UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, ~~2017~~2022

☐	o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~__________~~_______ to ~~__________~~_______

Commission File Number: 000-55456

American Resources Corporation
(Exact name of registrant as specified in its charter)
~~(Exact name of registrant as specified in its charter)~~

Florida

46-3914127

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

~~9002 Technology Lane~~12115 Visionary Way Fishers, Indiana46038

~~Fishers, IN 46038~~

(Address and Zip Code of principal executive offices)

Registrant’s telephone number, including area code: (~~917) 685-2547~~317) 855-9926

Indicate by check mark whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes o ☒ No x☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o ☒ No x☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨☐	Accelerated filer	¨☐
Non-accelerated ~~filer~~Filer	¨☐	Smaller Reporting Company	x ☒
		Emerging growth company	x ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o ☐ No x☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A Common

AREC

NASDAQ Capital Market

Warrant

ARECW

NASDAQ Capital Market

As of ~~February 9, 2018,~~May 16, 2022, the registrant had ~~892,037~~66,203,279 shares of Class A common stock issued and outstanding.

AMERICAN RESOURCES CORPORATION

~~AMERICAN RESOURCES CORPORATION~~

TABLE OF ~~CONTENTS~~CONTENTS

					PAGE

PART I. FINANCIAL INFORMATION


Item 1.	Condensed Consolidated Financial Statements			3

	Condensed Consolidated Balance Sheets (Unaudited)			4

	Condensed Consolidated Statements of Operation (Unaudited)			5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three Months ended March 31, 2022 and 2021 (unaudited)			6

	Condensed Consolidated Statements of Cash Flows (Unaudited)		6

	~~Notes to~~ ~~Unaudited~~ ~~Consolidated Financial Statements~~		7

	Notes to Unaudited Condensed Consolidated Financial Statements			8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
			16
~~Item 3.~~	~~Quantitative and Qualitative Disclosures~~ a~~bout Market Risk~~		19

~~Item 4.~~	~~Controls and Procedures~~		20

~~PART II. OTHER INFORMATION~~
Item 3.	Quantitative and Qualitative Disclosures about Market Risk			27

Item 1.4.	~~Legal Proceedings~~Controls and Procedures		21
			28

~~Item 1A.~~PART II. OTHER INFORMATION		~~Risk Factors~~			21

Item 1.	Legal Proceedings			29

Item 1A.	Risk Factors			29

Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds		21
			29

Item 3.	Defaults upon Senior Securities		21
			29

Item 4.	Mine Safety Disclosures		21
			29
~~Item 5.~~	~~Other Information~~		21
Item 5.	Other Information			29

Item 6.	Exhibits		22
			30

SIGNATURES				2332

2
Table of Contents

PART I. FINANCIAL INFORMATION

~~PART I~~. ~~FINANCIAL INFORMATION~~

Item 1. Consolidated Financial Statements

AMERICAN RESOURCES CORPORATION

CONSOLIDATED

FINANCIAL STATEMENTS

(UNAUDITED)

For the three months ended

March 31, ~~2017~~2022

Table of Contents

AMERICAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

~~AMERICAN RESOURCES CORPORATION~~

	March 31, 2022			December 31, 2021
ASSETS
CURRENT ASSETS
Cash	$	5,217,204		$	11,492,702
Accounts Receivable		2,856,324			3,175,636
Inventory		1,236,065			0
Prepaid fees		1,576,015			624,605
Total Current Assets		10,885,608			15,292,943

OTHER ASSETS
Cash - restricted		1,086,593			1,095,411
Property and equipment, net		22,698,618			22,903,154
Long-term right of use assets, net		704,627			726,194
Investment in LLC – Related Party		2,500,000			2,500,000
Note Receivable		685,000			350,000
Total Other Assets		27,674,838			27,574,759

TOTAL ASSETS	$	38,560,446		$	42,872,702

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Trade payable	$	3,013,987		$	3,245,566
Non-Trade Payables		1,788,280			1,950,567
Accounts payable – related party		3,241,109			3,932,716
Accrued interest		1,001,457			1,325,286
Due to affiliate, net		69,000			69,000
Current portion of long term-debt		3,736,719			5,283,647
Convertible note payables (net of unamortized discount of $0 and $18,106)		8,912,097			571,618
Current portion of lease liabilities, net		80,858			151,806
Total Current Liabilities		21,843,507			16,530,206

OTHER LIABILITIES
Notes payable		534,543			548,477
Convertible note payables (net of unamortized discount of $0 and $22,549)		0			8,620,412
Remediation liability		19,219,209			18,951,587
Lease liabilities, net		614,708			562,428
Total Other Liabilities		20,368,460			28,682,904

Total Liabilities		42,211,967			45,213,110

STOCKHOLDERS’ DEFICIT
Common stock: $.0001 par value; 230,000,000 shares authorized, 66,156,417 and 65,084,992 shares issued and outstanding		6,616			6,508
Additional paid-in capital		164,888,336			163,441,655
Accumulated deficit		(168,538,589	)		(165,793,571	)
Total American Resources Corporation Shareholders’ Equity		(3,643,637	)		(2,345,408	)
Non Controlling Interesting		(7,884	)		0
Total Stockholders’ Equity (Deficit)		(3,651,521	)		(2,345,408	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	38,560,446		$	42,872,702

~~CONSOLIDATED BALANCE SHEETS~~

~~UNAUDITED~~

~~March 31, 2017 and December 31, 2016~~

3-31-17

12/31/2016

ASSETS

CURRENT ASSETS

Cash

$ 756,160

$ 784,525

Accounts Receivable

1,427,736

2,753,199

Accounts Receivable - Other

196,966

199,701

Total Current Assets

2,380,862

3,737,425

OTHER ASSETS

Cash - restricted

220,602

141,102

Processing and rail facility

2,914,422

2,914,422

Underground equipment

7,514,410

7,500,512

Surface equipment

3,771,943

3,751,054

Less Accumulated Depreciation

(2,722,499 )

(2,262,855 )
Land

178,683

178,683

Accounts Receivable - Other

178,774

196,347

Note Receivable

4,117,139

4,117,139

Total Other Assets

16,173,474

16,536,404

TOTAL ASSETS

$ 18,554,336

$ 20,273,829

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable

$ 3,111,825

$ 2,196,060

Accrued related party management fee

17,840,615

17,840,615

Accrued interest

152,945

122,945

Funds held for others

104,487

24,987

Due to affiliate

74,000

74,000

Current portion of long term-debt

4,016,233

4,431,006

Current portion of reclamation liability

2,105,320

707,645

Total Current Liabilities

27,405,425

25,397,258

OTHER LIABILITIES

Long-term portion of note payable (net of issuance costs of $448,548 and $451,389)

4,947,368

4,964,941

Reclamation liability

16,149,751

17,419,228

Total Other Liabilities

21,097,119

22,384,169

Total Liabilities

48,502,544

47,781,427

STOCKHOLDERS' DEFICIT

AREC - Class A Common stock: $.0001 par value; 230,000,000 shares authorized, 878,704 and 0 shares issued and outstanding for the period end

88

-

AREC - Series A Preferred stock: $.0001 par value; 4,817,792 shares authorized, 4,817,792 shares issued and outstanding

482

482

AREC - Series B Preferred stock: $.001 par value; 20,000,000 shares authorized, 500,000 shares issued and outstanding

500

-

Additional paid-in capital

687,605

88,193

Accumulated deficit

(30,868,618 )

(27,651,030 )
Total American Resources Corporation's Shareholders' Equity

(30,179,943 )

(27,562,355 )
Non controlling interest

231,735

54,757

Total Stockholders' Deficit

(29,948,208 )

(27,507,598 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$ 18,554,336

$ 20,273,829

The accompanying footnotes are integral to the unaudited consolidated financial statements

4
Table of Contents

AMERICAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

~~For the Three Months Ended March 31, 2017 and~~

~~For the Three Months Ended March 31, 2016~~

							For the three months ended			For the three months ended
	3/31/2017			3/31/2016			March 31, 2022			March 31, 2021

Coal Sales	$	5,718,098		$	-		$	9,031,259		$	3,274
Processing Services Income		893,983			746,779
Metal recovery and sales								37,226			0
Royalty Income								12,137			7,372

Total Revenue		6,612,081			746,779			9,080,622			10,646

Cost of Coal Sales and Processing		(4,851,572	)		(735,146	)		(2,890,858	)		(800,515	)
Accretion Expense		(328,061	)		(168,250	)		(267,622	)		(305,636	)
Loss of Settlement		(155,922	)		-
Depreciation		(459,644	)		(484,188	)		(626,042	)		(393,530	)
Amortization of Mining Rights								(303,394	)		(311,685	)
General and Administrative		(131,185	)		(46,682	)		(1,020,814	)		(1,081,447	)
Professional Fees		(307,307	)		(23,481	)		(350,938	)		(710,032	)
Consulting Fees - Related Party		-			(6,858,255	)
Production Taxes and Royalties		(1,672,240	)		(63,508	)		(819,477	)		(568,182	)
Development Costs		(1,795,205	)		(1,187,861	)		(6,784,188	)		(1,811,951	)

Total Expenses from Operations		(9,701,136	)		(9,567,371	)
Total Operating expenses								(13,063,333	)		(5,982,978	)

Net Loss from Operations		(3,089,055	)		(8,820,592	)		(3,983,711	)		(5,972,332	)

Other Income and (expense)
Other Income		176,978			-			82,156			35,296
Interest		(128,533	)		(4,034	)
Gain on cancelation of debt								1,521,304
Amortization of debt discount and debt issuance costs								0			(2,879	)
Interest Income								10,045			41,171
Interest expense								(383,696	)		(491,113	)
Total Other income (expense)								1,229,809			(417,525	)

Net Loss		(3,040,610	)		(8,824,626	)		(2,752,902	)		(6,389,857	)

Less: Net income attributable to Non Controlling Interest		(176,978	)		-
Less: Net Loss attributable to Non controlling interest								7,884			0

Net loss attributable to American Resources Corp. Shareholders	$	(3,217,588	)	$	(8,824,626	)	$	(2,745,018	)	$	(6,389,857	)

Net loss per share - basic and diluted	$	(6	)	$	-
Net loss per common share - basic and diluted							$	(0.04	)	$	(0.14	)

Weighted average shares outstanding		498,633			-
Weighted average common shares outstanding- basic and diluted								65,253,533			46,917,910

The accompanying footnotes are integral to the unaudited consolidated financial statements

5
Table of Contents

AMERICAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

~~UNAUDITED~~FOR THE PERIOD FROM JANAURY 1, 2022 THROUGH MARCH 31, 2022 AND JANAURY 1, 2021 THROUGH MARCH 31, 2021

~~For the 3 Months Ended~~ UNAUDITED

	American Resources
	Common Stock
	Par value		0.0001				Accumulated
	Shares		Amount	APIC			Deficit			Total
Balance December 31, 2020		42,972,762	4,296		113,279,450			(133,289,246	)		(20,005,500	)

Shares issued in connection with registered offering		425,000	43		1,274,881						1,274,924

Shares issued in connection with warrant conversions		1,734,610	182		2,055,617						2,055,799

Shares issued for services		80,000	8		187,992						188,000

Shares issued in connection with debt and payable conversions		4,658,526	457		9,845,183						9,845,640

Amortization of debt discount					(163,297	)					(163,297	)

Amortization of Warrant and Option Expense					262,025						262,025

Net loss								(6,389,857	)		(6,389,857	)

Balance March 31, 2021		49,870,898	4,986		127,068,445			(139,679,103	)		(12,605,673	)

AMERICAN RESOURCES CORP

Statement of Stockholders’ Deficit

March 31, ~~2017 and~~

~~For the 3 Months Ended March 31, 2016~~2022

3/31/17

3/31/2016

Cash Flows from Operating activities:

Net loss

(3,040,610 )

$ (8,824,626 )
Adjustments to reconcile net income (loss) to net cash

Depreciation

459,644

484,188

Accretion expense

328,061

168,250

Loss on reclamation settlements

155,922

-

Assumption of note payable in reverse merger

50,000

Amortization of issuance costs and debt discount

52,841

-

Stock compensation expense

-

83,300

Change in current assets and liabilities:

Accounts receivable

1,325,463

(25,774 )
Prepaid expenses and other assets

40,000

(6,983 )
Restricted cash used to pay interest

3,266

4,034

Accounts payable

925,483

372,260

Accrued expenses

-

6,840,615

Accrued interest

30,000

30,000

Reclamation liability settlements

(355,785 )

-

Cash used in operating activities

(25,715 )

(874,736 )

Cash Flows from Investing activities:

Note receivable

-

(4,117,139 )
Increase in restricted cash

(79,500 )

(2,487,380 )
Restricted cash used to pay down debt

17,042

21,511

Advances made in connection with management agreement

(40,000 )

(285,000 )
Advance repayment in connection with management agreement

75,000

-

Cash paid for PPE, net

(34,787 )

242,037

Cash received from acquisitions, net of $100 cash paid

-

2,935,700

Cash used in investing activities

(62,245 )

(3,690,271 )

Cash Flows from Financing activities:

Principal payments on long term debt

(25,201 )

(14,528 )
Proceeds from long term debt

-

4,682,391

Payments on factoring agreement

(2,454,430 )

-

Proceeds from factoring agreement

2,039,226

-

Proceeds from sale of series B preferred equity

500,000

-

Cash provided by financing activities

59,595

4,667,863

Increase(decrease) in cash

(28,365 )

102,856

Cash, beginning of period

784,525

-

Cash, end of period

$ 756,160

$ 102,856

Supplemental Information

Non-cash investing and financing activities

Assumption of net assets and liabilities for asset acquisitions

$ -

$ 626,148

Equipment for notes payable

$ -

$ 139,425

Debt payment by affiliate

$ -

$ 63,000

Conversion of note payable to common stock

$ 50,000

Beneficial conversion feature on note payable

$ 50,000

$ -

Cash paid for interest

$ 45,692

$ 4,034

Cash paid for income taxes

$ -

$ -

American Resources

Common Stock

Non

Par value

0.0001

Accumulated

controlling

Shares

Amount

APIC

Deficit

interest

Total

Shares issued in connection with warrant conversions

187,250

19

280,856

280,875

Amortization of beneficial conversion features

(40,655 )

(40,655 )

Shares issued in connection with debt conversions

884,229

89

1,006,637

1,006,726

Amortization of Warrant and Stock Option Expense

199,843

199,843

-

Net Loss

(2,745,018 )

(7,884 )

(2,752,902 )

Balance March 31, 2022

66,156,471

6,616

164,888,336

(168,538,589 )

(7,884 )

(3,651,521 )

The accompanying footnotes are integral to the unaudited consolidated financial statements

6
Table of Contents

AMERICAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

	For the three months ended			For the three months ended
	March 31, 2022			March 31, 2021
Cash Flows from Operating activities:
Net loss	$	(2,752,902	)	$	(6,389,857	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on forgiveness of debt		(1,521,304	)		0
Depreciation		626,042			393,530
Amortization of mining rights		303,394			311,685
Accretion expense		267,622			305,636
Accretion of right of use assets		2,899			0
Warrant expense		199,843			115,025
Issuance of common share options for compensation		0			147,000
Amortization of beneficial conversion feature		0			590,464
Issuance of common shares for services		0			188,000
Change in current assets and liabilities:

Accounts receivable		319,312			35,376
Prepaid expenses and other assets		(951,410	)		(66,668	)
Inventory		(1,236,065	)		0
Accounts payable		(393,866	)		(1,613,643
Accounts payable related party		(691,607	)		33,726
Accrued interest		94,435			(796,248	)
Cash provided by (used in) operating activities		(5,733,607	)		(6,745,974

Cash Flows from Investing activities:

Cash paid for PPE, net		(724,900	)		(565,000	)
Capitalized interest		267,875
Cash invested in notes receivable		(335,000	)
Investment in LLC		0			(2,275,000	)
Cash provided by (used in) investing activities		(792,025	)		(2,840,000	)

Cash Flows from Financing activities:

Principal payments on long term debt		(39,559	)		(62,294	)
Issuance of common shares for debt and payable conversion		0			1,997,514
Proceeds from convertible note		0			1,620,000
Proceeds from warrant conversions		280,875			2,055,723
Proceeds from sale of common stock, net		0			1,105,001
Cash provided by financing activities		241,316			6,715,944

Increase (decrease) in cash and restricted cash		(6,284,316	)		(2,870,030	)

Cash and restricted cash, beginning of period		12,588,113			11,201,203

Cash and restricted cash, end of period	$	6,303,797		$	8,331,173

Supplemental Information
Non-cash investing and financing activities

Conversion of debt to common shares	$	1,006,726		$	1,997,514
Discount on note due to beneficial conversion feature	$	0		$	715,740

Cash paid for interest	$	3,726		$	42,426

The accompanying footnotes are integral to the unaudited consolidated financial statements

Table of Contents

AMERICAN RESOURCES CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~AMERICAN RESOURCES CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

American Resources Corporation (ARC or the Company) ~~was~~operates through subsidiaries that were formed or acquired in ~~June~~2020, 2019, 2018, 2016 and 2015 for the purpose of acquiring, rehabilitating and operating various natural resource assets including coal ~~oil~~used in the steel making and ~~natural gas.~~industrial markets, critical and rare earth elements used in the electrification economy and aggregated metal and steel products used in the recycling industries.

Basis of Presentation and ~~Consolidation:~~Consolidation:

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries ~~Quest Energy Inc, (QEI)~~American Carbon Corp (ACC), Deane Mining, LLC (Deane), Quest Processing LLC (Quest Processing), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy) ~~and~~, Knott County Coal LLC (KCC), Wyoming County Coal (WCC),Perry County Resources LLC (PCR), and American Metals LLC (AM). All significant intercompany accounts and transactions have been eliminated.

~~On January 5, 2017, QEI entered into~~Entities for which ownership is less than 100% a ~~share exchange agreement with NGFC Equities, Inc (NGFC). Under~~determination is made whether there is a requirement to apply the agreement, the shareholders of QEI exchanged 100% of its common stock to NGFC for 4,817,792 newly created Series A Preferred shares that is convertible into approximately 95% of outstanding common stock of NGFC. The previous NGFC shareholders retained 845,370 common shares as part of the agreement. The conditionsvariable interest entity (VIE) model to the ~~agreement were fully satisfied on February 7, 2017, at which time~~entity. Where the company holds current or potential rights that give it the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, combined with a variable interest that gives the Company ~~took full control of NGFC. NGFC has been renamed~~the right to ~~American Resources Corporation ARC. The transaction was accounted for as~~receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company would be deemed to have a recapitalization. QEI was the accounting acquirer and ARC will continue the business operations of QEI, therefore, the historical financial statements presented are those of QEI and its subsidiaries. The equity and share information reflect the results of the recapitalization. On May 15, 2017 ARC initiated a one-for-thirty reverse stock split. The financial statements have been retrospectively restated to give effect to this split.

On February 17, 2016, McCoy Elkhorn Coal LLC (McCoy) acquired certain assets in exchange for $100 and for assuming certain liabilities of Fortress Resources, LLC. The fair values of liabilities were determined to be $3,561,848 respectively. The liabilities assumed do not require fair value readjustments.controlling interest.

The ~~assets acquired~~company is the owner of ~~McCoy do not represent~~92.5% and is the primary beneficiary of American Rare Earth, LLC, which qualifies as a business as defined in FASB AS 805-10-20. McCoy does not have an integrated set of activities and assets that that is capable of being conducted and managed for the purpose of providing a return or other economic benefit to their investors, members or participants.variable interest entity. Accordingly, the assets, ~~acquired are initially recognized at~~liabilities, revenue and expenses of American Rare Earth, LLC have been included in the ~~consideration paid, which was~~accompanying consolidated financial statements with a non-controlling interest not owned by the liabilities assumed, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair value. The assets acquired and liabilities assumed of McCoy were as follows at the purchase date:

Assets

Cash

$ 2,935,800

Underground Mining Equipment

531,249

Surface Mining Equipment

36,218

Coal Preparation and Loading Facilities

58,681

Liabilities

Asset Retirement Obligation

$ 3,561,848

7
~~Table of Contents~~
company excluded from operating results.

The accompanying Consolidated Financial Statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

Interim Financial Information

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. In the opinion of management, these interim unaudited Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair presentation of the results for the periods presented. Results of operations for the three months ended March 31, ~~2017~~2022 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2017~~2022 or any other period. These financial statements should be read in conjunction with the Company’s ~~2016 and 2015~~2021 audited financial statements and ~~the~~ notes thereto which were filed on form ~~8-K/A~~10-K on ~~September 25, 2017.~~March 11, 2022.

~~Going Concern:~~ The Company has suffered recurring losses from operations and currently a working capital deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. We plan to generate profits by expanding current coal operations as well as developing new coal operations. However, we will need to raise the funds required to do so through sale of our securities or through loans from third parties. We do not have any commitments or arrangements from any person to provide us with any additional capital. If additional financing is not available when needed, we may need to cease operations. We may not be successful in raising the capital needed to expand or develop operations. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty.

Table of Contents

Convertible Preferred Securities: We account for hybrid contracts that feature conversion options in accordance with generally accepted accounting principles in the United States. ASC 815, Derivatives and Hedging Activities (“ASC 815”) requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

We also follow ASC 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) in its evaluation of the accounting for a hybrid instrument. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception (b) variations in something other than the fair value of the issuer’s equity shares or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with remeasurements reported in interest expense in the accompanying Consolidated Statements of Operations.

8
~~Table of Contents~~

Cash is maintained in bank deposit accounts which, at times, may exceed federally insured limits. To date, there have been no losses in such accounts.

Restricted cash:As part of the Kentucky New Markets Development Program (See Note 3) an asset management fee reserve was set up in the amount of $116,115. The funds are held to pay annual asset management fees to an unrelated party through ~~2021.~~2022. The balance as of March 31, ~~2017~~2022 and December 31, ~~2016~~2021 was ~~$116,115,~~$19,138 and $47,987, respectively. ~~Additionally, upon closing, a disbursement reserve was established in the amount of $2,394,640.~~ The total balance of restricted cash also includes amounts held under the management agreement. ~~See note 6.~~

During 2021, the Company established an escrow account for certain assumed liabilities in the PCR acquisition. The balance as of March 31, 2022 and December 31, 2021 includes in the amount of $447,070 and $347,070, respectively, to pay for assumed liabilities in the PCR asset acquisition.

During 2019 the Company established a reclamation bonding collateral fund. The balance of the restricted cash being held totaled $250,000 and $250,000 as of March 31, 2022 and December 31, 2021.

Table of Contents

The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that agrees to the total of those amounts as presented in the consolidated statement of cash flows for the three months ended March 31, 2022 and March 31, 2021:

March 31,
2022

March 31,
2021

Cash

$ 5,217,204

$ 7,097,465

Restricted Cash

1,086,593

1,233,708

Total cash and restricted cash presented in the consolidated statement of cash flows

$ 6,303,797

$ 8,331,173

Asset Retirement Obligations (ARO) – Reclamation: At the time they are incurred, legal obligations associated with the retirement of long-lived assets are reflected at their estimated fair value, with a corresponding charge to mine development. Obligations are typically incurred when we commence development of underground and surface mines, and include reclamation of support facilities, refuse areas and slurry ponds or through acquisitions.

Obligations are reflected at the present value of their future cash flows. We reflect accretion of the obligations for the period from the date they incurred through the date they are extinguished. The asset retirement obligation assets are amortized using the units-of-production method over estimated recoverable (proved and probable) ~~reserves.~~deposits. We are using a discount rate of 10%. Federal and State laws require that mines be reclaimed in accordance with specific standards and approved reclamation plans, as outlined in mining permits. Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry ponds.

We assess our ARO at least annually and reflect revisions for permit changes, change in our estimated reclamation costs and changes in the estimated timing of such costs. ~~During the period ending March 31, 2017 and 2016, $155,922 and $0 were incurred for loss on settlement on ARO, respectively.~~

The table below reflects the changes to our ARO:

Balance at December 31, 2016

$ 18,126,873

Accretion – 3 months March 31, 2017

328,061

Reclamation work – 3 months March 31, 2017

(199,863 )
Balance at March 31, 2017

$ 18,255,071

Balance at December 31, 2021	$	18,951,587
Accretion – 3 months March 31, 2022		267,622
Reclamation work – 3 months March 31, 2022		-
Balance at March 31, 2022	$	19,219,209
Balance at December 31, 2020	$	17,855,305
Accretion – 3 months March 31, 2021		305,636
Reclamation work – 3 months March 31, 2021		-
Sale of PCR Permits
Balance at March 31, 2021	$	18,160,941

Allowance For Doubtful Accounts: The Company recognizes an allowance for losses on trade and other accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable amounts considered at risk or uncollectible.

Allowance for trade receivables as of March 31, ~~2017~~2022 and December 31, ~~2016~~2021 amounted to $0, for both periods. Allowance for other accounts receivables as of March 31, ~~2017~~2022 and December 31, ~~2016~~2021 amounted to ~~$640,000~~$1,744,570 and ~~$640,000,~~$1,744,570, respectively.

Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of March 31, ~~2017~~2022 and December 31, ~~2016.~~

9
~~Table of Contents~~
2021.

Prepaid Fees and Advance Royalties: Coal leases that require minimum annual or advance payments and are recoverable from future production are generally deferred and charged to expense as the coal is subsequently produced.

Inventory: Inventory consisting of mined coal is stated at the lower of cost (first in, first out method) or net realizable value.

Reclassifications: Reclassifications have been made to conform with current year presentation.

~~New Accounting Pronouncements:~~ ~~Management has determined that the impact of the following recent FASB pronouncements will not have a material impact on the financial statements.~~

· ~~Accounting Standards Update (ASU) 2014-09,~~ ~~Revenue from Contracts with Customers~~~~, effective for years beginning after December 15, 2017~~10
· ~~ASU 2015-11,~~ ~~Simplifying the Measurement of Inventory~~~~, effective for years beginning after December 15, 2016~~
· ~~ASU 2015-17,~~ ~~Balance Sheet Classification~~Table of ~~Deferred Taxes~~~~, effective for years beginning after December 15, 2017~~Contents
· ~~ASU 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities~~~~, effective for years beginning after December 15, 2018~~
· ~~ASU 2016-02,~~ ~~Leases~~~~, effective for years beginning after December 15, 2019~~
· ~~ASU 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash,~~ ~~effective beginning after December 15, 2017~~
· ~~ASU 2017-01,~~ ~~Business Combinations,~~ ~~effective beginning after December 15, 2017~~
· ~~ASU 2017-11,~~ ~~Earnings Per Share,~~ ~~effective beginning after December 15, 2018~~

~~Management has elected to early adopt ASU 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~ ~~effective at inception. See above in Note 1.~~

NOTE 2 - PROPERTY AND EQUIPMENT

At March 31, ~~2017~~2022 and December 31, ~~2016,~~2021, property and equipment were comprised of the following:

	March 31, 2017			December 31, 2016
							March 31, 2022			December 31, 2021
Processing and rail facility	$	2,914,422		$	2,914,422		$	11,591,274		$	11,591,274
Underground equipment		7,514,410			7,500,512			9,777,667			9,687,667
Surface equipment		3,771,943			3,751,054			3,201,464			3,201,464
Coal refuse storage								12,134,192			12,134,192
Mine Development								561,575			561,575
Construction in Process								743,021			108,122
Land		178,683			178,683			1,572,435			1,572,435

Less: Accumulated depreciation		(2,722,499	)		(2,262,855	)		(16,883,011	)		(15,953,575	)

Total Property and Equipment, Net	$	11,656,959		$	12,081,816		$	22,698,618		$	22,903,154

Depreciation expense amounted to ~~$459,644~~$393,530 and ~~$484,188~~$393,530 for the ~~periods~~period March 31, ~~2017~~2022 and March 31, ~~2016,~~2021, respectively.

The estimated useful lives are as follows:

Processing and Rail Facilities
207-20 years
Surface Equipment
7 years
Underground Equipment
5 years
Mining Rights
5-10 years
Coal Refuse Storage
10 years

10
~~Table of Contents~~

NOTE 3 - NOTES PAYABLE

During the ~~three month~~three-month period ended March 31, ~~2017~~2022, principal reductions on long term debt totaled $1,564,684, primarily due to debt forgiveness of PPP loan. During the three-month period ended March 31, 2022, increases to long term debt totaled $0. The notes have a minimum offering amount of $12,500,000 and ~~2016,~~maximum of $25,000,000 and minimum investment of $500,000. The notes carry a 24-month term, 12.5% interest 10% warrant coverage and a conversion price of $1.05. The warrants have an exercise price of $1.50.

During the three-month period ended March 31, 2021, principal payments on long term debt totaled ~~$25,201 and $14,528, respectively.~~$8,136,378. During the ~~three month~~three-month period ended March 31, ~~2017 and 2016, proceeds from~~2021, increases to long term debt totaled ~~$0 and $4,682,391, respectively,~~$1,620,000, primarily from the Kentucky New Markets Development program. (See Note 5). During the three month period ended March 31, 2017 and 2016, proceeds from the factoring agreement totaled $2,039,226 and $0, respectively and repayments according to the factoring agreement totaled $2,454,430 and $0, respectively.

~~NOTE 4 - RELATED PARTY TRANSACTIONS~~

On June 12, 2015, the Company executed a consulting agreement with an entity with common ownership. During the three months ended March 31, 2017 and March 31, 2016, the Company incurred fees totaling $0 and $6,858,255 relating to services rendered under this agreement. The amount outstanding and payable as of March 31, 2017 and December 31, 2016, was $17,840,615 and $17,840,615, respectively. The amount is due on demand and does not accrue interest.

~~NOTE 5 – KENTUCKY NEW MARKETS DEVELOPMENT PROGRAM~~

On March 18, 2016, Quest Processing entered into two loans under the Kentucky New Markets Development Program for a total of $5,143,186. Quest Processing paid $460,795 of debt issuance costs resulting in net proceeds of $4,682,391. See note 3. The Company retains the right to call $5,143,186 of the loans in March 2023. State of Kentucky income tax credits were generated for the lender which the Company has guaranteed over their statutory life of seven yearscash received in the ~~event the credits are recaptured or reduced. At the time~~form of ~~the transaction, the income tax credits were valued at $2,005,843.~~a senior convertible note totaling $1,620,000. The ~~Company has not established~~notes have a ~~liability in connection with the guarantee because it believes the likelihood of recapture or reduction is remote.~~

On March 18, 2016, ERC Mining LLC, an entity consolidated as a VIE, lent $4,117,139 to an unaffiliated entity, as part of the Kentucky New Markets Development Program loans. The note bears interest at 4% and is due March 7, 2046. The balance as of March 31, 2017 and December 31, 2016 was $4,117,139, respectively. Payments of interest only are due quarterly until March 18, 2023 at which time quarterly principal and interest are due.

~~NOTE 6 – MANAGEMENT AGREEMENT~~

On April 13, 2015, ERC entered into a mining and management agreement with an unrelated entity, to operate a coal mining and processing facility in Jasonville, Indiana. Under the management agreement funds advanced for the three month period ended March 31, 2017 and 2016 are $40,000 and $285,000, respectively and the amounts repaid totaled $75,000 and $0, respectively.

~~NOTE 7 – EQUITY TRANSACTIONS~~

A new 2016 Stock Incentive Plan (2016 Plan) was approved by the Board during January 2016. The Company may grant up to 6,363,225 shares of Series A Preferred stock under the 2016 Plan. The 2016 Plan is administered by the Board of Directors, which has substantial discretion to determine persons, amounts, time, price, exercise terms, and restrictions of the grants, if any. The options issued under the 2016 Plan vest upon issuance.

On January 1, 2016, the Company issued options amounting to 6,108,696 shares (which includes shares disclosed above) under an adopted stock option plan that were cashlessly exercised into 2,069,655 shares resulting in an expense of $83,300.

~~The Company had a note payable in the~~minimum offering amount of ~~$50,000 which was assumed as part~~$12,500,000 and maximum of ~~the share exchange agreement~~$25,000,000 and ~~accounted for as an expense in the recapitalization transaction. On February 22, 2017, the Company modified the note to add~~minimum investment of $500,000. The notes carry a 24-month term, 12.5% interest 10% warrant coverage and a conversion ~~option with a~~price of $1.05. The warrants have an exercise price of $1.50. The conversion option was beneficial, therefore, the Company recognized $50,000 as a discount to the assume note payable. The note was converted, resulting in the issuance of 33,334 shares and the full amortization of the discount.

Table of Contents

NOTE 4 – RIGHT OF USE ASSETS AND LEASES

The right-of-use asset is the Company’s right to use an asset over the life of a lease. The asset is calculated as the initial amount of the lease liability, plus any lease payments made to the lessor before the lease commencement date, plus any initial direct costs incurred, minus any lease incentives received.

The Company’s discounted lease payment rate is 10.82%.

Our principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038. We pay $5,726 per month in rent for the office space and the rental lease expires December 2026. On January 1, 2022, the Company entered into an expansion lease for the site. The amended lease has a ten-year term and $5,869 per month rate.

We also rent office space from an affiliated entity, LRR, at 11000 Highway 7 South, Kite, Kentucky 41828 and pay $1,702 per month rent and the rental lease expires January 1, 2030.

On August 17, 2021, American Rare Earth entered into a Commercial Land Lease sublease agreement with Land Betterment for nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility. The sublease is for the period of 5 years with a rate of $3,500 a month.

On October 8, 2021, American Rare Earth entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility. The is for the period of 2 years with a rate of $4,745.83 a month.

At March 31, 2022, right of use assets and liabilities were comprised of the following:

	March 31, 2022		March 31, 2021
Assets:
ROU asset	$	704,627	$	0

Liabilities
Current:
Operating lease assets	$	80,858	$	0
Non-current		0
Operating lease assets		695,566		0

As of March 31, 2022, remaining maturities of lease liabilities were as follows:

	Operating
2023		80,858
2024		71,801
2025		59,690
2026		68,414
2027 and thereafter		414,802

Table of Contents

NOTE 5 - RELATED PARTY TRANSACTIONS

Land Resources & Royalties

The Company leases property from Land Resources & Royalties (LRR), an entity controlled by certain members of the Company’s management who are also directors and shareholders. Until July 1, 2018, LRR was consolidated as a VIE resulting in transaction between the two companies to be eliminated upon consolidation. Upon deconsolidation, amounts paid and owed to LRR have been disclosed discreetly in the consolidated financial statements. For the three-month period ending March 31, 2022, royalty expense incurred with LRR amounted to $57,135 and amounts advanced from LRR amounted $0 and amounts repaid amounted to $0. As of March 31, 2022, total amounts owed LRR amounted to $0. For the three-month period ending March 31, 2021, royalty expense incurred with LRR amounted to $80,146 and amounts advanced from LRR amounted to $0 and amounts repaid to LRR amounted to $0. As of March 31, 2021, total amounts owed LRR amounted to $712,872.

Land Betterment Corp

On February 13, 2021, the Company entered into a Contract Services Agreement with Land Betterment Corporation, an entity controlled by certain members of the Company’s management who are also directors and shareholders. The contract terms state that service costs are passed through to the Company with a 10% mark-up and a 50% share of cost savings which includes payroll covering aforementioned members of the Company’s management. The services agreement covers all of the Company’s properties. For the 3 months ended March 31, 2022 amounts incurred under the agreement amounted to $1,574,015 and amounts paid totaled $839,280. As of March 31, 2022, amounts payable under the agreement amounted to $2,793,658. For the 3 months ended March 31, 2021 amounts incurred under the agreement amounted to $113,873 and amounts paid totaled $0. As of March 31, 2021, amounts payable under the agreement amounted to $9,784. For the 3 months ended March 31, 2021, service charges covering members of the Company’s management amounted to $0.

American Opportunity Venture, LLC

During January 2021, the company invested $2,250,000 for 50% ownership and become the managing member of American Opportunity Venture, LLC. (AOV) It has been determined that AOV is a variable interest entity and that the Company is not primary beneficiary. As such, the investment in AOV will be accounted for using the equity method of accounting.

American Opportunity Venture II, LLC

During March 2021, the Company invested $25,000 for 100% ownership and become the managing member of American Opportunity Venture II, LLC. (AOVII). As such, the investment in AOVII has been eliminated in the accompanying financial statements. As of March 31, 2022, AOVII has had no operational activity.

Novusterra, Inc.

During March 2021, the Company licensed certain technology to an unrelated entity, Novusterra, Inc. According to the commercial terms of the license, the Company is to receive 50% of future cash flows and 15,750,000 common shares of Novusterra, Inc. It has been determined that Novusterra is a variable interest entity and that the Company is not the primary beneficiary. As such, the investment in Novusterra will be accounted for using the equity method of accounting. As of March 31, 2022, Novusterra has had no operational activity.

Land Betterment Exchange (LBX)

The Company is the holder of 2,000,000 LBX Tokens with a par value of $250 for each token. The token issuance process is undertaken by a related party, Land Betterment, and is predicated on proactive environmental stewardship and regulatory bond releases. As of March 31, 2021, there is no market for the LBX Token and therefore no value has been assigned.

FUB Mineral LLC

On October 1, 2021, the Company invested $250,000 into FUB Mineral, LLC a company with common owners.

NOTE 6 – EQUITY TRANSACTIONS

Employee stock compensation expense for the three-month period ending March 31, 2022 and 2021 amounted to $199,843 and $262,025 respectively.

Table of Contents

Class A Common Shares Issued in exchange for services, trade payables and related party debt

On March ~~7, 2017, ARC closed a private placement whereby it~~31, 2021, the Company issued ~~an aggregate~~884,229 class A common shares pursuant to the conversion of ~~500,000~~$1,006,726 of accrued interest.

Warrant Exercises

On January 13, 2022, the Company issued 117,250 shares of ~~ARC’s Series B Preferred~~Class A Common Stock based upon a cash pay warrant exercise. The share price at issuance was $1.50.

On March 30, 2022, the Company issued 47,500 shares of Class A Common Stock based upon a cash pay warrant exercise. The share price at issuance was $1.50.

On March 31, 2022, the Company issued 22,500 shares of Class A Common Stock based upon a cash pay warrant exercise. The share price at issuance was $1.50.

New Warrant Issuances

On January 26, 2021, the Company issued Common Stock Purchase Warrant “A-10” for rare earth capture advisory. The warrant provides the option to purchase 10,000 Class A Common Shares at a ~~purchase~~ price of ~~$1.00 per share, and~~$2.05. The warrants expire on January 26, 2024.

On February 2, 2021, the Company issued Common Stock Purchase Warrant “C-37” in conjunction with the issuance of $600,000 convertible note. The warrant provides the option to purchase an aggregate of 6,250,000 shares of the ARC’s common stock, for proceeds to ARC of $500,000 (the “March 2017 Private Placement”). After deducting for fees and expenses, the aggregate net proceeds from the sale of the preferred series B shares and the warrants in the March 2017 Private Placement were approximately $500,000. The ‘A’ warrants totaling 138,889 shares expire March 6, 2020 and hold an exercise60,000 Class A Common Shares at a price of ~~$7.60 per share.~~$1.50. The ~~‘A-1’~~ warrants ~~totaling 69,445 shares~~ expire ~~March 6, 2020 and hold an exercise~~on February 2, 2023.

On February 7, 2021, the Company issued Common Stock Purchase Warrant “A-11” for rare earth processing advisory. The warrant provides the option to purchase 50,000 Class A Common Shares at a price of ~~$.003 per share.~~$4.25. The warrants expire on February 7, 2026.

The ~~Series B Preferred share purchase agreement provides for certain adjustments~~company uses the Black Scholes option pricing model to ~~the conversion~~ value ~~of the Series B Preferred to common shares of the Company that~~its warrants and options. The significant inputs are based on the EBITDA (earning before interest, taxes, depreciation, and amortization) for the Company for the 12 months ended March 31, 2018. Those adjustments provide for a decrease in the conversion value based on the proportional miss of the Company’s EBITDA, up to a maximum of 30.0% decrease in the conversion value of the Series B Preferred to common shares.as follows:

	March 31, 2022			March 31, 2021
Expected Dividend Yield		0	%		0	%
Expected volatility	123-617		%	123-617		%
Risk-free rate	1.40-1.62		%	1.40-1.62		%
Expected life of warrants	1.635-5.588 years			1.635-5.588 years

~~The Series B Preferred share purchase agreement provides for an option for the investor to put the Series B Preferred investment to the~~

Company at a premium to the Series B Preferred purchase price should the Company achieve certain hurdles, such as a secondary offering and an up-listing to a national stock exchange. Such put option expires after 20 days from notification of the Company to the Series B Preferred investor of the fulfillment of such qualifications.Warrants:

			Weighted		Weighted
			Average		Average		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Warrants		Price		Life in Years		Value
Exercisable (Vested) – December 31, 2020		8,401,221	$	1.135		2.152	$	7,453,214
Granted		60,000	$	3.883		4.521	$	18,000
Forfeited or Expired		-	$	-		-	$	-
Exercised		1,681,022	$	1.215		3.094	$	5,321,781
Outstanding - March 31, 2021		6,780,199	$	1.139		1.635	$	18,277,625
Exercisable (Vested) - March 31, 2021		6,780,199	$	1.139		1.635	$	18,277,625

Exercisable (Vested) – December 31, 2021		10,213,764	$	2.25		2.69	$	121,018
Granted		-	$	-		-	$	121,018
Forfeited or Expired		-	$	-		-	$	-
Exercised		187,250	$	1.50		2.00	$	54,080-
Outstanding - March 31, 2022		10,026,514	$	1.14		3.86	$	66,938
Exercisable (Vested) - March 31, 2022		10,026,514	$	1.14		3.86	$	66,938

~~The~~

Table of Contents

Company evaluated the convertible feature of the preferred stock under ASC 815 and concluded that derivative accounting was not required, therefore the conversion feature qualified to be an equity instrument. The Company evaluated the conversion option under ASC 470 and concluded that it was not a beneficial conversion feature. The Company considered ASC 480 to determine if the Series A convertible preferred stock should be classified as a liability or as equity. The Company’s conclusion was that it was equity under ASC 480.Options:

			Weighted		Weighted
			Average		Average		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Options		Price		Life in Years		Value
Outstanding – December 31, 2020		2,159,269	$	1.606		5.660	$	1,919,129
Exercisable (Vested) – December 31, 2020		888,659	$	1.581		5.047	$	749,470
Granted		75,000	$	2.560		6.847	$	105,000
Forfeited or Expired		50,000	$	1.050		-	$	-
Exercised		-	$	-		-	$	-
Outstanding - March 31, 2021		2,184,269	$	1.651		5.588	$	5,010,909
Exercisable (Vested) - March 31, 2021		938,659	$	1.739		5.260	$	2,149,710

Outstanding – December 31, 2021		4,209,269	$	1.665		5.39	$	3,186,870
Exercisable (Vested) – December 31, 2021		3,159,268	$	1.517		4.91	$	3,141,183
Granted		-	$	-		-	$	-
Forfeited or Expired		-	$	-		-	$	-
Exercised		-	$	-		-	$	-
Outstanding - March 31, 2022		4,209,269	$	1.980		6.79	$	3,257,470
Exercisable (Vested) - March 31, 2022		4,209,269	$	1.980		6.79	$	3,257,470

NOTE 87 - CONTINGENCIES

In the course of normal operations, the Company is involved in various claims and litigation that management intends to defend. The range of loss, if any, from potential claims cannot be reasonably estimated. However, management believes the ultimate resolution of matters will not have a material adverse impact on the Company’s business or financial position.

~~NOTE 9 - SUBSEQUENT EVENTS~~

~~Loans~~

~~On April 28, 2017,~~In the course of normal operations, the Company is involved in various claims and litigation that management intends to defend. The range of loss, if any, from potential claims cannot be reasonably estimated. However, management believes the ultimate resolution of matters will not have a material adverse impact on the Company’s business or financial position. These claims include amounts assessed by the Kentucky Energy Cabinet totaling $1,415,590, the Company has accrued $1,432,077 as a payable to the Commonwealth of Kentucky including amounts owed to the Kentucky Energy Cabinet. Claims assessed by the Mine Health Safety Administration amount to $856,498 of which the Company has accrued $351,303 as a payable. During 2019, McCoy ~~entered into a business loan agreement~~and Deane, received notice of intent to place liens for amounts owed on federal excise taxes. The amounts associated with ~~Crestmark Bank~~the notices are included in the amount of $200,000. The agreement calls for equal monthly payments through maturity of January 1, 2018 with an interest rate of 12%. The note is secured by a corporate guaranty by the Company and a personal guaranty.company’s trade payables.

On ~~June 12, 2017, McCoy entered into an equipment purchase agreement with an unaffiliated entity~~April 3, 2019 KCC partially settled a case relating to ~~purchase certain underground mining equipment.~~a reclamation issue while the property was under former ownership. The ~~agreement provided for $10,000~~settled amount is $100,000 which will be paid ~~upon execution, $25,000 on July 12, 2017, $25,000 on August, 12, 2017 and $112,500 on September 12, 2017.~~

~~During July 2017, an officer~~out of a prior insurance policy. The remaining portion of the ~~Company advanced $50,000 to Quest.~~case was settled during for amount of $280,000. The ~~advance~~outstanding amount has not been paid as of the report date and is ~~unsecured, non interest bearing and due on demand.~~included in trade payables.

On September ~~8, 2017, Quest~~26, 2019, the Company received notice that a certain lease assumption as part of the PCR acquisition was being disputed by the lessor (see note 1).

Our principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038. We pay $5,726 per month in rent for the office space and the rental lease expires December 2026. On January 1, 2022, the Company entered into an ~~equipment purchase~~expansion lease for the site. The amended lease has a ten year term and $5,869 per month rate.

We also rent office space from an affiliated entity, LRR, at 11000 Highway 7 South, Kite, Kentucky 41828 and pay $1,702 per month rent and the rental lease expires January 1, 2030.

On August 17, 2021, American Rare Earth entered into a Commercial Land Lease sublease agreement with ~~an unaffiliated entity to purchase certain underground mining equipment~~Land Betterment for ~~$600,000.~~nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility. The ~~agreement provided~~sublease is for ~~$80,000 paid upon execution, $30,000 monthly payments until~~ the ~~balance is paid in full.~~

12
~~Table of Contents~~
period of 5 years with a rate of $3,500 a month.

On October ~~4, 2017, ARC~~8, 2021, American Rare Earth entered into a ~~consolidated loan agreement~~Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility. The is for the period of 2 years with ~~an unaffiliated entity. $5,444,632 has been advanced under the note. $5,240,000~~a rate of the note was advanced after March 31, 2017. 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,$4,745.83 a ~~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~~

On October 19, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity 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%.

On October 20, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity 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%.

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 monthly payments until maturity of January 7, 2021.

On January 25, 2018, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $346,660. The agreement calls for monthly payments until maturity of December 25, 2020.

~~Equity Transactions~~

On April 2, 2017, American Resources Corporation closed a private placement whereby it issued an aggregate of 100,000 shares of the ARC’s Series B Preferred Stock at a purchase price of $1.00 per share, and warrants to purchase an aggregate of 833,333 shares of the ARC’s common stock (subject to certain adjustments), for proceeds to ARC of $100,000 (the “April 2017 Private Placement”). After deducting for fees and expenses, the aggregate net proceeds from the sale of the series B preferred shares and the warrants in the April 2017 Private Placement were approximately $100,000.month.

The ~~Series B Preferred share purchase agreement provides for certain adjustments to the conversion value~~Company also utilizes various office spaces on-site at its coal mining operations and coal preparation plant locations in eastern Kentucky, with such rental payments covered under any surface lease contracts with any of the Series B Preferred to common shares of the Company that are based on the EBITDA (earning before interest, taxes, depreciation, and amortization) for the Company for the 12 months ended March 31, 2018. Those adjustments provide for a decrease in the conversion value based on the proportional miss of the Company’s EBITDA, up to a maximum of 30.0% decrease in the conversion value of the Series B Preferred to common shares.surface land owners.

The Series B Preferred share purchase agreement provides for an option for the investor to put the Series B Preferred investment to the Company at a premium to the Series B Preferred purchase price should the Company achieve certain hurdles, such as a secondary offering and an up-listing to a national stock exchange. Such put option expires after 20 days from notification of the Company to the Series B Preferred investor of the fulfillment of such qualifications.NOTE 8 - SUBSEQUENT EVENTS

American Resources Corporation closed on a private placement agreement which was dated April 30, 2017 and effective May 30, 2017, whereby it issued an aggregate of 250,000 shares of the ARC’s Series B Preferred Stock and warrants amounting to 2,310,733 for the purchase of $250,000 of secured debt from an unrelated debt holder of an operating subsidiary of a related party.None.

~~On July 5, 2017, the Company issued 13,333 common shares and warrants to purchase 33,333 shares to an unrelated consulting company. The warrants had an exercise price of $3.60 with a three year term.~~

1315
Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Form 10-Q and other reports filed by Registrant from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, Registrant’s management as well as estimates and assumptions made by Registrant’s management. When used in the filings the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions as they relate to Registrant or Registrant’s management identify forward looking statements. Such statements reflect the current view of Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors relating to Registrant’s industry, Registrant’s operations and results of operations and any businesses that may be acquired by Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Although Registrant believes that the expectations reflected in the forward-looking statements are reasonable, Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results.

Overview

~~Company was engaged in organizational efforts and obtaining initial financing.~~ When we formed our company, our focus was to (i) construct and/or purchase and manage a chain of combined gasoline, diesel and natural gas (NG) fueling and service stations (initially, in the Miami, FL area); (ii) construct conversion factories to convert NG to liquefied natural gas (LNG) and compressed natural gas (CNG); and (iii) construct conversion factories to retrofit vehicles currently using gasoline or diesel fuel to also run on NG in the United States and also to build a convenience store to serve our customers in each of our locations.

On January 5, 2017, American Resources Corporation (ARC) executed a Share Exchange Agreement between the Company and Quest Energy Inc. ~~(Quest Energy)~~(“Quest Energy”), a private company incorporated in the State of Indiana on May 2015 with offices at ~~9002 Technology Lane,~~12115 Visionary Way, Fishers, IN 46038, and due to the fulfillment of various conditions precedent to closing of the transaction, the control of the Company was transferred to the Quest Energy shareholders on February 7, 2017. This transaction resulted in Quest Energy becoming a wholly-owned subsidiary of ARC. Through Quest Energy, ARC was able to acquire coal mining and coal processing operations, substantially all located in eastern ~~Kentucky.~~Kentucky and western West Virginia. On November 25, 2020, Quest Energy changed its name to American Carbon Corp. (American Carbon)

~~Quest Energy~~American Carbon currently has ~~five~~seven coal mining and processing operating subsidiaries: McCoy Elkhorn Coal LLC (doing business as McCoy Elkhorn Coal Company) (McCoy Elkhorn), Knott County Coal LLC (Knott County Coal), Deane Mining, LLC (Deane Mining) and Wyoming County Coal LLC (Wyoming County), Quest Processing LLC (Quest Processing), Perry County Resources (Perry County) located in eastern Kentucky and western West Virginia within the Central Appalachian coal basin, and ERC Mining Indiana Corporation (ERC) located in southwest Indiana within the Illinois coal basin. The coal ~~reserves~~deposits under control by the Company are generally comprise of metallurgical coal (used for steel making), pulverized coal injections (used in the steel making process) and high-BTU, low sulfur, low moisture bituminous coal used for a variety of uses within several industries, including industrial customers and specialty ~~products and~~products. Since mid-2019, we have not mined or sold coal which is sold into the thermal coal markets. All production and future investment will be for the mining of metallurgical coal used ~~for electricity generation.~~in the steel and specialty markets.

Table of Contents

Efforts to diversify revenue streams have led to the establishment of additional subsidiaries; American Metals LLC (AM) which is focused on the recovery and sale of recovered metal and steel and American Rare Earth LLC (ARE) which is focused on the aggregation and monetization of critical and rare earth element deposits.

We have not classified, and as a result, do not have any “proven” or “probable” reserves as defined in United States Securities and Exchange Commission Industry Guide 7, and as a result, our company and its business activities are deemed to be in the exploration stage until mineral deposits are defined on our properties.

McCoy Elkhorn Coal LLC

General:

Located primarily within Pike County, Kentucky, McCoy Elkhorn is currently comprised of two ~~active~~ mines (Mine #15 and the Carnegie 1 Mine) in “hot idle” status, and one mine in development (Carnegie 2 Mine), two coal preparation facilities (Bevins #1 and Bevins #2), and other mines in various stages of development or reclamation. McCoy Elkhorn sells its coal to a variety of customers, both domestically and internationally, primarily to the steel making industry as a high-vol “B” coal or blended coal. The coal controlled at McCoy Elkhorn (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and ~~high-grade thermal coal~~Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to ~~utilities.~~Industry Guide 7.

14
~~Table of Contents~~

Mines:

Mine #15 is an underground mine in the Millard (also known as Glamorgan) coal seam and located near Meta, Kentucky. Mine #15 is mined via room-and-pillar mining methods using continuous miners, and the coal is belted directly from the stockpile to McCoy Elkhorn’s coal preparation facility. Mine #15 is currently a “company run” mine, whereby the Company manages the workforce at the mine. The coal from Mine #15 is stockpiled at the mine site and belted directly to the Company’s nearby coal preparation facilities. Production at Mine #15 re-commenced under Quest Energy’s ownership in September 2016.

The Carnegie ~~Mine~~1Mine is an underground mine in the Alma and Upper Alma coal seams and located near Kimper, Kentucky. In 2011, coal production from the Carnegie Mine in the Alma coal seam commenced and then subsequently the mine was idled. Production at the Carnegie Mine was reinitiated in early 2017 under Quest Energy’s ownership and is currently being mined via room-and-pillar mining methods utilizing a continuous miner. The coal is stockpiled on-site and trucked approximately 7 miles to McCoy Elkhorn’s preparation facilities. The Carnegie Mine is currently operated as a modified contractor ~~mine.~~mine, whereby McCoy Elkhorn provides the mining infrastructure and equipment for the operations and pays the contractor a fixed per-ton fee for managing the workforce, procuring the supplies, and maintaining the equipment and infrastructure in proper working order.

~~There are two coal preparation facilities at McCoy Elkhorn:~~Beginning in January 2020, Mine #15 and Carnegie 1 mines were idled due to the adverse market effects Covid-19 global pandemic. The Carnegie 1 mine restarted during October 2021.

Processing & Transportation:

Table of Contents

The Bevins #1 Preparation Plant is an 800 ton-per hour coal preparation facility located near Meta, Kentucky, across the road from Mine #15. Bevins #1 has raw coal stockpile storage of approximately 25,000 tons and clean coal stockpile storage of 100,000 tons of coal. The Bevins #1 facility has a fine coal circuit and a stoker circuit that allows for enhance coal recovery and various coal sizing options depending on the needs of the customer. The Company acquired the Bevins Preparation Plants as idled facilities, and since acquisition, the primary work completed at the Bevins Preparation Plants by the Company includes rehabilitating the plants’ warehouse and replacing belt lines.

The Bevins #2 Preparation Plant ~~located~~is on the same permit site as Bevins #1 and is a 500 ton-per-hour processing ~~facility. Both coal preparation plants have~~facility with fine coal recovery and a stoker ~~circuits~~circuit for ~~enhanced coal recovery and~~ coal sizing options. Bevins #2 has raw coal stockpile storage of 25,000 tons of coal and a clean coal stockpile storage of 45,000 tons of coal. We are currently utilizing less than 10% of the available processing capacity of Bevins #1 and Bevins #2.

Both Bevins #1 and Bevins #2 have a batch-weight loadout and rail spur for loading coal into trains for rail shipments. The spur has storage for 110 rail cars and is serviced by CSX Transportation and is located on CSX’s Big Sandy, Coal Run Subdivision. Both Bevins #1 and Bevins #2 have coarse refuse and slurry impoundments called Big Groundhog and Lick Branch. While the Big Groundhog impoundment is nearing the end of its useful life, the Lick Branch ~~Impoundments.~~impoundment has significant operating life and will be able to provide for coarse refuse and slurry storage for the foreseeable future at Bevins #1 and Bevins #2. Coarse refuse from Bevins #1 and Bevins #2 is belted to the impoundments. Both Bevins #1 and Bevins #2 are facilities owned by McCoy Elkhorn, subject to certain restrictions present in the agreement between McCoy Elkhorn and the surface land owner.

Both Bevins #1 and Bevins #2, as well as the rail loadout, are operational and any work required on any of the plants or loadouts would be routine maintenance. The allocated cost of for this property at McCoy Elkhorn Coal paid by the company is $95,210.

Due to additional coal processing storage capacity at Bevins #1 and Bevins #2 Preparation Plants, McCoy Elkhorn has the ability to process, store, and load coal for other regional coal producers for an agreed-to fee.

Additional Permits:

In addition to the above mines, McCoy Elkhorn holds 11 additional coal mining permits that are idled operations or in various stages of reclamation. For the idled coal mining operations, McCoy Elkhorn will determine which coal mines to bring back into production, if any, as the coal market changes, and there are currently no other idled mines within McCoy Elkhorn that are slated to go into production in the foreseeable future. Any idled mines that are brought into production would require significant upfront capital investment, and there is no assurance of the feasibility of any such new operations.

Knott County Coal LLC

General:

Located primarily within Knott County, Kentucky (but with additional idled permits in Leslie County, Perry County, and Breathitt County, Kentucky), Knott County Coal is comprised of 1722 idled mining permits (or permits in reclamation) and permits for ~~two~~one preparation ~~facilities:~~facility: the idled Supreme Energy Preparation ~~Plant and the Raven Preparation Plant, both of which are also idled.~~Plant. The idled mining permits are either in various stages of reclamation or being maintained as idled, pending any changes to the coal market that may warrant reinitiating production. The idled mines at Knott County Coal are primarily underground mines that utilize room-and-pillar mining. The coal controlled at Deane Mining (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

Table of Contents

Mines:

Currently all permitted mines are idled, in development or in reclamation.

Processing & Transportation:

The idled Supreme Energy Preparation Plant is a 450 ton-per-hour coal preparation facility located in Kite, Kentucky. The Bates Branch rail loadout associated with the Supreme Energy Preparation Plant is a batch-weigh rail loadout with 110 rail car storage capacity and serviced by CSX Transportation in their Big Sandy rate district. The Supreme Energy Preparation Plant has a coarse refuse and slurry impoundment called the King Branch Impoundment.

The Supreme Energy Preparation Plant is owned by Knott County Coal, subject to certain restrictions present in the agreement between Knott County Coal and the surface land owner, Land Resources & Royalties LLC.

The Company acquired the Supreme Energy Preparation Plants as an idled facility, and since acquisition, no work has been performed at the facility other than minor maintenance. Both the Supreme Energy Preparation Plant and the rail loadout are idled and would require an undetermined amount of work and capital to bring them into operation. The allocated cost of for the property at Knott County Coal paid by the Company is ~~also owner~~$286,046.

Additional Permits:

In addition to the above mines, Knott County Coal holds 22 coal mining permits that are in development, idled or in various stages of reclamation. Any idled mines that are brought into production would require significant upfront capital investment and there is no assurance of the permits to the idled Raven Preparation Plant, an 800 ton-per-hour coal preparation facility with a fine coal circuit, located in Raven, Kentucky. The Raven rail loadout is a batch-weight rail loadout with 110 car storage capacity and services by CSX Transportation in their Big Sandy rate district. The Raven Preparation Plant has a coarse refuse and slurry impoundment called the Big Branch Impoundment.feasibility of any such new operations.

Deane Mining LLC

General:

Located within ~~Knott~~Letcher County and ~~Letcher~~Knott County, Kentucky, Deane Mining ~~LLC~~ is ~~currently~~ comprised of one ~~active~~idled underground coal mine ~~called~~(the Access Energy Mine), one idled surface mine (Razorblade Surface) and ~~other mines~~one idled coal preparation facility called Mill Creek Preparation Plant, along with 12 additional idled mining permits (or permits in reclamation). The idled mining permits are either in various stages of development, reclamation or ~~reclamation.~~being maintained as idled, pending any changes to the coal market that may warrant re-starting production. The coal controlled at Deane Mining ~~sells its coal primarily to an electricity generation utility located~~(along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in ~~southern~~the United States ~~but also sells~~Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to ~~other customers, both domestically and internationally.~~Industry Guide 7.

Mines:

Access Energy is an underground mine in the Elkhorn #33 coal seam and located ~~near~~in Deane, Kentucky. Access Energy is mined via room-and-pillar mining methods using a continuous ~~miner,~~miners, and the coal is belted directly from the mine to ~~Deane Mining’s~~the raw coal ~~preparation facility.~~stockpile at the Mill Creek Preparation Plant across the road from Access Energy. Access Energy is currently a ~~contractor~~“company run” mine, whereby the Company ~~owns~~manages the ~~equipment, infrastructure, and permits at Access Energy and employs a contractor to manage and pay for the~~ workforce ~~and supplies~~ at the mine ~~for a per-ton fee. The coal from~~and pays all expenses of the mine. During 2019, the permit related to the Access Energy mine was idled and is ~~stockpiled at~~not expected to produce again under the ~~preparation plant site. Production at Access Energy re-commenced under Quest Energy’s ownership in September 2017.~~Company’s control due to the continued focused on the metallurgical and industrial markets.

1519

Table of Contents

Razorblade Surface is a surface mine targeting the Hazard 4 and Hazard 4 Rider coal seams and located in Deane, Kentucky. Deane Mining commenced mining activity at Razorblade Surface during the spring of 2018. Coal produced from Razorblade Surface is trucked approximately one mile to the Mill Creek Preparation Plant. Razorblade Surface is currently run as a contractor model for which the contractor is paid a fixed per-ton fee for the coal produced. During 2019, the permit related to the Access Energy mine was idled and is not expected to produce again under the Company’s control due to the continued focused on the metallurgical and industrial markets.

Processing & Transportation:

Coal from Access Energy is processed at Deane Mining’s Mill Creek Preparation Plant, an 800 ton-per hour coal preparation facility with a batch-weight loadout and rail spur for loading coal into trains for rail shipments. The spur has storage for 110 rail cars and is serviced by CSX Transportation and is located on both CSX’s Big Sandy rate district and CSX’s Elkhorn rate district. The Mill Creek Preparation Plant has a coarse refuse and slurry impoundment called Razorblade Impoundment.

Both the Mill Creek Preparation Plant and the rail loadout are operational, and any work required on any of the plant or loadouts would be routine maintenance. The allocated cost of for the property at Deane Mining paid by the Company is $1,569,641.

Additional Permits:

In addition to the above mines and preparation facility, Deane Mining holds 12 additional coal mining permits that are in development, idled or in various stages of reclamation. Any idled mines that are brought into production would require significant upfront capital investment and there is no assurance of the feasibility of any such new operations.

Wyoming County Coal LLC

General:

Located within Wyoming County, West Virginia, Wyoming County Coal is comprised of two idled underground mining permits and the three permits associated with the idled Pioneer Preparation Plant, the Hatcher rail loadout, and Simmons Fork Refuse Impoundment. The two idled mining permits are undisturbed underground mines that are anticipated to utilize room-and-pillar mining. The coal controlled at Wyoming County Coal (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” deposits under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

Mines:

The mining permits held by Wyoming County Coal are in various stages of planning with no mines currently in production.

Potential customers of Wyoming County Coal would include steel mills in the United States or international marketplace although no definitive sales have been identified yet.

Table of Contents

Processing & Transportation:

The idled Pioneer Preparation Plant is a 350 ton-per-hour coal preparation facility located near Oceana, West Virginia. The Hatcher rail loadout associated with the Pioneer Preparation Plant is a rail loadout serviced by Norfolk Southern Corporation. The refuse from the preparation facility is trucked to the Simmons Fork Refuse Impoundment, which is approximately 1.0 mile from the Pioneer Preparation facility. The preparation plant utilizes a belt press technology which eliminates the need for pumping slurry into a slurry pond for storage within an impoundment.

The Company is in the initial planning phase of getting estimates on the cost to upgrade the preparation facility to a modern 350 ton per hour preparation facility, although no cost estimates have yet been received. The Company is also in the initial planning phase of getting estimates on the cost and timing of upgrading the rail load out facility to a modern batch weight load out system, although no cost estimates have yet been received.

The Company acquired the Pioneer Preparation Plants as an idled facility, and since acquisition, no work has been performed at the facility. Both the Pioneer Preparation Plant and the rail loadout are idled and would require an undetermined amount of work and capital to bring them into operation, which is currently in the initial phases of planning and no cost estimates have been received. The allocated cost for the property at Wyoming County Coal will pay by the Company is $22,326,101 of which $22,091,688 has been paid using shares of the Company’s Class A Common stock. The remaining portion was paid in cash.

Permits:

Wyoming County Coal holds two coal mining permits that are in the initial planning phase and three permits associated with the idled Pioneer Preparation Plant, the Hatcher rail loadout, and Simmons Fork Refuse Impoundment. Any mine that is brought into production would require significant upfront capital investment and there is no assurance of the feasibility of any such new operations. As of the report date, the permits have not been fully transferred as they await final regulatory approval. As of the balance sheet date and report date, the West Virginia permit transfers have not yet been approved, and WCC has not substituted its reclamation surety bonds for the seller’s bond collateral. The transfer of any new permits to the Company is subject to regulatory approval. This approval is subject to the review of both unabated or uncorrected violations that are listed on the Applicator Violator List. The Company, to include several of its subsidiaries, does have unabated and/or uncorrected violations that are listed on the Applicator Violator List. Should the state regulators believe that the Company is not in the process of abating or correcting the currently outstanding issues associated with their currently held permits they may choose not to issue the Company any new permits until such issues are properly rectified.

Perry County Resources LLC

General:

Located primarily within Perry County, Kentucky, Perry County Resources LLC is comprised of one active underground mine (the E4-2 mine) and one active coal processing facility called the Davidson Branch Preparation Plant, along with two additional idled underground mining permits. The two idled mining permits are for underground mines and have been actively mined in the past and being maintained as idled, pending any changes to the coal market that may warrant re-starting production. The coal controlled at Perry County Resources (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

Table of Contents

Mines:

The E4-2 mine is an underground mine in the Elkhorn 4 (aka the Amburgy) coal seam located near the town of Hazard, Kentucky. The E4-2 mine is mined via room-and-pillar mining methods using both continuous miners and continuous haulage systems, and the coal is belted directly from the mine to the raw coal stockpile at the Davidson Branch Preparation Plant less than a mile away. The E4-2 mine is currently a “company-run” mine, whereby the Company manages the workforce at the mine and pays all expenses of the mine. The Company acquired the E4-2 mine as an active mine, and since acquisition in September 2019, the primary work at the E4-2 mine has been rehabilitation of existing infrastructure to increase the operational efficiencies of the mine, including replacing belt structure, repairing equipment, replacing underground mining infrastructure, and installing new mining infrastructure as the mine advances due to coal extraction. The E4-2 mine has the estimated capacity to produce up to approximately 80,000 tons per month of coal.

Beginning in January 2020, The E4-2 mine was idled due to the adverse market effects Covid-19 global pandemic. The E4-2 Mine was restarted during March 2021.

Processing and Transportation:

The Davidson Branch Preparation Plant is a 1,300 ton-per-hour coal preparation facility located near Hazard, Kentucky. The associated “Bluegrass 4” rail loadout is a batch-weight rail loadout with 135 car storage capacity and services by CSX Transportation in their Hazard/Elkhorn rate district. The Davidson Branch Preparation Plant is owned by Perry County Resources. We are currently utilizing less than 10% of the available processing capacity of the Davidson Branch Preparation Plant.

Both the Davidson Branch Preparation Plant and the rail loadout are operational, and any work required on any of the plant or loadouts would be routine maintenance. The allocated cost of for the property at Perry County Resources paid by the Company is $1,954,317.

Additional Permits:

In addition to the above mine, preparation facility, and related permits, Perry County Resources holds four additional coal mining permits that are idled or in development. Any idled mines that are brought into production would require significant upfront capital investment and there is no assurance of the feasibility of any such new operations.

The transfer of any new permits to the Company is subject to regulatory approval. This approval is subject to the review of both unabated or uncorrected violations that are listed on the Applicator Violator List. The Company, to include several of its subsidiaries, does have unabated and/or uncorrected violations that are listed on the Applicator Violator List. Should the state regulators believe that the Company is not in the process of abating or correcting the currently outstanding issues associated with their currently held permits they may choose not to issue the Company any new permits until such issues are properly rectified.

Table of Contents

Quest Processing LLC

Quest Energy’s wholly-owned subsidiary, Quest Processing, ~~LLC,~~ manages the assets, operations, and personnel of the certain coal processing and transportation facilities of Quest Energy’s various other subsidiaries, namely the Supreme Energy Preparation Facility (of Knott County Coal LLC), the Raven Preparation Facility (of Knott County Coal LLC), and Mill Creek Preparation Facility (of Deane Mining LLC). Quest Processing LLC was the recipient of a New Markets Tax Credit loan that allowed for the payment of certain expenses of these preparation facilities. As part of that financing transaction, Quest Energy loaned ~~Quest MGMT~~ERC Mining LLC, an entity owned by members of Quest Energy, Inc.’s management, $4,120,000 to facilitate the New Markets Tax Credit loan, of which is all outstanding as of March 31, ~~2017.~~2019. ERC Mining LLC is considered a variable interest entity and is consolidated into Quest Energy’s financial statements.

~~ERC Mining Indiana Corporation (the Gold Star Mine)~~

Quest Energy, through its wholly-owned subsidiary, ERC Mining Indiana Corporation (“ERC”), has a management agreement with an unrelated entity, LC Energy Operations LLC to manage an underground coal mine, clean coal processing facility and rail loadout located in Greene County, Indiana (referred to as the “Gold Star Mine”) for a monthly cash and per-ton fee. As part of that management agreement, ERC manages the operations of the Gold Star Mine, is the holder of the mining permit, provides the reclamation bonding, is the owner of some of the equipment located at the Gold Star Mine, and provides the employment for the personnel located at the Gold Star Mine. LC Energy Operations LLC owns the remaining equipment and infrastructure, is the lessee of the mineral (and the owner of some of the mineral and surface), and provides funding for the operations. Currently the coal mining operations at the Gold Star Mine are idled.

In addition to the current owned permits and controlled reserves, ARC may, from time to time, and frequently, acquire additional coal mining permits or reserves, or dispose of coal mining permits or reserves currently held by ARC, as management of the Company deems appropriate.

Mineral and Surface Leases

Coal mining and processing involves the extraction of coal (mineral) and the use of surface property incidental to such extraction and processing. All of the mineral and surface related to the Company’s coal mining operations is leased from various mineral and surface owners (the “Leases”). The Company’s operating subsidiaries, collectively, are parties to approximately 200 various Leases and other agreements required for the Company’s coal mining and processing operations. The Leases are with a variety of Lessors, from individuals to professional land management firms such as the Elk Horn Coal Company LLC and ~~Penn Virginia Operating Company, LLC.~~Alma Land Company. In some instances, the Company has leases with Land Resources & Royalties LLC ~~(“LRR”)~~(LRR), a professional leasing firm that is an entity wholly owned by ~~Quest MGMT LLC~~Wabash Enterprises Inc, an entity owned by members of Quest Energy Inc.’s management.

Coal Sales

ARC sells its coal to domestic and international customers, some which blend ARC’s coal at east coast ports with other qualities of coal for export. Coal sales currently come from the Company’s ~~McCoy Elkhorn’s Mine #15, McCoy Elkhorn’s Carnegie Mine, and Deane Mining’s Access Energy Mine.~~Perry’s E4-2 mine. The Company may, at times, purchase coal from other regional producers to sell on its contracts.

Coal sales at the Company is primarily outsource to third party intermediaries who act on the Company’s behalf to source potential coal sales and contracts. The third-party intermediaries have no ability to bind the Company to any contracts, and all coal sales are approved by management of the Company.

16
~~Table of Contents~~

Competition

The coal industry is intensely competitive. The most important factors on which the Company competes are coal quality, delivered costs to the customer and reliability of supply. Our principal domestic competitors will include ~~Alpha Natural Resources,~~Corsa Coal Corporation, Ramaco Resources, Blackhawk Mining, Coronado Coal, Arch ~~Coal,~~Resources, Contura Energy, and Warrior Met ~~Coal, Alliance Resource Partners, and ERP Compliance Fuels.~~Coal. Many of these coal producers may have greater financial resources and larger ~~reserve~~coal deposit bases than we do. We also compete in international markets directly with domestic companies and with companies that produce coal from one or more foreign countries, such as China, Australia, Colombia, Indonesia and South Africa.

Table of Contents

Legal Proceedings

From time to time, we are subject to ordinary routine litigation incidental to our normal business operations. ~~We are not currently a party to, and our property is not subject to, any material legal proceedings.~~

Please see financial statement note 6 for detail on cases.

Environmental, Governmental, and Other Regulatory Matters

Our operations are subject to federal, state, and local laws and regulations, such as those relating to matters such as permitting and licensing, employee health and safety, reclamation and restoration of mining properties, water discharges, air emissions, plant and wildlife protection, the storage, treatment and disposal of wastes, remediation of contaminants, surface subsidence from underground mining and the effects of mining on surface water and groundwater conditions. In addition, we may become subject to additional costs for benefits for current and retired coal miners. These environmental laws and regulations include, but are not limited to, ~~SMCRA~~the Surface Mining Control and Reclamation Act of 1977 (SMCRA) with respect to coal mining activities and ancillary activities; the ~~CAA~~Clean Air Act (CAA) with respect to air emissions; the ~~CWA~~Clean Water Act (CWA) with respect to water discharges and the permitting of key operational infrastructure such as impoundments; Resource Conservation and Recovery RCRA with respect to solid and hazardous waste management and disposal, as well as the regulation of underground storage tanks; the Comprehensive Environmental Response, Compensation and Liability Act ~~(“CERCLA”~~(CERCLA or ~~“Superfund”)~~Superfund) with respect to releases, threatened releases and remediation of hazardous substances; the Endangered Species Act of 1973 ~~(“ESA”)~~(ESA) with respect to threatened and endangered species; and the National Environmental Policy Act of 1969 ~~(“NEPA”)~~(NEPA) with respect to the evaluation of environmental impacts related to any federally issued permit or license. Many of these federal laws have state and local counterparts which also impose requirements and potential liability on our operations.

Compliance with these laws and regulations may be costly and time-consuming and may delay commencement, continuation or expansion of exploration or production at our facilities. They may also depress demand for our products by imposing more stringent requirements and limits on our customers’ operations. Moreover, these laws are constantly evolving and are becoming increasingly complex and stringent over time. These laws and regulations, particularly new legislative or administrative proposals, or judicial interpretations of existing laws and regulations related to the protection of the environment could result in substantially increased capital, operating and compliance costs. Individually and collectively, these developments could have a material adverse effect on our operations directly and/or indirectly, through our customers’ inability to use our products.

Certain implementing regulations for these environmental laws are undergoing revision or have not yet been promulgated. As a result, we cannot always determine the ultimate impact of complying with existing laws and regulations.

Due in part to these extensive and comprehensive regulatory requirements and ~~ever- changing~~ever-changing interpretations of these requirements, violations of these laws can occur from time to time in our industry and also in our operations. Expenditures relating to environmental compliance are a major cost consideration for our operations and safety and compliance is a significant factor in mine design, both to meet regulatory requirements and to minimize long-term environmental liabilities. To the extent that these expenditures, as with all costs, are not ultimately reflected in the prices of our products and services, operating results will be reduced.

Table of Contents

In addition, our customers are subject to extensive regulation regarding the environmental impacts associated with the combustion or other use of coal, which may affect demand for our coal. Changes in applicable laws or the adoption of new laws relating to energy production, greenhouse gas emissions and other emissions from use of coal products may cause coal to become a less attractive source of energy, which may adversely affect our mining operations, the cost structure and, the demand for coal.

17
~~Table of Contents~~

We believe that our competitors with operations in the United States are confronted by substantially similar conditions. However, foreign producers and operators may not be subject to similar requirements and may not be required to undertake equivalent costs in or be subject to similar limitations on their operations. As a result, the costs and operating restrictions necessary for compliance with United States environmental laws and regulations may have an adverse effect on our competitive position with regard to those foreign competitors. The specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, applicable legislation and its production methods.

The Mine Act and the MINER Act, and regulations issued under these federal statutes, impose stringent health and safety standards on mining operations. The regulations that have been adopted under the Mine Act and the MINER Act are comprehensive and affect numerous aspects of mining operations, including training of mine personnel, mining procedures, roof control, ventilation, blasting, use and maintenance of mining equipment, dust and noise control, communications, emergency response procedures, and other matters. ~~MSHA~~The Mine Safety and Health Administration (MSHA) regularly inspects mines to ensure compliance with regulations promulgated under the Mine Act and MINER Act.

Due to the large number of mining permits held by the Company that have been previously mined and operated, there is a significant amount of environmental reclamation and remediation required by the Company to comply with local, state, and federal regulations for coal mining companies.

~~Further discussion regarding the required environmental remediation of the Company and associated risks to the Company are discussed in the Risk Factors section.~~

Property

Our principal offices are located at ~~9002 Technology Lane,~~12115 Visionary Way, Fishers, Indiana 46038. We pay ~~$2,500~~$5,726 per month in rent for the office space and the rental lease expires in December ~~2018.~~ 2026. On January 1, 2022, the Company entered into an expansion lease for the site. The amended lease has a ten year term and $5,869 per month rate.

We also rent office space from an affiliated entity, LRR, at 11000 Highway 7 South, Kite, Kentucky 41828 and pay ~~$500~~$1,702 per month rent and the rental lease expires January 1, 2030.

On October ~~30, 2021.~~8, 2021, American Rare Earth entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility. The is for the period of 2 years with a rate of $4,745.83 a month.

The Company also utilizes various office spaces on-site at its coal mining operations and coal preparation plant locations in eastern Kentucky, with such rental payments covered under any surface lease contracts with any of the surface land owners.

Employees

ARC, through its operating subsidiaries, employs a combination of company employees and contract labor to mine coal, process coal, and related functions. The Company is continually evaluating the use of company employees and contract labor to determine the optimal mix of each, given the needs of the Company. Currently, McCoy Elkhorn’s Carnegie 1 Mine ~~#15 is primarily run by company employees, McCoy Elkhorn’s Carnegie Mine is~~and Perry’s E4-1 mine and are primarily run by contract labor, and the Company’s various coal preparation facilities are run by ~~company employees.~~contract labor.

The Company currently has approximately ~~120 employees, with a substantial majority based in eastern Kentucky.~~10 direct employees. The Company is headquartered in Fishers, Indiana with ~~six~~four members of the Company’s executive team based at this location.

Table of Contents

Results of Operations

Our consolidated operations had operating revenues of ~~$6,612,081~~$9,080,622 for the three-months ended March 31, ~~2017~~2022 and ~~$746,779~~$10,646 operating revenue for the three-months ended March 31, ~~2016.~~2021. We have incurred net loss attributable to American Resources shareholders in the amount of ~~$3,117,588~~$2,752,902 and a net loss of ~~$8,824,626~~$6,389,857 respectively for the same periods.

The primary driver for ~~increased~~increase in revenue was a increase in coal production since the commencement of underground mining operations in September 2016. The primary driver for decreased net loss was the consulting fees incurred during the period ended March 31, 2016 that were not incurred during the period ended March 31, 2017.

18
~~Table of Contents~~
Covid-19 global pandemic.

From our inception to-date our activities have been primarily financed from the proceeds of our acquisitions, ~~series B~~common share equity investments and loans.

For the three months ended March 31, ~~2017~~2022 and ~~2016,~~2021, coal sales and processing expenses were ~~$4,851,572~~$2,890,858 and ~~$735,146~~$800,515 respectively, development costs, including loss on settlement of ARO were ~~$1,951,127~~$6,784,188 and ~~$1,356,111,~~$1,811,951, respectively, and production taxes and royalties ~~$1,672,240~~$819,477 and ~~$63,508,~~$568,182, respectively. Depreciation expense for the ~~same periods~~three months ended March 31, ~~2016~~2022 and ~~2015~~2021 were ~~$459,644~~$626,042 and ~~$484,188~~$393,530 respectively.

Liquidity and Capital Resources

As of March 31, 2022, and 2021, our available cash was $5,217,204 and $7,097,465. We expect to fund our liquidity requirements with cash on hand, future borrowings and cash flow from operations. If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may reduce our mine development and/or fund a portion of our expenditures through issuance of debt or equity securities, the entry into debt arrangements for from other sources, such as asset sales. We do not have any credit lines currently available to fund our liquidity requirements, and currently there is uncertainty regarding our ability to execute on the above strategy.

For the three months ending March 31, ~~2017~~2022 our net cash flow used in operating activities was ~~$25,715~~$5,733,607 and for the period ending March 31, ~~2016~~2021 the net cash flow used in operating activities was ~~$874,736.~~$6,745,974.

For the three months ending March 31, ~~2017~~2022 and ~~2016~~2021 net cash ~~used in~~provided by (used in) investing activities were ~~$62,245~~$(792,025) and ~~$3,690,271~~$(2,840,000) respectively.

For the three months ending March 31, ~~2017~~2022 and ~~2016~~2021 net cash proceeds (used in) from financing activities were ~~$59,595~~$241,316 and ~~$4,667,863~~$6,715,944 respectively.

As a public company, we will be subject to certain reporting and other compliance requirements of a publicly reporting company. We will be subject to certain costs for such compliance which private companies may not choose to make. We have identified such costs as being primarily for audits, legal services, filing expenses, financial and reporting controls and shareholder communications and estimate the cost to be approximately ~~$10,000~~$35,000 monthly if the activities of our Company remain somewhat the same for the next few months. We have included such costs in our monthly cash flow needs and expect to pay such costs from a combination of cash from operations.

Table of Contents

Business Effect of Covid-19.

During 2021 and 2020, the worldwide COVID-19 outbreak has resulted in muted demand for infrastructure and steel products and their necessary inputs including Metallurgical coal. These recent developments are expected to result in lower sales and gross margins. Because of the adverse market conditions caused by the global pandemic the Company’s operations were idled in January 2020 and resumed during December 2020. Additionally, supply chain constraints are persistent in all parts of our business.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Critical Accounting Policies

The preparation of financial statements requires management to utilize estimates and make judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The estimates are evaluated by management on an ongoing basis, and the results of these evaluations form a basis for making decisions about the carrying value of assets and liabilities that are not readily apparent from other sources. Although actual results may differ from these estimates under different assumptions or conditions, management believes that the estimates used in the preparation of our financial statements are reasonable. The critical accounting policies affecting our financial reporting are summarized in Note 1 to the financial statements included elsewhere in this report.

Recent Accounting Pronouncements

We determined that all other issued, but not yet effective accounting pronouncements are inapplicable or insignificant to us and once adopted are not expected to have a material impact on our financial position.None.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Because we are a smaller reporting company, we are not required to include any disclosure under this item.

1927

Table of Contents

Item 4. Controls and Procedures

(a) Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

With respect to the period ending March 31, ~~2017,~~2022, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.

Based upon our evaluation regarding the period ending March 31, ~~2017,~~2022, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s insufficient number of staff performing accounting and reporting functions and lack of timely reconciliations. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

(b) Changes in Internal Controls.

There have been no changes in the Company’s internal control over financial reporting during the period ended March 31, ~~2017~~2022 that have materially affected the Company’s internal controls over financial reporting.

The company has hired a Chief Financial Officer, President, Chief Executive Officer and General Counsel, all of whom work in conjunction on risk assessment and segregation of duties. Management has identified material weaknesses as described above. Management has hired outside consultants as described above to mitigate the risk though we still deem the controls to be ineffective.

2028
Table of Contents

PART II. OTHER INFORMATION

~~PART II~~. ~~OTHER INFORMATION~~

Item 1. Legal Proceedings

WeFrom time to time, we are ~~currently not involved in any~~subject to ordinary routine litigation ~~that we believe could have a material adverse effect on~~incidental to our ~~financial condition or results of~~normal business operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Please see financial statement note 6 for detail on cases.

Item 1A.Risk Factors

Not applicable.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

~~On July 5, 2017, the Company issued 13,333 common shares and warrants to purchase 33,333 shares to an unrelated consulting company.~~

~~Item 3.~~~~Defaults~~ u~~pon Senior Securities~~

None.

Item 3.Defaults upon Senior Securities

None.

Item 4.Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Quarterly Report.

Item 5.Other Information

None.

2129

Table of Contents

Item 6.Exhibits

The following exhibits are filed herewith except as otherwise noted:

Exhibit~~No.~~ Number	Description	Location Reference

3.1	Articles of Incorporation of Natural Gas Fueling and Conversion Inc. ~~(filed as~~	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).~~2013.
3.2	Amended and Restated Articles of Incorporation of NGFC Equities Inc. ~~(filed as~~	Incorporated herein by reference to Exhibit 3.1 to the Company’s 8k filed on February 25, ~~2015).~~2015.
3.3	Articles of Amendment to Articles of Incorporation of NGFC Equities, Inc. ~~(filed as~~	Incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K on February 21, ~~2017).~~2017.
3.4	Articles of Amendment to Articles of Incorporation of American Resources Corporation dated March ~~24,~~21, 2017.	Incorporated herein by reference to Exhibit 3.4 to the Company’s Form 10-Q, filed with the SEC on February 20, 2018.
3.5	Bylaws of Natural Gas Fueling and Conversion Inc. ~~(filed as~~	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).~~2013.
3.6	~~By-Laws,~~Bylaws, of NGFC Equities Inc., as amended and ~~restated (filed as~~restated.	Incorporated herein by reference to Exhibit 3.2 to the Company’s 8k filed on February 25, ~~2015).~~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 December 11, 2018.

Table of Contents

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 December 11, 2018.
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 6, 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 6, 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 6, 2019.
10.16	Employee Stock Option Plan	Incorporated herein by reference to Exhibit 10.16 to the Company’s registration statement filed on February 6, 2019.
10.17	Letter of Intent	Incorporated herein by reference to Exhibit 10.17 to the Company’s registration statement filed on February 6, 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 ~~Business~~ Conduct ~~and Ethics (filed as~~	Incorporated herein by reference to Exhibit ~~14.1~~99.2 to the Company’s ~~Registration Statement on Form S-1,~~8k filed ~~with the SEC~~ on November ~~27, 2013).~~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.
21.1	Subsidiaries of the Registrant	Filed 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
9595.1	Mine Safety Disclosure pursuant to Regulation S-K, Item 104 ~~filed herewith~~	Filed Herewith

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension ~~Label~~Labels Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

2231
Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN RESOURCES CORPORATION
Date: ~~February 20, 2018~~May 16, 2022
By:
/s/ Mark C. Jensen
Name:
Mark C. Jensen
Title:
CEO, Chairman of the Board
~~(Principal Executive Officer)~~
(Principal Executive Officer)

23
32

	3-31-17			12/31/2016

ASSETS

CURRENT ASSETS
Cash	$	756,160		$	784,525
Accounts Receivable		1,427,736			2,753,199
Accounts Receivable - Other		196,966			199,701
Total Current Assets		2,380,862			3,737,425

OTHER ASSETS
Cash - restricted		220,602			141,102
Processing and rail facility		2,914,422			2,914,422
Underground equipment		7,514,410			7,500,512
Surface equipment		3,771,943			3,751,054
Less Accumulated Depreciation		(2,722,499	)		(2,262,855	)
Land		178,683			178,683
Accounts Receivable - Other		178,774			196,347
Note Receivable		4,117,139			4,117,139
Total Other Assets		16,173,474			16,536,404

TOTAL ASSETS	$	18,554,336		$	20,273,829

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable	$	3,111,825		$	2,196,060
Accrued related party management fee		17,840,615			17,840,615
Accrued interest		152,945			122,945
Funds held for others		104,487			24,987
Due to affiliate		74,000			74,000
Current portion of long term-debt		4,016,233			4,431,006
Current portion of reclamation liability		2,105,320			707,645
Total Current Liabilities		27,405,425			25,397,258

OTHER LIABILITIES
Long-term portion of note payable (net of issuance costs of $448,548 and $451,389)		4,947,368			4,964,941
Reclamation liability		16,149,751			17,419,228
Total Other Liabilities		21,097,119			22,384,169
Total Liabilities
		48,502,544			47,781,427

STOCKHOLDERS' DEFICIT
AREC - Class A Common stock: $.0001 par value; 230,000,000 shares authorized, 878,704 and 0 shares issued and outstanding for the period end		88			-
AREC - Series A Preferred stock: $.0001 par value; 4,817,792 shares authorized, 4,817,792 shares issued and outstanding		482			482
AREC - Series B Preferred stock: $.001 par value; 20,000,000 shares authorized, 500,000 shares issued and outstanding		500			-
Additional paid-in capital		687,605			88,193
Accumulated deficit		(30,868,618	)		(27,651,030	)
Total American Resources Corporation's Shareholders' Equity		(30,179,943	)		(27,562,355	)
Non controlling interest		231,735			54,757
Total Stockholders' Deficit		(29,948,208	)		(27,507,598	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	18,554,336		$	20,273,829

	3/31/17			3/31/2016

Cash Flows from Operating activities:
Net loss		(3,040,610	)	$	(8,824,626	)
Adjustments to reconcile net income (loss) to net cash
Depreciation		459,644			484,188
Accretion expense		328,061			168,250
Loss on reclamation settlements		155,922			-
Assumption of note payable in reverse merger		50,000
Amortization of issuance costs and debt discount		52,841			-
Stock compensation expense		-			83,300

Change in current assets and liabilities:

Accounts receivable		1,325,463			(25,774	)
Prepaid expenses and other assets		40,000			(6,983	)
Restricted cash used to pay interest		3,266			4,034
Accounts payable		925,483			372,260
Accrued expenses		-			6,840,615
Accrued interest		30,000			30,000
Reclamation liability settlements		(355,785	)		-
Cash used in operating activities		(25,715	)		(874,736	)

Cash Flows from Investing activities:

Note receivable		-			(4,117,139	)
Increase in restricted cash		(79,500	)		(2,487,380	)
Restricted cash used to pay down debt		17,042			21,511
Advances made in connection with management agreement		(40,000	)		(285,000	)
Advance repayment in connection with management agreement		75,000			-
Cash paid for PPE, net		(34,787	)		242,037
Cash received from acquisitions, net of $100 cash paid		-			2,935,700
Cash used in investing activities		(62,245	)		(3,690,271	)

Cash Flows from Financing activities:

Principal payments on long term debt		(25,201	)		(14,528	)
Proceeds from long term debt		-			4,682,391
Payments on factoring agreement		(2,454,430	)		-
Proceeds from factoring agreement		2,039,226			-
Proceeds from sale of series B preferred equity		500,000			-
Cash provided by financing activities		59,595			4,667,863

Increase(decrease) in cash		(28,365	)		102,856

Cash, beginning of period		784,525			-

Cash, end of period	$	756,160		$	102,856

Supplemental Information
Non-cash investing and financing activities
Assumption of net assets and liabilities for asset acquisitions	$	-		$	626,148
Equipment for notes payable	$	-		$	139,425
Debt payment by affiliate	$	-		$	63,000
Conversion of note payable to common stock	$	50,000
Beneficial conversion feature on note payable	$	50,000		$	-

Cash paid for interest	$	45,692		$	4,034
Cash paid for income taxes	$	-		$	-

	American Resources
	Common Stock										Non
	Par value			0.0001				Accumulated			controlling
	Shares		Amount		APIC			Deficit			interest			Total
Shares issued in connection with warrant conversions		187,250		19		280,856									280,875

Amortization of beneficial conversion features						(40,655	)								(40,655	)

Shares issued in connection with debt conversions		884,229		89		1,006,637									1,006,726

Amortization of Warrant and Stock Option Expense						199,843									199,843
															-
Net Loss									(2,745,018	)		(7,884	)		(2,752,902	)

Balance March 31, 2022		66,156,471		6,616		164,888,336			(168,538,589	)		(7,884	)		(3,651,521	)

Assets
Cash	$	2,935,800
Underground Mining Equipment		531,249
Surface Mining Equipment		36,218
Coal Preparation and Loading Facilities		58,681
Liabilities
Asset Retirement Obligation	$	3,561,848

Balance at December 31, 2016	$	18,126,873
Accretion – 3 months March 31, 2017		328,061
Reclamation work – 3 months March 31, 2017		(199,863	)
Balance at March 31, 2017	$	18,255,071


·	~~Accounting Standards Update (ASU) 2014-09,~~ ~~Revenue from Contracts with Customers~~~~, effective for years beginning after December 15, 2017~~10
	·	~~ASU 2015-11,~~ ~~Simplifying the Measurement of Inventory~~~~, effective for years beginning after December 15, 2016~~
	·	~~ASU 2015-17,~~ ~~Balance Sheet Classification~~Table of ~~Deferred Taxes~~~~, effective for years beginning after December 15, 2017~~Contents
	·	~~ASU 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities~~~~, effective for years beginning after December 15, 2018~~
	·	~~ASU 2016-02,~~ ~~Leases~~~~, effective for years beginning after December 15, 2019~~
	·	~~ASU 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash,~~ ~~effective beginning after December 15, 2017~~
	·	~~ASU 2017-01,~~ ~~Business Combinations,~~ ~~effective beginning after December 15, 2017~~
	·	~~ASU 2017-11,~~ ~~Earnings Per Share,~~ ~~effective beginning after December 15, 2018~~

Processing and Rail Facilities		207-20 years
Surface Equipment		7 years
Underground Equipment		5 years
Mining Rights	5-10 years
Coal Refuse Storage	10 years