Exhibit 99.1
 
 
American Resources Corporation Reports First Quarter 2020 Financial Results and Provides Business Outlook
 
Company prepared to rapidly emerge as leading infrastructure company solely focused on mining metallurgical carbon used in the steelmaking process
 
Company well-positioned to be a long-term supplier of raw material to the global infrastructure market while bringing a more efficient and modernized business model to the industry
 
Strategic steps taken to transform Company into infrastructure company producing pure metallurgical carbon, while enhancing environmental, social and governance (ESG) profile
 
Company expects multiple value driving milestones over the course of 2020
 
June 18, 2020 Source: American Resources Corporation
 
FISHERS, INDIANA / ACCESSWIRE / June 18, 2020 / American Resources Corporation (NASDAQ:AREC) (“American Resources” or the “Company”), a supplier of raw materials to the rapidly growing global infrastructure marketplace with a primary focus on the extraction, processing, transportation and distribution of metallurgical carbon to the steel and specialty metals industries, today reported its first quarter of 2020 financial results.
 
Mark Jensen, Chairman and CEO of American Resources Corporation commented, “The first three months of 2020 continued to be very productive in the transformation of the Company in becoming an infrastructure company and pure producer of metallurgical carbon. We continued to advance our efforts and position the company to be a stable, long-term supplier of metallurgical carbon to the worldwide steel markets to support growing global infrastructure demand, while bringing a more efficient and modernized business model to the industry.”
 
First Quarter 2020 Key Highlights
 
January 2020: Advanced the Company’s Environmental Social Governance (ESG) position by establishing a partnership with Land Betterment Corporation, an environmental solutions company focused on fostering a positive impact through upcycling former coal mining sites to create sustainable community development and job creation.
February 2020: Completed the restructuring of Perry County Resources (PCR), the Company’s fifth carbon processing and logistics complex which was acquired in September 2019. The Company implemented its Strategic Plan of Action to bring its next-generation operating model and philosophy to eliminate overburdensome, legacy costs and streamline its operations to allow the complex to operate more efficiently.
March 2020: Divested certain non-core assets at Perry County Resources to lower the complex’s holding costs and to monetize assets that are not in the Company’s 5-10 year operating plan.
 
 
1
 
 
Mr. Jensen continued, “Looking forward to the remainder of 2020 and into the coming years, we remain quite optimistic on global infrastructure demand and believe governments around the world will continue to look to increase infrastructure projects as a way to stimulate economic activity as we recover from the COVID-19 pandemic. We feel we are currently in a great position to fulfill a portion of that demand growth given the efforts and achievements we have made at our PCR and McCoy Elkhorn complexes to effectively be one of the lowest cost producers of metallurgical carbon in the industry. Additionally, and as we execute on this transformational phase of our growth, so does our equally important ability to provide stable long-term employment to a region in need.”
 
“Lastly, we believe our ESG efforts will further distinguish American Resources as industry revolutionaries and the partnerships we have made will accelerate our goals to permanently shut down and remediate irrational thermal coal operation throughout our region and find creative ways to contribute to the advancement of social and environmental issues facing this region.”
 
Financial Results for First Quarter 2020
 
For the first quarter of 2020, American Resources reported a net loss from operations of $4.26 million, or a loss of $0.12 per share, as compared with a net loss from operations of $9.89 million, or a loss of $0.48 per share, in the prior-year period. The Company earned adjusted EBITDA loss of $713,008 in the first quarter of 2020, as compared with adjusted EBITDA loss of $3.82 million for the first quarter of 2019.
 
Fourth Quarter 2019 Summary
 
Total revenues were $524,334 for the first quarter of 2020. Cost of sales (includes mining, transportation, royalty and processing costs,) for the first quarter of 2020 were $1.86 million, or 353 percent of total revenues, compared to $6.64 million, or 95 percent of total revenue in the same period of 2019.
 
General and administrative expenses for the first quarter of 2020 were $842,925, or 160 percent of total revenue, compared to $1.37 million during the first quarter of 2019. Depreciation for the first quarter of 2020 was $915,052, or 174 percent of total revenue. American Resources incurred interest expense of $500,640 during the first quarter of 2020 compared to $324,854 during the first quarter of 2019. Development costs during the quarter were $128,159, compared to $1.32 million in the fourth quarter of 2019.
 
The Company did not incur any income tax expense in the first quarter of 2020 as it was able to utilize its available net operating losses (“NOL”) carried forward from prior periods of approximately $13,746,391 as of December 31, 2019.
 
Operational Results
 
The Company produced and sold 6,568 short tons of coal in the first quarter of 2020, compared to 73,633 short tons in the fourth of 2019 and 99,338 short tons in the first quarter of 2019.
 
 
2
 
 
The exhibit below summarizes some of the key sales, production and financial metrics:
 
 
 
Three month ended
 
 
Three month ended
 
 
 
March 31,
 
 
December 31,
 
 
March 31,
 
 
 
2020
 
 
2019
 
 
2019
 
Sales Volume (a)
 
 
 
 
 
 
 
 
 
Tons Sold
  6,568 
  73,633 
  99,338 
 
    
    
    
Company Production (a)
    
    
    
McCoy Elkhorn Coal
  6,568 
  28,351 
  38,276 
Perry County Resources
  - 
  45,282 
  - 
Deane Mining
  - 
  - 
  61,062 
Total
  6,568 
  73,633 
  99,338 
 
    
    
    
Company Financial Metrics(b)
    
    
    
Revenue per Ton
  79.83 
  85.48 
  70.41 
Cash Cost per Ton Sold (c)
  282.46 
  147.10 
  66.88 
Cash Margin per Ton (c)
  (202.63)
  (61.62)
  3.53 
 
    
    
    
Development Costs
 $128,159 
 $1,324,063 
  1,600,117 
 
Notes:
(a) In short tons
(b) Excludes transportation
(c) Cash cost per ton is based on reported cost of sales and includes items such as production taxes, royalties, labor, fuel, and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Statement of Operations as costs other than cost of sales, but relate directly to the cost incurred to produce coal. Our cash cost of sales per short ton is calculated as cash cost of sales divided by short tons sold, and our cash margin per ton is calculated by subtracting cash cost per ton from revenue per ton. Cash cost of sales per short ton and average cash margin per ton are non-GAAP financial measure which are calculated in conformity with U.S. GAAP and should be considered supplemental to, and not as a substitute or superior to financial measures calculated in conformity with GAAP. We believe cash cost of sales per ton and average cash margin per ton are useful measurse of performance as it aides some investors and analysts in comparing us against other companies. Cash cost of sales per ton and margin per ton may not be comparable to similarly titled measures used by other companies.
 
 
3
 
 
 
AMERICAN RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
 
 
 
For the three months ended
 
 
For the three months ended
 
 
 
March 31,
2020
 
 
March 31,
2019
 
 
 
 
 
 
 
 
Coal Sales
 $524,334 
 $6,994,276 
 
    
    
Total Revenue
  524,334 
  6,994,276 
 
    
    
Cost of Coal Sales and Processing
  (1,855,187)
  (6,644,087)
Accretion Expense
  (370,587)
  (321,701)
Depreciation
  (915,052)
  (816,916)
Amortization of Mining Rights
  (313,224)
  (536,791)
General and Administrative
  (842,925)
  (1,372,588)
Professional Fees
  (194,046)
  (4,333,896)
Production Taxes and Royalties
  (160,230)
  (1,259,586)
Development Costs
  (128,159)
  (1,600,117)
 
    
    
Total Operating expenses
  (4,779,410)
  (16,885,682)
 
    
    
Net Loss from Operations
  (4,255,076)
  (9,891,406)
 
    
    
Other Income and (expense)
    
    
Loss on payable settlement
  - 
  (22,660)
Other Income
  1,412,005 
  266,425 
Amortization of debt discount and debt issuance costs
  - 
  (134,296)
Interest Income
  82,343 
  41,171 
Interest expense
  (500,640)
  (324,854)
Total Other income (expense)
  993,708 
  (174,214)
 
    
    
Net loss attributable to American Resources Corp. Shareholders
 $(3,261,368)
 $(10,065,620)
 
    
    
Net loss per common share - basic and diluted
 $(0.12)
 $(0.48)
 
    
    
Weighted average common shares outstanding- basic and diluted
  27,267,197 
  20,798,065 
 
 
4
 
 
AMERICAN RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS
UNAUDITED
 
 
 
March 31,
2020
 
 
December 31,
2019
 
 
 
 
 
 
 
 
 
ASSETS 
 
 
 
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
 
Cash
 $43,745 
 $3,324 
Accounts Receivable
  37,400 
  2,424,905 
Inventory
  150,504 
  515,630 
Prepaid fees
  175,000 
  - 
Accounts Receivable - Other
  234,240 
  234,240 
Total Current Assets
  640,889 
  3,178,099 
 
    
    
OTHER ASSETS
    
    
Cash - restricted
  415,487 
  265,487 
Processing and rail facility
  12,554,715 
  12,723,163 
Underground equipment
  8,550,626 
  8,294,188 
Surface equipment
  3,136,906 
  3,224,896 
Acquired mining rights
  669,860 
  669,860 
Coal refuse storage
  12,171,271 
  12,171,271 
Less Accumulated Depreciation
  (11,981,983)
  (11,162,622)
Land
  1,748,169 
  1,748,169 
Note Receivable
  4,117,139 
  4,117,139 
Total Other Assets
  31,382,190 
  32,051,551 
 
    
    
TOTAL ASSETS
 $32,023,079 
 $35,229,650 
 
    
    
 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
 
 
    
    
CURRENT LIABILITIES
    
    
Accounts payable
 $11,763,906 
 $11,044,479 
Accounts payable – related party
  803,602 
  718,156 
Accrued interest
  2,363,380 
  2,869,763 
Due to affiliate
  132,639 
  132,000 
Current portion of long term-debt (net of unamortized discount of $- and $-)
  17,944,572 
  20,494,589 
Convertible note payables – short term
  - 
  7,419,612 
Current portion of reclamation liability
  2,327,169 
  2,327,169 
Total Current Liabilities
  35,335,268 
  45,006,407 
 
    
    
OTHER LIABILITIES
    
    
Long-term portion of note payable (net of issuance costs of $425,820 and $428,699)
  5,415,271 
  5,415,271 
Convertible note payables – long term
  9,164,011 
  - 
Reclamation liability
  17,521,976 
  17,512,613 
Total Other Liabilities
  32,101,258 
  22,927,884 
 
    
    
Total Liabilities
  67,436,526 
  67,934,291 
 
    
    
STOCKHOLDERS’ EQUITY (DEFICIT)
    
    
AREC - Class A Common stock: $.0001 par value; 230,000,000 shares authorized, 27,410,512 and 27,410,512 shares issued and outstanding
  2,740 
  2,740 
AREC - Series A Preferred stock: $.0001 par value; 5,000,000 shares authorized, 0 and 0 shares issued and outstanding
  - 
  - 
AREC - Series C Preferred stock: $.0001 par value; 20,000,000 shares authorized, 0 and 0 shares issued and outstanding
  - 
  - 
Additional paid-in capital
  90,993,691 
  90,326,104 
Accumulated deficit
  (126,409,878)
  (123,033,485)
Total Stockholders’ Equity (Deficit)
  (35,413,447)
  (32,704,641)
 
    
    
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
 $32,023,079 
 $35,229,650 
 
 
5
 
 
AMERICAN RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
 
 
 
For the three months ended
 
 
For the three months ended
 
 
 
March 31,
2020
 
 
March 31,
2019
 
 
 
 
 
 
 
 
Cash Flows from Operating activities:
 
 
 
 
 
 
Net loss
 $(3,261,368)
 $(10,065,620)
Adjustments to reconcile net loss to net cash used in operating activities:
    
    
Depreciation
  915,052 
  816,916 
Amortization of mining rights
  313,224 
  536,791 
Accretion expense
  370,587 
  321,701 
Reduction of ARO liability due to sale of assets
  (312,338)
  - 
Warrant expense
  115,025 
  2,385,000 
Issuance of common shares for services
  - 
  1,672,200 
Stock compensation expense
  - 
  68,693 
Amortization of issuance costs and debt discount
  - 
  134,296 
Recovery of previously impaired receivable
  - 
  (50,806)
Change in current assets and liabilities:
    
    
 
    
    
Accounts receivable
  2,387,505 
  792,381 
Prepaid expenses and other assets
  (175,000)
  (335,174)
Inventory
  365,126 
  (574,254)
Funds held for others
  - 
  60,202 
Accounts payable
  555,516 
  (1,804,045)
Accounts payable – related party
  85,446 
  104,467 
Accrued interest
  (506,383)
  193,826 
Cash provided by (used in) operating activities
  852,392 
  (5,743,426)
 
    
    
Cash Flows from Investing activities:
    
    
 
    
    
Cash paid for PPE, net
  (408,915)
  (721,444)
Cash provided by (used in) investing activities
  (408,915)
  (721,444)
 
    
    
Cash Flows from Financing activities:
    
    
 
    
    
Principal payments on long term debt
  (72,255)
  (1,373,024)
Proceeds from long term debt
  28,000 
  2,000,000 
Payments on factoring agreement, net
  (1,807,443)
  (649,258)
Proceeds from convertible note
  1,598,642 
  - 
Proceeds from sale of common stock, net
  - 
  4,254,000 
Cash provided by financing activities
  (253,056)
  4,231,718 
 
    
    
Increase (decrease) in cash and restricted cash
  190,421 
  (2,233,152)
 
    
    
Cash and restricted cash, beginning of period
  268,811 
  2,704,799 
 
    
    
Cash and restricted cash, end of period
 $459,232 
 $471,647 
 
    
    
Supplemental Information
    
    
Non-cash investing and financing activities
    
    
 
    
    
Shares issued in asset acquisition
 $- 
 $24,400,000 
Assumption of net assets and liabilities for asset acquisitions
 $- 
 $6,623,999 
Discount on note due to beneficial conversion feature
 $- 
 $7,362,925 
Conversion of trade payable to common shares
 $- 
 $231,661 
Issuance of shares as part of note payable consideration
 $- 
 $297,831 
Warrant exercise for common shares
 $- 
 $60 
Return of shares related to employee settlement
 $- 
 $11 
Conversion of Preferred Series A Shares to common shares
 $- 
 $161 
Conversion of Preferred Series C Shares to common shares
 $- 
 $1 
 
    
    
Cash paid for interest
 $165,728 
 $557,663 
Cash paid for income taxes
 $- 
 $- 
 
 
6
 
 
Reconciliation of Non-GAAP Measures
Reconciliation of Adjusted EBITDA to Amounts Reported Under U.S. GAAP
 
 
 
For the three months ended
March 31,
2020
 
 
For the three months ended
March 31,
2019
 
Net Income
  (3,261,368)
  (10,065,620)
 
    
    
Interest & Other Expenses
  500,640 
  324,854 
Income Tax Expense
  - 
  - 
Accretion Expense
  370,587 
  321,701 
Depreciation
  915,052 
  816,916 
Amortization of Mining Rights
  313,224 
  536,791 
Amortization of Dedt Discount & Issuance
  - 
  134,296 
Non-Cash Stock Options
  - 
  49,161 
Non-Cash Warrant Expense
  115,025 
  2,385,000 
Non-Cash Share Comp. Expense
  - 
  68,693 
Development Costs
  128,159 
  1,600,117 
PCR Restructuring Expenses
  205,673 
  - 
 
    
    
Total Adjustments
  2,548,360 
  6,237,529 
 
    
    
Adjusted EBITDA
  (713,008)
  (3,828,091)
 
(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 supplier of high-quality raw materials to the rapidly growing global infrastructure market. The Company is focused on the extraction and processing of metallurgical carbon, an essential ingredient used in steelmaking. 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 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 market 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 americanresourcescorp.com or connect with the Company on Facebook, Twitter, and LinkedIn.
 
 
7
 
 
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
917-280-7329
matt@precisionpr.co
 
 
Investor Contact:
 
JTC Team, LLC
Jenene Thomas
833-475-8247
AREC@jtcir.com
 
 
Company Contact:
Mark LaVerghetta
317-855-9926 ext. 0
Vice President of Corporate Finance and Communications
investor@americanresourcescorp.com
 
Source: American Resources Corporation
 
 
8

The following information was filed by American Resources Corp (AREC) on Friday, June 19, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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