AREC 8-K

American Resources Corp (AREC)

8-K 2021-03-11 For: 2021-03-11

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Exhibit No.		Description
99.1		Earnings Release Dated March 11, 2021

	American Resources Corporation

Date: March 11, 2021	By:	/s/ Mark C. Jensen
		Mark C. Jensen
		Chief Executive Officer

	Years ended December 31,
	2020	2019

Coal Sales	$524,334	$24,456,831
Processing Services Income	-	20,876
Metal Recovery and Sales	535,357	-

Total Revenue	1,059,691	24,477,707

Cost of Coal Sales and Processing	(3,749,519)	(26,086,814)
Accretion Expense	(1,287,496)	(1,482,349)
Gain on purchase and disposal of asset, respectively	-	394,484
Depreciation	(2,298,703)	(4,588,136)
Amortization of mining rights	(1,251,357)	(1,657,673)
General and Administrative	(2,486,799)	(5,113,688)
Professional Fees	(1,076,548)	(6,750,848)
Production Taxes and Royalties	(1,357,749)	(4,222,175)
Impairment of Fixed Assets	-	(27,688,030)
Development Costs	(3,998,885)	(7,236,652)

Total Expenses from Operations	(17,507,056)	(84,431,881)

Net Loss from Operations	(16,447,365)	(59,954,174)

Other Income	20,538	2,072,861
(Loss)/Gain on settlement of note payable and accounts payable	-	(22,660)
Gain on Interest Forgiven	832,500
Gain on Depreciation Recapture	1,706,569
Gain on Sale of Stock	6,820,949
Amortization of debt discount and debt issuance costs	(11,516)	(7,725,076)
Interest Income	205,857	164,686
Warrant modification expense	-	(2,545,360)
Interest expense	(3,383,294)	(2,908,579)

Net Loss	(10,255,762)	(70,918,302)

Less: Net income attributable to Non Controlling Interest	-	-

Net loss attributable to American Resources Corporation Shareholders	$(10,255,762)	$(70,918,302)

Net loss per share - basic and diluted	$(.35)	$(2.94)

Weighted average shares outstanding	29,359,993	24,094,420

	December 31,
	2020	2019

ASSETS

CURRENT ASSETS
Cash	$10,617,495	$3,324
Accounts Receivable	38,650	2,424,905
Inventory	150,504	515,630
Prepaid	175,000	-
Accounts Receivable - Other	234,240	234,240
Total Current Assets	11,215,889	3,178,099

OTHER ASSETS
Cash - restricted	583,708	265,487
Processing and rail facility	11,591,273	12,723,163
Underground equipment	6,838,417	8,294,188
Surface equipment	2,527,576	3,224,896
Mine development	561,575	669,860
Coal Refuse Storage	12,134,192	12,171,271
Less Accumulated Depreciation	(12,726,809)	(11,162,622)
Land	1,572,435	1,748,169
Note Receivable	4,117,139	4,117,139
Total Other Assets	27,199,506	32,051,551

TOTAL ASSETS	$38,415,395	$35,229,650

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable	$4,288,794	$11,044,479
Non-Trade Payables	3,850,781	-
Accounts payable - related party	679,146	718,156
Accrued interest	1,043,519	2,869,763
Funds held for others	-	-
Due to affiliate	74,000	132,639
Current portion of notes payables (net of unamortized discount of $0 and $134,296)	10,997,692	20,494,589
Convertible note payables	-	7,419,612
Current portion of reclamation liability	2,327,169	2,327,169
Total Current Liabilities	23,261,101	45,006,407

OTHER LIABILITIES
Long-term portion of note payable (net of issuance costs $405,667 and $428,699)	5,330,752	5,415,271
Long-term portion of convertible note payable (net of unamortized discount of $0 and $0)	14,300,907	-
Reclamation liability	15,528,135	17,512,613
Total Other Liabilities	35,159,794	22,927,884

Total Liabilities	58,420,895	67,934,291

STOCKHOLDERS' DEFICIT
AREC - Class A Common stock: $.0001 par value; 230,000,000 shares
authorized, 40,522,762 and 27,410,512 shares issued and outstanding for the period end	4,256	2,740
AREC - Series A Preferred stock: $.0001 par value; 100,000 shares authorized, nil and nil shares issued and outstanding	-	-
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 nil shares issued and outstanding	-	-
Additional paid-in capital	113,279,448	90,326,104
Accumulated deficit	(133,289,247)	(123,033,485)

Total Stockholders' Deficit	(20,005,500)	(32,704,641)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$38,415,395	$35,229,650

	2020	2019
Cash Flows from Operating activities:
Net loss	$(10,255,762)	$(70,918,302)
Adjustments to reconcile net income (loss) to net cash
Depreciation	1,855,236	4,588,136
Amortization of mining rights	939,672	1,657,673
Accretion expense	1,287,496	1,482,349
Liabilities reduced due to sale of assets	(3,271,974)	-
Forgiveness of debt	-	-
Gain on purchase of assets	-	(394,484)
Impairment loss		27,688,030
Amortization of debt discount and issuance costs	-	7,725,076
Recovery of advances receivable		(177,686)
Warrant expense	-	2,524,500
Warrant modification expense	-	2,545,360
Issuance of common shares for services	18,800	1,906,253
Issuance of warrants in conjunction with convertible notes	1,223,700	-
Loss on settlement of accounts payable with common shares	642,060	22,660
Return of common shares for property sale	(1,840,200)	-
Stock compensation expense	230,050	377,255
Change in current assets and liabilities:

Accounts receivable	2,386,255	(1,000,917)
Prepaid expenses and other assets	(175,000)	147,826
Inventory	365,126	(351,830)
Accounts payable	(4,301,976	1,164,080
Account payable related party	(97,649)	243,502
Funds held for others		(79,662)
Accrued interest	(1,826,244)	1,643,075
Cash used in operating activities	(13,847,255)	(19,207,106)

Cash Flows from Investing activities:
Advances made in connection with management agreement	-	-
Advance repayment in connection with management agreement	-	-
Cash received (paid) for PPE, net	417,857	(327,250)
Cash received from acquisitions	-	650,000
Cash provided by investing activities	417,857	322,750

Cash Flows from Financing activities:
Principal payments on long term debt	(1,103,191)	(2,059,484)
Proceeds from long term debt (net of issuance costs $0 and $0)	28,000	8,660,527
Proceeds from convertible debt	14,411,949	599,980
Proceeds from related party		(9,861)
Net (payments) proceeds from factoring agreement	(1,807,443)	1,489,508
Sale of common stock for cash	12,832,475	7,767,698
Proceeds series C preferred stock	-	-
Cash provided by financing activities	24,361,790	16,448,368

Increase (decrease) in cash	10,932,392	(2,435,988)

Cash, beginning of year	268,811	2,704,799

Cash, end of year	$11,201,203	$268,811

Supplemental Information

Assumption of net assets and liabilities for asset acquisitions	$-	$6,623,999
Shares issues in asset acquisition	$-	$24,400,000
Discount on note due to beneficial conversion feature	$-	$7,362,925
Conversion of note payable to common stock	$-	$231,661
Issuance of shares as part of note payable consideration	$-	$297,831
Conversion of Preferred Series A Shares to common shares	$-	$161
Conversion of Preferred Series C Shares to common shares	$-	$1
Return of shares related to employee settlement	$-	$11
Warrant exercise for common shares	$-	$60
Cash paid for interest	$327,239	$557,663
Cash paid for income tax	$-	$-

	For the three months ended Dec. 31, 2020	For the twelve months ended Dec. 31, 2020	For the three months ended Dec. 31, 2019	For the twelve months ended Dec. 31, 2019
Net Income	(9,097,560)	(10,255,762)	(40,047,544)	(70,918,302)

Interest & Other Expenses	2,908,579	3,383,294	1,233,926	2,908,579
Income Tax Expense	-	-	-	-
Accretion Expense	305,636	1,287,496	519,650	1,482,349
Depreciation	443,467	2,298,703	1,551,389	4,588,136
Amortization of Mining Rights	311,685	1,251,357	65,563	1,657,673
Amortization of Debt Discount & Issuance	2,879	11,516	670,601	7,725,076
Non-Cash Stock & Option Comp. Expense	115,026	345,076	131,869	2,283,478
Non-Cash Warrant Expense	-	-	-	5,069,860
Development Costs	2,770,552	3,998,885	1,324,063	7,236,652
Non-Cash Impairment	-	-	27,688,030	27,688,030
PCR Restructuring Expenses	225,269	452,743	3,669,164	3,669,164

Total Adjustments	7,083,093	13,029,070	36,854,255	64,308,997

Adjusted EBITDA	(2,014,467)	2,773,308	(3,193,289)	(6,609,305)