fortem Resources. “There is no other way.” OPEC and its allies, he adds, are “drawing a line in the sand for $50 oil so they can stabilize oil prices until demand picks up.”
I thought the way the stock traded today was quite encouraging.
I think it's probably too early to say that it indicates a financing deal has been reached... but once funding is in place and the stock starts being promoted by our newly proposed Investor Relations companies, I think increasing volume and share price will continue for a while.
Agreed... I was away when this press release was issued.
There are some pretty great quotations...
This position at American Resources is a newly created role that is in response to the company's rapid coal production growth and its anticipated continued increase of coal sales. The forecasted increase in production of high-quality metallurgical coal (or coking coal) and pulverized coal injection (PCI) coal over the next eighteen months will be sold to the international and domestic marketplaces.
[[Not to mention, this metallurgical coal sells for over $100 per ton... and with AREC's annual run rate somewhere between $150-200 million, I don't doubt he will more than pay for his wages by marketing AREC's coal at the highest possible prices!! AND OF COURSE this compares with $31 Million in Revenue for the whole of 2018!!!.]]
The Chief Executive Officer of American Resources, Mark Jensen noted:
"We are thrilled to have someone of Andy's caliber, character and work ethic join our team and his hiring comes at a time where we are forecasting rapid growth over the next four quarters.. We continue to see numerous opportunities to expand both organically and through strategic acquisitions and want to be more proactive in expanding our distribution network and servicing our customer base. Andy brings extensive knowledge and relationships to our platform which will certainly complement our growth."
And then Andy Cox concludes:
"I am excited to join American Resources Corporation in their endeavor as they continue to expand their operations and coal production" commented Andy Cox. "After understanding their production strategy and growth potential, I think I can add value to the team as the company executes on its growth."
I think you can make of it what you will, but at face value, it's simply the resignation of a director.
She was one of the three independent board members added prior to our being listed on the TSXV.
Here's a link:
https://www.otcmarkets.com/filing/html?id=12934270&guid=FWyxUH4MwJ3-23h
I think price movment and volume today and future attributable to being added to the Russell Microcap Index.
Still way underpriced I believe.
Go AREC!!
FWIW Randy is just a guy, who doesn't have a gang.
In fact Randy is a shareholder and hopes the company succeeds.
For the last year there had been a couple narratives trying to explain what has happened and what is going to happen.
I have friends and acquaintances on both sides of the discussion, and find the whole matter dizzying.
As for these personal attacks, we'll let them speak for themselves. I used to moderate this board and only shared what I believed was accurate and timely information.