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American Resources Corporation Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Business Outlook

Tuesday, 29 March 2022 04:05 PM

American Resources Corporation


Company highly aligned with major U.S. priorities in both infrastructure and electrification

On track be the first in the U.S. to produce isolated and purified critical and rare earth elements (REEs) and bring the most environmentally-safe refining solutions to the domestic marketplace

Significant increase in carbon demand and price realization being seen as Company scales operations and on track this March to realize operating profit

Current specialty and metallurgical carbon backlog represents approximately $110 million

Strong balance sheet provides financial strength and flexibility to execute on its innovation, collaboration and growth plans

Company to host update conference call today at 4:30 PM ET

FISHERS, IN / ACCESSWIRE / March 29, 2022 / American Resources Corporation (NASDAQ:AREC) ("American Resources" or the "Company"), a next generation and socially responsible supplier of rare earth and critical elements, carbon and advanced carbon materials to the new infrastructure and electrification marketplace, today announced financial results for the fourth quarter and full year ended December 31, 2021. The Company will host a conference call and webcast, today, March 29, 2022, at 4:30 PM ET (details below).

Mark Jensen, Chairman and CEO of American Resources Corporation commented, "Throughout 2021 we further established our pillars of growth and believe the year was marked by tremendous success in transforming our Company to expand our near term and future potential and opportunities. In retrospect and as a point of reference, we began unveiling the patents and technology behind our rare earth 'Capture - Process - Purify' process chain in early 2021. Today, we are only a few months away from being the first in the U.S. to produce isolated and purified critical and REEs and bringing the most environmentally-safe refining solutions to the domestic marketplace. Solidifying our position not only addresses our national supply chain and sustainability challenges of critical and REEs, but also eliminates the need to depend on foreign nations, such as China, for the final stage of refinement for these increasingly important raw materials. As we become the nation's first producer of highly-purified critical and REEs, which we believe is a monumental milestone, we are also steadily increasing our carbon production in one of the strongest markets we have ever seen."

2021 Key Division Highlights

American Rare Earth

  • Advanced its innovation by entering into exclusive patent and technology licensing agreements on 16 patents and technologies to establish the foundation of American Rare Earth's "Capture - Process - Purify" process chain and entered into three sponsored research partnerships to further develop and refine the most environmentally friendly methods to capture, process and purify critical and REEs from waste streams and end-of-life products.
  • Achieved a high purity (99.5%) of the rare earth magnet metals neodymium (Nd), praseodymium (Pr) and dysprosium (Dy) and battery metals lithium (Li), cobalt (Co), nickel (Ni) and manganese (Mn) from end-of-life permanent magnets and NMC batteries from electric vehicles using its patented chromatography process and technology.
  • Advanced its efforts to onshore the final isolation and purification stage of critical and REEs with its site selection of its first two critical and REE isolation and purification facilities; both in Noblesville, IN, and began the build phase of its initial two commercial production trains at its first facility. This facility will be the first facility in the United States capable of producing isolated and high-purity critical and REEs while focusing on the sustainability and circular supply chain.

American Carbon

  • Announced plans to restart its Wyoming County, WV mining complex along with receiving preliminary approval from the state of West Virginia for the issuance of $45 million tax-exempt industrial development bonds for advanced carbon and rare earth and critical mineral processing.
  • Acquired E4-2 mineral reserves to secure the long-term viability and of its Perry County Resources complex and further reduces its operating costs.


  • Elevated its shareholder-focused and value-creative culture by pricing the initial public offering of American Acquisition Opportunity Inc. (NADSAQ: AMAOU), a blank check company in which the Company has an indirect investment, and sub-licensed two of its exclusive patents for the production of graphene to Novusterra Inc. for a 50% equity stake in the privately-held company and a portion of future cash flows from the sale of graphene from that entity.
  • Strengthened its balance sheet and financial flexibility by eliminating approximately $19 million of debt and payables and added over $30 million of equity capital.

"Looking forward to the remainder of 2022, our excitement over the opportunities we have in front of us continues to reach an all-time high. Our current specialty and metallurgical carbon backlog represents approximately $110 million. As our carbon production continues to scale and become more consistent, we're confident in showcasing the low-cost and growth attributes of our platform with the investments we've made and with the future investments we're planning at our Wyoming County, West Virginia complex. Over the first several weeks of 2022, once we managed through the Omicron variant, we have seen our rate of production become more consistent and will realize a profitable March month on a $5.25 to $6 million monthly revenue run rate," continued Mr. Jensen.

"The opportunity for American Rare Earth continues to manifest at a very rapid pace and continues to be bolstered by our tremendous team and partnerships. We wholeheartedly believe that the greatest impact we can make to our domestic supply of critical and REEs is to provide the most efficient and environmentally-safe solutions for the final stage of separation and purification while providing a sustainable and circular supply of materials. We will be showcasing our ability to achieve this on a commercial scale this year and will commensurately continue to bolster our upstream and downstream partnerships. "

Expected Near-Term Catalysts

  • Continued increase in carbon production to meet backlog and growing market demand.
  • Closing of $45 million West Virginia tax-exempt industrial development bonds for Company's Wyoming County advanced carbon and rare earth processing facility.
  • Additional American Rare Earth upstream and downstream partnerships to bolster feedstocks of end-of-life products for critical and REEs and offtake customers of recycled, sustainable and domestic sources of high-purity battery and magnet metals.
  • Broaden its suite of patented IP to efficiently produce critical and REEs using the lowest cost and most environmentally-safe methods.
  • Commencement of its first two commercial production trains producing isolated and high-purity battery and magnet metals.

Conference Call Information

American Resources management will host a conference call for investors, analysts and other interested parties today, Tuesday, March 29, 2022 at 4:30 PM ET.

Interested participants and investors may access the conference call by dialing (877) 407-4019 and referencing American Resources Corporation's Fourth Quarter and Full Year 2021 Conference Call, or by the webcast link: here.

Financial Results for Fourth Quarter and Year-End December 31, 2021

For the full year of 2021, American Resources reported a net income loss of $32.4 million or a loss of $0.59 per share for the twelve months ended December 31, 2021, as compared with a net income loss $10.3 million or loss of $0.35 per share for the full year of 2020. The Company earned adjusted earnings before interest, taxes, depreciation, amortization, accretion on asset retirement obligations, non-operating expenses, non-cash impairment and development costs (‘adjusted EBITDA") loss of $4.7 million for the year ended December 31, 2021, as compared with an adjusted EBITDA loss of $2.77 million in 2020.

For the fourth quarter of 2021, American Resources reported a net income loss of $10.4 million, or a loss of $0.17 per share, as compared with a net income loss of $9.1 million, or a loss of $0.24 per share, in the prior year period. The Company earned an adjusted EBITDA of $1.3 million in the fourth quarter of 2021, as compared with an adjusted EBITDA loss of $2.0 million for the fourth quarter of 2020.

Fourth Quarter 2021 Summary

Total revenues were $4.54 million for the fourth quarter of 2021 compared to revenues of $13,875 during the fourth quarter of 2020. General and administrative expenses for the fourth quarter of 2021 were $1.3 million compared to $826,890 in the prior year period. American Resources incurred interest expense of $1.9 million during the fourth quarter of 2021 compared to $1.5 million during the fourth quarter of 2020. Development costs during the quarter were $8.09 million, compared to $5.14 million in the third quarter of 2021.

Full Year 2021 Summary

Full year 2021 revenues were $7.76 million compared to full year 2020 revenues of $1,059,691. The Company recommenced carbon production during 2021 following the COVID-19 induced idle period and has seen a steady sequential production and sales ramp while navigating various supply chain, labor and COVID variant related headwinds. The Company is currently realizing a higher and more consistent production schedule and expects to exit the current March month on a $5.25 - $6 million monthly revenue run rate and better positioned to meet its current 2022 order backlog of approximately $110 million. Development costs during 2021 were $18.1 million compared to $4.0 million during 2020 and better positions the Company to meet its demand while realizing strong pricing.

The Company did not incur any income tax expense in 2021 as it was able to utilize its available net operating losses ("NOL") carried forward from prior periods of approximately $24.2 million as of December 31, 2021.


December 31,
2021 2020 2019
Coal sales
$7,518,792 $524,334 $24,456,831
Processing services income
- - 20,876
Metal recovery and sales
159,599 535,357 -
Royalty income
76,915 - -
Total revenue
7,755,306 1,059,691 24,477,707
Cost of coal sales and processing
(7,088,951) (3,749,519) (26,086,814)
(1,096,283) (1,287,496) (1,482,349)
Gain on purchase and disposal of asset, respectively
- - 394,484
(1,980,026) (2,298,703) (4,588,136)
Amortization of mining rights
(1,246,740) (1,251,357) (1,657,673)
General and administrative
(3,774,464) (2,486,799) (7,659,048)
Professional fees
(1,387,430) (1,076,548) (6,750,848)
Production taxes and royalties
(1,306,150) (1,357,749) (4,222,175)
Impairment of fixed assets
- - (27,688,030)
(18,098,670) (3,998,885) (7,236,653)
Total expenses from operations
(35,978,714) (17,507,056) (86,977,242)
Net loss from operations
(28,223,408) (16,447,365) (62,499,535)
Other income and (expense)
(232,994) 20,537 2,072,862
Loss on settlement of 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
(8,637) (11,516) (7,725,076)
Interest income
230,529 205,857 164,686
Interest expense
(4,159,813) (3,383,294) (2,908,579)
Net loss attributable to American Resources Corporation shareholders
$(32,394,323) $(10,255,763) $(70,918,302)
Net loss per share - basic and diluted
$(0.59) $(0.35) $(2.94)
Weighted average shares outstanding
55,222,768 29,359,993 24,094,420


December 31,
2021 2020
Current assets
$11,492,702 $10,617,495
3,175,636 38,650
- 150,504
Prepaid fees and deposits
624,605 175,000
Receivables - other
- 234,240
Advances to related party
5,000 -
Total current assets
15,297,943 11,215,889
Cash - restricted
1,095,411 583,708
Property and equipment, net
22,903,154 22,498,659
Long-term right of use assets, net
726,194 -
Investment in llc- related party
2,500,000 -
Notes receivables
350,000 4,117,139
Total assets
$42,872,702 $38,415,395
Current liabilities
Trade payables
$3,135,566 $4,288,794
Non-trade payables
1,950,567 3,850,781
Accounts payable - related party
3,932,716 679,146
Accrued interest
1,325,286 1,043,519
Due to affiliate
74,000 74,000
Current portion of long term debt
5,283,647 10,997,692
Current portion of convertible debt (net of unamortized discount of $18,106 and $827,573)
571,618 -
Current portion of lease liabilities, net
Total current liabilities
16,425,206 20,933,932
Notes payable (net of issuance costs of $0 and $405,667)
548,477 5,330,752
Convertible note payables (net of unamortized discount of $22,549 and $0)
8,620,412 14,300,907
Remediation liability
18,951,587 17,855,304
Lease liabilities, net
548,477 -
Total liabilities
45,108,110 58,420,895
Stockholders' deficit
Common stock: $.0001 par value; 230,000,000 shares authorized, 65,084,992 and 42,972,762 shares issued and outstanding
6,508 4,296
Additional paid in capital
163,441,655 113,279,452
Accumulated deficit
(165,683,571) (133,289,248)
Total stockholders' deficit
(2,235,408) (20,005,500)
Total liabilities and stockholders' deficit
$42,872,702 $38,415,395
Shares Outstanding
65,084,992 40,522,762


2021 2020
Cash Flows from Operating activities:
Net loss
$(32,269,839) $(10,255,762) (70,918,302)
Adjustments to reconcile net income loss) to net cash
Depreciation expense
1,980,026 1,855,236 4,588,136
Amortization of mining rights
1,246,740 939,672 1,657,673
Accretion expense
1,096,283 1,287,496 1,482,349
Accretion of Right to Use Assets
(11,960) -
Gain on purchase of assets
Impairment loss
Amortization of debt discount
(571,559) - 7,725,076
Recovery of advances receivable
Warrant expense
Warrant modification expense
Option Expense
1,093,603 230,050
Net Discount
206,724 -
Discount Amortization Conver
580,195 -
Liabilities reduced due to sale of assets
- (3,271,974)
Issuance of common shares for services
10,000 18,800 1,906,253
Loan forgiveness - NMTC
397,030 - 377,255
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)
Change in current assets and liabilities:
Accounts receivable
(3,032,230) 2,386,255 (1,000,917)
150,504 365,126 351,830
Prepaid expenses and other current assets
(449,605) (175,000) 147,826
Accounts payable
(3,053,442) (4,301,976) 1,164,080
Accrued interest
281,767 (1,826,244) 1,643,075
Funds held for others
Accounts payable related party- Due to Affliates
3,253,570 (97,649) 243,502
Cash used in operating activities
(29,092,193) (13,847,255) (19,207,106)
Cash Flows from Investing activities:
Cash received (paid) for PPE, net
(3,068,943) 417,857 (327,250)
Cash received from acquisitions
Cash invested in note receivable
(350,000) -
Investment in LLCs
Cash provided by investing activities
(5,918,943) 417,857 322,750
Cash Flows from Financing activities:
Principal payments on long term debt
(672,424) (1,103,191) (2,059,484)
Sale of Common Stock for Cash
29,217,964 12,832,475 7,767,698
Cash received from warrant and option conversions
Proceeds from convertible note
600,000 14,411,949 599,980
Convertible Note Conversions
8,556,084 -
Capitalized Interest
1,677,192 -
Issuance of common shares for debt settlement
(5,648,698) -
Proceeds from long term debt (net of issuance costs $0 and $0)
- 28,000 8,660,527
Proceeds from related party
Net (payments) proceeds from factoring agreement
- (1,807,443) 1,489,508
Cash provided by financing activities
36,398,046 24,361,790 16,448,368
Increase (decrease) in cash
1,386,910 10,932,392 (2,435,988)
Cash, beginning of year
11,201,203 268,811 2,704,799
Cash, end of year
$12,588,113 $11,201,203 $268,811
Supplemental Information
Cash paid for interest
$708,076 $327,239 557,663
Assumption of net assets and liabilities for asset acquisitions
Shares issues in asset acquisition
Discount on note due to beneficial conversion feature
Conversion of note payable to common stock
Issuance of shares as part of note payable consideration
Conversion of preferred series A shares to common shares
Conversion of preferred series C shares to common shares
Return of shares related to employee settlement
Warrant exercise for common shares

Reconciliation of Non-GAAP Measures

Reconciliation of Adjusted EBITDA to Amounts Reported Under U.S. GAAP

For the three months ended Dec. 31, 2021 For the twelve months ended Dec. 31, 2021 For the three months ended Dec. 31, 2020 For the twelve months ended Dec. 31, 2020
Net Income
(10,440,772) (32,394,323) (9,097,560) (10,255,762)
Interest & Other Expenses
1,898,848 4,159,813 2,908,579 3,383,294
Income Tax Expense
- - - -
Accretion Expense
179,374 1,096,283 305,636 1,287,496
615,806 1,980,026 443,467 2,298,703
Amortization of Mining Rights
308,605 1,246,740 311,685 1,251,357
Amortization of Debt Discount & Issuance
- 8,637 2,879 11,516
Non-Cash Stock, Warrant & Option Comp. Expense
614,938 1,093,603 115,026 345,076
Development Costs
8,088,810 18,098,620 2,770,552 3,998,885
Non-Cash Impairment
- - - -
PCR Restructuring Expenses
- - 225,269 452,743
Total Adjustments
11,706,381 27,683,722 7,083,093 13,029,070
Adjusted EBITDA
1,265,609 (4,710,601) (2,014,467) 2,773,308
  1. Adjusted EBITDA is defined as net income before net interest expense, income tax expense, accretion expense, depreciation, non-cash stock compensation expense, transaction and other professional fees, and development costs. Adjusted EBITDA is not a measure of financial performance in accordance with GAAP, and we believe items excluded from Adjusted EBITDA are significant to a reader in understanding and assessing our financial condition. Therefore, Adjusted EBITDA should not be considered in isolation, nor as an alternative to net income, income from operations, cash flow from operations or as a measure of our profitability, liquidity, or performance under GAAP. We believe that Adjusted EBITDA presents a useful measure of our ability to incur and service debt based on ongoing operations. Furthermore, similar measures are used by analysts to evaluate our operating performance. Investors should be aware that our presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by others.

About American Resources Corporation

American Resources Corporation is a next-generation, environmentally and socially responsible supplier of high-quality raw materials to the new infrastructure market. The Company is focused on the extraction and processing of metallurgical carbon, an essential ingredient used in steelmaking, critical and rare earth minerals for the electrification market, and reprocessed metal to be recycled. American Resources has a growing portfolio of operations located in the Central Appalachian basin of eastern Kentucky and southern West Virginia where premium quality metallurgical carbon and rare earth mineral deposits are concentrated.

American Resources has established a nimble, low-cost business model centered on growth, which provides a significant opportunity to scale its portfolio of assets to meet the growing global infrastructure and electrification markets while also continuing to acquire operations and significantly reduce their legacy industry risks. Its streamlined and efficient operations are able to maximize margins while reducing costs. For more information visit or connect with the Company on Facebook, Twitter, and LinkedIn.

Special Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause the Company's actual results, performance, or achievements or industry results to differ materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are subject to a number of risks and uncertainties, many of which are beyond American Resources Corporation's control. The words "believes", "may", "will", "should", "would", "could", "continue", "seeks", "anticipates", "plans", "expects", "intends", "estimates", or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Any forward-looking statements included in this press release are made only as of the date of this release. The Company does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure you that the projected results or events will be achieved.

PR Contact
Precision Public Relations
Matt Sheldon
[email protected]

Investor Contact:
Jenene Thomas
[email protected]

RedChip Companies Inc.
Todd McKnight
1-800-RED-CHIP (733-2447)
[email protected]

Company Contact:

Mark LaVerghetta
Vice President of Corporate Finance and Communications
317-855-9926 ext. 0
[email protected]

SOURCE: American Resources Corporation

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