$AREC: $36m shelf filed during the weekend (one third of market cap) will cause heavy dilution.

In addition, $AREC’s sales plunged 50% QoQ to $4.7m in 4Q22 even though coking coal prices were high. This points to problems with the company’s only operational mines at the McCoy Elkhorn complex. (5/5)

$AREC reported operating cash flow of $6.1m in 2022. Like for the income statement, this is overstated by the $16m patent sale gain. AREC chose to dump the entire $16m in the investing line. Placing it correctly would result in negative OCF of ~$10m. (4/5)

Like many of $AREC’s investments, Novusterra does not generate any sales. We believe these patents ("carbon nanostructure and graphene") are worthless. (3/5)

American Resources ($AREC) reported losses of only $1.4m in 2022. But this was due to $16m of highly dubious revaluation gains from the sale of tech patents to related-party Novusterra Inc, in a non-cash exchange for stock. (1/5)

Novusterra’s chairman is Mark Laverghetta who is also $AREC’s VP of corporate finance and communications. Novusterra is described as a ‘specialty chemical company that produces graphene from carbon based deposits’. (2/5)

The state of affairs at $QUBT is best summarised by its management.

$BBAI lost $122m on sales of $155m in 2022. Backlog fell for the third straight quarter from $324m to $221m. With cash outflows of ~$49m, and liquidity of $37m, its cash will last ~9 months.

@DeepSailCapital Is he paid by $LILM or just delusional?

$RKLY, our April 2022 short, filed for chapter 11.

With a funding gap, low liquidity, and a rapid burn rate, BigBear will have to turn to dilutive funding. We expect pressure on the stock with the expiration of options at the end of this week. (10/10)

BigBear had only $22m in the bank at the end of Sep 2022. It has an undrawn senior secured revolving credit facility. But BigBear’s failure to meet the facility’s fixed charge criteria reduced the available funds from $50m to $25m. (9/10)

Expected revenue from its awarded contracts, both funded and unfunded, dropped by 23% from $146m at the end of 2021 to $113m at the end of Sep 2022. (7/10)

BigBear’s operations lost ~$60m in cash over the LTM. In 3Q22, BigBear slashed ~7% of its workforce, the 1st step of its plan to cut annual spending by $20m. (8/10)

Archived versions of these entities’ websites suggest the portfolio companies were mostly focused on data analytics and other IT consulting services, but for the SPAC merger, they were rebranded as AI-focused. (5/10)

BigBear has been struggling since its Dec 2021 SPAC merger. Within 12 months, the company sacked its COO, CTO, and corporate development officer, without replacements. Its former CEO quit in Oct 2022 without notice. (6/10)

The Maryland-based company was formed in Feb 2021 after private equity firm AE Industrial merged 2 of its portfolio companies - NuWave Solutions and PCI Strategic Management - and renamed the scaled-up entity (4/10)

BigBear released the news more than a month after the Air Force published the results. We believe this was done to boost the stock price, which had been trading below $1 for 30 straight days as of 23 Dec 2022, triggering an SEC notice. (3/10)

The PR was misleading as the IDIQ contract is a competitive award. BigBear will have to compete with 93 other companies for future orders. The contract ends in 2032. Sales in the future are in no way guaranteed. (2/10)

We are short $BBAI via put options. The consulting firm’s stock soared 260% on 12 Jan after announcing that subsidiary NuWave won a 10-year $900m IDIQ contract from the US Air Force. The Bloomberg headline got the bulls excited. This bubble will pop. (1/10)

CFO Geoff Richardson just resigned

$LILM's fraudulent claims about its batteries are well documented but problems extend to noise

The FT on $LILM. "A lot of beer was involved" in the creation of this company.

$BBBY The meme crowd about to re-discover (for the umpteenth time) that the kryptonite for gamma squeeze is option maturity. This will get bloody.