Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 15, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | American Resources Corporation | |
Entity Central Index Key | 0001590715 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 66,519,279 | |
Entity File Number | 000-55456 | |
Entity Incorporation State Country Code | FL | |
Entity Tax Identification Number | 46-3914127 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 12115 Visionary Way | |
Entity Address City Or Town | Fishers | |
Document Quarterly Report | true | |
Entity Address Postal Zip Code | 46038 | |
City Area Code | 317 | |
Local Phone Number | 855-9926 | |
Security 12b Title | Class A Common, $0.0001 Par Value | |
Trading Symbol | AREC | |
Security Exchange Name | NASDAQ | |
Document Transition Report | false | |
Entity Address State Or Province | IN |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash | $ 3,807,783 | $ 11,492,702 |
Accounts Receivable | 5,354,770 | 3,175,636 |
Prepaid fees | 816,053 | 624,605 |
Total Current Assets | 9,978,606 | 15,292,943 |
LONG-TERM ASSETS | ||
Cash - restricted | 1,086,971 | 1,095,411 |
Property and Equipment, Net | 22,883,868 | 22,903,154 |
Right of use assets, net | 1,799,769 | 726,194 |
Investment in LLC - Related Party | 3,242,398 | 2,500,000 |
Note Receivable | 685,000 | 350,000 |
Total Long-Term Assets | 27,698,006 | 27,574,759 |
TOTAL ASSETS | 37,676,612 | 42,872,702 |
CURRENT LIABILITIES | ||
Accounts payable | 2,982,208 | 3,245,566 |
Non-Trade payables | 1,984,399 | 1,950,567 |
Accounts payable - related party | 3,940,317 | 3,932,716 |
Accrued interest | 38,194 | 1,325,286 |
Due to affiliate | 69,000 | 69,000 |
Current portion of debt | 410,417 | 5,283,647 |
Current portion of convertible debt, (net of unamortized discount of $0 and $40,655) | 0 | 571,618 |
Current portion of operating lease liabilities, net | 85,218 | 151,806 |
Current portion of finance lease liabilities, net | 341,771 | 0 |
Total Current Liabilities | 9,851,524 | 16,530,206 |
LONG-TERM LIABILITIES | ||
Notes payable | 2,500,000 | 548,477 |
Convertible notes payable | 9,192,731 | 8,620,412 |
Reclamation liability | 19,583,029 | 18,951,587 |
Operating lease liabilities, net | 591,127 | 562,428 |
Finance lease liabilities, net | 655,468 | 0 |
Total Long-Term Liabilities | 32,522,355 | 28,682,904 |
Total Liabilities | 42,373,879 | 45,213,110 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
AREC - Class A Common stock: $.0001 par value; 230,000,000 shares authorized, 66,613,085 and 65,084,992 shares issued and outstanding | 6,661 | 6,508 |
Additional paid-in capital | 166,286,379 | 163,441,655 |
Accumulated deficit | (170,969,757) | (165,793,571) |
Total American Resources Corporation Stockholders' Equity (Deficit) | (4,676,717) | (2,345,408) |
Non controlling interest | (20,550) | 0 |
Total stockholders' deficit | (4,697,267) | (2,345,408) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 37,676,612 | $ 42,872,702 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical ) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Unamortized Discount, Current Portion Of Convertible Notes Payable | $ 0 | $ 40,655 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 230,000,000 | 230,000,000 |
Common Stock, Shares Issued | 66,613,085 | 65,084,992 |
Common Stock, Shares Outstanding | 66,613,085 | 65,084,992 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED | ||||
Coal Sales | $ 15,969,787 | $ 339,314 | $ 25,001,047 | $ 342,588 |
Metal Aggregating, Processing and Sales | 3,292 | 27,875 | 40,519 | 27,875 |
Royalty Income | 226,125 | 26,021 | 238,262 | 33,394 |
Total Revenue | 16,199,204 | 393,210 | 25,279,828 | 403,857 |
Cost of Coal Sales and Processing | (5,569,133) | (944,327) | (8,459,992) | (1,744,842) |
Accretion Expense | (363,820) | (305,636) | (631,442) | (611,273) |
Depreciation | (630,341) | (475,014) | (1,256,383) | (868,544) |
Amortization of Mining Rights | (311,685) | (311,685) | (615,079) | (623,370) |
General and Administrative | (903,046) | (593,621) | (1,923,861) | (1,675,068) |
Professional Fees | (235,487) | (193,951) | (586,425) | (903,984) |
Production Taxes and Royalties | (786,008) | (99,475) | (1,605,485) | (667,658) |
Development Costs | (11,532,406) | (3,055,603) | (18,316,594) | (4,867,554) |
Total Operating Expenses | (20,331,926) | (5,979,312) | (33,395,261) | (11,962,293) |
Net Loss from Operations | (4,132,722) | (5,586,102) | (8,115,433) | (11,558,436) |
Other Income (loss) | (76,000) | (446,884) | (158,156) | (411,588) |
Unrealized loss on trading securities | (7,602) | 0 | (7,602) | 0 |
Gain on cancelation of debt | 1,891,848 | 0 | 3,413,152 | 0 |
Amortization of debt discount and issuance costs | 0 | (2,579) | 0 | (5,458) |
Interest Income | 3,282 | 60,220 | 13,327 | 101,392 |
Interest expense | (274,640) | (674,829) | (658,336) | (1,165,942) |
Total Other income (expense) | 1,688,888 | (1,064,072) | 2,918,697 | (1,481,596) |
Net Income (Loss) | (2,443,834) | (6,650,174) | (5,196,736) | (13,040,032) |
Less: Non-Controlling interest | 12,666 | 0 | 20,550 | 0 |
Net loss attributable to American Resources Corporation shareholders | $ (2,431,168) | $ 0 | $ (5,176,186) | $ 0 |
Net loss per common share - basic and diluted | $ (0.04) | $ (0.13) | $ (0.08) | $ (0.26) |
Weighted average common shares outstanding | 66,377,788 | 52,133,268 | 65,846,220 | 49,539,996 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY - USD ($) | Total | Common Stock | APIC | Accumulated Deficit | Non Controlling Interest |
Balance, shares at Dec. 31, 2020 | 42,972,762 | ||||
Balance, amount at Dec. 31, 2020 | $ (20,005,543) | $ 4,256 | $ 113,279,448 | $ (133,289,247) | |
Adjustment for Prior Year | 8 | $ 40 | 114,991 | (115,023) | |
Adjusted Opening Balance, shares | 42,972,762 | ||||
Adjusted Opening Balance, amount | (20,005,535) | $ 4,296 | 113,394,439 | (133,404,270) | |
Shares issued in conjunction with warrant and option conversions, shares | 1,705,508 | ||||
Shares issued in conjunction with warrant and option conversions, amount | 2,257,712 | $ 171 | 2,257,541 | 0 | |
Shares issued in connection with debt and payable conversions, shares | 4,757,628 | ||||
Shares issued in connection with debt and payable conversions, amount | 10,131,984 | $ 476 | 10,131,508 | 0 | |
Shares issued pursuant to restricted stock offering, shares | 425,000 | ||||
Shares issued pursuant to restricted stock offering, amount | 1,275,000 | $ 43 | 1,274,957 | 0 | |
Shares issued for services, shares | 10,000 | ||||
Shares issued for services, amount | 10,000 | $ 1 | 9,999 | 0 | |
Amortization of Warrant and Stock Option Expense | 115,025 | 0 | 115,025 | 0 | |
Net Loss | (6,389,857) | $ 0 | 0 | (6,389,857) | |
Balance, shares at Mar. 31, 2021 | 49,870,898 | ||||
Balance, amount at Mar. 31, 2021 | (12,605,671) | $ 4,987 | 127,183,469 | (139,794,127) | |
Balance, shares at Dec. 31, 2020 | 42,972,762 | ||||
Balance, amount at Dec. 31, 2020 | (20,005,543) | $ 4,256 | 113,279,448 | (133,289,247) | |
Net Loss | (13,040,032) | ||||
Amortization of debt discount | 3,560,019 | ||||
Balance, shares at Jun. 30, 2021 | 58,876,187 | ||||
Balance, amount at Jun. 30, 2021 | 9,310,590 | $ 5,888 | 155,749,003 | (146,444,301) | |
Balance, shares at Mar. 31, 2021 | 49,870,898 | ||||
Balance, amount at Mar. 31, 2021 | (12,605,671) | $ 4,987 | 127,183,469 | (139,794,127) | |
Shares issued in connection with debt and payable conversions, shares | 380,289 | ||||
Shares issued in connection with debt and payable conversions, amount | 625,276 | $ 38 | 625,237 | 0 | |
Net Loss | (6,650,174) | $ 0 | 0 | (6,650,174) | |
Shares issued in connection with warrant and option conversions, shares | 25,000 | ||||
Shares issued in connection with warrant and option conversions, amount | 11,703 | $ 3 | 11,700 | 0 | |
Shares issued in connection with registered offering, shares | 8,600,000 | ||||
Shares issued in connection with registered offering, amount | 27,943,000 | $ 860 | 27,942,140 | 0 | |
Amortization of debt discount | (128,568) | 0 | (128,568) | 0 | |
Stock Compensation - Options | 115,025 | $ 0 | 115,025 | 0 | |
Balance, shares at Jun. 30, 2021 | 58,876,187 | ||||
Balance, amount at Jun. 30, 2021 | 9,310,590 | $ 5,888 | 155,749,003 | (146,444,301) | |
Balance, shares at Dec. 31, 2021 | 65,084,992 | ||||
Balance, amount at Dec. 31, 2021 | (2,345,408) | $ 6,508 | 163,441,655 | (165,793,571) | $ 0 |
Net Loss | (2,752,902) | 0 | (2,745,018) | (7,884) | |
Amortization of debt discount | (40,655) | 0 | (40,655) | 0 | 0 |
Stock Compensation - Options | 199,843 | $ 0 | 199,843 | 0 | 0 |
Issuance of common shares for Warrant Conversion, shares | 488,594 | ||||
Issuance of common shares for Warrant Conversion, amount | 665,391 | $ 50 | 665,341 | 0 | 0 |
Issuance of common shares for Conversion of debt and interest, shares | 582,885 | ||||
Issuance of common shares for Conversion of debt and interest, amount | 622,210 | $ 58 | 622,152 | 0 | 0 |
Balance, shares at Mar. 31, 2022 | 66,156,471 | ||||
Balance, amount at Mar. 31, 2022 | (3,651,521) | $ 6,616 | 164,888,336 | (168,538,589) | (7,884) |
Balance, shares at Dec. 31, 2021 | 65,084,992 | ||||
Balance, amount at Dec. 31, 2021 | (2,345,408) | $ 6,508 | 163,441,655 | (165,793,571) | 0 |
Net Loss | (5,196,736) | ||||
Amortization of debt discount | 0 | ||||
Balance, shares at Jun. 30, 2022 | 66,613,085 | ||||
Balance, amount at Jun. 30, 2022 | (4,697,267) | $ 6,661 | 166,286,379 | (170,969,757) | (20,550) |
Balance, shares at Mar. 31, 2022 | 66,156,471 | ||||
Balance, amount at Mar. 31, 2022 | (3,651,521) | $ 6,616 | 164,888,336 | (168,538,589) | (7,884) |
Net Loss | (2,443,834) | 0 | 0 | (2,431,168) | (12,666) |
Stock Compensation - Options | 190,024 | $ 0 | 190,024 | 0 | 0 |
Issuance of common shares for Warrant Conversion, shares | 5,364 | ||||
Issuance of common shares for Warrant Conversion, amount | 8,064 | $ 0 | 8,064 | 0 | 0 |
Issuance of common shares for Conversion of debt and interest, shares | 451,250 | ||||
Issuance of common shares for Conversion of debt and interest, amount | 1,200,000 | $ 45 | 1,199,955 | 0 | 0 |
Balance, shares at Jun. 30, 2022 | 66,613,085 | ||||
Balance, amount at Jun. 30, 2022 | $ (4,697,267) | $ 6,661 | $ 166,286,379 | $ (170,969,757) | $ (20,550) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating activities: | ||
Net loss | $ (5,196,736) | $ (13,040,032) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on debt forgiveness | (3,413,152) | 0 |
Depreciation expense | 1,256,383 | 868,544 |
Amortization of mining rights | 615,079 | 623,370 |
Accretion expense | 631,442 | 611,273 |
Amortization expense of right to use assets | (15,021) | 0 |
Amortization of issuance costs and debt discount | 0 | 3,560,019 |
Options expense | 389,867 | 230,050 |
Warrant expense | 673,455 | 0 |
Issuance of common shares for service | 0 | 10,000 |
Change in current assets and liabilities: | ||
Accounts receivable | (2,179,134) | (103,673) |
Inventory | 0 | (488,376) |
Prepaid expenses and other assets | (191,448) | (93,333) |
Accounts payable | (229,526) | (2,246,713) |
Accrued interest | (299,700) | (711,104) |
Accounts payable - related party | 7,601 | 334,167 |
Net cash (used in)/generated from operations | (7,950,890) | (10,445,808) |
Cash Flows from Investing activities: | ||
Cash used in investments in LLCs | (742,398) | (2,250,000) |
Cash invested in note receivable | (335,000) | 0 |
Cash received (paid) for PPE, net | 147,824 | (676,601) |
Net cash (used in)/generated from investing activities | (929,574) | (2,926,601) |
Cash Flows from Financing activities: | ||
Principal payments on finance lease | (99,204) | 0 |
Principal payments on debt | (1,276,691) | (787,849) |
Proceeds from convertible note | 0 | 600,000 |
Proceeds from the sale of common stock, net | 0 | 29,218,000 |
Proceeds from debt | 2,563,000 | 0 |
Proceeds from warrant conversions | 0 | 2,269,428 |
Net cash (used in)/generated from financing activities | 1,187,105 | 31,299,579 |
Increase(decrease) in cash and restricted cash | (7,693,359) | 17,927,170 |
Cash and restricted cash, beginning of period | 12,588,113 | 11,201,203 |
Cash and restricted cash, end of period | 4,894,754 | 29,128,373 |
Supplemental Information | ||
Cash paid for interest | $ 64,094 | $ 42,426 |
Conversion of debt and interest to common shares | 1,822,210 | 10,757,260 |
Acquisition of right of use assets for lease obligations | $ 1,117,219 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Note 1 - Summary Of Significant Accounting Policies | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES American Resources Corporation (ARC or the Company) operates through subsidiaries that were acquired in 2019, 2018, 2016 and 2015 for the purpose of acquiring, rehabilitating and operating various natural resource assets including coal, oil and natural gas. Basis of Presentation and Consolidation : The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries American Carbon Corp (ACC), Deane Mining, LLC (Deane), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy), Knott County Coal LLC (KCC), Wyoming County Coal (WCC),Perry County Resources LLC (PCR), American Rare Earth LLC (ARE), American Metals LLC (AM) and American Opportunity Venture II, LLC (AOV II). All significant intercompany accounts and transactions have been eliminated. Entities for which ownership is less than 100% a determination is made whether there is a requirement to apply the variable interest entity (VIE) model to the 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 the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company would be deemed to have a controlling interest. The company is the owner of 92.5% and is the primary beneficiary of American Rare Earth, LLC, which qualifies as a variable interest entity. Accordingly, the assets, liabilities, revenue and expenses of American Rare Earth, LLC have been included in the accompanying consolidated financial statements with a non-controlling interest not owned by the 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 and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any other period. These financial statements should be read in conjunction with the Company’s 2021 audited financial statements and notes thereto which were filed on Form 10-K on March 30, 2022. Convertible Preferred Securities: We account for hybrid contracts that feature conversion options in accordance with U.S. GAAP. ASC 815, Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity Cash: We maintain cash balances in bank deposit accounts which, at times, may exceed federally insured limits. To date, there have been no losses in such accounts. Restricted cash: During 2019 the Company established a reclamation bonding collateral fund for ERC Mining Indiana. The balance of the restricted cash being held totaled 250,000 and $250,000 as of June 30, 2022 and December 31, 2021. During 2020, the Company established an escrow account for certain assumed liabilities in the PCR acquisition. The balance as of June 30, 2022 and December 31, 2021 was $0 and $347,070, respectively. The funds were used to pay for remaining assumed liabilities. During 2020, the Company established an environmental escrow account with the Commonwealth of Kentucky. The balance as of June 30, 2022 and December 31, 2021 was $500,000 and $500,000, respectively. During 2020, the Company established a reclamation bonding collateral fund for McCoy. The balance of the restricted cash being held totaled $105,770 and $105,770 as of June 2022 and December 31, 2021, respectively. During 2021, the Company established a reclamation bonding collateral fund for WCC. The balance of the restricted cash being held totaled $231,201 and $231,201 as of June 30, 2022 and December 31, 2021. 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 six months ended June 30, 2022 and June 30, 2021. June 30, 2022 June 30, 2021 Cash $ 3,807,783 $ 28,109,470 Restricted Cash 1,086,971 1,018,903 Total cash and restricted cash presented in the consolidated statement of cash flows $ 4,894,754 $ 29,128,373 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. 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 periods ending June 30, 2022 and 2021, $- and $- were incurred for loss on settlement on ARO, respectively. The table below reflects the changes to our ARO: Balance at December 31, 2021 $ 18,951,587 Accretion – six months June 30, 2022 631,442 Reclamation work – six months June 30, 2022 - Reduction of ARO due to dispositions - Balance at June 30, 2022 $ 19,583,029 Balance at December 31, 2020 $ 17,855,304 Accretion – six months Jun 30, 2021 611,273 Reclamation work – six months June 30, 2021 - Reduction of ARO due to dispositions - Balance at June 30, 2021 $ 18,466,577 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 June 30, 2022 and December 31, 2021 amounted to $0, for both periods. Allowance for other accounts receivables, including note receivables as of June 30, 2022 and December 31, 2021 amounted to $0 and $0, respectively. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of June 30, 2022 and December 31, 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 of prior periods have been made to conform with current year presentation. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2022 | |
PROPERTY AND EQUIPMENT | |
Note 2 - Property And Equipment | NOTE 2 - PROPERTY AND EQUIPMENT At June 30, 2022 and December 31, 2021, property and equipment were comprised of the following: June 30, 2022 December 31, 2021 Processing and rail facility $ 11,663,975 $ 11,591,273 Underground equipment 9,777,667 9,687,667 Surface equipment 2,647,216 3,201,464 Coal refuse storage 12,134,192 12,134,192 Mine Development 561,575 561,575 Construction in Progress 231,869 108,122 Land 1,617,435 1,572,435 Less: Accumulated depreciation (17,750,061 ) (15,953,575 ) Total Property and Equipment, Net $ 20,883,868 $ 22,903,154 Depreciation expense amounted to $630,341 and $475,014 for the three-month periods June 30, 2022 and June 30, 2021, respectively. Depreciation expense amounted to $1,256,383 and $868,544 for the six-month periods June 30, 2022 and June 30, 2021, respectively. The estimated useful lives are as follows: Processing and Rail Facilities 7-20 years Surface Equipment 7 years Underground Equipment 5 years Rare Earth Processing Equipment 5 Years Mining Rights 5-10 years Coal Refuse Storage 10 years |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2022 | |
NOTES PAYABLE | |
Note 3 - Notes Payable | NOTE 3 - NOTES PAYABLE During the three-month period ended June 30, 2022, principal reductions on long term debt totaled $3,389,301, primarily due to the repayment of PPP loan and converting to common shares. During the three-month period ended June 30, 2022, increases to long term debt totaled $2,843,635 due mostly to equipment financing for reELEMENT Technologies and a mine development coal for Carnegie 2 expansion. During the three-month period ended June 30, 2021, principal payments on long term debt totaled $722,676. During the three-month period ended June 30, 2021, increases to long term debt totaled $400,441, primarily from accrued interest on the senior convertible notes. The notes have a minimum offering amount of $12,500,000 and 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. |
RIGHT OF USE ASSETS AND LEASES
RIGHT OF USE ASSETS AND LEASES | 6 Months Ended |
Jun. 30, 2022 | |
RIGHT OF USE ASSETS AND LEASES | |
Note 4 - Right Of Use Assets And Leases | 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. On November 8, 2021, American Carbon Corp entered into a Financial Lease for equipment at 2069 Highway 194 E., Meta, KY 41501. The lease is for a period of three years with a monthly rate of $17,660. There is an option to purchase the equipment at the end of the lease for $1. On June 22, 2022, American Rare Earth entered into a Financial Lease for equipment at 1716 Pleasant Street, Noblesville, IN 46060. The lease is for a period of three years with a monthly rate of $31,800. There is an option to purchase the equipment at the end of the lease for $1. At June 30, 2022, right of use assets and liabilities were comprised of the following: June 30, 2022 June 30, 2021 Assets: ROU asset $ 1,799,769 $ - Liabilities Current: Operating lease liabilities $ 85,218 $ - Financing lease liabilities 341,771 - Non-current: Operating lease liabilities 591,127 - Financing lease liabilities 655,468 - As of June 30, 2022, remaining maturities of lease liabilities were as follows: Operating Finance 2023 87,321 341,771 2024 67,726 340,357 2025 62,423 315,111 2026 71,475 - 2027 and thereafter 387,400 - |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
Note 5 - Related Party Transactions | 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 June 30, 2022, royalty expense incurred with LRR amounted to $81,284 and amounts advanced from LRR amounted $0 and amounts repaid amounted to $0. As of June 30, 2022, total amounts owed LRR amounted to $81,284. For the three-month period ending June 30, 2021, royalty expense incurred with LRR amounted to $73,859 and amounts advanced from LRR amounted to $0 and amounts repaid to LRR amounted to $786,732. As of June 30, 2021, total amounts owed LRR amounted to $0. Land Betterment Corp On February 13, 2020, 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 three-months ended June 30, 2022 amounts incurred under the agreement amounted to $2,103,400 and amounts paid totaled $1,062,198. For the three-months ended June 30, 2022, service charges covering members of the Company’s management amounted to $0. For the six-months ended June 30, 2022 amounts incurred under the agreement amounted to $3,677,415 and amounts paid totaled $1,901,478. For the six-months ended June 30, 2022, service charges covering members of the Company’s management amounted to $0. For the three-months ended June 30, 2021 amounts incurred under the agreement amounted to $1,039,862 and amounts paid totaled $1,039,862. For the three-months ended June 30, 2021, service charges covering members of the Company’s management amounted to $0. For the six-months ended June 30, 2021 amounts incurred under the agreement amounted to $1,903,234 and amounts paid totaled $1,920,820. For the six-months ended June 30, 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 June 30, 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 June 30, 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 June 30, 2022, 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. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
EQUITY TRANSACTIONS | |
Note 6 - Equity Transactions | NOTE 6 – EQUITY TRANSACTIONS Common Share Transactions Employee stock compensation expense for the three-month period ending June 30, 2022 and 2021 amounted to $190,024 and $262,025 respectively. Employee stock compensation expense for the six-month period ending June 30, 2022 and 2021 amounted to $389,868 and $377,050 respectively. Conversion of debt and interest for the three-month period ending June 30, 2022 and 2021 amounted to $1,200,000 and $624,537 respectively. Conversion of debt and interest for the six-month period ending June 30, 2022 and 2021 amounted to $1,822,210 and $10,253,912 respectively. Warrant Exercises On January 13, 2022, the Company issued 117,250 shares of 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. On June 6, 2022, the Company issued 5,364 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 price of $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 60,000 Class A Common Shares at a price of $1.50. The warrants expire 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 $4.25. The warrants expire on February 7, 2026. On March 11, 2021, the Company issued Common Stock Purchase Warrant “C-38” in conjunction with a restricted stock purchase. The warrant provides the option to purchase 42,500 Class A Common Shares at a price of $5.00. The warrants expire on March 11, 2023. On March 12, 2021, the Company issued Common Stock Purchase Warrant “C-39” in conjunction with a restricted stock purchase. The warrant provides the option to purchase 42,500 Class A Common Shares at a price of $5.00. The warrants expire on March 12, 2023. On March 15, 2021, the Company issued Common Stock Purchase Warrant “C-39” in conjunction with consulting services. The warrant provides the option to purchase 75,000 Class A Common Shares at a price of $4.59. The warrants expire on March 15, 2026. On March 16, 2021, the Company issued Common Stock Purchase Warrant “C-40” in conjunction with a restricted stock purchase. The warrant provides the option to purchase 21,250 Class A Common Shares at a price of $5.00. The warrants expire on March 16, 2023. On June 9, 2021, the Company issued Common Stock Purchase Warrant “C-38” in conjunction with a common stock offering. The warrant provides the option to purchase 2,150,000 Class A Common Shares at a price of $3.50. The warrants expire on June 9, 2026. On June 9, 2021, the Company issued Common Stock Purchase Warrant “C-39” in conjunction with a common stock offering. The warrant provides the option to purchase 2,150,000 Class A Common Shares at a price of $3.50. The warrants expire on June 9, 2026. The Company uses the Black Scholes option pricing model to value its warrants and options. The significant inputs are as follows: June 30, 2022 Expected Dividend Yield 0 % Expected volatility 87.97 % Risk-free rate 0.870 % Expected life of warrants 1.592-6.60 years Company 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 4,601,250 $ 3.531 4.814 $ 69,700 Forfeited or Expired - $ - - $ - Exercised 1,705,508 $ 1.226 3.070 $ 5,347,983 Outstanding – June 30, 2021 11,296,963 $ 2.102 2.771 $ 9,918,604 Exercisable (Vested) – June 30, 2021 11,296,963 $ 2.102 2.771 $ 9,918,604 Exercisable (Vested) – December 31, 2021 10,213,764 $ 2.25 2.69 $ 121,018 Granted - $ - - $ - Forfeited or Expired - $ - - $ - Exercised 5,364 $ 1.50 2.00 $ 6,686 Outstanding - June 30, 2022 10,021,150 $ 1.14 3.86 $ 514,906 Exercisable (Vested) - June 30, 2022 10,021,150 $ 1.14 3.86 $ 514,906 Company 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 6.597 $ 105,000 Forfeited or Expired 125,000 $ 1.998 3.00 $ 58,500 Exercised 25,000 $ 1.640 6.562 $ 41,500 Outstanding – June 30, 2021 2,084,269 $ 1.551 5.369 $ 2,363,549 Exercisable (Vested) – June 30, 2021 1,055,325 $ 1.496 5.191 $ 1,278,944 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 - June 30, 2022 4,209,269 $ 1.980 6.49 $ 3,257,470 Exercisable (Vested) - June 30, 2022 4,209,269 $ 1.980 6.49 $ 3,257,470 |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
CONTINGENCIES | |
Note 7 - Contingencies | NOTE 7 - 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. These claims include amounts assessed by the Kentucky Energy Cabinet totaling $1,430,997, the Company has accrued $1,707,621 as a payable to the Commonwealth of Kentucky including amounts owed to the Kentucky Energy Cabinet. Claims assessed by the Mine Health Safety Administration totaling $754,398 of which the Company has accrued $351,071.32 as a payable. During 2019, McCoy and Deane, received notice of intent to place liens for amounts owed on federal excise taxes. The amounts associated with the notices are included in the Company’s trade payables. On April 3, 2019 KCC partially settled a case relating to a reclamation issue while the property was under former ownership. The settled amount is $100,000 which will be paid out of a prior insurance policy. The remaining portion of the case was settled during for amount of $299,038. The outstanding amount has not been paid as of the report date and is included in trade payables. On September 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). The Company, through its investment in AOV is proportionally a sponsor of the special purpose acquisition Company, American Acquisition Opportunity Inc. (AMAO) As such it is proportionally obligated to fund operating and working capital deficits of AMAO up to $800,000. As of June 30, 2022, amounts under the note totaled $485,900 and has been repaid subsequent to the balance sheet date. 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. 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
SUBSEQUENT EVENTS | |
Note 8 - Subsequent Events | NOTE 8 - SUBSEQUENT EVENTS None. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis Of Presentation And Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries American Carbon Corp (ACC), Deane Mining, LLC (Deane), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy), Knott County Coal LLC (KCC), Wyoming County Coal (WCC),Perry County Resources LLC (PCR), American Rare Earth LLC (ARE), American Metals LLC (AM) and American Opportunity Venture II, LLC (AOV II). All significant intercompany accounts and transactions have been eliminated. Entities for which ownership is less than 100% a determination is made whether there is a requirement to apply the variable interest entity (VIE) model to the 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 the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company would be deemed to have a controlling interest. The company is the owner of 92.5% and is the primary beneficiary of American Rare Earth, LLC, which qualifies as a variable interest entity. Accordingly, the assets, liabilities, revenue and expenses of American Rare Earth, LLC have been included in the accompanying consolidated financial statements with a non-controlling interest not owned by the 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 and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any other period. These financial statements should be read in conjunction with the Company’s 2021 audited financial statements and notes thereto which were filed on Form 10-K on March 30, 2022. |
Convertible Preferred Securities | We account for hybrid contracts that feature conversion options in accordance with U.S. GAAP. ASC 815, Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity |
Cash | We maintain cash balances 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 2022. The balance as of June 30, 2022 and December 31, 2021 was $0 and $47,987, respectively. During 2019 the Company established a reclamation bonding collateral fund for ERC Mining Indiana. The balance of the restricted cash being held totaled 250,000 and $250,000 as of June 30, 2022 and December 31, 2021. During 2020, the Company established an escrow account for certain assumed liabilities in the PCR acquisition. The balance as of June 30, 2022 and December 31, 2021 was $0 and $347,070, respectively. The funds were used to pay for remaining assumed liabilities. During 2020, the Company established an environmental escrow account with the Commonwealth of Kentucky. The balance as of June 30, 2022 and December 31, 2021 was $500,000 and $500,000, respectively. During 2020, the Company established a reclamation bonding collateral fund for McCoy. The balance of the restricted cash being held totaled $105,770 and $105,770 as of June 2022 and December 31, 2021, respectively. During 2021, the Company established a reclamation bonding collateral fund for WCC. The balance of the restricted cash being held totaled $231,201 and $231,201 as of June 30, 2022 and December 31, 2021. 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 six months ended June 30, 2022 and June 30, 2021. June 30, 2022 June 30, 2021 Cash $ 3,807,783 $ 28,109,470 Restricted Cash 1,086,971 1,018,903 Total cash and restricted cash presented in the consolidated statement of cash flows $ 4,894,754 $ 29,128,373 |
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. 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 periods ending June 30, 2022 and 2021, $- and $- were incurred for loss on settlement on ARO, respectively. The table below reflects the changes to our ARO: Balance at December 31, 2021 $ 18,951,587 Accretion – six months June 30, 2022 631,442 Reclamation work – six months June 30, 2022 - Reduction of ARO due to dispositions - Balance at June 30, 2022 $ 19,583,029 Balance at December 31, 2020 $ 17,855,304 Accretion – six months Jun 30, 2021 611,273 Reclamation work – six months June 30, 2021 - Reduction of ARO due to dispositions - Balance at June 30, 2021 $ 18,466,577 |
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 June 30, 2022 and December 31, 2021 amounted to $0, for both periods. Allowance for other accounts receivables, including note receivables as of June 30, 2022 and December 31, 2021 amounted to $0 and $0, respectively. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of June 30, 2022 and December 31, 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 of prior periods have been made to conform with current year presentation. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule Of Restricted Cash And Cash Equivalents | June 30, 2022 June 30, 2021 Cash $ 3,807,783 $ 28,109,470 Restricted Cash 1,086,971 1,018,903 Total cash and restricted cash presented in the consolidated statement of cash flows $ 4,894,754 $ 29,128,373 |
Schedule Of Asset Retirement Obligations | Balance at December 31, 2021 $ 18,951,587 Accretion – six months June 30, 2022 631,442 Reclamation work – six months June 30, 2022 - Reduction of ARO due to dispositions - Balance at June 30, 2022 $ 19,583,029 Balance at December 31, 2020 $ 17,855,304 Accretion – six months Jun 30, 2021 611,273 Reclamation work – six months June 30, 2021 - Reduction of ARO due to dispositions - Balance at June 30, 2021 $ 18,466,577 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
PROPERTY AND EQUIPMENT | |
Schedule Of Property And Equipment | June 30, 2022 December 31, 2021 Processing and rail facility $ 11,663,975 $ 11,591,273 Underground equipment 9,777,667 9,687,667 Surface equipment 2,647,216 3,201,464 Coal refuse storage 12,134,192 12,134,192 Mine Development 561,575 561,575 Construction in Progress 231,869 108,122 Land 1,617,435 1,572,435 Less: Accumulated depreciation (17,750,061 ) (15,953,575 ) Total Property and Equipment, Net $ 20,883,868 $ 22,903,154 |
RIGHT OF USE ASSETS AND LEASES
RIGHT OF USE ASSETS AND LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
RIGHT OF USE ASSETS AND LEASES (Tables) | |
Schedule Of Right Of Use Assets And Liablities | June 30, 2022 June 30, 2021 Assets: ROU asset $ 1,799,769 $ - Liabilities Current: Operating lease liabilities $ 85,218 $ - Financing lease liabilities 341,771 - Non-current: Operating lease liabilities 591,127 - Financing lease liabilities 655,468 - |
Remaining Maturities Of Lease Liabilities | Operating Finance 2023 87,321 341,771 2024 67,726 340,357 2025 62,423 315,111 2026 71,475 - 2027 and thereafter 387,400 - |
EQUITY TRANSACTIONS (Tables)
EQUITY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
EQUITY TRANSACTIONS | |
Schedule Of Black scholes option pricing model | June 30, 2022 Expected Dividend Yield 0 % Expected volatility 87.97 % Risk-free rate 0.870 % Expected life of warrants 1.592-6.60 years |
Schedule Of 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 4,601,250 $ 3.531 4.814 $ 69,700 Forfeited or Expired - $ - - $ - Exercised 1,705,508 $ 1.226 3.070 $ 5,347,983 Outstanding – June 30, 2021 11,296,963 $ 2.102 2.771 $ 9,918,604 Exercisable (Vested) – June 30, 2021 11,296,963 $ 2.102 2.771 $ 9,918,604 Exercisable (Vested) – December 31, 2021 10,213,764 $ 2.25 2.69 $ 121,018 Granted - $ - - $ - Forfeited or Expired - $ - - $ - Exercised 5,364 $ 1.50 2.00 $ 6,686 Outstanding - June 30, 2022 10,021,150 $ 1.14 3.86 $ 514,906 Exercisable (Vested) - June 30, 2022 10,021,150 $ 1.14 3.86 $ 514,906 |
Schedule Of 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 6.597 $ 105,000 Forfeited or Expired 125,000 $ 1.998 3.00 $ 58,500 Exercised 25,000 $ 1.640 6.562 $ 41,500 Outstanding – June 30, 2021 2,084,269 $ 1.551 5.369 $ 2,363,549 Exercisable (Vested) – June 30, 2021 1,055,325 $ 1.496 5.191 $ 1,278,944 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 - June 30, 2022 4,209,269 $ 1.980 6.49 $ 3,257,470 Exercisable (Vested) - June 30, 2022 4,209,269 $ 1.980 6.49 $ 3,257,470 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Cash | $ 3,807,783 | $ 11,492,702 | $ 28,109,470 |
Restricted Cash | 1,086,971 | 1,018,903 | |
Total Cash And Restricted Cash Presented In The Consolidated Statement Of Cash Flows | $ 4,894,754 | $ 29,128,373 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Beginning Balance Amount | $ 18,951,587 | $ 17,855,304 |
Accretion | 631,442 | 611,273 |
Reclamation Work | 0 | 0 |
Reduction of ARO due to dispositions | 0 | 0 |
Ending Balance, Amount | $ 19,583,029 | $ 18,466,577 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Asset Management Fee Reserve | $ 116,115 | ||
Loss on settlement | $ 0 | $ 0 | |
Discount Rate | 10% | ||
Allowance For Trade Receivables | $ 0 | $ 0 | |
Allowance For Other Accounts Receivables | 0 | 0 | |
Restricted Cash | 105,770 | 105,770 | |
Restricted Cash Balance | 0 | 47,987 | |
Restricted Cash, total | 250,000 | 250,000 | |
American Opportunity Venture, LLC [Member] | January 2020 [Member] | |||
Restricted Cash | 0 | 347,070 | |
Restricted Cash, total | 231,201 | 231,201 | |
Balance | $ 500,000 | $ 500,000 | |
Warrant A-11 [Member] | Common Shares Class A [Member] | |||
Ownership Percentage | 92.50% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Total Property And Equipment, Net | $ 20,883,868 | $ 22,903,154 |
Less: Accumulated Depreciation | (17,750,061) | (15,953,575) |
Property And Equipment | 22,883,868 | 22,903,154 |
Underground equipment [Member] | ||
Property And Equipment | 9,777,667 | 9,687,667 |
Surface equipment [Member] | ||
Property And Equipment | 2,647,216 | 3,201,464 |
Mine development [Member] | ||
Property And Equipment | 561,575 | 561,575 |
Processing and rail facilities [Member] | ||
Property And Equipment | 11,663,975 | 11,591,273 |
Coal refuse storage [Member] | ||
Property And Equipment | 12,134,192 | 12,134,192 |
Construction in Progress [Member] | ||
Property And Equipment | 231,869 | 108,122 |
Land [Member] | ||
Property And Equipment | $ 1,617,435 | $ 1,572,435 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details 1) | 6 Months Ended |
Jun. 30, 2022 | |
Coal refuse storage [Member] | |
Estimated Useful Lives | 10 years |
Processing and rail facilities [Member] | Minimum [Member] | |
Estimated Useful Lives | 7 years |
Processing and rail facilities [Member] | Maximum [Member] | |
Estimated Useful Lives | 20 years |
Rare Earth Processing Equipment [Member] | |
Estimated Useful Lives | 5 years |
Underground equipment [Member] | |
Estimated Useful Lives | 5 years |
Surface equipment [Member] | |
Estimated Useful Lives | 7 years |
Mining Rights [Member] | Minimum [Member] | |
Estimated Useful Lives | 5 years |
Mining Rights [Member] | Maximum [Member] | |
Estimated Useful Lives | 10 years |
PROPERTY AND EQUIPMENT (Detai_3
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
PROPERTY AND EQUIPMENT | ||||
Depreciation Expense | $ 630,341 | $ 475,014 | $ 1,256,383 | $ 868,544 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Principal reductions on long term debt | $ 3,389,301 | |
Principal Payments On Long Term Debt | 722,676 | |
Total long term debt increased | $ 2,843,635 | $ 400,441 |
Long Term Debt Description | The notes carry a 24-month term, 12.5% interest 10% warrant coverage and a conversion price of $1.05 | |
Exercise Price Of Warrants | $ 1.50 | |
Maximum [Member] | Mining Rights [Member] | ||
Offering Amount | $ 25,000,000 | |
Minimum [Member] | ||
Investing Amount | 500,000 | |
Offering Amount | $ 12,500,000 |
RIGHT OF USE ASSETS AND LEASE_2
RIGHT OF USE ASSETS AND LEASES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
RIGHT OF USE ASSETS AND LEASES (Details) | |||
ROU asset | $ 1,799,769 | $ 726,194 | $ 0 |
Operating lease liabilities, current | 85,218 | 151,806 | 0 |
Financing lease liabilities, current | 341,771 | 0 | 0 |
Operating lease assets, Non-current | 591,127 | 562,428 | 0 |
Financing lease liabilities, Non-current | $ 655,468 | $ 0 | $ 0 |
RIGHT OF USE ASSETS AND LEASE_3
RIGHT OF USE ASSETS AND LEASES (Details 1) | Jun. 30, 2022 USD ($) |
Operating Lease Liabilities [Member] | |
2023 | $ 87,321 |
2024 | 67,726 |
2025 | 62,423 |
2026 | 71,475 |
2027 and thereafter | 387,400 |
Finance Lease Liabilities [Member] | |
2023 | 341,771 |
2024 | 340,357 |
2025 | 315,111 |
2026 | 0 |
2027 and thereafter | $ 0 |
RIGHT OF USE ASSETS AND LEASE_4
RIGHT OF USE ASSETS AND LEASES (Details Narrative) | 1 Months Ended | 6 Months Ended | |||
Nov. 08, 2021 USD ($) | Oct. 08, 2021 USD ($) ft² | Jun. 22, 2022 USD ($) | Aug. 17, 2021 USD ($) a | Jun. 30, 2022 USD ($) | |
Discounted lease payment rate | 10.82% | ||||
Rent For The Office Space | $ 5,726 | ||||
Amended Lease | The amended lease has a ten-year term and $5,869 per month rate | ||||
Rental Lease Expired Date | December 2026 | ||||
Sublease rent | $ 3,500 | ||||
Sublease Term | 5 years | ||||
Warehouse Space | ft² | 6,700 | ||||
Commercial Lease Rent | $ 474,500 | ||||
Commercial Land Lease Sublease Area | a | 7 | ||||
Commercial Land Lease Term | 3 years | 2 years | |||
Financial lease for equipment rent | $ 17,660 | $ 31,800 | |||
Financial lease equipment purchase option | $ 1 | $ 1 | |||
Financial equipment lease term | three years | ||||
LRR [Member] | |||||
Rent For The Office Space | $ 1,702 | ||||
Rental Lease Expired Date | January 1, 2030 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Royalty Expense | $ 786,008 | $ 99,475 | $ 1,605,485 | $ 667,658 | |
Invested amount | 3,242,398 | $ 3,242,398 | $ 2,500,000 | ||
March, 2021 [Member] | Novusterra, Inc [Member] | |||||
Ownership Percentage | 50% | ||||
Common shares exchange for equity method investment | 15,750,000 | ||||
LRR [Member] | |||||
Amounts payable under the agreement | 0 | 0 | |||
Amount Paid To Related Party | 0 | 786,732 | |||
Royalty Expense | 81,284 | 73,859 | |||
Total Amount Owed From Related Party | 81,284 | 0 | $ 81,284 | 0 | |
American Opportunity Venture II, LLC [Member] | March, 2021 [Member] | |||||
Ownership Percentage | 100% | ||||
Invested amount | 25,000 | $ 25,000 | |||
Land Betterment Corporation [Member] | Contract Services Agreement [Member] | |||||
Terms Of Contract, Description | 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 | ||||
Amounts payable under the agreement | 2,103,400 | 1,039,862 | $ 3,677,415 | 1,903,234 | |
Amount Paid To Related Party | 1,062,198 | 1,039,862 | 1,901,478 | 1,920,820 | |
Service charges | 0 | $ 0 | $ 0 | $ 0 | |
American Opportunity Venture, LLC [Member] | January, 2021 [Member] | |||||
Ownership Percentage | 50% | ||||
Invested amount | 2,250,000 | $ 2,250,000 | |||
Land Betterment Exchange (LBX) [Member] | |||||
LBX token par value | 250 | $ 250 | |||
LBX token holding, Description | The Company is the holder of 2,000,000 LBX Tokens | ||||
FUB Mineral LLC [Member] | October 1, 2021 [Member] | |||||
Invested amount | $ 250,000 | $ 250,000 |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Expected Dividend Yield | 0% |
Expected Volatility | 87.97% |
Risk-free Rate | 0.87% |
Maximum [Member] | Mining Rights [Member] | |
Expected Life Of Warrants | 6 years 7 months 6 days |
Minimum [Member] | |
Expected Life Of Warrants | 1 year 7 months 3 days |
EQUITY TRANSACTIONS (Detail 1)
EQUITY TRANSACTIONS (Detail 1) - Warrants [Member] - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Beginning Balance Option | 0 | 0 | 0 | |
Beginning Exercisable Option | 10,213,764 | 8,401,221 | 8,401,221 | |
Granted | 4,601,250 | |||
Forfeited Or Expired | 0 | |||
Exercised | 5,364 | 1,705,508 | ||
Outstanding Ending Balance | 10,021,150 | 11,296,963 | 0 | 0 |
Exercisable Ending Exercise | 10,021,150 | 11,296,963 | ||
Beginning Outstanding Exercise | $ 0 | $ 0 | $ 0 | |
Exercisable Beginning Exercise | 2.25 | 1.135 | $ 1.135 | |
Grantes Weighted Average Exercise Price | 0 | 3.531 | ||
Forfeited Or Expired, Weighted Average Exercise Price | 0 | |||
Exercised, Weighted Average Exercise Price | 1.50 | 1.226 | ||
Ending Balance Exercise | 1.14 | 2.102 | ||
Ending Exercisable Exercise | $ 1.14 | $ 2.102 | ||
Exerisable Beginning Weighted Average | 2 years 1 month 25 days | |||
Granted Weighted Average | 4 years 9 months 23 days | |||
Exercised Weighted Average | 2 years | 3 years 25 days | ||
Ending Balance Weighted Average | 3 years 10 months 9 days | 2 years 9 months 7 days | ||
Exercisable Ending Weighted Average | 3 years 10 months 9 days | 2 years 9 months 7 days | 2 years 8 months 8 days | |
Beginning Balance Intrinsic value | $ 121,018 | $ 7,453,214 | $ 7,453,214 | |
Outstanding Balance Intrinsic value | 0 | 0 | $ 0 | |
Granted, Aggregate Intrinsic Value | 0 | 69,700 | ||
Forfeited Or Expired, Aggregate Intrinsic Value | 0 | 0 | ||
Exercised, Aggregate Intrinsic Value | 6,686 | 5,347,983 | ||
Ending Balances Intrinsic | 514,906 | 9,918,604 | ||
Ending Exercisable Intrinsic Weighted | $ 514,906 | $ 9,918,604 |
EQUITY TRANSACTIONS (Detail 2)
EQUITY TRANSACTIONS (Detail 2) - Option [Member] - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Beginning Balance Option | 4,209,269 | 2,159,269 | 2,159,269 | |
Beginning Exercisable Option | 3,159,268 | 888,659 | 888,659 | |
Granted | 75,000 | |||
Forfeited Or Expired | 125,000 | |||
Exercised | 25,000 | |||
Outstanding Ending Balance | 4,209,269 | 2,084,269 | 4,209,269 | 2,159,269 |
Exercisable Ending Exercise | 4,209,269 | 1,055,325 | ||
Beginning Outstanding Exercise | $ 1.665 | $ 1.606 | $ 1.606 | |
Exercisable Beginning Exercise | 1.517 | 1.581 | $ 1.581 | |
Grantes Weighted Average Exercise Price | 0 | 2.560 | ||
Forfeited Or Expired, Weighted Average Exercise Price | 0 | 1.998 | ||
Exercised, Weighted Average Exercise Price | 0 | 1.640 | ||
Ending Balance Exercise | 1.980 | 1.551 | ||
Ending Exercisable Exercise | $ 1.980 | $ 1.496 | ||
Beginningbalance Weighted Average | 5 years 7 months 28 days | |||
Exerisable Beginning Weighted Average | 5 years 17 days | |||
Granted Weighted Average | 6 years 7 months 4 days | |||
Forfeited or Expired Weighted Average | 3 years | |||
Exercised Weighted Average | 6 years 6 months 22 days | |||
Ending Balance Weighted Average | 6 years 5 months 26 days | 5 years 4 months 13 days | 5 years 4 months 20 days | |
Exercisable Ending Weighted Average | 6 years 5 months 26 days | 5 years 2 months 8 days | 4 years 10 months 28 days | |
Beginning Balance Intrinsic value | $ 3,186,870 | $ 1,919,129 | $ 1,919,129 | |
Outstanding Balance Intrinsic value | 3,141,183 | 749,470 | $ 749,470 | |
Granted, Aggregate Intrinsic Value | 0 | 105,000 | ||
Forfeited Or Expired, Aggregate Intrinsic Value | 0 | 58,500 | ||
Exercised, Aggregate Intrinsic Value | 0 | 41,500 | ||
Ending Balances Intrinsic | 3,257,470 | 2,363,549 | ||
Ending Exercisable Intrinsic Weighted | $ 3,257,470 | $ 1,278,944 |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||||||||
Jun. 09, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 06, 2022 | Mar. 31, 2022 | Mar. 30, 2022 | Jan. 13, 2022 | Mar. 16, 2021 | Mar. 15, 2021 | Mar. 12, 2021 | Mar. 11, 2021 | Feb. 07, 2021 | Feb. 02, 2021 | Jan. 26, 2021 | |
Employee Stock Compensation | $ 190,024 | $ 262,025 | $ 389,868 | $ 377,050 | ||||||||||||
Conversion of debt and interest | $ 1,200,000 | $ 624,537 | $ 1,822,210 | $ 10,253,912 | ||||||||||||
Common Shares Class A [Member] | ||||||||||||||||
Shares Issued | 5,364 | 22,500 | 47,500 | 117,250 | ||||||||||||
Exercise price | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | ||||||||||||
Common Shares Class A [Member] | Warrant C-38 [Member] | ||||||||||||||||
Shares Issued | 2,150,000 | 42,500 | ||||||||||||||
Exercise price | $ 3.50 | $ 5 | ||||||||||||||
Warrants expiration date | Jun. 09, 2026 | Mar. 11, 2023 | ||||||||||||||
Common Shares Class A [Member] | Warrant C-39 [Member] | ||||||||||||||||
Shares Issued | 2,150,000 | 75,000 | 42,500 | |||||||||||||
Exercise price | $ 3.50 | $ 4.59 | $ 5 | |||||||||||||
Warrants expiration date | Jun. 09, 2026 | Mar. 12, 2023 | ||||||||||||||
Common Shares Class A [Member] | Warrant C-40 [Member] | ||||||||||||||||
Shares Issued | 21,250 | |||||||||||||||
Exercise price | $ 5 | |||||||||||||||
Warrants expiration date | Mar. 16, 2023 | |||||||||||||||
Warrant A-11 [Member] | Common Shares Class A [Member] | ||||||||||||||||
Shares Issued | 50,000 | |||||||||||||||
Exercise price | $ 4.25 | |||||||||||||||
Warrants expiration date | Feb. 07, 2026 | |||||||||||||||
Warrant A-10 [Member] | Common Shares Class A [Member] | ||||||||||||||||
Shares Issued | 10,000 | |||||||||||||||
Exercise price | $ 2.05 | |||||||||||||||
Warrants expiration date | Jan. 26, 2024 | |||||||||||||||
Warrant C-37 [Member] | Common Shares Class A [Member] | ||||||||||||||||
Shares Issued | 60,000 | |||||||||||||||
Exercise price | $ 1.50 | |||||||||||||||
Warrants expiration date | Feb. 02, 2023 | |||||||||||||||
Shares Issuable Upon Exercise Of Warrant, Amount | $ 600,000 |
CONTINGENCIES (Details Narrativ
CONTINGENCIES (Details Narrative) | 1 Months Ended | 6 Months Ended | |||
Oct. 08, 2021 USD ($) ft² | Aug. 17, 2021 USD ($) a | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Apr. 03, 2019 USD ($) | |
Term | 5 years | 2 years | |||
Rent For The Office Space | $ 5,726 | ||||
Working capital | 800,000 | ||||
Note totaled | $ 485,900 | ||||
Commercial Land Lease Sublease Area | a | 7 | ||||
Income | $ 3,500 | ||||
Warehouse Space | ft² | 6,700 | ||||
Amended Lease | The amended lease has a ten year term and $5,869 per month rate | ||||
Rental Lease Expired Date | December 2026 | ||||
Accrued Liabilities | $ 38,194 | $ 1,325,286 | |||
KCC [Member] | |||||
Accrued Liabilities | 1,707,621 | ||||
Commonwealth of Kentucky [Member] | Kentucky Energy Cabinet [Member] | |||||
Accrued Liabilities | 351,071 | ||||
Claims Amounts | 754,398 | ||||
Mine Health Safety [Member] | |||||
Claims Amounts | 1,430,997 | ||||
Warrant C-37 [Member] | Common Shares Class A [Member] | |||||
Settlement Of Reclamation Issue | $ 100,000 | ||||
Remaining Amount Settlement | $ 299,038 | ||||
Rare Earth Commercial Purification Facility Lease [Member] | |||||
Rent For The Office Space | $ 4,745 | $ 1,702 | |||
Rental Lease Expired Date | January 1, 2030 |