Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | AMERICAN RESOURCES CORPORATION | ||
Entity Central Index Key | 0001590715 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 78,213,454 | ||
Entity Public Float | $ 77,628,145 | ||
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 | ||
Entity Address State Or Province | IN | ||
Entity Address Postal Zip Code | 46038 | ||
City Area Code | 317 | ||
Local Phone Number | 855-9926 | ||
Security 12b Title | Class A Common, $0.0001 Par Value | ||
Trading Symbol | AREC | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Firm Id | 5041 | ||
Auditor Name | BF Borgers CPA PC | ||
Auditor Location | Lakewood, CO |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 8,868,566 | $ 11,492,702 |
Receivables | 660,755 | 3,175,636 |
Inventory | 446,690 | 0 |
Prepaid fees and deposits | 786,576 | 624,605 |
Advances to related party | 0 | 5,000 |
Total current assets | 10,762,587 | 15,297,943 |
Cash - restricted | 2,122,263 | 1,095,411 |
Property and equipment, net | 9,113,722 | 22,903,154 |
Long-term right of use assets, net | 13,033,889 | 726,194 |
Investment in llc- related party | 20,784,866 | 2,500,000 |
Notes receivables | 99,022 | 350,000 |
Total assets | 55,916,349 | 42,872,702 |
Current liabilities | ||
Trade payables | 4,916,243 | 3,245,566 |
Non-trade payables | 2,524,243 | 1,950,567 |
Accounts payable - related party | 4,295,232 | 3,932,716 |
Accrued interest | 106,886 | 1,325,286 |
Due to affiliate | 0 | 74,000 |
Current portion of long term debt | 1,917,506 | 5,283,647 |
Current portion of convertible debt (net of unamortized discount of $0 and $18,106) | 9,787,423 | 571,618 |
Current portion of lease liabilities, net | 3,889,235 | 151,806 |
Total current liabilities | 27,436,768 | 16,535,206 |
Notes payable | 0 | 548,477 |
Convertible note payables (net of unamortized discount of $0 and $22,549) | 0 | 8,620,412 |
Remediation liability | 20,295,634 | 18,951,587 |
Lease liabilities, net | 7,899,251 | 548,477 |
Total liabilities | 55,631,653 | 45,128,110 |
Stockholders' deficit | ||
Common stock: $0.0001 par value; 230,000,000 shares authorized, 66,777,620 and 65,084,992 shares issued and outstanding | 6,680 | 6,508 |
Additional paid in capital | 167,517,259 | 163,441,655 |
Accumulated deficit | (167,239,243) | (165,793,571) |
Total stockholders' deficit | 284,696 | (2,345,408) |
Total liabilities and stockholders' deficit | $ 55,916,349 | $ 42,872,702 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Unamortized discount, current portion of notes payable | $ 0 | $ 18,106 |
Unamortized discount, current portion of Convertible notes payable | $ 0 | $ 22,549 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 230,000,000 | 230,000,000 |
Common Stock, Shares Issued | 66,777,620 | 65,084,992 |
Common Stock, Shares Outstanding | 66,777,620 | 65,084,992 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | ||
Coal sales | $ 39,103,995 | $ 7,518,792 |
Metal recovery and sales | 48,199 | 159,599 |
Royalty income | 322,075 | 76,915 |
Total revenue | 39,474,269 | 7,755,306 |
Cost of coal sales and processing | (21,687,656) | (7,088,951) |
Accretion | (1,344,047) | (1,096,283) |
Depreciation | (2,157,763) | (1,980,026) |
Amortization of mining rights | (1,238,449) | (1,246,740) |
General and administrative | (4,020,464) | (3,884,464) |
Professional fees | (1,103,322) | (1,387,430) |
Production taxes and royalties | (3,785,049) | (1,306,150) |
Development | (28,134,883) | (18,098,670) |
Total expenses from operations | (63,471,633) | (36,088,714) |
Net loss from operations | (23,997,364) | (28,333,408) |
Other income and (expense) | 312,179 | (232,994) |
Unrealized gain on trading securities | 4,866 | 0 |
Gain on cancelation of debt | 3,119,775 | 0 |
Gain on Sales of Assets | 4,510,043 | 0 |
Gain on Sales of Patents | 16,000,000 | 0 |
Amortization of debt discount and debt issuance costs | 0 | (8,637) |
Interest income | 30,982 | 230,529 |
Interest expense | (1,426,153) | (4,159,813) |
Net loss attributable to American Resources Corporation shareholders | $ (1,445,672) | $ (32,504,323) |
Net loss per share - basic and diluted | $ (0.02) | $ (0.59) |
Weighted average shares outstanding | 66,316,058 | 55,222,768 |
STATEMENT OF STOCKHOLDERS DEFIC
STATEMENT OF STOCKHOLDERS DEFICIT - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2020 | 42,972,762 | |||
Balance, amount at Dec. 31, 2020 | $ (20,005,500) | $ 4,296 | $ 113,279,452 | $ (133,289,248) |
Shares issued in connection with registered offering, shares | 9,025,000 | |||
Shares issued in connection with registered offering, amount | 29,217,964 | $ 903 | 29,217,061 | 0 |
Shares issued in connection with warrant and option conversions, shares | 2,813,707 | |||
Shares issued in connection with warrant and option conversions, amount | 2,667,928 | $ 281 | 2,667,647 | 0 |
Shares issued in connection with debt and payable conversions, shares | 10,263,523 | |||
Shares issued in connection with debt and payable conversions, amount | 16,729,068 | $ 1,027 | 16,728,041 | 0 |
Shares issued for services, shares | 10,000 | |||
Shares issued for services, amount | 10,000 | $ 1 | 9,999 | 0 |
Amortization of debt discount | (580,195) | 0 | (580,195) | 0 |
Stock compensation - options | 1,093,603 | 0 | 1,093,603 | 0 |
Assumption of membership interest | 1,026,047 | 0 | 1,026,047 | 0 |
Net loss | (32,504,323) | $ 0 | 0 | (32,504,323) |
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) |
Shares issued in connection with warrant and option conversions, shares | 549,395 | |||
Shares issued in connection with warrant and option conversions, amount | 756,611 | $ 55 | 756,556 | 0 |
Shares issued in connection with debt and payable conversions, shares | 1,209,643 | |||
Shares issued in connection with debt and payable conversions, amount | 2,428,919 | $ 124 | 2,428,795 | 0 |
Shares issued for services, shares | 20,000 | |||
Shares issued for services, amount | 38,800 | $ 2 | 38,798 | 0 |
Amortization of debt discount | (40,655) | 0 | (40,655) | 0 |
Stock compensation - options | 985,535 | 0 | 985,535 | 0 |
Net loss | $ (1,445,672) | $ 0 | 0 | (1,445,672) |
Repurchase of Shares Outstanding, shares | 86,410 | (86,410) | ||
Repurchase of Shares Outstanding, amount | $ (93,435) | $ (9) | (93,426) | 0 |
Balance, shares at Dec. 31, 2022 | 66,777,620 | |||
Balance, amount at Dec. 31, 2022 | $ 284,696 | $ 6,680 | $ 167,262,362 | $ (166,722,588) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows from Operating activities: | ||
Net loss | $ (1,445,672) | $ (32,504,323) |
Adjustments to reconcile net income loss) to net cash | ||
Depreciation expense | 2,157,763 | 1,980,026 |
Amortization of mining rights | 1,238,449 | 1,246,740 |
Accretion expense | 1,344,047 | 1,096,283 |
Accretion of Right to Use Assets | (946,868) | (11,960) |
Amortization of debt discount | 0 | (571,559) |
Option Expense | 1,742,145 | 1,093,603 |
Net Discount | 0 | 206,724 |
Discount Amortization Conversion | 0 | 580,195 |
Gain on debt forgiveness | (3,046,062) | 0 |
Issuance of common shares for services | 38,800 | 10,000 |
Loan forgiveness - NMTC | 0 | 397,030 |
Change in current assets and liabilities: | ||
Accounts receivable | 2,514,880 | (2,907,746) |
Inventory | (446,690) | 150,504 |
Prepaid expenses and other current assets | (161,971) | (449,605) |
Accounts payable | 2,428,974 | (2,943,442) |
Accrued interest | 363,684 | 281,767 |
Accounts payable related party- Due to Affiliates | 293,516 | 3,253,570 |
Cash used in operating activities | 6,074,995 | (29,092,193) |
Cash Flows from Investing activities: | ||
Cash received (paid) for PPE, net | 10,393,220 | (3,068,943) |
Cash invested in note receivable | (250,978) | (350,000) |
Investment in LLCs | (18,284,866) | (2,500,000) |
Cash provided by investing activities | (7,640,668) | (5,918,943) |
Cash Flows from Financing activities: | ||
Principal payments on long term debt | (2,214,603) | (672,424) |
Sale of Common Stock for Cash | 0 | 29,217,964 |
Cash received from warrant and option conversions | 0 | 2,667,928 |
Proceeds from convertible note | 0 | 600,000 |
Convertible Note Conversions | 0 | 8,556,084 |
Capitalized Interest | 0 | 1,677,192 |
Issuance of common shares for debt settlement | 0 | (5,648,698) |
Proceeds from long term debt | 2,563,000 | 0 |
Cash used to repurchase shares | (93,435) | 0 |
Principal payments on finance lease | (286,573) | 0 |
Cash provided by financing activities | (31,611) | 36,398,046 |
Increase (decrease) in cash | (1,597,284) | 1,386,910 |
Cash, beginning of year | 12,588,113 | 11,201,203 |
Cash, end of year | 10,990,829 | 12,588,113 |
Supplemental Information | ||
Cash paid for interest | $ 23,166 | $ 708,076 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Common Shares Class A [Member] | |
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 formed or acquired in 2020, 2019, 2018, 2016 and 2015 for the purpose of acquiring, rehabilitating and operating various natural resource assets including coal used in the steel making and 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: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries American Carbon Corp (ACC), Deane Mining, LLC (Deane), Quest Processing LLC (Quest Processing), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy), Knott County Coal LLC (KCC), Wyoming County Coal (WCC),Perry County Resources LLC (PCR), reElement Technologies LLC (RLMT), American Metals LLC (AM) and American Opportunity Venture II, LLC (AOV II). All significant intercompany accounts and transactions have been eliminated. On January 5, 2017, ACC entered into a share exchange agreement with NGFC Equities, Inc (NGFC). Under the agreement, the shareholders of ACC 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 845,377 common shares as part of the agreement. The conditions to the agreement were fully satisfied on February 7, 2017, at which time the Company took full control of NGFC. NGFC has been renamed to American Resources Corporation ARC. The transaction was accounted for as a recapitalization. ACC was the accounting acquirer and ARC will continue the business operations of ACC, therefore, the historical financial statements presented are those of ACC 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. 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 primary beneficiary of ERC Mining, LLC, which qualifies as a variable interest entity. Accordingly, the assets, liabilities, revenue and expenses of ERC Mining, LLC have been included in the accompanying consolidated financial statements. The company has no ownership in ERC Mining, LLC. Determination of the company as the primary beneficiary is based on the power through its management functions to direct the activities that most significantly impact the economic performance of ERC Mining, LLC. On March 18, 2016, the company lent ERC Mining, LLC $4,117,139 to facilitate the transaction described in Note 6, which represent amounts that could be significant to ERC. No further support has been provided. The company has ongoing involvement in the management of ERC Mining, LLC to ensure their fulfillment of the transaction described in Note 6. The company is the primary beneficiary of Advanced Carbon Materials LLC (ACM), which qualifies as a variable interest entity. Accordingly, the assets, liabilities, revenue and expenses of ACM have been included in the accompanying consolidated financial statements. The company is a 49.9% owner in ACM and has control of 90% of the cash flow which led to the determination of the company as the primary beneficiary. As of December 31, 2022, ACM had no assets, liabilities or operations. Deane was formed in November 2007 for the purpose of operating underground coal mines and coal processing facilities. Deane was acquired on December 31, 2015 and as such no operations are presented prior to the acquisition date. Quest Processing was formed in November 2014 for the purpose of operating coal processing facilities and had no operations before March 8, 2016. ERC was formed in April 2015 for the purpose managing an underground coal mine and coal processing facility. Operations commenced in June 2015. McCoy was formed in February 2016 for the purpose of operating underground coal mines and coal processing facilities. McCoy was acquired on February 17, 2016 and as such no operations are presented prior to the acquisition date. KCC was formed in September 2004 for the purpose of operating underground coal mines and coal processing facilities. KCC was acquired on April 14, 2016 and as such no operations are presented prior to the acquisition date. On August 23, 2018, KCC disposed of certain non-operating assets totaling $111,567 and the corresponding asset retirement obligation totaling $919,158 which resulted in a gain of $807,591. WCC was formed in October 2018 for the purpose of acquiring and operating underground and surface coal mine and a coal processing facility. No operations were undergoing at the time of formation or acquisition. On September 25, 2019, Perry County Resources LLC (PCR) was formed as a wholly owned subsidiary of ACC. On June 8, 2020, American Rare Earth LLC was created as a wholly owned subsidiary of ARC for the purpose of developing and monetizing rare earth mineral deposits. During 2022, American Rare Earth LLC was renamed to reElement Technology LLC. On June 28, 2020, American Metals LLC was created as a wholly owned subsidiary of ARC for the purpose of aggregating, processing and selling recovered steel and metals. 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. (Note 5) 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 September 30, 2021, AOVII has had no operational activity. (Note 5) 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. During August 22, 2022, the Company sold the licensed patents to Novusterra, Inc. All prior licensing obligations were voided upon the sale. 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. (Note 5) Asset Acquisitions: On September 23, 2019, American Resources Corporation, (“Buyer”) entered into a binding agreement with Bear Branch Coal LLC, a Kentucky limited liability company, Perry County Coal LLC, a Kentucky limited liability company, Ray Coal LLC, a Kentucky limited liability company, and Whitaker Coal LLC, a Kentucky limited liability company (each a “Seller” and collectively, “Sellers”). The agreement was entered into as part of the bankruptcy proceedings of Cambrian Holding Company LLC, (“Cambrian), and is subject to approval by the United States Bankruptcy Court for the Eastern District of Kentucky (the “Bankruptcy Court”) in the chapter 11 bankruptcy cases of the Sellers, Case No. 19-51200(GRS), by entry of an order in form and substance acceptable to Sellers and Buyer (the “Sale Order). Under the agreement of the Sale Order, each Seller will sell, transfer, assign, convey and deliver to American Resources Corporation, effective as of the Closing, all assets, rights, titles, permits, leases, contracts and interests of such Seller free and clear of all liens, claims, interests and encumbrances, to the fullest extent permitted by the Bankruptcy Court. In consideration for the purchased assets, the Buyer will assume certain liabilities. Additionally, the Buyer will assume all liabilities relating to the transferred permits and the associated reclamation and post-mining liabilities of the purchased assets. 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. As of the report date, the Company is in the process of transferring the permits. On September 27, 2019, PCR closed and acquired certain assets in exchange for assuming certain liabilities of Perry County Coal, LLC and a cash payment of $1. The preliminary fair values of the asset retirement obligation liabilities assumed were determined to be $2,009,181. Additional assumed liabilities total $1,994,727. The liabilities assumed do not require fair value readjustments. The assets acquired do not represent a business as defined in FASB AS 805-10-20 due to their classification as a single asset. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the liabilities assumed and a cash payment of $1, 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. Because the transaction closed near the end of the reporting quarter the values assigned were provisional as of December 31, 2020 while the company continues to gather information, including evaluations of mining permits, discovery of assumed unsecured payables and timing and extent of end of mine life cost. As of September 30, 2020, the values assigned were deemed final. The assets acquired and liabilities assumed of Perry County Coal, LLC were as follows at the purchase date: Assets Coal Inventory $ 523,150 Mine Development 415,984 Coal Refuse 142,443 Land 675,092 Equipment - Underground 692,815 Equipment - Surface 3,763 Processing and Loading Facility 1,550,663 Liabilities Reclamation liability 2,009,181 Accrued liabilities 1,994,727 On March 4, 2020, PCR entered into a sales agreement with an unrelated entity for three non-core permits which were acquired during the initial purchase on September 27, 2019. At the time of the purchase, PCR did not assign any value to the permits as they were not within the company’s plans to operate. The sale of the permits resulted in the release of $2,386,439 of reclamation bonds and $336,995 of asset retirement obligation liability. Consideration received was $700,000 in cash and $300,000 in equipment. The equipment has not been received as of the report date. The transaction resulted in a gain on sale of $1,061,225. Estimates: Convertible Preferred Securities: Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity Related Party Policies: Advance Royalties: Cash Restricted cash During the 2020 the Company established a reclamation bonding collateral fund. The balance of the restricted cash being held totaled $736,540 and $355,770 as of December 31, 2022 and 2021, respectively. 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 year ended December 31, 2022 and December 31, 2021. December 31, 2022 December 31, 2021 Cash $ 8,868,566 $ 11,492,702 Restricted Cash 2,122,263 1,095,411 Total cash and restricted cash presented in the consolidated statement of cash flows $ 10,990,829 $ 12,588,113 Coal Property and Equipment Property and equipment and amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net undiscounted cash flows expected to be generated by the related assets. If these assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the assets. There was no impairment loss recognized during the period ending December 31, 2021. There was no impairment loss recognized during the period ending December 31, 2022. Costs related to maintenance and repairs which do not prolong the asset’s useful life are expensed as incurred. Mine Development: Cost of Goods Sold and Gross Profit: Asset Retirement Obligations (ARO) – Reclamation: 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 based on expected reclamation outflows over estimated recoverable coal deposit lives. We are using a discount rates ranging from 6.16% to 7.22%, risk free rates ranging from 1.76% to 2.92% and inflation rate of 2%. Revisions to estimates are a result of changes in the expected spending estimate or the timing of the spending estimate associated with planned reclamation. 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 2022 and 2021, $0 and $0 were incurred for gain loss on settlement on ARO. The table below reflects the changes to our ARO: 2022 2021 Beginning Balance $ 18,951,587 $ 17,855,304 Accretion 1,344,047 1,096,283 Ending Balance $ 20,295,634 $ 18,951,587 Income Taxes The Company filed an initial tax return in 2015. Management believes that the Company’s income tax filing positions will be sustained on audit and does not anticipate any adjustments that will result in a material change. Therefore, no reserve for uncertain income tax positions has been recorded. The Company’s policy for recording interest and penalties, if any, associated with income tax examinations will be to record such items as a component of income taxes. Revenue Recognition: Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied; for all contracts this occurs when control of the promised goods have been transferred to our customers. For coal shipments to domestic and international customers via rail, control is transferred when the railcar is loaded. Our revenue is comprised of sales of mined coal, sales of recovered metals and services for processing coal. All of the activity is undertaken in eastern Kentucky and Southern Indiana. Revenue from metal recovery and sales are recognized when conditions within the contract or sales agreement are met including transfer of title. Revenue from coal processing and loading are recognized when services have been performed according to the contract in place. Our coal sales generally include 10 to 30-day payment terms following the transfer of control of the goods to the customer. We typically do not include extended payment terms in our contracts with customers. As such, spot sales prices and forward contract pricing has declined. During late 2019 management anticipated adverse market conditions globally, and in response began to selectively reduce or idle coal production operations and furlough or terminate employees. During Q1 2020, the worldwide COVID-19 outbreak sharply reduced worldwide demand for infrastructure and steel products and their necessary inputs including Metallurgical coal. Company management fully idled the Company’s operations accordingly, and the operations have remained idled through the report date. These recent, global market disruptions and developments are expected to result in lower sales and gross margins for the coal industry and the Company in 2020 and possibly beyond. Customer Concentration and Disaggregation of Revenue: For the year ended December 31, 2022 and 2021, 100% and 100% of generated from sales to the steel and industrial industry, respectively. For the year ended December 31, 2022 and 2021, 0% and 0% of generated from sales to the utility industry, respectively. Leases: , Leases . The Company leases certain equipment and other assets under noncancelable operating leases, typically with initial terms of 3 to 7 years. Capital leases are recorded at the present value of the future minimum lease payments at the inception of the lease. The gross amount of assets recorded under capital lease amounted to $333,875, all of which is classified as surface equipment. The Company leases certain office and facility space under noncancelable operating leases, typically with initial terms of 1 to 10 years. Right to use assets recorded on the balance sheet as of December 31, 2022, associated with these leases amounted to $13,033,889. Right to use liabilities recorded on the balance sheet as of December 31, 2022, associated with these leases amounted to $11,788,486. Beneficial Conversion Features of Convertible Securities: The Company has a convertible note outstanding. Principal and accrued interest is convertible into common shares at $1.05 per share. The remaining balance of the convertible note outstanding converted to common shares during January 2023. Loan Issuance Costs and Discounts Allowance For Doubtful Accounts: Allowance for trade receivables as of December 31, 2022 and 2021 amounted to $0 and $0, respectively. Allowance for other accounts receivables as of December 31, 2022 and 2021 amounted to $0 and $0, respectively. Allowance for trade receivables as of December 31, 2022 and 2021 amounted to $0, for both years. Allowance for other accounts receivables, including note receivables as of December 31, 2022 and 2021 amounted to $1,744,570 and $1,494,570, respectively. The allowance related to the purchase of a note receivable from a third party. The note receivable has collateral in certain mining permits which are strategic to KCC. Timing of payment on the note is uncertain resulting a full allowance for the note. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of December 31, 2022 and 2021. Inventory: Stock-based Compensation: Earnings Per Share: For the years ended December 31, 2022 and 2021, the Company had 10,273,764 and 10,213,764 outstanding stock warrants, respectively. For the years ended December 31, 2022 and 2021, the Company had 4,039,269 and 4,209,269 outstanding stock options, respectively. For the years ended December 31, 2022 and 2021, the Company had 0 and 0 shares of Series A Preferred Stock, respectively, that has the ability to convert at any time into 0 and 0 shares of common stock, respectively. For the years ended December 31, 2022 and 2021, the Company had 0 and 0 shares of Series B Preferred Stock, respectively, that has the ability to convert at any time into 0 and 0 shares of common stock, respectively. For the years ended December 31, 2022 and 2021, the Company had 6,364,269 and 4,209,269 restrictive stock awards, restricted stock units, or performance-based awards. Reclassifications: New Accounting Pronouncements: ASU 2020-10, Codification Improvements ASU 2020-09, Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable and other Costs ASU 2020-06, Debt – Debt with Conversion and Other Options |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
NOTE 2 - PROPERTY AND EQUIPMENT | NOTE 2 - PROPERTY AND EQUIPMENT At December 31, 2022 and 2021, property and equipment were comprised of the following: 2022 2021 Processing and rail facility $ - $ 11,591,274 Underground equipment - 9,687,667 Surface equipment - 3,201,464 Mine development 561,575 561,575 Coal refuse storage 12,134,192 12,134,192 Rare Earth Processing - 96,107 Construction in Progress - 12,015 Land 1,572,435 1,572,435 Less: Accumulated depreciation (5,199,478 ) (15,953,575 ) Total Property and Equipment, Net $ 9,113,724 $ 22,903,154 Depreciation expense amounted to $2,157,763 and $1,980,026 for the years of December 31, 2022 and 2021, respectively. Amortization of mining rights amounted to $1,238,449 and $1,246,740 for the years of December 31, 2022 and 2021, respectively. The estimated useful lives are as follows: Processing and Rail Facilities 7-20 years Surface Equipment 7 years Underground Equipment 5 years Mine Development 5-10 years Coal Refuse Storage 10 years |
RIGHT OF USE ASSETS
RIGHT OF USE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
RIGHT OF USE ASSETS | |
NOTE 3 - RIGHT OF USE ASSETS | NOTE 3 – RIGHT OF USE ASSETS Our principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038. We pay $5,869 per month in rent for the office space and the rental lease expires December 2032. 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 June 22, 2022 ReElement Technologies LLC entered into a Financial Lease for equipment at 2069 Highway 194 E., Meta, KY 41501 with Maxus Capital Group. On August 16, 2022 the Company entered into a Financial Lease for equipment for it facilitates with Maxus Capital Group. At December 31, 2022 and 2021 Right of use assets and liabilities were comprised of the following: 2022 2021 Operating Leases Asset Liability Asset Liability Principal Office Lease 434,422 439,133 $ 471,321 $ 465,501 Kite Kentucky Lease 77,258 76,305 83,075 82,003 Rare Earth Commercial Land Lease 83,989 82,321 101,799 106,005 Rare Earth Commercial Purification Facility Lease 33,465 32,579 69,888 67,054 Finance Leases Rare Earth Equipment Lease 991,894 853,260 - - Equipment Lease 11,412,861 10,304,888 - - Totals $ 13,033,889 $ 11,788,486 $ 742,702 $ 736,678 Current $ - $ 3,889,235 $ - $ 151,806 Long-term $ 13,033,889 $ 7,899,251 $ 743,702 $ 562,428 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
NOTES PAYABLE | |
NOTE 4 - NOTES PAYABLE | NOTE 4 - NOTES PAYABLE During the year ended December 31, 2022 and 2021, principal payments on long term debt totaled $2,214,601 and $562,318, respectively. During the year ended December 31, 2021 and 2020, new debt issuances totaled $2,563,000 and $562,318, respectively. Short-term and Long-term debt consisted of the following at December 31, 2022 and 2021: 2022 2021 Equipment Loans - ACC Note payable to an unrelated company in monthly installments of $1,468, With interest at 6.95%, through maturity in March 2021, when the note is due in full. The note is secured by equipment and a personal guarantee by an officer of the Company. - 6,106 On December 7, 2017, ACC entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $56,900. The agreement calls for an interest rate of 8.522%, monthly payments until maturity of January 7, 2021. The note is secured by the equipment purchased. The balance of the note was repaid with cash during 2021. 11,082 11,082 On January 25, 2018, ACC entered into an equipment loan agreement with an unrelated party in the amount of $346,660. The agreement calls for monthly payments of $11,360 until maturity date of December 24, 2020 and carries an interest rate of 9%. The loan is secured by the underlying surface equipment purchased by the loan. Loan proceeds were used directly to purchase equipment. 57,509 141,689 On May 9, 2018, ACC entered into a loan agreement with an unrelated party in the amount of $1,000,000 with a maturity date of September 24, 2018 with monthly payments of $250,000 due beginning June 15, 2018. The note is secured by the assets and equity of the company and carries an interest rate of 0%. Proceeds of the note were split between receipt of $575,000 cash and $425,000 payment for new equipment. No payments have been made on the note which is in default. The note is secured by the equipment purchased by the note and a personal guarantee of an officer. - 1,000,000 ARC Corporate Loan On June 3, 2022, the Company entered into a loan agreement with an unrelated party in the amount of $2,500,000 with a maturity date of June 27, 2023. The interest rate is 5% and payments are based on coal sales. 1,604,180 - On April 20, 2022 the Company entered into a loan agreement with an unrelated party in the amount of $45,000 and will repay $63,000. 63,000 - On April 23, 2020, the Company received loan proceeds in the amount of approximately $2,649,800 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the period. On January 26, 2022, the Company received forgiveness of $1,521,304 of principal. - 2,649,800 On September 11, 2020, the Company entered into a $1,493,233.65 settlement agreement with a non-related party. Starting April 1, 2021, the note requires monthly payments of $100,000 until the balance is paid in full. - 1,293,234 Equipment Loans - McCoy On September 25, 2017, ACC entered into an equipment purchase Agreement, which carries 0% interest with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $350,000. The agreement provided for $20,000 monthly payments until the balance is paid in full. The note matures on September 25, 2019, and the note is in default. The note is secured by the equipment purchased with the note. 181,736 181,736 Total note payables 1,917,507 5,832,124 Less: Current maturities 1,917,507 5,283,647 Total Long-term note payables, net of discount $ - $ 548,477 Convertible notes payable consisted of the following at December 31, 2022 and 2021: 2022 2021 ARC In 2020, the Company created a convertible debt offering. The debt matures in two years, with interest at 12.5% capitalizing monthly. The remaining portion of convertible debt outstanding was converted to common shares during January 2023. 9,797,423 9,232,685 Less: Debt Discounts - (40,655 ) Total convertible note payables, net of discount 9,797,423 9,192,030 Affiliate notes consisted of the following at December 31, 2022 and 2021: 2022 2021 Notes payable to affiliate, due on demand with no interest and is uncollateralized. Equipment purchasing was paid by an affiliate resulting in the note payable. $ - $ 74,000 Total affiliate note payables - 74,000 Total interest expense was $1,426,153 in 2022 and $4,159,813 in 2021. Future minimum principal payments, interest payments and payments on capital leases are as follows: Payable In Loan Principal 2023 11,704,929 2024 - 2025 - 2026 - 2027 - Thereafter |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
NOTE 5 - RELATED PARTY TRANSACTIONS | NOTE 5 - RELATED PARTY TRANSACTIONS During 2015, equipment purchasing was paid by an affiliate resulting in a note payable. The balance of the note was $0 and $74,000 as of December 31, 2022 and 2021, respectively. On April 30, 2017, the Company purchased $250,000 of secured debt that had been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the notes. The first note in the amount of $150,000 is dated March 13, 2013, carries an interest rate of 12% and was due on September 13, 2015. The second note in the amount of $100,000 is dated July 17, 2013, carries an interest rate of 12% and was due January 17, 2016. Both notes are in default and have been fully impaired due to collectability uncertainty. On October 24, 2016, the Company sold certain mineral and land interests to a subsidiary of an entity, LRR, owned by members of the Company’s management. LRR leases various parcels of land to QEI and engages in other activities creating miscellaneous income. The consideration for the transaction was a note in the amount of $178,683. The note bears no interest and is due in 2026. As of January 28, 2017, the note was paid in full. From October 24, 2016. this transaction was eliminated upon consolidation as a variable interest entity. As of July 1, 2018, the accounts of Land Resources & Royalties, LLC have been deconsolidated from the financial statements based upon the ongoing review of its status as a variable interest entity. As of December 31, 2022, and 2021, amounts owed to LRR totaled $338,246 and $45,359, respectively. On February 13, 2020, the Company entered into a Contract Services Agreement with Land Betterment Corp, 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. The agreement covers services across all of the Company’s properties. During 2022 and 2021, the amount incurred under the agreement amounted to $5,572,644 and $4,296,266 and the amount paid amounted to $3,080,783 and $2,578,335. As of December 31, 2022 and 2021, the amount due under the agreement amounted to $4,481,922 and $2,073,830. 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 December 31, 2022, there is no market for the LBX Token and therefore no value has been assigned. On June 11, 2020 the Company purchased $1,494,570 of secured debt included accrued interest that had been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the four notes. The first note in the amount of $75,000 is dated June 28, 2013, carries an interest rate of 12% and was due on June 28, 2015. The second note in the amount of $150,000 is dated June 28, 2013, carries an interest rate of 12% and was due June 28, 2015. The third note in the amount of $199,500 is dated March 18, 2014, carries an interest rate of 4% and was due on March 18, 2016. The fourth note in the amount of $465,500 is dated March 18, 2014, carries an interest rate of 4% and was due on March 18, 2016. The notes are in default and have been fully impaired due to collectability uncertainty. On January 1, 2021, the Company purchased $250,000 of secured debt including accrued interest that has been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the note. The note is in default and has been fully impaired due to collectability uncertainty. 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. Condensed Summary Financials as Of December 31, 2022: AOV December 31, 2022 Balance Sheet Assets Investment in American Acquisition Opportunity Inc $ 4,500,000 Assets $ 4,500,000 Liabilities $ - Members Equity $ 4,500,000 Total Liabilities and Members' Equity $ 4,500,000 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. Condensed Summary Financials as Of December 31, 2021: AOV II December 31, 2022 Balance Sheet Assets Deposits $ 25,000 Assets $ 25,000 Liabilities $ - Members Equity $ 25,000 Total Liabilities and Members' Equity $ 25,000 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. During August 22, 2022, the Company sold the licensed patents to Novusterra, Inc. All prior licensing obligations were voided upon the sale. 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. Condensed Summary Financials as Of December 31, 2022: ASSETS December 31, 2022 Current assets: Cash and cash equivalents $ 186,106 Total current assets 186,106 Non-current assets: Intangible assets 422,515 Operating lease right-of-use asset 437,352 Total non-current assets 859,868 Total Assets $ 1,050,974 Liabilities and Stockholders’ Equity Current liabilities: Accounts payables $ 9,500 Accrued interest 6,022 Other current liabilities 247,827 Current portion of operating lease liabilities 40,165 Total current liabilities 273,514 Long term debt, net of current portion 208,029 Operating lease liabilities, less current portion 403,339 Total liabilities 914,881 Commitments and contingencies Stockholders’ Equity Preferred stock - no par value; 400,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020 - Class A Common stock - no par value; 2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 806,777 Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively - Accumulated deficit (670,685 ) Total stockholders’ equity 136,092 Total Liabilities and Stockholders’ Equity $ 1,050,974 Condensed Summary Financials as Of December 31, 2021: ASSETS December 31, 2021 Current assets: Cash and cash equivalents $ 196,623 Total current assets 196,623 Non-current assets: Intangible assets 450,221 Operating lease right-of-use asset 478,369 Total non-current assets 928,590 Total Assets $ 1,125,213 Liabilities and Stockholders’ Equity Current liabilities: Accounts payables $ 7,699 Accrued interest - Other current liabilities 145,934 Current portion of operating lease liabilities 37,326 Total current liabilities 190,959 Long term debt, net of current portion - Operating lease liabilities, less current portion 443,503 Total liabilities 634,462 Commitments and contingencies Stockholders’ Equity Preferred stock - no par value; 400,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020 - Class A Common stock - no par value; 2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 801,359 Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively - Accumulated deficit (310,608 ) Total stockholders’ equity 490,751 Total Liabilities and Stockholders’ Equity $ 1,125,213 |
KENTUCKY NEW MARKETS DEVELOPMEN
KENTUCKY NEW MARKETS DEVELOPMENT PROGRAM | 12 Months Ended |
Dec. 31, 2022 | |
NOTE 6 - KENTUCKY NEW MARKETS DEVELOPMENT PROGRAM | NOTE 6 – 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 years in the event the credits are recaptured or reduced. At the time of the transaction, the income tax credits were valued at $2,005,843. The Company has not established 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 December 31, 2021 and 2020 was $0 and $4,117,139, respectively. Payments of interest only are due quarterly until March 18, 2023 at which time quarterly principal and interest are due. The note is collateralized by the equity interests of the borrower. The Company’s management also manages the operations of ERC Mining LLC. ERC Mining LLC has assets totaling $4,117,139 and liabilities totaling $4,415,860 as of December 31, 2021 and 2020, respectively, for which there are to be used in conjunction with the transaction described above. Assets totaling $3,325,401 and $3,490,087 and liabilities totaling $4,117,139 and $4,117,139, respectively, are eliminated upon consolidation as of December 31, 2021 and 2020. The Company’s risk associated with ERC Mining LLC is greater than its ownership percentage and its involvement does not affect the Company’s business beyond the relationship described above. On November 9. 2021, Quest Processing fulfilled all obligations of the loans under the Kentucky New Markets Development Program. As such, all amounts due under the notes were forgiven and ongoing requirements were ended. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
NOTE 7 - INCOME TAXES | NOTE 7 - INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The primary temporary differences that give rise to the deferred tax assets and liabilities are as follows: accrued expenses. Deferred tax liability and assets consisted of $344,509 and $6,366,032 at December 31, 2022 and 2021, respectively, which was fully reserved. Deferred tax assets consist of net operating loss carryforwards in the amount of $23,831,009 and $24,175,518 at December 31, 2022 and 2021, respectively, which was fully reserved. The net operating loss carryforwards for years 2015, 2016, 2017, 2018, 2019, 2020, and 2021 begin to expire in 2035. The application of net operating loss carryforwards are subject to certain limitations as provided for in the tax code. The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and reduced the corporate income tax rate from 34% to 21%. The Company’s deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law. On March 25, 2020, the CARES Act was established with implications of corporate tax treatment. The CARES Act provides that NOLs arising in a tax year beginning after December 31, 2018 and before January 1, 2021 can be carried back to each of the five tax years preceding the tax year of such loss. The CARES Act temporarily and retroactively increases the limitation on the deductibility of interest expense under Code Sec. 163(j)(1) from 30% to 50% for the tax years beginning in 2019 and 2020. The Company’s effective income tax rate is lower than what would be expected if the U.S. federal statutory rate (21%) were applied to income before income taxes primarily due to certain expenses being deductible for tax purposes but not for financial reporting purposes. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. All years are open to examination as of December 31, 2022. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY TRANSACTIONS | |
NOTE 8 - EQUITY TRANSACTIONS | NOTE 8 – EQUITY TRANSACTIONS As of December 31, 2022, the following describes the various types of the Company’s securities: Common Stock Voting Rights Dividend Rights Liquidation Rights Other Matters Series A Preferred Stock Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series A Preferred stock, par value $0.0001 per share, covering up to an aggregate of 100,000 shares of Series A Preferred stock. The Series A Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Additionally, the holders of preferred stock will entitled to vote at or receive notice of any meeting of stockholders. As of the date of this filing, no shares of Series A Preferred stock are outstanding. See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series A Preferred stockholders. Voting Rights Dividend Rights Conversion Rights Liquidation Rights Anti-Dilution Protections As of February 14, 2019, all Series A Preferred stock has been converted into Common shares of the company. Series B Preferred Stock Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series B Preferred stock, par value $0.001 per share, covering up to an aggregate of 20,000,000 shares of Series B Preferred stock. The Series B Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of stockholders. As of the date of this filing, no shares of Series B Preferred stock are outstanding. See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series B Preferred stock holders. Voting Rights Dividend Rights Conversion Rights Liquidation Rights Series C Preferred Stock Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series C Preferred stock, par value $0.0001 per share, covering up to an aggregate of 20,000,000 shares of Series C Preferred stock. The Series C Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of stockholders. As of the date of this filing, no shares of Series C Preferred stock are outstanding. See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series C Preferred stock holders. Voting Rights Dividend Rights Conversion Rights Liquidation Rights As of February 21, 2019, all Series C Preferred stock has been converted into Common shares of the company. Common Share Transactions On March 17, 2021, 425,000 of restricted common shares were sold. Gross proceeds to the Company amounted to $1,275,000. On June 9, 2021, the Company issued 8,600,000 shares of Class A Common Stock. Net proceeds to the Company after offering expenses amounted to $27,943,000. During 2021, the Company issued 3,826,532 share of Class A Common Stock pursuant to warrant conversions. During 2021, the Company issued 6,242,859 shares of Class A Common Stock pursuant to debt conversions. During 2021, the Company issued 162,000 shares of Class A Common Stock pursuant to various consulting arrangements. During 2022, the Company issued 549,395 share of Class A Common Stock pursuant to warrant conversions. During 2022, the Company issued 1,209,643 shares of Class A Common Stock pursuant to debt conversions. During 2022, the Company issued 20,000 shares of Class A Common Stock pursuant to various consulting arrangements. During 2022, the Company repurchased 86,410 shares of Class A Common Stock. Common Stock Option Transactions A 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. A new 2018 Stock Option Plan (2018 Plan) was approved by the Board on July 1, 2018 and amended on July 16, 2020. The Company may grant up to 4,000,000 shares of common stock under the 2018 Plan. The 2018 Plan is administered by the Board of Directors, which has substantial discretion to determine persons, amounts, time, price, vesting schedules, exercise terms, and restrictions of the grants, if any. On September 12, 2018, the Board issued a total of 636,830 options to four employees of the Company under the 2018 Plan. The options have an expiration date of September 10, 2025 and have an exercise price of $1.00 per share. Of the total options issued, 25,000 vested immediately, with the balance of 611,830 options vesting equally over the course of three years, subject to restrictions regarding the employee’s continued employment by the Company. On June 18, 2020, the Board issued a total of 750,000 options to 2 employees of the Company under the 2018 Plan. The options have an expiration date of June 17, 2027 and have an exercise price of $2.630. The options vested equally over the course of seven years, subject to restrictions regarding the employee’s continued employment by the Company. On July 16, 2020, the Board issued a total of 50,000 options to a director of the Company under the 2018 Plan as amended. The options have an expiration date of March 15, 2021 and vest immediately. On November 23, 2020, the Board issued a total of 302,439 options to 3 employees and 4 directors. The options have an expiration of November 22, 2027 and vest immediately. During December 2021, the Company issued 1,020,000 Employee Stock options under the current plan. The individual option awards vest over a period of 1 to 9 years. During July and September 2022, the Company issued 2,675,000 Employee Stock options under the current plan. The individual option awards vest over a period of 1 to 9 years. Warrant Transactions On June 12, 2019, we entered into an agreement with Golden Properties Ltd., a British Columbia company based in Vancouver, Canada (“Golden Properties”) to amend warrants “C-1”, “C-2” “C-3”, and “C-4” that were originally part of a October 4, 2017 agreement with Golden Properties that involved a series of loans made by Golden Properties to the Company. As a result, the following warrants are issued to Golden Properties: · Warrant B-4, for the purchase of 3,417,006 shares of common stock at $0.01 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $34,170 in cash proceeds should all the warrants be exercised. There was no change to Warrant B-4 as part of the June 12, 2019 amendment; · Warrant C-1, for the purchase of 750,000 shares of common stock at $3.55 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $2,662,500 in cash proceeds should all the warrants be exercised; · Warrant C-2, for the purchase of 750,000 shares of common stock at $4.25 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $2,836,000 in cash proceeds should all the warrants be exercised; · Warrant C-3, for the purchase of 750,000 shares of common stock at $4.50 per share, as adjusted from time to time, expiring April 4, 2022, and providing the Company with up to $3,375,000 in cash proceeds should all the warrants be exercised; and · Warrant C-4, for the purchase of 750,000 shares of common stock at $5.00 per share, as adjusted from time to time, expiring April 4, 2022, and providing the Company with up to $3,750,000 in cash proceeds should all the warrants be exercised. On February 3 2020, we entered into a warrant adjustment agreement with Golden Properties Ltd., a British Columbia company based in Vancouver, Canada (“Golden Properties”) to amend warrants “C-1”, “C-2” “C-3”, and “C-4” that were originally part of a October 4, 2017 agreement with Golden Properties that involved a series of loans made by Golden Properties to the Company. As a result, the following warrants modified for Golden Properties: · Warrant C-1, for the purchase of 750,000 shares of common stock at $1.05 per share, as adjusted from time to time, expiring on January 31, 2023, and providing the Company with up to $787,500 in cash proceeds should all the warrants be exercised; · Warrant C-2, for the purchase of 750,000 shares of common stock at $1.05 per share, as adjusted from time to time, expiring on January 31, 2023, and providing the Company with up to $787,500 in cash proceeds should all the warrants be exercised; · Warrant C-3, for the purchase of 750,000 shares of common stock at $1.05 per share, as adjusted from time to time, expiring January 31, 2023, and providing the Company with up to $787,500 in cash proceeds should all the warrants be exercised; and · Warrant C-4, for the purchase of 750,000 shares of common stock at $1.05 per share, as adjusted from time to time, expiring January 31, 2023, and providing the Company with up to $787,500 in cash proceeds should all the warrants be exercised. 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. On July 28, 2022, the Company issued Common Stock Purchase Warrant “A-12” in conjunction with a IR Services. The warrant provides the option to purchase 60,000 Class A Common Shares at a price of $3.50. The warrants expire on July 28, 2026. The company uses the black Scholes option pricing model to value its warrants and options. The significant inputs are as follows: 2022 2021 Expected Dividend Yield 0 % 0 % Expected volatility 87.97 % 87.97 % Risk-free rate 2.37 % 0.98 % Expected life of warrants .47-9 years 1-9 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 $ 3.53 4.56 $ 95,200 Forfeited or Expired - - - $ - Exercised 2,788,707 $ 0.86 0.36 $ 5,347,595 Outstanding - December 31, 2021 10,213,764 $ 2.25 2.69 $ 121,018 Exercisable (Vested) - December 31, 2021 10,213,764 $ 2.25 2.69 $ 121,018 Granted 60,000 $ 3.50 4.00 $ 61,200 Forfeited or Expired - - - $ - Exercised 549,395 $ 1.49 0.47 $ 368,095 Outstanding - December 31, 2022 9,724,369 $ 2.75 1.69 $ 6,515,327 Exercisable (Vested) - December 31, 2022 9,724,369 $ 2.75 1.69 $ 6,515,327 Company Options: Number of Weighted Average Exercise Weighted Average Contractual Aggregate Intrinsic Options Price Life in Years Value Exercisable (Vested) - December 31, 2020 888,659 $ 1.581 5.047 $ 749,470 Granted 2,350,000 $ 2.305 7.13 $ 2,748,250 Forfeited or Expired 275,000 1.454 3.54 58,500 Exercised 25,000 1.640 1.17 388 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 2,675,000 $ 1.94 7 $ 1,792,250 Forfeited or Expired - - - - Exercised - - - - Outstanding - December 31, 2022 5,834,268 $ 1.665 5.39 $ 3,186,870 Exercisable (Vested) - December 31, 2022 3,159,268 $ 1.517 4.91 $ 3,141,183 |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 12 Months Ended |
Dec. 31, 2022 | |
CONTINGENCIES AND COMMITMENTS | |
NOTE 9 - CONTINGENCIES AND COMMITMENTS | NOTE 9 – CONTINGENCIES AND COMMITMENTS 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. 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 $1,155,780, the Company has accrued $1,393,107 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 $640,090 of which the Company has accrued $351,071 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 November 7, 2018, Wyoming County Coal LLC, acquired 5 permits, coal processing and loading facilities, surface ownership, mineral ownership, and coal refuse storage facilities from unrelated entities. Consideration for the acquired assets was the assumption of reclamation bonds totaling $234,240, 1,727,273 shares of common stock of the company, a seller note of $350,000 and a seller note of $250,000. As of the balance sheet date, the West Virginia permit transfers have not yet been approved. 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). 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, ReElement 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, ReElement 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 | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
NOTE 10 - SUBSEQUENT EVENTS | NOTE 10 - SUBSEQUENT EVENTS On January 31, 2023, the remaining amounts of the convertible notes in the amount of $9,891,241 was converted into 9,420,230 common shares of the Company. Extinguishing all future liabilities under the convertible note. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Asset Acquisition | On September 23, 2019, American Resources Corporation, (“Buyer”) entered into a binding agreement with Bear Branch Coal LLC, a Kentucky limited liability company, Perry County Coal LLC, a Kentucky limited liability company, Ray Coal LLC, a Kentucky limited liability company, and Whitaker Coal LLC, a Kentucky limited liability company (each a “Seller” and collectively, “Sellers”). The agreement was entered into as part of the bankruptcy proceedings of Cambrian Holding Company LLC, (“Cambrian), and is subject to approval by the United States Bankruptcy Court for the Eastern District of Kentucky (the “Bankruptcy Court”) in the chapter 11 bankruptcy cases of the Sellers, Case No. 19-51200(GRS), by entry of an order in form and substance acceptable to Sellers and Buyer (the “Sale Order). Under the agreement of the Sale Order, each Seller will sell, transfer, assign, convey and deliver to American Resources Corporation, effective as of the Closing, all assets, rights, titles, permits, leases, contracts and interests of such Seller free and clear of all liens, claims, interests and encumbrances, to the fullest extent permitted by the Bankruptcy Court. In consideration for the purchased assets, the Buyer will assume certain liabilities. Additionally, the Buyer will assume all liabilities relating to the transferred permits and the associated reclamation and post-mining liabilities of the purchased assets. 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. As of the report date, the Company is in the process of transferring the permits. On September 27, 2019, PCR closed and acquired certain assets in exchange for assuming certain liabilities of Perry County Coal, LLC and a cash payment of $1. The preliminary fair values of the asset retirement obligation liabilities assumed were determined to be $2,009,181. Additional assumed liabilities total $1,994,727. The liabilities assumed do not require fair value readjustments. The assets acquired do not represent a business as defined in FASB AS 805-10-20 due to their classification as a single asset. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the liabilities assumed and a cash payment of $1, 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. Because the transaction closed near the end of the reporting quarter the values assigned were provisional as of December 31, 2020 while the company continues to gather information, including evaluations of mining permits, discovery of assumed unsecured payables and timing and extent of end of mine life cost. As of September 30, 2020, the values assigned were deemed final. The assets acquired and liabilities assumed of Perry County Coal, LLC were as follows at the purchase date: Assets Coal Inventory $ 523,150 Mine Development 415,984 Coal Refuse 142,443 Land 675,092 Equipment - Underground 692,815 Equipment - Surface 3,763 Processing and Loading Facility 1,550,663 Liabilities Reclamation liability 2,009,181 Accrued liabilities 1,994,727 On March 4, 2020, PCR entered into a sales agreement with an unrelated entity for three non-core permits which were acquired during the initial purchase on September 27, 2019. At the time of the purchase, PCR did not assign any value to the permits as they were not within the company’s plans to operate. The sale of the permits resulted in the release of $2,386,439 of reclamation bonds and $336,995 of asset retirement obligation liability. Consideration received was $700,000 in cash and $300,000 in equipment. The equipment has not been received as of the report date. The transaction resulted in a gain on sale of $1,061,225. |
Estimates | Estimates: |
Convertible Preferred Securities | Convertible Preferred Securities: Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity |
Related Party Policies | Related Party Policies: |
Advance Royalties | Advance Royalties: |
Cash | Cash |
Restricted cash | Restricted cash During the 2020 the Company established a reclamation bonding collateral fund. The balance of the restricted cash being held totaled $736,540 and $355,770 as of December 31, 2022 and 2021, respectively. 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 year ended December 31, 2022 and December 31, 2021. December 31, 2022 December 31, 2021 Cash $ 8,868,566 $ 11,492,702 Restricted Cash 2,122,263 1,095,411 Total cash and restricted cash presented in the consolidated statement of cash flows $ 10,990,829 $ 12,588,113 |
Coal Property and Equipment | Coal Property and Equipment Property and equipment and amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net undiscounted cash flows expected to be generated by the related assets. If these assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the assets. There was no impairment loss recognized during the period ending December 31, 2021. There was no impairment loss recognized during the period ending December 31, 2022. Costs related to maintenance and repairs which do not prolong the asset’s useful life are expensed as incurred. |
Mine Development | Mine Development: |
Cost of Goods Sold and Gross Profit | Cost of Goods Sold and Gross Profit: |
Asset Retirement Obligations (ARO) - Reclamation | Asset Retirement Obligations (ARO) – Reclamation: 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 based on expected reclamation outflows over estimated recoverable coal deposit lives. We are using a discount rates ranging from 6.16% to 7.22%, risk free rates ranging from 1.76% to 2.92% and inflation rate of 2%. Revisions to estimates are a result of changes in the expected spending estimate or the timing of the spending estimate associated with planned reclamation. 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 2022 and 2021, $0 and $0 were incurred for gain loss on settlement on ARO. The table below reflects the changes to our ARO: 2022 2021 Beginning Balance $ 18,951,587 $ 17,855,304 Accretion 1,344,047 1,096,283 Ending Balance $ 20,295,634 $ 18,951,587 |
Income Taxes | Income Taxes The Company filed an initial tax return in 2015. Management believes that the Company’s income tax filing positions will be sustained on audit and does not anticipate any adjustments that will result in a material change. Therefore, no reserve for uncertain income tax positions has been recorded. The Company’s policy for recording interest and penalties, if any, associated with income tax examinations will be to record such items as a component of income taxes. |
Revenue Recognition | Revenue Recognition: Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied; for all contracts this occurs when control of the promised goods have been transferred to our customers. For coal shipments to domestic and international customers via rail, control is transferred when the railcar is loaded. Our revenue is comprised of sales of mined coal, sales of recovered metals and services for processing coal. All of the activity is undertaken in eastern Kentucky and Southern Indiana. Revenue from metal recovery and sales are recognized when conditions within the contract or sales agreement are met including transfer of title. Revenue from coal processing and loading are recognized when services have been performed according to the contract in place. Our coal sales generally include 10 to 30-day payment terms following the transfer of control of the goods to the customer. We typically do not include extended payment terms in our contracts with customers. As such, spot sales prices and forward contract pricing has declined. During late 2019 management anticipated adverse market conditions globally, and in response began to selectively reduce or idle coal production operations and furlough or terminate employees. During Q1 2020, the worldwide COVID-19 outbreak sharply reduced worldwide demand for infrastructure and steel products and their necessary inputs including Metallurgical coal. Company management fully idled the Company’s operations accordingly, and the operations have remained idled through the report date. These recent, global market disruptions and developments are expected to result in lower sales and gross margins for the coal industry and the Company in 2020 and possibly beyond. Customer Concentration and Disaggregation of Revenue: For the year ended December 31, 2022 and 2021, 100% and 100% of generated from sales to the steel and industrial industry, respectively. For the year ended December 31, 2022 and 2021, 0% and 0% of generated from sales to the utility industry, respectively. |
Leases | Leases: , Leases . The Company leases certain equipment and other assets under noncancelable operating leases, typically with initial terms of 3 to 7 years. Capital leases are recorded at the present value of the future minimum lease payments at the inception of the lease. The gross amount of assets recorded under capital lease amounted to $333,875, all of which is classified as surface equipment. The Company leases certain office and facility space under noncancelable operating leases, typically with initial terms of 1 to 10 years. Right to use assets recorded on the balance sheet as of December 31, 2022, associated with these leases amounted to $13,033,889. Right to use liabilities recorded on the balance sheet as of December 31, 2022, associated with these leases amounted to $11,788,486. |
Beneficial Conversion Features of Convertible Securities | Beneficial Conversion Features of Convertible Securities: The Company has a convertible note outstanding. Principal and accrued interest is convertible into common shares at $1.05 per share. The remaining balance of the convertible note outstanding converted to common shares during January 2023. |
Loan Issuance Costs and Discounts | Loan Issuance Costs and Discounts |
Allowance For Doubtful Accounts | Allowance For Doubtful Accounts: Allowance for trade receivables as of December 31, 2022 and 2021 amounted to $0 and $0, respectively. Allowance for other accounts receivables as of December 31, 2022 and 2021 amounted to $0 and $0, respectively. Allowance for trade receivables as of December 31, 2022 and 2021 amounted to $0, for both years. Allowance for other accounts receivables, including note receivables as of December 31, 2022 and 2021 amounted to $1,744,570 and $1,494,570, respectively. The allowance related to the purchase of a note receivable from a third party. The note receivable has collateral in certain mining permits which are strategic to KCC. Timing of payment on the note is uncertain resulting a full allowance for the note. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of December 31, 2022 and 2021. |
Inventory | Inventory: |
Stock-based Compensation | Stock-based Compensation: |
Earnings Per Share | Earnings Per Share: For the years ended December 31, 2022 and 2021, the Company had 10,273,764 and 10,213,764 outstanding stock warrants, respectively. For the years ended December 31, 2022 and 2021, the Company had 4,039,269 and 4,209,269 outstanding stock options, respectively. For the years ended December 31, 2022 and 2021, the Company had 0 and 0 shares of Series A Preferred Stock, respectively, that has the ability to convert at any time into 0 and 0 shares of common stock, respectively. For the years ended December 31, 2022 and 2021, the Company had 0 and 0 shares of Series B Preferred Stock, respectively, that has the ability to convert at any time into 0 and 0 shares of common stock, respectively. For the years ended December 31, 2022 and 2021, the Company had 6,364,269 and 4,209,269 restrictive stock awards, restricted stock units, or performance-based awards. |
Reclassifications | Reclassifications: |
New Accounting Pronouncements | New Accounting Pronouncements: ASU 2020-10, Codification Improvements ASU 2020-09, Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable and other Costs ASU 2020-06, Debt – Debt with Conversion and Other Options |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of restricted cash and cash equivalents | December 31, 2022 December 31, 2021 Cash $ 8,868,566 $ 11,492,702 Restricted Cash 2,122,263 1,095,411 Total cash and restricted cash presented in the consolidated statement of cash flows $ 10,990,829 $ 12,588,113 |
Schedule of Asset Retirement Obligations | 2022 2021 Beginning Balance $ 18,951,587 $ 17,855,304 Accretion 1,344,047 1,096,283 Ending Balance $ 20,295,634 $ 18,951,587 |
Schedule of assets acquired and liabilities assumed | Assets Coal Inventory $ 523,150 Mine Development 415,984 Coal Refuse 142,443 Land 675,092 Equipment - Underground 692,815 Equipment - Surface 3,763 Processing and Loading Facility 1,550,663 Liabilities Reclamation liability 2,009,181 Accrued liabilities 1,994,727 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
Schedule of property, plant and equipment | 2022 2021 Processing and rail facility $ - $ 11,591,274 Underground equipment - 9,687,667 Surface equipment - 3,201,464 Mine development 561,575 561,575 Coal refuse storage 12,134,192 12,134,192 Rare Earth Processing - 96,107 Construction in Progress - 12,015 Land 1,572,435 1,572,435 Less: Accumulated depreciation (5,199,478 ) (15,953,575 ) Total Property and Equipment, Net $ 9,113,724 $ 22,903,154 |
Schedule of property, plant and equipment, estimated useful lives | Processing and Rail Facilities 7-20 years Surface Equipment 7 years Underground Equipment 5 years Mine Development 5-10 years Coal Refuse Storage 10 years |
RIGHT OF USE ASSETS (Tables)
RIGHT OF USE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RIGHT OF USE ASSETS | |
Schedule of right of use assets and liablities | 2022 2021 Operating Leases Asset Liability Asset Liability Principal Office Lease 434,422 439,133 $ 471,321 $ 465,501 Kite Kentucky Lease 77,258 76,305 83,075 82,003 Rare Earth Commercial Land Lease 83,989 82,321 101,799 106,005 Rare Earth Commercial Purification Facility Lease 33,465 32,579 69,888 67,054 Finance Leases Rare Earth Equipment Lease 991,894 853,260 - - Equipment Lease 11,412,861 10,304,888 - - Totals $ 13,033,889 $ 11,788,486 $ 742,702 $ 736,678 Current $ - $ 3,889,235 $ - $ 151,806 Long-term $ 13,033,889 $ 7,899,251 $ 743,702 $ 562,428 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party transactions, American Oppurtunity Ventures, LLC | AOV December 31, 2022 Balance Sheet Assets Investment in American Acquisition Opportunity Inc $ 4,500,000 Assets $ 4,500,000 Liabilities $ - Members Equity $ 4,500,000 Total Liabilities and Members' Equity $ 4,500,000 |
Schedule of related party transactions, American Opportunity Ventures II, LLC | AOV II December 31, 2022 Balance Sheet Assets Deposits $ 25,000 Assets $ 25,000 Liabilities $ - Members Equity $ 25,000 Total Liabilities and Members' Equity $ 25,000 |
Schedule of related party transactions, Novusterra, Inc. | ASSETS December 31, 2022 Current assets: Cash and cash equivalents $ 186,106 Total current assets 186,106 Non-current assets: Intangible assets 422,515 Operating lease right-of-use asset 437,352 Total non-current assets 859,868 Total Assets $ 1,050,974 Liabilities and Stockholders’ Equity Current liabilities: Accounts payables $ 9,500 Accrued interest 6,022 Other current liabilities 247,827 Current portion of operating lease liabilities 40,165 Total current liabilities 273,514 Long term debt, net of current portion 208,029 Operating lease liabilities, less current portion 403,339 Total liabilities 914,881 Commitments and contingencies Stockholders’ Equity Preferred stock - no par value; 400,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020 - Class A Common stock - no par value; 2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 806,777 Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively - Accumulated deficit (670,685 ) Total stockholders’ equity 136,092 Total Liabilities and Stockholders’ Equity $ 1,050,974 ASSETS December 31, 2021 Current assets: Cash and cash equivalents $ 196,623 Total current assets 196,623 Non-current assets: Intangible assets 450,221 Operating lease right-of-use asset 478,369 Total non-current assets 928,590 Total Assets $ 1,125,213 Liabilities and Stockholders’ Equity Current liabilities: Accounts payables $ 7,699 Accrued interest - Other current liabilities 145,934 Current portion of operating lease liabilities 37,326 Total current liabilities 190,959 Long term debt, net of current portion - Operating lease liabilities, less current portion 443,503 Total liabilities 634,462 Commitments and contingencies Stockholders’ Equity Preferred stock - no par value; 400,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020 - Class A Common stock - no par value; 2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 801,359 Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively - Accumulated deficit (310,608 ) Total stockholders’ equity 490,751 Total Liabilities and Stockholders’ Equity $ 1,125,213 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NOTES PAYABLE | |
Schedule of payments | Payable In Loan Principal 2023 11,704,929 2024 - 2025 - 2026 - 2027 - Thereafter |
Schedule of notes payable | 2022 2021 Equipment Loans - ACC Note payable to an unrelated company in monthly installments of $1,468, With interest at 6.95%, through maturity in March 2021, when the note is due in full. The note is secured by equipment and a personal guarantee by an officer of the Company. - 6,106 On December 7, 2017, ACC entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $56,900. The agreement calls for an interest rate of 8.522%, monthly payments until maturity of January 7, 2021. The note is secured by the equipment purchased. The balance of the note was repaid with cash during 2021. 11,082 11,082 On January 25, 2018, ACC entered into an equipment loan agreement with an unrelated party in the amount of $346,660. The agreement calls for monthly payments of $11,360 until maturity date of December 24, 2020 and carries an interest rate of 9%. The loan is secured by the underlying surface equipment purchased by the loan. Loan proceeds were used directly to purchase equipment. 57,509 141,689 On May 9, 2018, ACC entered into a loan agreement with an unrelated party in the amount of $1,000,000 with a maturity date of September 24, 2018 with monthly payments of $250,000 due beginning June 15, 2018. The note is secured by the assets and equity of the company and carries an interest rate of 0%. Proceeds of the note were split between receipt of $575,000 cash and $425,000 payment for new equipment. No payments have been made on the note which is in default. The note is secured by the equipment purchased by the note and a personal guarantee of an officer. - 1,000,000 ARC Corporate Loan On June 3, 2022, the Company entered into a loan agreement with an unrelated party in the amount of $2,500,000 with a maturity date of June 27, 2023. The interest rate is 5% and payments are based on coal sales. 1,604,180 - On April 20, 2022 the Company entered into a loan agreement with an unrelated party in the amount of $45,000 and will repay $63,000. 63,000 - On April 23, 2020, the Company received loan proceeds in the amount of approximately $2,649,800 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the period. On January 26, 2022, the Company received forgiveness of $1,521,304 of principal. - 2,649,800 On September 11, 2020, the Company entered into a $1,493,233.65 settlement agreement with a non-related party. Starting April 1, 2021, the note requires monthly payments of $100,000 until the balance is paid in full. - 1,293,234 Equipment Loans - McCoy On September 25, 2017, ACC entered into an equipment purchase Agreement, which carries 0% interest with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $350,000. The agreement provided for $20,000 monthly payments until the balance is paid in full. The note matures on September 25, 2019, and the note is in default. The note is secured by the equipment purchased with the note. 181,736 181,736 Total note payables 1,917,507 5,832,124 Less: Current maturities 1,917,507 5,283,647 Total Long-term note payables, net of discount $ - $ 548,477 2022 2021 ARC In 2020, the Company created a convertible debt offering. The debt matures in two years, with interest at 12.5% capitalizing monthly. The remaining portion of convertible debt outstanding was converted to common shares during January 2023. 9,797,423 9,232,685 Less: Debt Discounts - (40,655 ) Total convertible note payables, net of discount 9,797,423 9,192,030 2022 2021 Notes payable to affiliate, due on demand with no interest and is uncollateralized. Equipment purchasing was paid by an affiliate resulting in the note payable. $ - $ 74,000 Total affiliate note payables - 74,000 |
EQUITY TRANSACTIONS (Tables)
EQUITY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY TRANSACTIONS | |
Schedule of Stockholders' Equity Note, Warrants | 2022 2021 Expected Dividend Yield 0 % 0 % Expected volatility 87.97 % 87.97 % Risk-free rate 2.37 % 0.98 % Expected life of warrants .47-9 years 1-9 years |
Schedule of assumptions used to messure fair value of warrants/rights | 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 $ 3.53 4.56 $ 95,200 Forfeited or Expired - - - $ - Exercised 2,788,707 $ 0.86 0.36 $ 5,347,595 Outstanding - December 31, 2021 10,213,764 $ 2.25 2.69 $ 121,018 Exercisable (Vested) - December 31, 2021 10,213,764 $ 2.25 2.69 $ 121,018 Granted 60,000 $ 3.50 4.00 $ 61,200 Forfeited or Expired - - - $ - Exercised 549,395 $ 1.49 0.47 $ 368,095 Outstanding - December 31, 2022 9,724,369 $ 2.75 1.69 $ 6,515,327 Exercisable (Vested) - December 31, 2022 9,724,369 $ 2.75 1.69 $ 6,515,327 Number of Weighted Average Exercise Weighted Average Contractual Aggregate Intrinsic Options Price Life in Years Value Exercisable (Vested) - December 31, 2020 888,659 $ 1.581 5.047 $ 749,470 Granted 2,350,000 $ 2.305 7.13 $ 2,748,250 Forfeited or Expired 275,000 1.454 3.54 58,500 Exercised 25,000 1.640 1.17 388 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 2,675,000 $ 1.94 7 $ 1,792,250 Forfeited or Expired - - - - Exercised - - - - Outstanding - December 31, 2022 5,834,268 $ 1.665 5.39 $ 3,186,870 Exercisable (Vested) - December 31, 2022 3,159,268 $ 1.517 4.91 $ 3,141,183 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details ) - Perry County Coal LLC [Member] | Dec. 31, 2022 USD ($) |
Coal Inventory | $ 523,150 |
Mine Development | 415,984 |
Coal Refuse | 142,443 |
Land | 675,092 |
Equipment - Underground | 692,815 |
Equipment - Surface | 3,763 |
Processing and Loading Facility | 1,550,663 |
Reclamation liability | 2,009,181 |
Accrued liabilities | $ 1,994,727 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Cash | $ 8,868,566 | $ 11,492,702 |
Restricted Cash | 2,122,263 | 1,095,411 |
Consolidated Statement Of Cash Flows [Member] | ||
Cash | 8,868,566 | 11,492,702 |
Restricted Cash | 2,122,263 | 1,095,411 |
Total cash and restricted cash presented in the consolidated statement of cash flows | $ 10,990,829 | $ 12,588,113 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Beginning Balance | $ 18,951,587 | $ 17,855,304 |
Accretion | 1,344,047 | 1,096,283 |
Ending Balance | $ 20,295,634 | $ 18,951,587 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2021 | Jan. 31, 2021 | Aug. 23, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 05, 2017 | Mar. 18, 2016 | |
Common stock newly issue | 4,817,792 | |||||||
Retained common stock | 845,377 | |||||||
Outstanding stock options | 4,039,269 | 4,209,269 | ||||||
Outstanding stock warrants | 10,273,764 | 10,213,764 | ||||||
Restrictive stock awards | 6,364,269 | 4,209,269 | ||||||
Invested amount | $ 25,000 | $ 2,250,000 | ||||||
Common shares | 15,750,000 | |||||||
Steel and industrial industry percentage | 100% | 100% | ||||||
Utility industry sales percentage | 0% | 0% | ||||||
Capital lease | $ 333,875 | |||||||
Common stock price per share | $ 1.05 | |||||||
PCR asset acquisition | $ 0 | |||||||
Long-term right of use assets, net | 13,033,889 | $ 726,194 | ||||||
Leases amount | 11,788,486 | |||||||
Gain loss on settlement | 0 | 0 | ||||||
Allowance for trade receivables | $ 0 | (8,637) | ||||||
Description of discount rates | We are using a discount rates ranging from 6.16% to 7.22%, risk free rates ranging from 1.76% to 2.92% and inflation rate of 2% | |||||||
Note Receivable | $ 99,022 | $ 350,000 | ||||||
Control ownership | 100% | 50% | ||||||
Preferred Stock Series A [Member] | ||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | ||||||
Conversion of preferred stock shares | 0 | 0 | ||||||
Two Coal Customers [Member] | ||||||||
Revenue rate | 99.70% | 75.30% | ||||||
Three Coal Customers [Member] | ||||||||
Revenue rate | 100% | 79.50% | ||||||
Two Customers [Member] | ||||||||
Accounts receivable | 100% | 95.10% | ||||||
LC Energy Operations, LLC [Member] | ||||||||
Asset management fee reserve | $ 116,115 | |||||||
Restricted cash | 736,540 | $ 355,770 | ||||||
Perry County Resources LLC (PCR) [Member] | March 4, 2020 [Member] | ||||||||
Reclamation bond | 2,386,439 | |||||||
Retirement obligations | 336,995 | |||||||
Cash received | $ 700,000 | |||||||
Equipment received (as payment) | 300,000 | |||||||
Gain on sale of permits | 1,061,225 | |||||||
Perry County Resources LLC (PCR) [Member] | Assets Acquisition [Member] | September 27, 2019 [Member] | ||||||||
Assumed liability - Total | 1,994,727 | |||||||
Fair value of assumed liability | $ 2,009,181 | |||||||
Advanced Carbon Materials LLC [Member] | ||||||||
Control ownership | 90% | |||||||
Variable interest entity | 49.90% | |||||||
KCC [Member] | ||||||||
Non-operating assets | $ 111,567 | |||||||
Gain on asset retirement obligation | $ 807,591 | |||||||
ARC Acquisition Corporation [Member] | ||||||||
Allowance for other accounts receivables | $ 0 | 0 | ||||||
ERC [Member] | ||||||||
Note Receivable | 4,117,139 | $ 4,117,139 | ||||||
Kentucky Energy Cabinet [Member] | ||||||||
Restricted cash | $ 8,818 | $ 19,138 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Less: Accumulated depreciation | $ (5,199,478) | $ (15,953,575) |
Total Property and Equipment, Net | 9,113,722 | 22,903,154 |
Underground equipment [Member] | ||
Property and equipment | 0 | 9,687,667 |
Surface equipment [Member] | ||
Property and equipment | 0 | 3,201,464 |
Mine development [Member] | ||
Property and equipment | 561,575 | 561,575 |
Processing and rail facilities [Member] | ||
Property and equipment | 0 | 11,591,274 |
Coal refuse storage [Member] | ||
Property and equipment | 12,134,192 | 12,134,192 |
Rare Earth Processing [Member] | ||
Property and equipment | 0 | 96,107 |
Construction in Progress [Member] | ||
Property and equipment | 0 | 12,015 |
Land [Member] | ||
Property and equipment | $ 1,572,435 | $ 1,572,435 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details 1) | 12 Months Ended |
Dec. 31, 2022 | |
Underground equipment [Member] | |
Estimated useful lives | 5 years |
Surface equipment [Member] | |
Estimated useful lives | 7 years |
Mine development [Member] | |
Estimated useful lives | 5-10 years |
Processing and rail facilities [Member] | |
Estimated useful lives | 7-20 years |
Coal refuse storage [Member] | |
Estimated useful lives | 10 years |
PROPERTY AND EQUIPMENT (Detai_3
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | ||
Amortization of mining rights | $ 1,238,449 | $ 1,246,740 |
Depreciation expense | $ 2,157,763 | $ 1,980,026 |
RIGHT OF USE ASSETS (Details)
RIGHT OF USE ASSETS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Asset | $ 0 | $ 0 |
Current Liability | 3,889,235 | 151,806 |
Finance Leases Asset | 13,033,889 | 742,702 |
Finance Leases Liability | 11,788,486 | 736,678 |
Long-term asset | 13,033,889 | 743,702 |
Long-term liabilities | 7,899,251 | 562,428 |
Equipment Lease [Member] | ||
Finance Leases Asset | 10,304,888 | 0 |
Finance Leases Liability | 11,412,861 | 0 |
Principal Office Lease [Member] | ||
Right of use assets | 434,422 | 471,321 |
Right of use liabilities | 439,133 | 465,501 |
Kite Kentucky Lease [Member] | ||
Right of use assets | 77,258 | 83,075 |
Right of use liabilities | 76,305 | 82,003 |
Rare Earth Commercial Land Lease [Member] | ||
Right of use assets | 83,989 | 101,799 |
Right of use liabilities | 82,321 | 106,005 |
Finance Leases Asset | 991,894 | 0 |
Finance Leases Liability | 853,260 | 0 |
Rare Earth Commercial Purification Facility Lease [Member] | ||
Right of use assets | 33,465 | 69,888 |
Right of use liabilities | $ 32,579 | $ 67,054 |
RIGHT OF USE ASSETS (Details Na
RIGHT OF USE ASSETS (Details Narrative) | 1 Months Ended | 12 Months Ended | |
Oct. 08, 2021 USD ($) a | Aug. 17, 2021 USD ($) a | Dec. 31, 2022 USD ($) | |
Rent for the office space | $ 4,745 | $ 5,869 | |
Rental lease expired date | December 2032 | ||
Sublease | $ 3,500 | ||
Sublease term | 2 | 5 | |
Warehouse space | a | 6,700 | ||
Commercial Land Lease sublease area | a | 7 | ||
LRR [Member] | |||
Rent for the office space | $ 1,702 | ||
Rental lease expired date | January 1, 2030 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Total note payables, net of discount | $ 1,917,507 | $ 5,832,124 |
Less: Current maturities | 1,917,507 | 5,283,647 |
Total Long-term note payables, net of discount | 0 | 548,477 |
Notes Payable 1 [Member] | ||
Total note payables, net of discount | 0 | 6,106 |
Notes Payable 2 [Member] | ||
Total note payables, net of discount | 11,082 | 11,082 |
Notes Payable 3 [Member] | ||
Total note payables, net of discount | 57,509 | 141,689 |
Notes Payable 4 [Member] | ||
Total note payables, net of discount | 0 | 1,000,000 |
Notes Payable 5 [Member] | ||
Total note payables, net of discount | 1,604,180 | 0 |
Notes Payable 6 [Member] | ||
Total note payables, net of discount | 63,000 | 0 |
Notes Payable 7 [Member] | ||
Total note payables, net of discount | 0 | 2,649,800 |
Notes Payable 8 [Member] | ||
Total note payables, net of discount | 0 | 1,293,234 |
Notes Payable 9 [Member] | ||
Total note payables, net of discount | $ 181,736 | $ 181,736 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
NOTES PAYABLE | ||
In 2020, the Company created a convertible debt offering. The debt matures in two years, with interest at 12.5% capitalizing monthly. | $ 9,797,423 | $ 9,232,685 |
Debt Discounts | 0 | (40,655) |
Total convertible note payables, net of discount | $ 9,797,423 | $ 9,192,030 |
NOTES PAYABLE (Details 2)
NOTES PAYABLE (Details 2) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
NOTES PAYABLE | ||
Notes payable to affiliate, due on demand with no interest and is uncollateralized. Equipment purchasing was paid by an affiliate resulting in the note payable. | $ 0 | $ 74,000 |
Notes payable to affiliate | $ 0 | $ 74,000 |
NOTES PAYABLE (Details 3)
NOTES PAYABLE (Details 3) - Loan Principal [Member] | Dec. 31, 2022 USD ($) |
2023 | $ 11,704,929 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | $ 0 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
NOTES PAYABLE | |||
Principal payments on long term debt | $ 2,214,601 | $ 562,318 | |
New debt issuances | 2,563,000 | $ 562,318 | |
Interest expense | $ (1,426,153) | $ (4,159,813) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Investment in American Acquisition Opporutnity Inc | $ 2,000,000 | $ 250,000 | ||
Total assets | 55,916,349 | $ 42,872,702 | ||
Total liabilities | 55,631,653 | 45,128,110 | ||
Members Equity | 284,696 | (2,345,408) | $ (20,005,500) | |
Total liabilities and stockholders' deficit | 55,916,349 | $ 42,872,702 | ||
American Opportunity Ventures LLC [Member] | ||||
Investment in American Acquisition Opporutnity Inc | 4,500,000 | $ 2,250,000 | ||
Total assets | 4,500,000 | |||
Total liabilities | 0 | |||
Members Equity | 4,500,000 | |||
Total liabilities and stockholders' deficit | $ 4,500,000 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Total assets | $ 55,916,349 | $ 42,872,702 | |
Total liabilities | 55,631,653 | 45,128,110 | |
Members Equity | 284,696 | (2,345,408) | $ (20,005,500) |
Total liabilities and stockholders' deficit | 55,916,349 | $ 42,872,702 | |
American Opportunity Ventures II LLC [Member] | |||
Deposits | 25,000 | ||
Total assets | 25,000 | ||
Total liabilities | 0 | ||
Members Equity | 25,000 | ||
Total liabilities and stockholders' deficit | $ 25,000 |
RELATED PARTY TRANSACTIONS (D_3
RELATED PARTY TRANSACTIONS (Details 2) - USD ($) | Dec. 31, 2022 | Jan. 26, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Total current assets | $ 10,762,587 | $ 15,297,943 | ||
Operating lease right-of-use asset | 13,033,889 | 726,194 | ||
Total assets | 55,916,349 | 42,872,702 | ||
Accrued liabilities | 106,886 | $ 27,256 | 1,325,286 | |
Current portion of operating lease liabilities | 3,889,235 | 151,806 | ||
Total current liabilities | 27,436,768 | 16,535,206 | ||
Long term debt, net of current portion | 1,917,506 | 5,283,647 | ||
Total liabilities | 55,631,653 | 45,128,110 | ||
Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 6,680 | 6,508 | ||
Accumulated deficit | (167,239,243) | (165,793,571) | ||
Members Equity | 284,696 | (2,345,408) | $ (20,005,500) | |
Total liabilities and stockholders' deficit | 55,916,349 | 42,872,702 | ||
Novusterra, Inc. [Member] | ||||
Cash and cash equivalents | 186,106 | 196,623 | ||
Total current assets | 186,106 | 196,623 | ||
Intangible assets | 422,515 | 450,221 | ||
Operating lease right-of-use asset | 437,352 | 478,369 | ||
Totan non-current assets | 859,868 | 928,590 | ||
Total assets | 1,050,974 | 1,125,213 | ||
Note payable, royalty | 9,500 | 7,699 | ||
Accrued liabilities | 6,022 | 0 | ||
Other current liabilities | 247,827 | 145,934 | ||
Current portion of operating lease liabilities | 40,165 | 37,326 | ||
Total current liabilities | 273,514 | 190,959 | ||
Long term debt, net of current portion | 208,029 | 0 | ||
Operating lease liabilities, less current portion | 403,339 | 443,503 | ||
Total liabilities | 914,881 | 634,462 | ||
Preferred stock - no par value; 400,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020 | 0 | 0 | ||
Class A Common stock - no par value; 2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 806,777 | 801,359 | ||
Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 0 | 0 | ||
Accumulated deficit | (670,685) | (310,608) | ||
Members Equity | 136,092 | 490,751 | ||
Total liabilities and stockholders' deficit | $ 1,050,974 | $ 1,125,213 |
RELATED PARTY TRANSACTIONS (D_4
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Jun. 11, 2020 | Feb. 13, 2020 | Sep. 13, 2015 | Mar. 13, 2013 | Apr. 30, 2017 | Jan. 17, 2016 | Jul. 17, 2013 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Jan. 31, 2021 | Oct. 24, 2016 | |
Purchase secured debt | $ 1,494,570 | $ 250,000 | ||||||||||
Token value | $ 250 | |||||||||||
Investment in American Acquisition Opporutnity Inc | 2,000,000 | $ 250,000 | ||||||||||
During 2015 [Member] | ||||||||||||
Note payable, Balance | 0 | $ 74,000 | ||||||||||
LRR [Member] | ||||||||||||
Note receivables | $ 178,683 | |||||||||||
Proceeds from related party debt | 338,246 | 45,359 | ||||||||||
Note 1 [Member] | ||||||||||||
Interest rate | 12% | 12% | ||||||||||
Maturity date | June 28, 2013 | March 13, 2013 | ||||||||||
Note issed | $ 75,000 | $ 150,000 | ||||||||||
Note 2 [Member] | ||||||||||||
Interest rate | 12% | 12% | ||||||||||
Maturity date | June 28, 2013 | July 17, 2013 | ||||||||||
Note issed | $ 150,000 | $ 100,000 | ||||||||||
Note 3 [Member] | ||||||||||||
Interest rate | 4% | |||||||||||
Maturity date | March 18, 2014 | |||||||||||
Note issed | $ 199,500 | |||||||||||
Note 4 [Member] | ||||||||||||
Interest rate | 4% | |||||||||||
Maturity date | March 18, 2014 | |||||||||||
Note issed | $ 465,500 | |||||||||||
Note 5 [Member] | ||||||||||||
Interest rate | 4% | |||||||||||
Maturity date | March 18, 2016 | |||||||||||
Note issed | $ 465,500 | |||||||||||
American Opportunity Ventures LLC [Member] | ||||||||||||
Investment in American Acquisition Opporutnity Inc | 4,500,000 | $ 2,250,000 | ||||||||||
American Opportunity Ventures II LLC [Member] | ||||||||||||
Investment in American Acquisition Opporutnity Inc | $ 25,000 | |||||||||||
Novusterra, Inc. [Member] | ||||||||||||
Receipt of common shares from related party | 15,750,000 | |||||||||||
Land Betterment Corp [Member] | Contract Services Agreement [Member] | ||||||||||||
Term 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 | |||||||||||
Incurred amount | 5,572,644 | 4,296,266 | ||||||||||
Amount paid under agreement | 3,080,783 | 2,578,335 | ||||||||||
Outstanding amount | $ 4,481,922 | $ 2,073,830 |
KENTUCKY NEW MARKETS DEVELOPM_2
KENTUCKY NEW MARKETS DEVELOPMENT PROGRAM (Details Narrative) - USD ($) | 1 Months Ended | |||
Mar. 18, 2016 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Note Receivable | $ 99,022 | $ 350,000 | ||
Total liabilities | 55,631,653 | 45,128,110 | ||
Total assets | $ 55,916,349 | 42,872,702 | ||
ERC [Member] | ||||
Note Receivable | $ 4,117,139 | $ 4,117,139 | ||
Total liabilities | 4,117,139 | 4,117,139 | ||
Assets eliminated upon consolidation | 3,325,401 | 3,490,087 | ||
Kentucky New Markets Development Program [Member] | Unaffiliated Entity [Member] | ||||
Maturity date | Mar. 07, 2046 | |||
Note Receivable | 0 | 4,117,139 | ||
Interest rate | 4% | |||
Loan borrowed amount | $ 5,143,186 | |||
Proceeds from debt issuance costs | 460,795 | |||
Net proceeds | 4,682,391 | |||
Right to call on loan | 5,143,186 | |||
Income tax credit | $ 2,005,843 | |||
Total liabilities | 4,117,139 | 4,415,860 | ||
Total assets | $ 4,117,139 | $ 4,117,139 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Deferred tax assets | $ 344,509 | $ 6,366,032 |
Deferred tax assets, net operating loss carry forward | $ 23,831,009 | $ 24,175,518 |
Federal statutory rate | 21% | |
Term, descriptions | The net operating loss carryforwards for years 2015, 2016, 2017, 2018, 2019, 2020, and 2021 begin to expire in 2035 | |
Reduced in corporate income tax rate | 34% to 21% | |
Corporate tax treatment | On March 25, 2020, the CARES Act was established with implications of corporate tax treatment. The CARES Act provides that NOLs arising in a tax year beginning after December 31, 2018 and before January 1, 2021 can be carried back to each of the five tax years preceding the tax year of such loss. The CARES Act temporarily and retroactively increases the limitation on the deductibility of interest expense under Code Sec. 163(j)(1) from 30% to 50% for the tax years beginning in 2019 and 2020 |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Expected Dividend Yield | 0% | 0% |
Risk-free rate | 2.37% | 0.98% |
Expected volatility | 87.97% | 87.97% |
Minimum [Member] | ||
Expected life of warrants | 5 months 19 days | 1 year |
Maximum [Member] | ||
Expected life of warrants | 9 years | 9 years |
EQUITY TRANSACTIONS (Detail 1)
EQUITY TRANSACTIONS (Detail 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Aggregate Intrinsic Value [Member] | ||
Exercisable (Vested) Beginning Weighted Average | $ 121,018 | $ 7,453,214 |
Granted, Aggregate Intrinsic Value | 61,200 | 95,200 |
Forfeited or Expired, Aggregate Intrinsic Value | 0 | 0 |
Exercised, Aggregate Intrinsic Value | 368,095 | 5,347,595 |
Exercisable (Vested) Ending Weighted Average | 6,515,327 | 121,018 |
Ending Balance Intrinsic | $ 6,515,327 | $ 121,018 |
Weighted Average Contractual Life in Years [Member] | ||
Beginning Exercisable (Vested) weighted Average | 2 years 8 months 8 days | 2 years 1 month 25 days |
Granted | 4 years | 4 years 6 months 21 days |
Forfeited or Expired | 0 years | 3 years 6 months 14 days |
Exercised | 5 months 19 days | 4 months 9 days |
Ending Balance Weighted Average | 1 year 8 months 8 days | 2 years 8 months 8 days |
Exercisable (Vested) Ending Weighted Average | 1 year 8 months 8 days | 2 years 8 months 9 days |
Weighted Average Exercise Price [Member] | ||
Beginning Exercisable (Vested) weighted Average Exercise Price | $ 2.25 | $ 1.135 |
Granted | 3.50 | 3.53 |
Forfeited or Expired, Weighted Average Exercise Price | 0 | 0 |
Exercised, Weighted Average Exercise Price | 1.49 | 0.86 |
Ending Balance Exercise | 2.75 | 2.25 |
Ending Exercisable (Vested) weighted Average Exercise Price | $ 2.75 | $ 2.25 |
Warrants [Member] | ||
Exercisable beginning Exercise | 10,213,764 | 8,401,221 |
Granted | 60,000 | 4,601,250 |
Forfeited or Expired | 0 | 0 |
Exercised | 549,395 | 2,788,707 |
Outstanding ending balance | 9,724,369 | 10,213,764 |
Exercisable ending Exercise | 9,724,369 | 10,213,764 |
EQUITY TRANSACTIONS (Detail 2)
EQUITY TRANSACTIONS (Detail 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Aggregate Intrinsic Value [Member] | ||
Outstanding Balance Intrinsic | $ 3,141,183 | $ 749,470 |
Granted | 1,792,250 | 2,748,250 |
Forfeited or Expired, Aggregate Intrinsic Value | 0 | 58,500 |
Exercised, Aggregate Intrinsic Value of Options | 0 | 388 |
Ending Balance Intrinsic | 3,186,870 | 3,186,870 |
Ending Exercisable Intrinsic | $ 3,141,183 | $ 3,141,183 |
Weighted Average Contractual Life in Years [Member] | ||
Exerisable beginning weighted average | 4 years 10 months 28 days | 5 years 17 days |
Granted | 7 years | 7 years 1 month 17 days |
Forfeited or Expired | 0 years | 3 years 6 months 14 days |
Exercised | 0 years | 1 year 2 months 1 day |
Ending Balance Weighted Average | 2 years 1 month 25 days | 5 years 4 months 20 days |
Exercisable Ending Weighted Average | 4 years 10 months 28 days | 5 years 4 months 20 days |
Option [Member] | ||
Beginning Exercisable option | 3,159,268 | 888,659 |
Granted | 2,675,000 | 2,350,000 |
Forfeited or Expired | 0 | 275,000 |
Exercised | 0 | 25,000 |
Ending Balance option | 5,834,268 | 4,209,269 |
Exercisable Ending option | 3,159,268 | 3,159,268 |
Weighted Average Exercise Price [Member] | ||
Exercisable beginning Exercise | $ 1.517 | $ 1.581 |
Granted | 1.94 | 2.305 |
Forfeited or Expired, Weighted Average Exercise Price | 0 | 1.454 |
Exercised | 0 | 1.640 |
Ending Outstanding Exercise | 1.665 | 1.665 |
Ending Exercisable Exercise | $ 1.517 | $ 1.517 |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | 15 Months Ended | |||||||||||||||||
Jun. 09, 2021 | Mar. 15, 2021 | Mar. 12, 2021 | Mar. 11, 2021 | Feb. 07, 2021 | Feb. 02, 2021 | Sep. 12, 2018 | Jul. 28, 2022 | Mar. 17, 2021 | Mar. 16, 2021 | Jan. 26, 2021 | Feb. 03, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Jul. 02, 2021 | Nov. 17, 2020 | Oct. 20, 2020 | Jun. 12, 2019 | Jan. 31, 2016 | |
Coomon stock shares issued, shares | 66,777,620 | 65,084,992 | ||||||||||||||||||
Repurchased of common stock, shares | 86,410 | |||||||||||||||||||
Warrant issued | 20,000 | 162,000 | ||||||||||||||||||
Warrant Conversion | ||||||||||||||||||||
Coomon stock shares issued, shares | 549,395 | 3,826,532 | 50,000 | |||||||||||||||||
Debt Conversion | ||||||||||||||||||||
Coomon stock shares issued, shares | 1,209,643 | 6,242,859 | 50,000 | |||||||||||||||||
Warrant C-1 [Member] | ||||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 2,662,500 | |||||||||||||||||||
Conversion price | $ 3.55 | |||||||||||||||||||
Warrant C-1 [Member] | GoldenProperties Ltd. [Member] | ||||||||||||||||||||
Shares price | $ 1.05 | |||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Expiration date | Oct. 04, 2020 | |||||||||||||||||||
Future value of shares issuable | $ 787,500 | |||||||||||||||||||
Warrant C-2 [Member] | ||||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 2,836,000 | |||||||||||||||||||
Conversion price | $ 4.25 | |||||||||||||||||||
Warrant C-2 [Member] | GoldenProperties Ltd. [Member] | ||||||||||||||||||||
Shares price | $ 1.05 | |||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Expiration date | Oct. 04, 2020 | |||||||||||||||||||
Future value of shares issuable | $ 787,500 | |||||||||||||||||||
Warrant C-3 [Member] | ||||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 3,375,000 | |||||||||||||||||||
Conversion price | $ 4.50 | |||||||||||||||||||
Warrant C-3 [Member] | GoldenProperties Ltd. [Member] | ||||||||||||||||||||
Shares price | $ 1.05 | |||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Expiration date | Apr. 04, 2022 | |||||||||||||||||||
Future value of shares issuable | $ 787,500 | |||||||||||||||||||
Warrant C-4 [Member] | ||||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 3,750,000 | |||||||||||||||||||
Conversion price | $ 5 | |||||||||||||||||||
Warrant C-4 [Member] | GoldenProperties Ltd. [Member] | ||||||||||||||||||||
Shares price | $ 1.05 | |||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 750,000 | |||||||||||||||||||
Expiration date | Apr. 04, 2022 | |||||||||||||||||||
Future value of shares issuable | $ 787,500 | |||||||||||||||||||
Warrant B-4 [Member] | ||||||||||||||||||||
Shares issuable upon exercise of warrant, shares | 3,417,006 | |||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 34,170 | |||||||||||||||||||
Conversion price | $ 0.01 | |||||||||||||||||||
Warrant C-34 [Member] | ||||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 500,000 | |||||||||||||||||||
Warrant C-35 [Member] | ||||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 550,000 | |||||||||||||||||||
Warrant A-9 [Member] | ||||||||||||||||||||
Exercise price | $ 1 | |||||||||||||||||||
Warrant issued, shares | 100,000 | |||||||||||||||||||
Warrant A-12 [Member] | July 28, 2022 [Member] | ||||||||||||||||||||
Exercise price | $ 3.50 | |||||||||||||||||||
Warrant expiry date | July 28, 2026 | |||||||||||||||||||
Warrant issued, shares | 60,000 | |||||||||||||||||||
2018 Stock Option Plan [Member] | ||||||||||||||||||||
Description of stock option plan | Of the total options issued, 25,000 vested immediately, with the balance of 611,830 options vesting equally over the course of three years, subject to restrictions regarding the employee’s continued employment by the Company. On June 18, 2020, the Board issued a total of 750,000 options to 2 employees of the Company under the 2018 Plan. The options have an expiration date of June 17, 2027 and have an exercise price of $2.630. The options vested equally over the course of seven years, subject to restrictions regarding the employee’s continued employment by the Company. On July 16, 2020, the Board issued a total of 50,000 options to a director of the Company under the 2018 Plan as amended. The options have an expiration date of March 15, 2021 and vest immediately. On November 23, 2020, the Board issued a total of 302,439 options to 3 employees and 4 directors. The options have an expiration of November 22, 2027 and vest immediately | |||||||||||||||||||
Exercise price | $ 1 | |||||||||||||||||||
Stock option granted during the period | 4,000,000 | |||||||||||||||||||
Stock option issued | 636,830 | |||||||||||||||||||
Employee Stock options [Member] | ||||||||||||||||||||
Warrant expiry date | over a period of 1 to 9 years | over a period of 1 to 9 years. | ||||||||||||||||||
Warrant issued | 1,020,000 | 2,675,000 | ||||||||||||||||||
Common Shares Class A [Member] | ||||||||||||||||||||
Description of stock option plan | Company issued 8,600,000 shares of Class A Common Stock. Net proceeds to the Company after offering expenses amounted to $27,943,000 | 425,000 of restricted common shares were sold. Gross proceeds to the Company amounted to $1,275,000 | ||||||||||||||||||
Common Shares Class A [Member] | Warrant A-10 [Member] | ||||||||||||||||||||
Exercise price | $ 2.05 | |||||||||||||||||||
Warrant expiry date | January 26, 2024 | |||||||||||||||||||
Warrant issued, shares | 10,000 | |||||||||||||||||||
Common Shares Class A [Member] | Warrant C-37 [Member] | ||||||||||||||||||||
Exercise price | $ 1.50 | |||||||||||||||||||
Warrant expiry date | February 2, 2023 | |||||||||||||||||||
Warrant issued, shares | 60,000 | |||||||||||||||||||
Shares issuable upon exercise of warrant, amount | $ 600,000 | |||||||||||||||||||
Common Shares Class A [Member] | Warrant A-11 [Member] | ||||||||||||||||||||
Exercise price | $ 4.25 | |||||||||||||||||||
Warrant expiry date | February 7, 2026 | |||||||||||||||||||
Warrant issued, shares | 50,000 | |||||||||||||||||||
Common Shares Class A [Member] | Warrant C-38 [Member] | ||||||||||||||||||||
Exercise price | $ 3.50 | $ 5 | ||||||||||||||||||
Warrant expiry date | June 9, 2026 | March 11, 2023 | January 26, 2024 | |||||||||||||||||
Warrant issued, shares | 2,150,000 | 42,500 | ||||||||||||||||||
Common Shares Class A [Member] | Warrant C-39 [Member] | ||||||||||||||||||||
Exercise price | $ 3.50 | $ 4.59 | $ 5 | |||||||||||||||||
Warrant expiry date | June 9, 2026 | March 15, 2026 | March 12, 2023 | |||||||||||||||||
Warrant issued, shares | 2,150,000 | 75,000 | 42,500 | |||||||||||||||||
Common Shares Class A [Member] | Warrant C-40 [Member] | ||||||||||||||||||||
Exercise price | $ 5 | |||||||||||||||||||
Warrant expiry date | March 16, 2023 | |||||||||||||||||||
Warrant issued, shares | 21,250 | |||||||||||||||||||
Series B Preferred Shares [Member] | ||||||||||||||||||||
Conversion price | $ 3.60 | |||||||||||||||||||
Preferred stock shares issued | 20,000,000 | |||||||||||||||||||
Preferred stock, per share value | $ 0.001 | |||||||||||||||||||
Dividend right, percentage | 8% | |||||||||||||||||||
Series C Preferred Shares [Member] | ||||||||||||||||||||
Conversion price | $ 6 | |||||||||||||||||||
Debt conversion, converted instrument, amount | $ 5,000,000 | |||||||||||||||||||
Preferred stock shares issued | 20,000,000 | |||||||||||||||||||
Preferred stock, per share value | $ 0.0001 | |||||||||||||||||||
Liquidiation price per share | $ 1 | |||||||||||||||||||
Dividend right, percentage | 10% | |||||||||||||||||||
Series A Preferred Shares [Member] | ||||||||||||||||||||
Preferred stock shares issued | 100,000 | |||||||||||||||||||
Preferred stock, per share value | $ 0.0001 | |||||||||||||||||||
Liquidiation price per share | $ 1 | |||||||||||||||||||
Description of conversion right | The holders of the Series A Preferred stock are entitled to convert into common shares, at the holder’s discretion, Into Forty Percent (40.0%) of the outstanding amount of Class A Common Stock plus common stock equivalents that are existing at the time of the conversion, at any time and from time to time. No additional consideration is required for the conversion | |||||||||||||||||||
Description of anti dilution protection | Any amount that is less than Seventy-Two Percent (72.0%) shall be adjusted to Seventy-Two Percent (72.0%) through the immediate issuance of additional common stock to the Series A Holders to cure the deficiency | |||||||||||||||||||
Preferred Stock Series A [Member] | 2016 Plan [Member] | ||||||||||||||||||||
Shares issued | 6,363,225 |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||
Oct. 08, 2021 USD ($) a | Aug. 17, 2021 USD ($) a | Dec. 31, 2022 USD ($) | Jan. 26, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 07, 2018 USD ($) shares | |
Rent for the office space | $ 4,745 | $ 5,869 | ||||
Commercial Land Lease sublease area | a | 7 | |||||
Sublease term | 2 | 5 | ||||
Warehouse space | a | 6,700 | |||||
Income | $ 3,500 | |||||
Amended lease | The amended lease has a ten year term and $5,869 per month rate | |||||
Rental lease expired date | December 2032 | |||||
Accrued payable | $ 106,886 | $ 27,256 | $ 1,325,286 | |||
Wyoming County Coal LLC [Member] | ||||||
Reclamation bonds shares | shares | 1,727,273 | |||||
Breach of contract, amount | $ 234,240 | |||||
Wyoming County Coal LLC [Member] | Seller Note One [Member] | ||||||
Note payable, Balance | 350,000 | |||||
Wyoming County Coal LLC [Member] | Seller Note Two [Member] | ||||||
Note payable, Balance | $ 250,000 | |||||
LRR [Member] | ||||||
Rent for the office space | $ 1,702 | |||||
Rental lease expired date | January 1, 2030 | |||||
Commonwealth of Kentucky [Member] | Kentucky Energy Cabinet [Member] | ||||||
Claims Amounts | $ 1,155,780 | |||||
Accrued payable | 1,393,107 | |||||
Mine Health Safety [Member] | ||||||
Claims Amounts | 640,090 | |||||
Accrued payable | $ 351,071 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jan. 31, 2023 | Dec. 31, 2022 | Jan. 26, 2022 | Dec. 31, 2021 |
Convertible notes | $ 0 | $ 8,620,412 | ||
Accrued payable | $ 106,886 | $ 27,256 | $ 1,325,286 | |
Remaining amount remains due as outlined in the original note | $ 1,128,495 | |||
Subsequent Event [Member] | ||||
Convertible notes | $ 9,891,241 | |||
Convertible notes into common shares | 9,420,230 |