American Resources Corp 10-K/A for FY2019

American Resources Corp (AREC)

10-K/A 2020-06-01 For: 2019-12-31

Added on April 06, 2026

About this 10-K/A

American Resources Corp filed this 10-K/A on June 1, 2020, covering the fiscal year ended December 31, 2019 (FY2019).

Headline figures

Fiscal year ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $24.48M; down 22.4% from $31.52M a year earlier
Net loss: $70.92M; compared with a net loss of $12.76M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Florida		46-3914127
(State or jurisdiction of Incorporation or organization		(I.R.S Employer Identification No.)

12115 Visionary Way Fishers, Indiana		46038
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common	AREC	NASDAQ Capital Market

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller company)		Emerging growth company	x

		Page
Special Note Regarding Forward Looking Statements		3

PART I

Item 1.	Business	4
Item 1A.	Risk Factors	24
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Financial Data	31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	34
Item 8.	Financial Statements and Supplementary Data	34
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	34
Item 9A.	Controls and Procedures	34
Item 9B.	Other Information	35

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	36
Item 11.	Executive Compensation	40
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	43
Item 13.	Certain Relationships and Related Transactions, and Director Independence	45
Item 14.	Principal Accounting Fees and Services	45

PART IV

Item 15.	Exhibits, Financial Statement Schedules	46

Signatures		48

Historic Metallurgical Coal Prices			Historic CAPP Thermal Coal Prices
Year End	Hampton Road Index HCC - High		Year End	Big Sandy / Kanawha Rate District
2013		$110.30	2013		$64.09
2014		$100.35	2014		$56.00
2015		$80.25	2015		$45.55
2016		$223.00	2016		$50.65
2017		$210.00	2017		$60.90
2018		$205.34	2018		$68.12
2019		$135.00	2019		$60.30

	·	A requirement to have only two years of audited financial statements and only two years of related MD&A;

	·	Exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;

	·	Reduced disclosure about the emerging growth company’s executive compensation arrangements; and

	·	No non-binding advisory votes on executive compensation or golden parachute arrangements.

	High		Low
Quarters ending in 2018
March 31	$	4.50	$	0.05
June 30		2.25		1.00
September 30		7.05		1.00
December 31		13.49		5.85
Quarters ending in 2019
March 31	$	12.20	$	2.10
June 30		4.24		2.10
September 30		3.57		0.59
December 31	$	0.762	$	0.52

Name	Age	Positions

Mark C. Jensen	40	Chief Executive Officer, Chairman of the Board of Directors
Thomas M. Sauve	41	President, Director
Kirk P. Taylor	41	Chief Financial Officer
Tarlis R. Thompson	36	Chief Operating Officer
Randal V. Stephenson	59	Director
Ian Sadler	68	Director- Former
Courtenay O. Taplin	70	Director

(a)	(b)	(c)		(d)	(e)	(f)		(g)	(h)	(I)		(j)
Name and principal position	Year	Salary ($)		Bonus ($)	Stock Awards ($)	Option Awards ($)		Non-equity Incentive plan Compensation ($)	Nonqualified deferred compensation earnings ($)	All other Compensation ($)		Total ($)

Mark C. Jensen, (1) CEO	2019		156,000	-0-	-0-		-0-	-0-	-0-		15,550		171,550
	2018		156,000	-0-	-0-		-0-	-0-	-0-		16,326		172,326

Thomas M. Sauve, (2) President	2019		156,000	-0-	-0-		-0-	-0-	-0-		15,550		171,550
	2018		156,000	-0-	-0-		-0-	-0-	-0-		16,326		172,326

Kirk P. Taylor, (3) CFO	2019		156,000	-0-	-0-		-0-	-0-	-0-		25,467		181,467
	2018		156,000	-0-	-0-		-0-	-0-	-0-		23,006		179,006

Tarlis R Thompson, (4) COO	2019		117,055	-0-	-0-		151,500	-0-	-0-		-0-		268,555
	2018		117,055	-0-	-0-		76,624	-0-	-0-		-0-		193,679

(1)	During 2017 salary in the amount of $32,000 was accrued and unpaid during 2017 and 2018. During 2019, $15,550 was repaid leaving an unpaid balance of $16,450. On January 2, 2018, the Company entered into an employment agreement with Mr. Jensen, at an annual salary rate of $156,000 which expired on December 31, 2019. The Company also has provided for a discretionary quarterly performance bonus of up to $.64 per clean ton of coal mined. The payment of such bonus shall be in the sole discretion of the Company’s management and/or applicable Board of Directors. No bonus was awarded during 2018 and 2019. During 2019, other compensation totaling $15,550 included $15,550 of retroactive pay.

(2)	During 2017 salary in the amount of $32,000 was accrued and unpaid during 2017 and 2018. During 2019, $12,672 was repaid leaving an unpaid balance of $19,328. On January 2, 2018, the Company entered into an employment agreement with Mr. Sauve, at an annual salary rate of $156,000, which expired on December 31, 2019. The Company also has provided for a discretionary quarterly performance bonus of up to $.54 per clean ton of coal mined. The payment of such bonus shall be in the sole discretion of the Company’s management and/or applicable Board of Directors. No bonus was awarded during 2018 and 2019. Other compensation totaling $15,550 included $2,878 health insurance reimbursement and $12,672 of retroactive pay.

(3)	During 2017 salary in the amount of $21,487 was accrued and unpaid during 2017 and 2018. During 2019, $13,109 was repaid leaving an unpaid balance of $8,378. On January 2, 2018, the Company entered into an employment agreement with Mr. Taylor, at an annual rate of $156,000, which expired on December 31, 2019. The Company also has provided for a discretionary quarterly performance bonus of up to $.20 per clean ton of coal mined. The payment of such bonus shall be in the sole discretion of the Company’s management and/or applicable Board of Directors. No bonus was awarded during 2018 and 2019. Other compensation totaling $25,467 included $12,358 health insurance reimbursement and $13,109 of retroactive pay.

(4)	There is no employment agreement in place for Mr. Thompson. In 2019, Mr. Thompson was awarded 75,000 options as part of the company’s 2018 stock option plan. The options to Mr. Thompson vest equally over the course of three years, and as of December 31, 2019, none of the options have vested.

Name and Address of Shareholder	Number of Shares of Common Stock Beneficially Owned (1)		Percent of Common Stock Owned

Golden Properties, Ltd. (2) (3)		2,122,878		9.99	%
Thomas Shelton		1,727,273		6.37	%

(1)	A person is deemed to be the beneficial owner of securities that can be acquired by such a person within 60 days upon exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such a person (but not those held by any other person) and are exercisable within 60 days from that date have been exercised;

(2)	Based on 30,116,384 shares of Common Stock deemed to be outstanding as if one or more warrants were exercised up to the maximum amount of 9.99% (or 3,005,872 shares) of the issued and outstanding number of shares at December 31, 2019. This percentage has been rounded for convenience;

(3)	Golden Properties, Ltd. is the owner of several Company common stock warrants for the purchase of shares of our Common Stock, which warrants are exercisable at such company’s discretion, subject to the following limitation on amount. The warrant agreements provide that at no time may Golden Properties, Ltd. or its affiliates exercise any warrant that would result in their ownership of more than 9.99% of the issued and outstanding shares of our Common Stock on the date of exercise. Additionally, as of December 31, 2019 Alexander Lau, who is a principal of Golden Properties and a beneficial owner through Golden Properties, is believed to be a holder of 19,710 Class A Common shares. Accordingly, Golden Properties, Ltd. is presently deemed the beneficial owner of 3,005,872 shares of our Common Stock pursuant to Securities and Exchange Commission Rule 13d-3, promulgated under the Securities Exchange Act of 1934. The full number of shares that Golden Properties' beneficially owns (including all shares underlying all the warrants owned by Golden Properties and excluding those Class A Common shares owned by Alexander Lau stated above) is 6,148,213 shares.

Name	Number of Shares of Series A Preferred Stock Beneficially Owned (4)		Percent of Series A Preferred Stock Owned (5)			Common Stock Beneficially Owned (4)		Percent of Common Stock Beneficially Owned (6)

Officers and Directors

Mark C. Jensen, (7) Chief Executive Officer, Director		-		0	%		5,231,241		19.30	%

Thomas M. Sauve, (8) President, Director		-		0	%		4,397,519		16.22	%

Kirk P. Taylor, Chief Financial Officer		-		0	%		1,620,383		5.98	%

Tarlis R. Thompson, Chief Operating Officer		-		0	%		163,170		0.60	%

All Directors and Officers as a Group (4 persons)		-		0	%		11,412,313		42.10	%

5% Holders

Gregory Q. Jensen		-		0	%		1,620,383		5.98	%

Thomas Shelton		-		0	%		1,727,273		6.37	%

All Directors, Officers and 5% Holders as a Group (5 persons)		-		0	%		14,759,969		54.45	%

(4)	A person is deemed to be the beneficial owner of securities that can be acquired by such a person within 60 days from December 31, 2019, upon exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such a person (but not those held by any other person) and are exercisable within 60 days from that date have been exercised;

(5)	Based on 0 shares of Series A Convertible Preferred Stock outstanding as of December 31, 2019;

(6)	Based on 27,110,512 Class A Common Stock outstanding as of December 31, 2019. These percentages have been rounded for convenience;

(7)	Mr. Jensen beneficially owns 92,264 shares of our Class A Common Stock through his equity ownership in T Squared Capital LLC, which shares are included in the table above.

(8)	Mr. Sauve beneficially owns 61,509 shares of our Class A Common Stock through his equity ownership in T Squared Capital LLC, which shares are included in the table above.

	2019		2018
Audit fees	$	235,000	$	235,000
Audit related fees		34,000		---
Tax fees		---		---
All other fees		---		---

Exhibit Number	Description	Location Reference

3.1	Articles of Incorporation of Natural Gas Fueling and Conversion Inc.	Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on November 27, 2013.
3.2	Amended and Restated Articles of Incorporation of NGFC Equities Inc.	Incorporated herein by reference to Exhibit 3.1 to the Company’s 8k filed on February 25, 2015.
3.3	Articles of Amendment to Articles of Incorporation of NGFC Equities, Inc.	Incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K on February 21, 2017.
3.4	Articles of Amendment to Articles of Incorporation of American Resources Corporation dated March 24, 2017.	Incorporated herein by reference to Exhibit 3.4 to the Company’s Form 10-Q, filed with the SEC on May 15, 2018.
3.5	Bylaws of Natural Gas Fueling and Conversion Inc.	Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, filed with the SEC on November 27, 2013.
3.6	Bylaws, of NGFC Equities Inc., as amended and restated.	Incorporated herein by reference to Exhibit 3.2 to the Company’s 8k filed on February 25, 2015.
3.7	Articles of Amendment to Articles of Incorporation of American Resources Corporation dated November 8, 2018.	Filed as Exhibit 99.1 to the Company’s 8k filed on November 13, 2018, incorporated herein by reference.
3.8	Bylaws of American Resources Corporation, as amended and restated	Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on November 13, 2018.
4.1	Common Stock Purchase Warrant “B-4” dated October 4, 2017	Incorporated herein by reference to Exhibit 4.1 to the Company’s 8k filed on October 11, 2017.
4.2	Common Stock Purchase Warrant “C-1” dated October 4, 2017	Incorporated herein by reference to Exhibit 4.2 to the Company’s 8k filed on October 11, 2017.
4.3	Common Stock Purchase Warrant “C-2” dated October 4, 2017	Incorporated herein by reference to Exhibit 4.3 to the Company’s 8k filed on October 11, 2017.
4.4	Common Stock Purchase Warrant “C-3” dated October 4, 2017	Incorporated herein by reference to Exhibit 4.4 to the Company’s 8k filed on October 11, 2017.
4.5	Common Stock Purchase Warrant “C-4” dated October 4, 2017	Incorporated herein by reference to Exhibit 4.5 to the Company’s 8k filed on October 11, 2017.
4.6	Promissory Note for $600,000.00 dated October 4, 2017	Incorporated herein by reference to Exhibit 4.6 to the Company’s 8k filed on October 11, 2017.
4.7	Promissory Note for $1,674,632.14 dated October 4, 2017	Incorporated herein by reference to Exhibit 4.7 to the Company’s 8k filed on October 11, 2017.
4.8	Loan Agreement for up to $6,500,000 dated December 31, 2018	Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on January 3, 2019.
4.9	Promissory Note for up to $6,500,000 dated December 31, 2018	Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on January 3, 2019.
10.1	Secured Promissory Note	Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on May 15, 2018.
10.2	Security Agreement	Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on May 15, 2018.
10.3	Pledge Agreement	Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on May 15, 2018.
10.4	Guaranty Agreement	Incorporated herein by reference to Exhibit 99.4 to the Company’s 8k filed on May 15, 2018.
10.5	Bill of Sale	Incorporated herein by reference to Exhibit 99.5 to the Company’s 8k filed on May 15, 2018.
10.6	Sublease Agreement Between Colonial Coal Company, Inc. and McCoy Elkhorn Coal LLC	Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on May 1, 2018
10.7	Interim Operating Agreement	Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on May 1, 2018
10.8	Consolidated and Restated Loan and Security Agreement dated October 4, 2017	Incorporated herein by reference to Exhibit 10.1 to the Company’s 8k filed on October 11, 2017
10.9	Asset Purchase Agreement between Wyoming County Coal LLC and Thomas Shelton dated November 7, 2018	Incorporated herein by reference to Exhibit 10.9 to the Company’s registration statement filed on February 14, 2019.

10.10	Asset Purchase Agreement between Wyoming County Coal LLC and Synergy Coal, LLC dated November 7, 2018	Incorporated herein by reference to Exhibit 10.10 to the Company’s registration statement filed on February 14, 2019.
10.11	Security Agreement	Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on January 3, 2019.
10.12	Purchase Order	Incorporated herein by reference to Exhibit 99.4 to the Company’s 8k filed on January 3, 2019.
10.13	Employment Agreement with Mark C. Jensen	Incorporated herein by reference to Exhibit 10.13 to the Company’s registration statement filed on February 14, 2019.
10.14	Employment Agreement with Thomas M. Sauve	Incorporated herein by reference to Exhibit 10.14 to the Company’s registration statement filed on February 14, 2019.
10.15	Employment Agreement with Kirk P. Taylor	Incorporated herein by reference to Exhibit 10.15 to the Company’s registration statement filed on February 14, 2019.
10.16	Employee Stock Option Plan	Incorporated herein by reference to Exhibit 10.16 to the Company’s registration statement filed on February 14, 2019.
10.17	Letter of Intent	Incorporated herein by reference to Exhibit 10.17 to the Company’s registration statement filed on February 14, 2019.
10.18	Merger Agreement with Colonial Coal	Incorporated herein by reference to Exhibit 10.18 to the Company’s registration statement filed on February 14, 2019.
10.19	Share Exchange Agreement to replace Merger Agreement with Colonial Coal	Incorporated herein by reference to Exhibit 10.19 to the Company’s registration statement filed on February 14, 2019.
14.1	Code of Conduct	Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on November 13, 2018.
14.2	Financial Code of Ethics	Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on November 13, 2018.
23.1	Consent of MaloneBailey LLP	Incorporated Herewith
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed Herewith
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed Herewith
95.1	Mine Safety Disclosure pursuant to Regulation S-K, Item 104	Filed Herewith.

101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

NAME	TITLE	DATE

/s/ Mark C. Jensen	Principal Executive Officer,	May 29, 2020
Mark C. Jensen	Chief Executive Officer, Chairman of the Board of Directors

		Page
CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheets		F-2

Consolidated Statements of Operations		F-3

Consolidated Statements of Changes Stockholders' Deficit		F-5

Consolidated Statements of Cash Flows		F-6

Notes to Consolidated Financial Statements		F-7

	December 31,
	2019			2018

ASSETS

CURRENT ASSETS
Cash	$	3,324		$	2,293,107
Accounts Receivable		2,424,905			1,338,680
Inventory		515,630			163,800
Prepaid		-			147,826
Accounts Receivable - Other		234,240			319,548
Total Current Assets		3,178,099			4,262,961

OTHER ASSETS
Cash - restricted		265,487			411,692
Processing and rail facility		12,723,163			11,630,171
Underground equipment		8,294,188			8,717,229
Surface equipment		3,224,896			3,101,518
Mine development		669,860			2,913,241
Coal Refuse Storage		12,171,271			11,993,827
Less Accumulated Depreciation		(11,162,622	)		(6,691,259	)
Land		1,748,169			907,193
Note Receivable		4,117,139			4,117,139
Total Other Assets		32,051,551			37,100,751

TOTAL ASSETS	$	35,229,650		$	41,363,712

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable	$	11,044,479		$	8,121,162
Accounts payable - related party		718,156			474,654
Accrued interest		2,869,763			1,118,736
Funds held for others		-			79,662
Due to affiliate		132,639			142,500
Current portion of notes payables (net of unamortized discount of $0 and $134,296)		20,494,589			14,169,139
Convertible note payables		7,419,612			-
Current portion of reclamation liability		2,327,169			2,327,169
Total Current Liabilities		45,006,407			26,433,022

OTHER LIABILITIES
Long-term portion of note payable (net of issuance costs $417,183 and $428,699)		5,415,271			7,918,872
Reclamation liability		17,512,613			16,211,640
Total Other Liabilities		22,927,884			24,130,512

Total Liabilities		67,934,291			50,563,534

STOCKHOLDERS' DEFICIT
AREC - Class A Common stock: $.0001 par value; 230,000,000 shares
authorized, 27,410,512 and 17,763,469 shares issued and outstanding for the period end		2,740			1,776
AREC - Series A Preferred stock: $.0001 par value; 481,780 shares authorized, nil and 4,817,792 shares issued and outstanding		-			48
AREC - Series B Preferred stock: $.001 par value; 20,000,000 shares authorized, nil and nil shares issued and outstanding, respectively		-			-
AREC - Series C Preferred stock: $.001 par value; 20,000,000 shares authorized, nil and 50,000 shares issued and outstanding		-			5
Additional paid-in capital		90,326,104			42,913,532
Accumulated deficit		(123,033,485	)		(52,115,183	)

Total Stockholders' Deficit		(32,704,641	)		(9,199,822	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	35,229,650		$	41,363,712

	Years ended December 31,
	2019			2018

Coal Sales	$	24,456,831		$	31,204,181
Processing Services Income		20,876			320,644

Total Revenue		24,477,707			31,524,825

Cost of Coal Sales and Processing		(26,086,814	)		(24,992,312	)
Accretion Expense		(1,482,349	)		(1,366,322	)
Gain on purchase and disposal of asset, respectively		394,484			807,591
Depreciation		(4,588,136	)		(2,461,557	)
Amortization of mining rights		(1,657,673	)		(478,801	)
General and Administrative		(5,113,688	)		(6,176,350	)
Professional Fees		(6,750,848	)		(1,363,250	)
Production Taxes and Royalties		(4,222,175	)		(3,175,294	)
Impairment of Fixed Assets		(27,688,030	)		-

Development Costs		(7,236,652	)		(3,815,235	)

Total Expenses from Operations		(84,431,881	)		(43,021,530	)

Net Loss from Operations		(59,954,174	)		(11,496,705	)

Other Income		2,072,861			466,808
(Loss)/Gain on settlement of note payable and accounts payable		(22,660	)		68,010
Amortization of debt discount and debt issuance costs		(7,725,076	)		(670,601	)
Interest Income		164,686			164,166
Warrant modification expense		(2,545,360	)		-
Interest expense		(2,908,579	)		(1,288,990	)

Net Loss		(70,918,302	)		(12,757,312	)

Less: Preferred Series B dividend requirement		-			(114,850	)
Less: Net income attributable to Non Controlling Interest		-			(151,264	)

Net loss attributable to American Resources Corporation Shareholders	$	(70,918,302	)	$	(13,023,426	)

Net loss per share - basic and diluted	$	(2.94	)	$	(3.69	)

Weighted average shares outstanding		24,094,420			3,513,513

	Common		Common		Preferred			Preferred			Preferred			Preferred			Preferred		Preferred		Additional Paid-In			Retained			Non-Controlling
	Shares		Stock		A Shares			A Stock			B Shares			B Stock			C Shares		C Stock		Capital			Earnings			Interest			Total
Balance January 1, 2018		892,044		89		4,817,792			482			850,000			850			-		-		1,527,254			(39,091,757	)		397,856			(37,165,226	)

Forgiveness of accrued management fee		-		-		-			-			-			-			-		-		17,840,615			-			-			17,840,615

Issuance of shares to consultants		310,000		31		-			-			-			-			-		-		482,469			-			-			482,500

Issuance of options to consultants		-		-		-			-			-			-			-		-		236,594			-			-			236,594

Stock-based compensation		-		-		-			-			-			-			-		-		63,126			-			-			63,126

Asset acquisition using common shares		1,727,273		173		-			-			-			-			-		-		22,091,688			-			-			22,091,861

Conversion of payables to common shares		43,500		4		-			-			-			-			-		-		507,986			-			-			507,990

Conversion of Series A Preferred shares to common		14,453,373		1,445		(4,336,012	)		(434	)		-			-			-		-		(1,011	)		-			-			-

Conversion of Series B Preferred shares to common		267,859		27		-			-			(850,000	)		(850	)		-		-		114,823			-			-			114,000

Sale of 50,000 Series C Preferred shares		-		-		-			-			-			-			50,000		5		49,995			-						50,000

Option exercise		69,420		7		-			-			-			-			-		-		(7	)		-			-			-
																															-
Series B Preferred Dividend		-		-		-			-			-			-			-		-		-			(114,850	)		-			(114,850	)

Deconsolidation of variable interest entity		-		-		-			-			-			-			-		-		-			-			(549,120	)		(549,120	)

Net Loss																						-			(12,908,576	)		151,264			(13,059,840	)

Balance December 31, 2018		17,763,469		1,776		481,780			48			-			-			50,000		5		42,913,532			(52,115,183	)		-			(9,199,822	)

	American Resources						American Resources						American Resources				American Resources
	Common Stock						Preferred Series A						Preferred Series B				Preferred Series C
	Par value Shares			0.0001 Amount			Par Value Shares			0.0001 Amount			Par Value Shares		0.0001 Amount		Par Value Shares			0.0001 Amount			Additional paid in capital			Accumulated Deficit			Total
January 1, 2019		17,763,469			1,776			481,780			48			-		-		50,000			5			42,913,532			(52,115,183	)		(9,199,822	)

Issuance of Common Stock for Cash		4,795,200			479			-			-			-		-		-			-			7,763,121			-			7,763,600

Issuance of Common Shares for Services		360,315			36			-			-			-		-		-			-			1,906,217			-			1,906,253

Issuance of Common Shares for Asset Acquisition		2,000,000			200			-			-			-		-		-			-			24,399,800			-			24,400,000

Issuance of Common Shares for Conversion of Debt and Accounts payable		54,417			5			-			-			-		-		-			-			231,656			-			231,661

Issuance of Warrants to Consultants		-			-			-			-			-		-		-			-			2,524,500			-			2,524,500

Amortization of Options - Stock Based Compensation		-			-			-			-			-		-		-			-			377,255			-			377,255

Issuance of Common Shares for Warrant Exercise- cashless		599,427			60			-			-			-		-		-			-			(60	)		-			-

Conversion of Series A into common stock		1,605,934			161			(481,780	)		(48	)		-		-		-			-			(113	)		-			-

Conversion of Series C into common stock		13,750			1			-			-			-		-		(50,000	)		(5	)		4			-			-

Beneficial Conversion on note payable		-			-			-			-			-		-		-			-			7,362,925			-			7,362,925

Return of common shares		(107,000	)		(11	)		-			-			-		-		-			-			11			-			-

Warrant modification expense		-			-			-			-			-		-		-			-			2,545,360			-			2,545,360

Underwriter warrants		-			-			-			-			-		-		-			-			4,098			-			4,098

Issuance of common shares with note payable		325,000			33			-			-			-		-		-			-			297,798			-			297,831

Net loss		-			-			-			-			-		-		-			-			-			(70,918,302	)		(70,918,302	)

Balance December 31, 2019		27,410,512			2,740			-			-			-		-		-			-			90,326,104			(123,033,485	)		(32,704,641	)

	2019			2018
Cash Flows from Operating activities:
Net loss	$	(70,918,302	)	$	(12,757,312	)
Adjustments to reconcile net income (loss) to net cash
Depreciation		4,588,136			2,461,557
Amortization of mining rights		1,657,673			478,801
Accretion expense		1,482,349			1,366,322
Gain on disposition		-			(807,591	)
Forgiveness of debt		-			(68,010	)
Gain on purchase of assets		(394,484	)		-
Impairment loss		27,688,030			-
Amortization of debt discount and issuance costs		7,725,076			670,601
Recovery of advances receivable		(177,686	)		(74,887	)
Warrant expense		2,524,500			-
Warrant modification expense		2,545,360			-
Insurance of common shares for services		1,906,253			-
Loss on settlement of accounts payable with common shares		22,660			-
Stock compensation expense		377,255			782,220
Change in current assets and liabilities:

Accounts receivable		(1,000,917	)		531,882
Prepaid expenses and other assets		147,826			(147,826	)
Inventory		(351,830	)		451,296
Accounts payable		1,164,080			2,496,749
Account payable related party		243,502			474,654
Funds held for others		(79,662	)		(3,166	)
Accrued interest		1,643,075			782,166
Cash used in operating activities		(19,207,106	)		(3,365,544	)

Cash Flows from Investing activities:
Advances made in connection with management agreement		-			(99,582	)
Advance repayment in connection with management agreement		-			222,304
Cash paid for PPE, net		(327,250	)		(133,363	)
Cash received from acquisitions		650,000			-
Cash provided by investing activities		322,750			(10,641	)

Cash Flows from Financing activities:
Principal payments on long term debt		(2,059,484	)		(2,309,571	)
Proceeds from long term debt (net of issuance costs $0 and $0)		8,660,527			8,431,965
Proceeds from convertible debt		599,980			-
Proceeds from related party		(9,861	)		18,500
Net (payments) proceeds from factoring agreement		1,489,508			(495,576	)
Sale of common stock for cash		7,767,698			-
Proceeds series C preferred stock		-			50,000
Cash provided by financing activities		16,448,368			5,695,319

Increase (decrease) in cash		(2,435,988	)		2,319,134

Cash, beginning of year		2,704,799			385,665

Cash, end of year	$	268,811		$	2,704,799

Supplemental Information

Assumption of net assets and liabilities for asset acquisitions	$	6,623,999		$	24,490,282
Shares issues in asset acquisition	$	24,400,000		$	-
Equipment for notes payable	$	-		$	906,660
Management fee forgiven	$	-		$	17,840,615
Discount on note due to beneficial conversion feature	$	7,362,925		$	-
Conversion of note payable to common stock	$	231,661		$	261,000
Issuance of shares as part of note payable consideration	$	297,831		$	-
Conversion of trade payable to equity	$	-		$	76,740
Cashless exercise of options into common shares	$	-		$	7
Conversion of Preferred Series A Shares to common shares	$	161		$	1,445
Conversion of Preferred Series C Shares to common shares	$	1		$	-
Return of shares related to employee settlement	$	11		$	-
Conversion and settlement of Preferred Series B Shares and dividends to common shares	$	-		$	114,000
Preferred Series B Shares accrued interest	$	-		$	114,850
Warrant exercise for common shares	$	60		$	-
Increase in related parties payable	$	-		$	474,654

Cash paid for interest	$	557,663		$	506,826
Cash paid for income tax	$	-		$	-

Assets
Mining Rights	$	2,678,732
Liabilities
Vendor Payables	$	53,771
Asset Retirement Obligation	$	2,624,961

Assets
Mining Rights	$	66,129
Liabilities
Asset Retirement Obligation	$	66,129

Assets
Acquired Mining Rights	$	25,400,000
Land		1,500,000
Liabilities
Seller Note	$	2,500,000

Assets
Cash	$	400,000
Restricted Cash		250,000

Liabilities
Reclamation liability	$	77,831

Assets
Coal Inventory	$	659,331
Mine Development		524,268
Coal Refuse		179,522
Land		850,826
Equipment - Underground		873,161
Equipment - Surface		4,743
Processing and Loading Facility		1,954,317
Liabilities
Reclamation liability	$	2,009,181
Accrued liabilities		3,036,987

	December 31, 2019		December 31, 2018
Cash	$	3,324	$	2,293,107
Restricted Cash		265,487		411,692
Total cash and restricted cash presented in the consolidated statement of cash flows	$	268,811	$	2,704,799

	2019			2018
Beginning Balance	$	18,528,009		$	14,987,135
Accretion		1,482,349			1,366,322
Reclamation work		-			-
Gain on Reclamation Work		-			-
Dispositions		-			(919,158	)
Wayland Acquisition		-			66,129
PointRock Acquisition		-			2,624,961
Razorblade Mine Development		-			168,380
WCC Acquisition		-			234,240
Gold Star Acquisition		77,831			-
PCR Acquisition		2,009,181			-
Change in ARO Estimate		(2,262,931	)		-
Ending Balance	$	19,839,782		$	18,528,009
Current portion of reclamation liability	$	2,327,169		$	2,327,169
Long-term portion of reclamation liability	$	17,512,613		$	16,211,640

Processing and Rail Facilities	7-20 years
Surface Equipment	7 years
Underground Equipment	5 years
Mine Development	5-10 years
Coal Refuse Storage	10 years

	2019		2018

Equipment Loans - QEI

Note payable to an unrelated company in monthly installments of $2,064, with interest at 8.75%, through maturity in March 2019, when the note is due in full. The note is secured by equipment and a personal guarantee by an officer of the Company.	$	-	$	4,627

Note payable to an unrelated company in monthly installments of $1,468, With interest at 6.95%, through maturity in March 2021, when the note is due in full. The note is secured by equipment and a personal guarantee by an officer of the Company.		28,861		35,683

On September 8, 2017, Quest entered into an equipment purchase agreement with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $600,000. The note carries 0% interest and is due April 1, 2019. The agreement provided for $80,000 paid upon execution, $30,000 monthly payments until the balance is paid in full. The note is secured by the equipment purchased. The note is currently in default.		220,000		280,000

On October 19, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, Inc. to purchase certain surface equipment for $90,400. The agreement calls for monthly payments until maturity of October 19, 2019 and interest of 9.95%. The note is secured by the equipment purchased.		4,136		66,324

On October 20, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, Inc. to purchase certain surface equipment for $50,250. The agreement calls for monthly payments until maturity of October 20, 2019 and interest of 10.60%. The note is secured by the equipment purchased.		5,166		31,105

On December 7, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $56,900. The agreement calls for an interest rate of 8.522%, monthly payments until maturity of January 7, 2021. The note is secured by the equipment purchased.		34,594		39,838

On January 25, 2018, QEI entered into an equipment loan agreement with an unrelated party in the amount of $346,660. The agreement calls for monthly payments of $11,360 until maturity date of December 24, 2020 and carries an interest rate of 9%. The loan is secured by the underlying surface equipment purchased by the loan. Loan proceeds were used directly to purchase equipment.		169,749		235,983

On May 9, 2018, QEI entered into a loan agreement with an unrelated party in the amount of $1,000,000 with a maturity date of September 24, 2018 with monthly payments of $250,000 due beginning June 15, 2018. The note is secured by the assets and equity of the company and carries an interest rate of 0%. Proceeds of the note were split between receipt of $575,000 cash and $425,000 payment for new equipment. No payments have been made on the note which is in default. The note is secured by the equipment purchased by the note and a personal guarantee of an officer.		1,000,000		1,000,000

Business Loan - ARC

On October 4, 2017, ARC entered into a consolidated loan agreement with an unaffiliated entity. $7,764,980 has been advanced under the note. The agreement calls for interest of 7% and with all outstanding amounts due on demand. The note is secured by all assets of Quest and subsidiaries. In conjunction with the loan, warrants for up to 5,017,006 common shares were issued at an exercise price ranging from $.01 to $11.44 per share and with an expiration date of October 2, 2020. The loan consolidation was treated as a loan modification for accounting purposes giving rise to a discount of $140,000. The discount was amortized over the life of the loan with $105,000 included as interest expense and $35,000 included as a note discount as of This note was not paid and was modified into a convertible note (Convertible Note) December 31, 2018. And $35,000 included as interest expense and $0 included as a note discount as of December 31, 2019. The note is secured by all assets of the Company.		-		6,819,632

Empire – Secured Seller Note

On February 20, 2019, as part of the merger with Empire Kentucky Land, Inc, the Company executed a seller financing note in the amount of $2,000,000 with the maturity date of August 20, 2019. The note was in technical default and carries a default interest rate of 5% until settled on May 8, 2020. (see note 10)		2,000,000		-

Sales Financing Arrangement ARC

The Company received $500,000 in cash with $700,000 worth of coal held as collateral. The agreement has a maturity of sixty days (July 30, 2019) and does not have a stated interest rate, however, the interest expense, “additional consideration” is stated to be $50,000 over the two-month term. The company also issued 25,000 shares as consideration for the inventory line of credit. This note is currently in default. The inventory line of credit is secured by the underlying inventory	$	450,000		-

ARC Corporate Loan

On August 9, 2019, the Company entered into a $500,000 promissory note with a non-related entity. The note bears interest at 11% and is due by September 15, 2019. On August 6, 2019, $250,000 was drawn on the promissory note. On August 9, 2019, $250,000 was drawn on the promissory note. On August 16, 2019, an additional $300,000 was drawn on the promissory note. The note included 300,000 common shares resulting in a relative fair value calculation discount of $210,581 which is amortized over the term of the note. This note is currently in default. The note is secured by specific equipment. Additional funds totaling $1,000,000 was advanced in December 31, 2019.		1,800,000		-

PCR Acquisition Note

On September 27, 2019, the Company entered into a promissory note with a non-related entity for an amount up to $1,850,000 in conjunction with the PCR asset acquisition but separate from the assumed liabilities. $250,000 was drawn on this note as of September 30, 2019. The note bears interest at 4% and is due in full on September 27, 2020. The note was subsequently amended on October 18, 2019 the increase the full amount of the borrowing to $2,010,547. The note is unsecured. The initial draw was to be used for closing costs and the remaining tranches are to be used for payroll and payroll related expenses. The note carries restrictive covenants outlined in the note agreement. The note is currently in default.		2,010,547		-

Customer Loan Agreement - ARC

On December 31, 2018, the Company entered into a loan agreement with an unrelated party. The loan is for an amount up to $6,500,000 of which $3,000,000 was advanced on December 31, 2018 and $3,500,000 was advanced During 2019. The promissory agreement carries interest at 5% annual interest rate and payments of principal and interest shall be repaid at a per-ton rate of coal sold to the lender. The outstanding amount of the note has a maturity of April 1, 2020. The note is secured by all assets of the Company. Loan issuance costs totaled $41,000 as of December 31, 2018. The note is currently in default.	$	6,035,988	$	3,000,000

Sales Financing Arrangement ARC

During May 2018, the company entered into a financing arrangement with two unrelated parties. The notes totaled $2,859,500, carried an original issue discount of $752,535, interest rate of 0% and have a maturity date of January 2019 and are secured by future receivables as well as personal guarantees of two officers of the company. As of December 31, 2019 and 2018, unamortized original issue discount totaled $0 and $88,685 and unamortized loan issuance costs totaled $0 and $4,611, respectively. On April 1, 2020, $375,690.37 of this note was converted into a senior convertible note. (See Note 10) The remaining portion of the note is in default.		804,618		1,613,049