AREC 8-K

American Resources Corp (AREC)

8-K 2024-05-21 For: 2024-05-20

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Added on April 06, 2026

☐	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 (17CFR240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

	American Resources Corporation

Date: May 21, 2024	By:	/s/ Mark C. Jensen
		Mark C. Jensen
		Chief Executive Officer

	·	Successfully separated and purified lithium from feedstocks derived from lithium brine sources and has expanded its Powered by ReElement service offering to include integration into direct lithium extraction flow sheets.

	·	Announced that it has been accepted as a member of the Defense Industrial Base Consortium to help address defense supply chain issues.

	·	Announced a strategic partnership with LVC Global Holdings focused on redefining critical mineral and rare earth element refining and recycling practices across the Emerging & Frontier Markets, particularly in Sub-Saharan Africa.

	·	Announced that its university research partner, Purdue University, has expanded the Company’s exclusive use of the patents for licensed ligand assisted displacement (“LAD”) chromatography and knowhow for all feedstocks to now include rare earth ores.

	·	Established its collaborative platform branded Powered by ReElement to focus on inline partnerships with other critical and rare earth mineral processors, recyclers or refiners that need to optimize certain components or the entire separation and purification process within their solvent-based and/or hydrometallurgical process.

	·	Received its initial certificate of occupancy for its Marion, Indiana Advanced Technology Center supersite which will be a first mover in reducing the chokehold that China has on the refining of critical and rare earth elements.

	·	Successfully executed and closed a Bond Purchase Agreement with Hilltop Securities Inc. for $150,000,000 principal amount of Kentucky Industrial Building Revenue Bonds, Series 2024, for the Company’s Kentucky Lithium LLC (“KYL”) complex which will be used for the development and operation commissioning of the United States’ first-of-its-kind critical mineral refining facility.

	·	Established commercial partnership with a major U.S. auto manufacturer showcasing its low cost and environmentally friendly process to fully recycle and refine the high value rare-earth elements within EV motors back to ultra-pure magnet-grade rare-earth oxides, pioneering a sustainable and truly circular life-cycle solution to ensure that the rare earth elements remain within the domestic supply chain to build in America and stay in America.

	·	Established commercial partnership with EDP Renewables North America (“EDPR NA”), the world’s fourth-largest wind energy producer and a top five owner and operator of renewables in North America, to advance sustainable practices in the wind energy sector with an initial focus on the efficient and sustainable recycling of neodymium-based permanent magnets from decommissioned wind turbines into magnet-grade rare earth elements, contributing to the development of a truly circular supply chain for renewable energy equipment and inputs.

	·	Executed MOU’s with two German-based battery recycling platforms (Duesenfeld GmbH, and Battery Damage Service GmbH) to source recycled black mass battery material to be refined back to battery-grade lithium products such as lithium carbonate (Li₂CO₃) and/or lithium hydroxide (LiOH) at its Marion, Indiana and Noblesville, Indiana refining facilities.

	·	Through its continued focus on proper environmental stewardship and cost structure reduction through reclamation and remediation of former mining operations, the Company has further reduced its environmental bonding liability by over an additional $1.05 million. With these recent approvals, it will bring the total number of acres of prior impacted coal mining operations from acquired assets that the Company has reclaimed or released to over 9,000 acres from previously acquired impacted lands and stranded mining permits.

	·	Acquired a 51% ownership interest in a Jamaica-based, diversified mineral asset with a focus on iron ore, titanium and vanadium to further establishes American Carbon’s foothold in the steelmaking supply chain.

		Corporate

	·	Engaged GBQ Partners LLC as the Company’s new independent registered public accounting firm.

	·	Announced that its Board of Directors has declared a special dividend of shares of its wholly owned subsidiary, American Carbon Corporation, and established the record date and distribution date of May 27, 2024 and June 11, 2024, respectively.

	·	Recently distributed a majority of the shares it held in Novusterra Inc., via a special dividend, to the underlying shareholders of American Resources in conjunction with the Company’s Special Committee’s directive to better unlock value.

	·	Additional ReElement Technologies upstream and downstream partnerships to bolster feedstocks of end-of-life products, manufacturing scrap and ores for critical and REEs and offtake customers of sustainable and domestic sources of high-purity battery and magnet materials.

	·	Broader international expansion of ReElement Technologies’ world-leading critical mineral platform for both critical mineral-based ores and recycling partnerships.

	·	Continue to scale critical mineral refining capacity at its next two large-scale facilities in Marion, Indiana and Knott County, Kentucky and through co-located facilities with supply chain partners.

	·	Continue to add best-in-class talent to drive the execution of each division.

	·	Monetization of American Carbon through its spin-off, increase in carbon production to meet market demand, leases, joint ventures and/or divestitures.

	For the three months ended March 31,
	2024			2023
Revenue
Coal sales	$	-		$	8,723,185
Metal recovery and sales		29,352			20,609
Royalty income		64,667			124,662
Total revenue		94,019			8,868,456

Operating expenses (income)
Cost of coal sales and processing		1,266,928			2,705,820
Accretion		248,291			248,291
Depreciation		22,086			13,336
Amortization of mining rights		307,801			305,859
General and administrative		2,062,021			1,321,468
Professional fees		390,196			293,255
Production taxes and royalties		121,767			981,636
Development		2,397,140			5,633,908
Gain on sale of equipment		(458,000	)		-
Total operating expenses		6,358,230			11,503,573

Net loss from operations		(6,264,211	)		(2,635,117	)

Other income (expense)
Other income and (expense)		251,639			93,000
Interest income		36,095			17,212
Interest expense		(249,455	)		(575,964	)
Total other income (expenses)		38,279			(465,752	)

Net loss	$	(6,225,932	)	$	(3,100,869	)
Less: Non-controlling interest		-			-
Net loss attributable to AREC shareholders		(6,225,932	)		(3,100,869	)

Net loss per share - basic and diluted	$	(0.03	)	$	(0.04	)

Weighted average shares outstanding - basic and diluted		76,886,957			72,953,104

	March 31,			December 31,
	2024			2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,168,557		$	2,666,638
Inventories		129,991			54,000
Prepaid expenses and other current assets		2,521,646			1,867,651
Total current assets		4,820,194			4,588,289

Restricted cash		177,643,892			34,664,936
Property and equipment, net		11,202,362			15,337,004
Right-of-use assets, net		18,108,411			18,276,913
Investment in LLCs- related parties		4,220,000			18,780,000
Notes receivable, net		99,022			99,022
Total assets	$	216,093,881		$	91,746,164
Liabilities And Equity
Current liabilities:
Trade payables	$	4,389,695		$	6,709,224
Non-trade payables		2,755,451			2,607,942
Accounts payable - related party		2,305,604			2,371,697
Accrued interest		146,101			512,558
Other current liabilities		-			200,000
Notes payable		792,184			804,656
Operating lease liabilities		59,691			57,663
Finance lease liabilities		5,510,004			4,806,822
Total current liabilities		15,958,730			18,070,562

Remediation liability		21,537,089			21,288,799
Bonds payable, net		192,430,933			44,152,500
Operating lease liabilities, non-current		480,004			495,611
Finance lease liabilities, non-current		5,488,120			7,514,848
Total liabilities		235,894,876			91,522,320

Commitments and contingencies (Note 9)

Stockholders' equity:
Common stock, $0.0001 par value; 230,000,000 shares authorized, 77,296,990 and 76,247,370 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		7,732			7,627
Additional paid-in capital		165,111,534			178,910,546
Accumulated deficit		(184,920,261	)		(178,694,329	)
Total stockholders' equity		(19,800,995	)		223,844
Total liabilities and stockholders' equity	$	216,093,881		$	91,746,164

AMERICAN RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	For the three months ended March 31,
	2024			2023
Cash Flows from Operating activities:
Net loss	$	(6,225,932	)	$	(3,100,869	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation expense		32,496			13,336
Amortization of mining rights		304,970			305,859
Accretion expense		248,290			248,291
Amortization of right-to-use assets		168,502			-
Accretion of right-to-use assets		242,817			107,895

Amortization of issuance costs and debt discount		41,572			-
Noncash stock-based compensation expense		560,393			376,573
Issuance of common shares for services		43,800			-

Change in current assets and liabilities:
Accounts receivable		-			(1,034,174	)
Inventories		(75,991	)		(2,512,821	)
Prepaid expenses and other current assets		(653,995	)		(10,500	)
Accounts payable		(2,172,024	)		(450,185	)
Accrued interest		(366,457	)		3,819
Accounts payable related party		(66,093	)		(1,290,188	)
Operating lease assets and liabilities, net		(13,579	)		-
Other liabilities		(200,000	)		-
Cash used in operating activities		(8,131,227	)		(7,342,964	)

Cash Flows from Investing activities:
Purchase of property and equipment		(264,939	)		(508,930	)
Cash received (paid) for PPE, net		4,062,115			-
Investment in LLCs		-			1,476,273
Cash (used in) provided by investing activities		(3,797,176	)		967,343

Cash Flows from Financing activities:
Repayments on notes payable		(12,472	)		(1,077,778	)
Repayments of finance lease liabilities		(1,566,363	)		(1,116,969	)
Proceeds from the exercise of stock option		156,900			-
Proceeds from tax exempt bonds, net		148,236,861			-
Cash provided by (used in) financing activities		146,817,926			(2,194,747	)

Increase (decrease) in cash		142,480,875			(8,570,368	)
Cash and cash equivalents, including restricted cash, beginning of period		37,331,574			10,990,829
Cash and cash equivalents, including restricted cash, end of period	$	179,812,449		$	2,420,461

SUPPLEMENTAL CASH FLOW INFORMATION
Cashless exercise of warrants	$	87		$	-
Dividend-in-kind of Novustera, Inc. common stock to shareholders	$	14,560,000		$	-

	For the three months ended March 31, 2024			For the three months ended March 31, 2023
Net Income		(6,225,932	)		(3,100,869	)

Interest & Other Expenses		249,455			575,964
Income Tax Expense		-			-
Accretion Expense		248,291			248,291
Depreciation		22,086			13,336
Amortization of Mining Rights		305,859			305,859
Non-Cash Stock, Warrant & Option Comp. Expense		560,393			367,573

Total Adjustments		1,386,084			1,511,023

Adjusted EBITDA		(4,839,848	)		(1,589,846	)