American Resources Corp

Current report

The following table summarizes the changes in revenue generating operations:

Current report

Revenues for the 2024 and 2023 were $383,234 and $13,234,399, respectively. The primary drivers of the decrease were reductions in coal sales and royalty income. Declines were due to adverse market conditions and unfavorable pricing that led to our decision to suspend coal production activities beginning in 2023.

Current report

For the year ended 2024, the Company had de minimis tons of coal sold to steel making end users. For the year ended 2023, tons sold to steel making end users amounted to 67,373 tons with a realized sales price of $180.

Current report

The following table summarizes the changes in operating expenses (income):

Current report

Total operating expenses decreased in 2024 as compared to 2023. This decrease was primarily attributable to decreases in coal production and holdings costs, litigation expense, production taxes and royalties and development. These decreases were partially offset by increases in depreciation, amortization of mining, general and administrative and professional. General and administrative expenses primarily consist of contract labor, payroll, facility maintenance, stock-based compensation to employees and consultants, insurance and other routine operating costs. The decrease in our coal production and holding costs is aligned with the suspension of our coal production activities beginning in 2023. The decrease in litigation expense is because in 2023, American Infrastructure recognized charges for certain litigation matters where the potential loss was assessed as probable in that year. The increase in general and administrative expenses is primarily attributable to the shift in our business from coal production to other activities including the development of RLMT technology for refining rare earth and battery elements.

Current report

The following table summarizes the changes in other income (expense):

Current report

The increase in net other expense is primarily attributable to the net increase in interest expense driven by the WCC bonds being outstanding for the full twelve months of 2024 compared to approximately seven months in 2023 and the KCC bonds that were issued in March 2024.

Current report

Our primary sources of liquidity are derived from existing unrestricted cash, reimbursements from bond funds and other debt and capital proceeds. With the suspension of our coal production activities beginning in 2023 and the development stage of our new ReElement and Electrified Materials businesses through 2024, our sources of revenue in 2024 were primarily limited to royalty income and coal processing fees. We anticipate our ReElement and Electrified Materials new businesses to achieve increasing revenues in 2025; however, we will continue to require cash flows from financing activities to support operations and the continued development of our new business models.

Current report

As of December 31, 2024, the company has a cash balance of $604,485 and a working deficit of $73,477,808. We expect to fund our liquidity requirements over the next 12 months primarily with cash on hand and additional debt and equity financing transactions. If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may be required to rationalize our expenditures or slow down efforts to further develop our new business models. We do not have any credit lines currently available to fund our liquidity requirements. Maintaining future liquidity is subject to significant uncertainties primarily related to the generation of revenues from our new business models at levels that surpass breakeven and the ability to obtain additional debt and equity financing.

Current report

The $2,124,423 increase in cash used for operating activities was primarily due to a $1,471,777 increase in net loss and a $3,654,193 decrease in cash flow provided by changes in working capital offset by an increase of $3,001,547 in non-cash charges.

Current report

Cash provided by investing activities during 2024 was $55,976 compared to cash used in investing activities of $1,127,427 in 2023. The change was primarily due to purchases of property and equipment, net of capitalized interest income and (expense) of $1,059,062 offset proceeds from sales of equipment of $400,000 and proceeds from short-term investments of $715,038.

Current report

Cash provided by financing activities during 2024 was $146,661,482 compared to $45,612,289 in 2023. The change was due to proceeds from tax exempt bonds, net of $149,719,203, proceeds from convertible promissory note of $1,624,860, proceeds from exercise of stock option of $156,900, proceeds from warrant conversions of $32,339, proceeds received from other financing obligations of $2,493,819 offset by repayments of other financing obligations of $7,365,639.

Previous report

Revenues for the year ended December 31, 2023 were $16,744,075 and 2022 were $39,474,269, respectively. The primary drivers for revenue decline were slowing down of global infrastructure markets, international import bans and overall softening in customer pricing. In response to slower demand and customer requests, Perry County was idled.

Previous report

Contribution of revenues:

Previous report

Year ended 2023

Previous report

For the year ended 2023, tons sold to steel making end users amounted to 67,372.57 with a realized sales price of $180.32. Steelmaking coal was contributed by McCoy Elkhorn’s Carnegie 1 mine.

Previous report

For the year ended 2023, tons sold to industrial and specialty end users amounted to 0 tons.

Previous report

Year ended 2022

Previous report

For the year ended 2022, tons sold to steel making end users amounted to 111,807 with a realized sales price of $233.11. Steelmaking coal was contributed by McCoy Elkhorn’s Carnegie 1 and Carnegie 2 mines.

Previous report

For the year ended 2022, tons sold to industrial and specialty end users amounted to 105,577.11 with a realized sales price of $153.43. For the year ended 2022, 100% of coal sales revenue was contributed by Perry County for industrial and specialty end users.

Previous report

Cost and Expenses.

Previous report

Cost of sales.* ***The decrease in cost of sales is due to lower sales volumes as a result of the ceasing of production on the Perry County mines.

Previous report

*Accretion.*The decrease in accretion expense in the year ended December 31, 2023 is driven primarily by the reduced liability balance due to no changes in the previous estimates.

Previous report

*Depreciation.*The decrease in depreciation expense in the year ended December 31, 2023 is primarily due to the Company’s significant disposal of fixed assets in 2022. The Company has acquired the majority of new fixed assets under financing leases.

Previous report

General and administrative. The increase in general and administrative expense in the year ended December 31, 2023 is primarily due to higher compensation cost, higher stock compensation recognized during the year and increase in travel and health benefits.

Previous report

Production taxes and royalties. The decrease in production taxes and royalties in the year ended December 31, 2023 is due to lower sales volumes and prices.

Previous report

Development.** **To meet specific demand and customer requests, Perry County and Carnegie 1 were re-opened with updated mine plans and more efficient long term operating structure. This re-working included one-time development costs for expanding and increasing efficient capacity at the operating locations was primarily recognized in the prior period and is the reason for the significant decrease in December 31, 2023. The Company expects to continue to improve mining performance and offset inflationary pressures through efficiency gains.

Previous report

Other income (expenses). The decrease in other income (expenses) is primarily due to the sale of patents that occurred totaling $16,000,000, the forgiveness of the PPP loan of $1,521,304 and the cancellation of notes payable by issuing common stock in lieu of payment to reduce our debt balance in prior year.

Previous report

Our primary sources of liquidity are derived from existing unrestricted cash balances, proceeds from future coal sales, and certain financing arrangements. Our primary capital resource requirements stem from the cost of coal sales and processing, general and administrative, capital expenditures, debt service obligations, reclamation obligations, and collateral requirements.

Previous report

As of December 31, 2023, the company has a cash balance of $7,034,370 and working capital of $16,814,931. The Company will use a combination of cash proceeds from operations, issuance of common stock for cash or for debt conversion and issuance of new debt instruments to satisfy both short term and long term obligations, including the settlement of payables and debt that are in default of their original agreements.

Previous report

These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses and as of December 31, 2023, had an accumulated deficit of $178,694,329. For the year ending December 31, 2023, the Company sustained a net loss of $11,455,086. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date these financial statements were issued. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. The Company will continue to seek to raise additional funding through debt or equity financing during the next twelve months from the date of issuance of these financial statements. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.

Previous report

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

Previous report

Cash used for operating activities during 2023 was $14,515,241 compared to cash provided by $2,549,189 in 2022. The change was primarily due to a net loss of $11,455,086, offset by amortization of mining rights of $1,240,914, accretion expense of $993,165, amortization of right-of-use asset of $626,253, option expense of $1,506,292, unrealized gain on short-term investments of $499,639, gain on sale of equipment of $8,475,468 and a change in working capital of $1,284,489.

Previous report

Cash used by investing activities during 2023 was $28,833,246 compared to $1,125,759 in 2022. The change was primarily due to an increase in the net purchase of short-term investments of $29,797,565 in 2023 compared to $0 in 2022.

Previous report

Cash provided by financing activities during 2023 was $37,387,162 compared to cash used by financing activities in 2022 of $1,015,848 for the prior year. The change was due to $1,112,850 repayments on long term debt, $5,599,988 repayments of finance lease liabilities, and $44,100,000 proceeds from tax exempt bonds.