Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2018 | |
Document and Entity Information: | |
Entity Registrant Name | American Resources Corp |
Entity Central Index Key | 1,590,715 |
Document Type | S1 |
Document Period End Date | Mar. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Smaller Reporting Company |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | |||
Cash | $ 9,006 | $ 186,722 | $ 784,525 |
Accounts Receivable | 2,269,609 | 1,870,562 | 2,753,199 |
Inventory | 317,122 | 615,096 | |
Prepaid fees | 443,482 | ||
Accounts Receivable - Other | 29,259 | 30,021 | 199,701 |
Total Current Assets | 3,068,478 | 2,702,401 | 3,737,425 |
OTHER ASSETS | |||
Cash - restricted | 85,786 | 198,943 | 141,102 |
Processing and rail facility | 2,914,422 | 2,914,422 | 2,914,422 |
Underground equipment | 8,887,045 | 8,887,045 | 7,500,512 |
Surface equipment | 4,439,263 | 3,957,603 | 3,751,054 |
Less Accumulated Depreciation | (5,300,140) | (4,820,569) | (2,262,855) |
Land | 178,683 | 178,683 | 178,683 |
Accounts Receivable - Other | 111,003 | 127,718 | 196,347 |
Note Receivable | 4,117,139 | 4,117,139 | 4,117,139 |
Total Other Assets | 15,433,201 | 15,560,984 | 16,536,404 |
TOTAL ASSETS | 18,501,679 | 18,263,385 | 20,273,829 |
CURRENT LIABILITIES | |||
Accounts payable | 6,407,660 | 5,360,537 | 2,196,060 |
Accrued related party management fee | 17,840,615 | 17,840,615 | 17,840,615 |
Accrued interest | 461,333 | 336,570 | 122,945 |
Accrued dividend on Series B | 70,157 | ||
Funds held for others | 12,056 | 82,828 | 24,987 |
Due to affiliate | 124,000 | 124,000 | 74,000 |
Current portion of long term-debt | 10,164,219 | 9,645,154 | 4,431,006 |
Current portion of Reclamation liability | 2,379,352 | 2,033,862 | 519,489 |
Total Current Liabilities | 37,459,392 | 35,423,566 | 25,209,102 |
OTHER LIABILITIES | |||
Long-term portion of note payable | 5,782,253 | 5,081,688 | 4,964,941 |
Reclamation liability | 17,964,267 | 17,851,195 | 17,607,384 |
Total Other Liabilities | 23,746,520 | 22,932,883 | 22,572,325 |
Total Liabilities | 61,205,912 | 58,356,449 | 47,781,427 |
STOCKHOLDERS' DEFICIT | |||
Additional paid-in capital | 1,527,254 | 1,527,254 | 88,193 |
Accumulated deficit | (44,759,278) | (42,019,595) | (27,651,030) |
Total American Resources Corporation Shareholders' Equity | (43,230,603) | (40,490,920) | (27,562,355) |
Non controlling interest | 526,370 | 397,856 | 54,757 |
Total Stockholders' Deficit | (42,704,233) | (40,093,064) | (27,507,598) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 18,501,679 | 18,263,385 | 20,273,829 |
Common Class A [Member] | |||
STOCKHOLDERS' DEFICIT | |||
Common stock, value | 89 | 89 | |
Series A Preferred Stock [Member] | |||
STOCKHOLDERS' DEFICIT | |||
Preferred stock, value | 482 | 482 | 482 |
Series B Preferred Stock [Member] | |||
STOCKHOLDERS' DEFICIT | |||
Preferred stock, value | $ 850 | $ 850 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current portion of long term-debt net of unamortized discount | $ 35,000 | $ 0 | |
OTHER LIABILITIES | |||
Long-term portion of note payable net of issuance costs | $ 437,335 | $ 440,333 | $ 451,389 |
Common Class A [Member] | |||
STOCKHOLDERS' DEFICIT | |||
Common Stock, Par Value | $ 0.0001 | $ 0.0001 | $ .0001 |
Common Stock, Shares Authorized | 230,000,000 | 230,000,000 | 230,000,000 |
Common Stock, Shares Issued | 892,044 | 892,044 | 0 |
Common Stock, Shares Outstanding | 892,044 | 892,044 | 0 |
Series A Preferred Stock [Member] | |||
STOCKHOLDERS' DEFICIT | |||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | $ .0001 |
Preferred Stock, Shares Authorized | 4,817,792 | 4,817,792 | 4,817,792 |
Preferred Stock, Shares Issued | 4,817,792 | 4,817,792 | 4,817,792 |
Preferred Stock, Shares Outstanding | 4,817,792 | 4,817,792 | 4,817,792 |
Series B Preferred Stock [Member] | |||
STOCKHOLDERS' DEFICIT | |||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 | $ .001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | 850,000 | 850,000 | 850,000 |
Preferred Stock, Shares Outstanding | 850,000 | 850,000 | 850,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated Statements Of Operations | ||||
Coal Sales | $ 7,305,860 | $ 5,718,098 | $ 19,231,249 | $ 5,345,145 |
Processing Services Income | 19,516 | 893,983 | 1,589,749 | 2,256,049 |
Total Revenue | 7,325,376 | 6,612,081 | 20,820,998 | 7,601,194 |
Cost of Coal Sales and Processing | (5,473,428) | (4,563,561) | (16,344,567) | (8,961,653) |
Accretion Expense | (447,762) | (328,061) | (1,791,051) | (1,664,774) |
Loss of ARO Settlement | (155,922) | (71,245) | ||
Depreciation | (479,571) | (459,644) | (2,557,714) | (2,262,855) |
General and Administrative | (476,589) | (419,196) | (1,378,111) | (237,601) |
Professional Fees | (274,603) | (307,307) | (694,366) | (391,659) |
Consulting Fees - Related Party | (12,340,615) | |||
Production Taxes and Royalties | (949,793) | (1,672,240) | (4,974,013) | (1,250,365) |
Impairment Loss from notes receivable from related party | (250,000) | (510,902) | ||
Development Costs | (1,687,173) | (1,795,205) | (6,850,062) | (1,760,594) |
Total Operating expenses | (9,788,919) | (9,701,136) | (34,839,884) | (29,452,263) |
Net Loss from Operations | (2,463,543) | (3,089,055) | (14,018,886) | (21,851,069) |
Other Income and (expense) | ||||
Other Income | 128,514 | 176,978 | 343,100 | 54,757 |
Amortization of debt discount and debt issuance costs | (477,056) | (9,406) | ||
Interest Income | 41,171 | 298,721 | ||
Receipt of previously impaired receivables | 387,427 | |||
Interest expense | (247,154) | (128,533) | (558,772) | (283,564) |
Total Other income (expense) | (77,469) | 48,445 | ||
Net Loss | (2,541,012) | (3,040,610) | (14,025,466) | (22,089,282) |
Less: Series B dividend requirement | (70,157) | (53,157) | ||
Less: Net income attributable to Non Controlling Interest | (128,514) | (176,978) | (343,099) | (54,757) |
Net loss attributable to American Resources Corporation Shareholders | $ (2,739,683) | $ (3,217,588) | $ (14,421,722) | $ (22,144,039) |
Net loss per common share - basic and diluted | $ (2.93) | $ (3.6) | $ (18.20) | |
Weighted average common shares outstanding- basic and diluted | 892,044 | 845,427 | 792,391 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS OF EQUITY - USD ($) | Common Stock | Preferred Stock A | Preferred Stock B | Additional Paid-In Capital | Retained Earnings | Non-Controlling Interest | Total |
Beginning Balance, Shares at Dec. 31, 2015 | 2,550,430 | ||||||
Beginning Balance, Amount at Dec. 31, 2015 | $ (5,506,991) | $ (5,506,991) | |||||
Stock-based compensation, Shares | 2,267,362 | ||||||
Stock-based compensation, Amount | $ 482 | 88,193 | 88,675 | ||||
New issuances | |||||||
Beneficial conversion feature | |||||||
Net loss | (22,144,039) | 54,757 | (22,089,282) | ||||
Ending Balance, Shares at Dec. 31, 2016 | 4,817,792 | ||||||
Ending Balance, Amount at Dec. 31, 2016 | $ 482 | 88,193 | (27,651,030) | 54,757 | (27,507,598) | ||
Stock-based compensation, Amount | 40,000 | 40,000 | |||||
Recapitalization, Shares | 845,377 | ||||||
Recapitalization, Amount | $ 85 | (85) | |||||
Sale of Preferred Series B Stock, Shares | 850,000 | ||||||
Sale of Preferred Series B Stock, Amount | $ 850 | 849,150 | 850,000 | ||||
Conversion of Debt, Shares | 33,334 | ||||||
Conversion of Debt, Amount | $ 3 | 49,997 | 50,000 | ||||
Beneficial conversion feature | 50,000 | 50,000 | |||||
Issuance of shares to consultant, Shares | 13,333 | ||||||
Issuance of shares to consultant, Amount | $ 1 | 9,999 | 10,000 | ||||
Relative fair value debt discount on warrants issued | 440,000 | 440,000 | |||||
Net loss | (14,358,565) | 343,099 | (14,025,466) | ||||
Ending Balance, Shares at Dec. 31, 2017 | 892,044 | 4,817,792 | 850,000 | ||||
Ending Balance, Amount at Dec. 31, 2017 | $ 89 | $ 482 | $ 850 | $ 1,527,254 | $ (42,019,595) | $ 397,856 | (40,093,064) |
Net loss | (2,541,012) | ||||||
Ending Balance, Amount at Mar. 31, 2018 | $ (42,704,233) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating activities: | ||||
Net loss | $ (2,541,012) | $ (3,040,610) | $ (14,025,466) | $ (22,089,282) |
Adjustments to reconcile net income (loss) to net cash | ||||
Depreciation | 479,571 | 459,644 | 2,557,714 | 2,262,855 |
Accretion expense | 447,762 | 328,061 | 1,791,051 | 1,664,774 |
Loss on reclamation settlements | (155,922) | (71,245) | ||
Assumption of note payable in reverse merger | 50,000 | 50,000 | ||
Amortization of debt discount and debt issuance costs | 37,841 | 52,841 | 477,056 | 9,406 |
(Recovery) impairment of previously impaired receivable | (50,806) | (387,427) | 510,902 | |
Impairment of related party note receivable | 250,000 | |||
Stock compensation expense | 50,000 | 88,675 | ||
Change in current assets and liabilities: | ||||
Accounts receivable | (399,047) | 1,325,463 | 882,637 | (2,753,199) |
Prepaid expenses and other assets | (443,482) | 40,000 | 920 | |
Inventory | 297,974 | (615,096) | ||
Restricted cash used to pay interest expense | 14,981 | 13,984 | ||
Accounts payable | 1,057,923 | 925,483 | 3,096,351 | 2,196,060 |
Funds held for others | (70,772) | |||
Accrued expenses | 12,340,615 | |||
Accrued interest | 124,763 | 30,000 | 213,625 | 122,945 |
Reclamation liability settlements | (355,785) | (256,892) | ||
Cash used in operating activities | (1,059,285) | (28,981) | (5,644,574) | (5,816,992) |
Cash Flows from Investing activities: | ||||
Note receivable | (4,117,139) | |||
Increase in restricted cash | (57,841) | (116,115) | ||
Restricted cash used to pay down debt | 65,604 | 54,421 | ||
Advances made in connection with management agreement | (7,000) | (40,000) | (77,800) | (1,845,902) |
Advance repayment in connection with management agreement | 79,219 | 75,000 | 625,227 | 1,175,000 |
Cash paid for PPE, net | (34,787) | (173,432) | (34,200) | |
Cash received from acquisitions, net of $0 and $100 cash paid | 5,315,700 | |||
Cash provided by investing activities | 72,219 | 213 | 381,758 | 431,765 |
Cash Flows from Financing activities: | ||||
Principal payments on long term debt | (191,517) | (4,893) | (392,002) | (303,706) |
Proceeds from long term debt | 1,000,000 | 4,440,000 | 4,857,391 | |
Proceeds from related party | 50,000 | |||
Net (payments) proceeds from factoring agreement | (112,290) | (415,204) | (32,985) | 1,616,067 |
Proceeds from private placements | 600,000 | |||
Proceeds from sale of series B preferred equity | 500,000 | |||
Cash provided by financing activities | 696,193 | 79,903 | 4,665,013 | 6,169,752 |
Increase (decrease) in cash and restricted cash | (290,873) | 51,135 | (597,803) | 784,525 |
Cash, beginning of year | 186,722 | 784,525 | 784,525 | |
Cash, end of year | 9,006 | 756,160 | 186,722 | 784,525 |
Cash and restricted cash, beginning of period | 385,665 | 925,627 | 925,627 | |
Cash and restricted cash, end of period | 94,792 | 976,762 | 385,665 | 925,627 |
Supplemental Information | ||||
Assumption of net assets and liabilities for asset acquisitions | 2,745,582 | |||
Equipment for notes payable | 481,660 | 1,419,650 | 904,425 | |
Purchase of related party note receivable in exchange for Series B Equity | 250,000 | |||
Affiliate note for equipment | 63,000 | |||
Preferred Series B Dividends | $ 70,157 | |||
Conversion of note payable to common stock | 50,000 | 50,000 | ||
Beneficial conversion feature on note payable | $ 50,000 | 50,000 | ||
Relative fair value debt discount on warrant issue | 440,000 | |||
Cash paid for interest | $ 345,147 | $ 160,619 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | American Resources Corporation (ARC or the Company) was formed in June 2015 for the purpose of acquiring, rehabilitating and operating various natural resource assets including coal, oil and natural gas. Basis of Presentation and Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Quest Energy Inc, (QEI), Deane Mining, LLC (Deane), Quest Processing LLC (Quest Processing), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy) and Knott County Coal LLC (KCC). All significant intercompany accounts and transactions have been eliminated. The accompanying Consolidated Financial Statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). Interim Financial Information Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. In the opinion of management, these interim unaudited Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair presentation of the results for the periods presented. Results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or any other period. These financial statements should be read in conjunction with the Companys 2017 audited financial statements and notes thereto which were filed on form 10K on April 23, 2018. Going Concern: Convertible Preferred Securities: Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity Cash Restricted cash: The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that agrees to the total of those amounts as presented in the consolidated statement of cash flows for the three months ended March 31, 2018 and March 31, 2017. March 31, 2018 March 31, 2017 Cash $ 9,006 $ 756,160 Restricted Cash 85,786 220,602 Total cash and restricted cash presented in the consolidated statement of cash flows $ 94,792 $ 976,762 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 using the units-of-production method over estimated recoverable (proved and probable) reserves. We are using a discount rate of 10%. Federal and State laws require that mines be reclaimed in accordance with specific standards and approved reclamation plans, as outlined in mining permits. Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry ponds. We assess our ARO at least annually and reflect revisions for permit changes, change in our estimated reclamation costs and changes in the estimated timing of such costs. During the period ending March 31, 2018 and 2017, $- and $155,922 were incurred for loss on settlement on ARO, respectively. The table below reflects the changes to our ARO: Balance at December 31, 2017 $ 19,885,057 Accretion 3 months March 31, 2018 447,762 Reclamation work 3 months March 31, 2018 - Balance at March 31, 2018 $ 20,343,619 Allowance For Doubtful Accounts: Allowance for trade receivables as of March 31, 2018 and December 31, 2017 amounted to $0, for both periods. Allowance for other accounts receivables as of March 31, 2018 and December 31, 2017 amounted to $0 and $92,573, respectively. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of March 31, 2018 and December 31, 2017. Reclassifications: New Accounting Pronouncements: - Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers - ASU 2015-11, Simplifying the Measurement of Inventory - ASU 2015-17, Balance Sheet Classification of Deferred Taxes - ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities - ASU 2016-02, Leases - ASU 2016-18, Statement of Cash Flows: Restricted Cash, - ASU 2017-01, Business Combinations, - ASU 2017-09, Compensation Stock Compensation, - ASU 2017-11, Earnings Per Share, - ASU 2018-05, Income Taxes, Management has elected to early adopt ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ASU 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230). ASU 2014-09, Revenue from Contracts with Customers (Topic 606). | American Resources Corporation (ARC or the Company) operates through subsidiaries that were acquired in 2016 and 2015 for the purpose of acquiring, rehabilitating and operating various natural resource assets including coal, oil and natural gas. Basis of Presentation and Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Quest Energy Inc (QEI), Deane Mining, LLC (Deane), Quest Processing LLC (Quest Processing), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy) and Knott County Coal LLC (KCC). All significant intercompany accounts and transactions have been eliminated. On January 5, 2017, QEI entered into a share exchange agreement with NGFC Equities, Inc (NGFC). Under the agreement, the shareholders of QEI exchanged 100% of its common stock to NGFC for 4,817,792 newly created Series A Preferred shares that is convertible into approximately 95% of outstanding common stock of NGFC. The previous NGFC shareholders retained 845,377 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. QEI was the accounting acquirer and ARC will continue the business operations of QEI, therefore, the historical financial statements presented are those of QEI and its subsidiaries. The equity and share information reflect the results of the recapitalization. On May 15, 2017 ARC initiated a one-for-thirty reverse stock split. The financial statements have been retrospectively restated to give effect to this split. 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 VIEs 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 is the primary beneficiary of Land Resources & Royalties LLC (LRR) which qualifies as a variable interest entity. Accordingly, the assets, liabilities, revenue and expenses of Land Resources & Royalties have been included in the accompanying consolidated financial statements. 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. The assets of McCoy were 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 February 17, 2016, McCoy Elkhorn Coal LLC (McCoy) acquired certain assets in exchange for $100 and for assuming certain liabilities of Fortress Resources, LLC. The fair values of the asset retirement obligation liabilities assumed were determined to be $3,561,848 respectively. The liabilities assumed do not require fair value readjustments. The assets acquired of McCoy do not represent a business as defined in FASB AS 805-10-20. McCoy does not have an integrated set of activities and assets that that is capable of being conducted and managed for the purpose of providing a return or other economic benefit to their investors, members or participants. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the liabilities assumed, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair value. The assets acquired and liabilities assumed of McCoy were as follows at the purchase date: Assets Cash $ 2,935,800 Underground Mining Equipment 531,249 Surface Mining Equipment 36,218 Coal Preparation and Loading Facilities 58,681 Liabilities Asset Retirement Obligation $ 3,561,848 On April 14, 2016, the Company acquired 100% of the membership interests of ICG Knott County, LLC, subsequently renamed Knott County Coal LLC. The fair values of the asset retirement obligation liabilities assumed were determined to be $4,499,434 respectively. The liabilities assumed do not require fair value readjustments. The assets acquired of ICG Knott County do not represent a business as defined in FASB AS 805-10-20. IGC Knott County does not have an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return or other economic benefit to their investors, members or participants. Accordingly, the assets acquired and liabilities assumed are initially recognized at the consideration paid, including direct acquisition costs. The cost is allocated to the group of assets acquired and liabilities assumed based on their relative fair value. The assets and liabilities assumed of ICG Knott County were as follows on the purchase date: Assets Cash $ 2,380,000 Underground Mining Equipment 1,533,937 Surface Mining Equipment 206,578 Land 178,683 Coal Preparation and Loading Facilities 200,236 Liabilities Asset Retirement Obligation $ 4,499,434 As a result of the KCC and McCoy acquisitions during 2016, $8,061,282 of ARO was assumed for net cash of $5,315,700 and property, equipment and land of $2,745,582. Going Concern: Estimates: Convertible Preferred Securities: Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity Related Party Policies: Advance Royalties: Cash As of December 31, 2017 and 2016 total cash, including restricted cash, amounted to $385,665 and $925,627, respectively. Restricted cash as of December 31, 2017 and 2016 amounted to $198,943 and $141,102, respectively. Restrictions to cash include funds held for the benefit other parties in the amount of $82,828 and $24,987 as of December 31, 2017 and 2016, respectively. The use of these funds are in conjunction with the management of the property owned by this party and the duration of the restrictions matches the duration of the management agreement. (See Note 7) As part of the Kentucky New Markets Development Program (See Note 3) an asset management fee reserve was set up in the amount of $116,115. The funds are held to pay annual asset management fees to an unrelated party through 2021. (See Note 6) Concentration: 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. Costs related to maintenance and repairs which do not prolong the assets useful life are expensed as incurred. Mine Development: 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 using the units-of-production method over estimated recoverable (proved and probable) reserves. We are using a discount rate of 10%. Federal and State laws require that mines be reclaimed in accordance with specific standards and approved reclamation plans, as outlined in mining permits. Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry ponds. We assess our ARO at least annually and reflect revisions for permit changes, change in our estimated reclamation costs and changes in the estimated timing of such costs. During 2017 and 2016, $0 and $71,245 were incurred for loss on settlement on ARO. The table below reflects the changes to our ARO: 2017 2016 Beginning Balance $ 18,126,873 $ 8,586,464 Accretion 1,791,051 1,664,774 Reclamation work (32,867 ) (185,647 ) McCoy Acquisition - 3,561,848 KCC Acquisition - 4,499,434 Ending balance $ 19,885,057 $ 18,126,873 Current portion of reclamation liability $ 2,033,862 $ 519,489 Long-term portion of reclamation liability $ 17,851,195 $ 17,607,384 Income Taxes The Company filed an initial tax return in 2015. Management believes that the Companys 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 Companys 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: Our revenue is comprised of sales of mined coal and services for processing coal. All of the activity is undertaken in eastern Kentucky. We recognize revenue from coal sales at the time risk of loss passes to the customer at contracted amounts and amounts are deemed collectible. Revenue from coal processing and loading are recognized when services have been performed according to the contract in place. Leases: The Company leases certain equipment and other assets under noncancelable operating leases, typically with initial terms of 3 to 7 years. Minimum rent on operating leases is expensed on a straight-line basis over the term of the lease. In addition to minimum rental payments, certain leases require additional payments based on sales volume, as well as reimbursement of real estate taxes, which are expensed when incurred. Capital leases are recorded at the present value of the future minimum lease payments at the inception of the lease. Loan Issuance Costs and Discounts Allowance For Doubtful Accounts: Allowance for trade receivables as of December 31, 2017 and 2016 amounted to $0 and $0, respectively. Allowance for other accounts receivables as of December 31, 2017 and 2016 amounted to $92,573 and $640,000, respectively. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of December 31, 2017 and 2016. Inventory: Stock-based Compensation: Earnings Per Share: For the years ended December 31, 2017 and 2016, the Company had 5,364,230 and 0 outstanding stock warrants, respectively. For the years ended December 31, 2017 and 2016, the Company did not have any restrictive stock awards, restricted stock units, or performance-based awards. Reclassifications: New Accounting Pronouncements: · Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers · ASU 2015-11, Simplifying the Measurement of Inventory · ASU 2015-17, Balance Sheet Classification of Deferred Taxes · ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities · ASU 2016-02, Leases · ASU 2016-18, Statement of Cash Flows: Restricted Cash, · ASU 2017-01, Business Combinations, · AUS 2017-09, Compensation Stock Compensation, · ASU 2017-11, Earnings Per Share, · ASU 2018-05, Income Taxes, Management has elected to early adopt ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ASU 2014-09, Revenue from Contracts with Customers (Topic 606). |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
PROPERTY AND EQUIPMENT | At March 31, 2018 and December 31, 2017, property and equipment were comprised of the following: March 31, 2018 December 31, 2017 Processing and rail facility $ 2,914,422 $ 2,914,422 Underground equipment 8,887,045 8,887,045 Surface equipment 4,439,263 3,957,603 Land 178,683 178,683 Less: Accumulated depreciation (5,300,140 ) (4,820,569 ) Total Property and Equipment, Net $ 11,119,273 $ 11,117,184 Depreciation expense amounted to $479,571 and $459,644 for the periods March 31, 2018 and March 31, 2017, respectively. The estimated useful lives are as follows: Processing and Rail Facilities 20 years Surface Equipment 7 years Underground Equipment 5 years | At December 31, 2017 and 2016, property and equipment were comprised of the following: 2017 2016 Processing and rail facility $ 2,914,422 $ 2,914,422 Underground equipment 8,887,045 7,500,512 Surface equipment 3,957,603 3,751,054 Land 178,683 178,683 Less: Accumulated depreciation (4,820,569 ) (2,262,855 ) Total Property and Equipment, Net $ 11,117,184 $ 12,081,816 Depreciation expense amounted to $2,557,714 and $2,262,855 for the years of December 31, 2017 and 2016, respectively. The estimated useful lives are as follows: Processing and Rail Facilities 20 years Surface Equipment 7 years Underground Equipment 5 years |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTES PAYABLE | During the three month period ended March 31, 2018 and 2017, principal payments on long term debt totaled $191,517 and $4,893 respectively. During the three-month period ended March 31, 2018 and 2017, increases to long term debt totaled $1,481,660 and $0, respectively, primarily $1,000,000 from the ARC business loan and $481,660 from equipment financings. The ARC business loan carries annual interest at 7%, is due within two months of advancement and is secure by all company assets. The equipment loan totaling $346,660 carries annual interest at 9%, is due in 24 months and is secured by the equipment. The equipment loan totaling $135,000 carries annual interest at 0%, was due one month after advancement, has been paid in full on May 2, 2018 and was secured by the equipment. During the three-month period ended March 31, 2018 and 2017, proceeds from the factoring agreement totaled $6,714,836 and $2,039,226, respectively and repayments according to the factoring agreement totaled $6,827,126 and $2,454,430, respectively. | During the year ended December 31, 2017 and 2016, principal payments on long term debt totaled $392,002 and $303,706, respectively. During the year ended December 31, 2017 and 2016, new debt issuances totaled $5,909,650 and $5,824,816, respectively, primarily from $4,490,000 of working capital loans and $1,419,650 of equipment loans in 2017 and $4,688,152 from the Kentucky New Markets Development program and $967,425 in equipment loans in 2016. (See Note 5). During the year ended December 31, 2017 and 2016, net proceeds from our factoring agreement totaled $32,985 and $1,616,067, respectively. During the year ended December 31, 2017 and 2016, discounts on debt issued amounted to $490,000 and $-, respectively related to the ARC business loan discussed below and the note payable discussed in note 9. During 2017 and 2016, $455,000 and $- was amortized into expense with $35,000 and $- remaining as unamortized discount. Long-term debt consisted of the following at December 31, 2017 and 2016: 2017 2016 Equipment Loans - QEI Note payable to an unrelated company in monthly installments of $2,064, with interest at 8.75%, through maturity in March 2019, when the note is due in full. The note is secured by equipment and a personal guarantee by an officer of the Company. $ 30,962 $ 50,235 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 57,290 64,175 On September 8, 2017, Quest entered into an equipment purchase agreement with an unaffiliated entity, to purchase certain underground mining equipment for $600,000. The agreement provided for $80,000 paid upon execution, $30,000 monthly payments until the balance is paid in full. 460,000 0 On October 19, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $90,400. The agreement calls for monthly payments until maturity of October 19, 2019 and interest of 9.95%. 88,297 0 On October 20, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $50,250. The agreement calls for monthly payments until maturity of October 20, 2019 and interest of 10.60%. 51,320 0 On December 4, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $56,900. The agreement calls for monthly payments until maturity of January 7, 2021. 56,900 0 Business Loan - ARC On October 4, 2017, ARC entered into a consolidated loan agreement with an unaffiliated entity. $5,444,632 has been advanced under the note. $1,300,000 of the note was advanced after December 31, 2017. The agreement calls for interest of 7% and with all outstanding amounts due on demand. The note is secured by all assets of Quest and subsidiaries. In conjunction with the loan, a warrants for up to 5,017,006 common shares were issued at an exercise price ranging from $.01 to $11.44 per share and with an expiration date of October 2, 2020. The loan consolidation was treated as a loan modification for accounting purposes giving rise to a discount of $140,000. The discount was amortized over the life of the loan with $105,000 included as interest expense and $35,000 included as a note discount as of December 31, 2017. 4,444,632 175,000 Equipment Loans ERC Equipment lease payable to an unrelated company in 48 equal payments of $771 with an interest rate of 5.25% with a balloon payment at maturity of June 30, 2019. The note is secured by equipment and a corporate guarantee from Quest Energy Inc. The equipment is being utilized as part of the management agreement referred to in Note 7. Therefore, the title of the assets are not held with ERC and there is a corresponding receivable due for the payment of this note. 27,288 35,644 Equipment lease payable to an unrelated company in 48 equal payments of $3,304 with an interest rate of 5.25% with a balloon payment at maturity of June 30, 2019. The note is secured by equipment and a corporate guarantee from Quest Energy Inc. The equipment is being utilized as part of the management agreement referred to in Note 7. Therefore, the title of the assets are not held with ERC and there is a corresponding receivable due for the payment of this note. 128,254 161,738 Equipment lease payable to an unrelated company in 48 equal payments of $2,031 with an interest rate of 5.25% with a balloon payment at maturity of August 13, 2019. The note is secured by equipment and a corporate guarantee from Quest Energy Inc. The equipment is being utilized as part of the management agreement referred to in Note 7. Therefore, the title of the assets are not held with ERC and there is a corresponding receivable due for the payment of this note. 36,890 60,541 Equipment Loans - McCoy Equipment note payable to an unrelated company, with monthly payments of $150,000 in September 2016, October 2016, November 2016 and a final payment of $315,000 due in December 2016. No extensions have been entered into subsequent to December 31, 2017 resulting in the note being in default. 540,000 540,000 On May 2, 2017, Quest entered into an equipment purchase agreement with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $250,000. Full payment was due September 12, 2017. 135,000 0 On June 12, 2017, Quest entered into an equipment purchase agreement with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $22,500. Full payment was due September 12, 2017. 22,500 0 On September 25, 2017, Quest entered into an equipment purchase agreement 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. 330,000 0 Business Loans - McCoy Business loan agreement with Crestmark Bank in the amount of $200,000, with monthly payments of 23,000, with an interest rate of 12%, through maturity in January 1, 2018. The note is secured by a corporate guaranty by the Company and a personal guaranty. 66,667 0 Seller Note - Deane Deane Mining - promissory note payable to an unrelated company, with monthly interest payments of $10,000, at an interest rate of 6%, beginning June 30, 2016. The note is due December 31, 2017. No payments have been made on the note and no extensions have been entered into subsequent to December 31, 2017, resulting in the note being in default. 2,000,000 2,000,000 Accounts Receivable Factoring Agreement McCoy, Deane and Knott County secured accounts receivable note payable to a bank. The agreement calls for interest of .30% for each 10 days of outstanding balances. The advance is secured by the accounts receivable, corporate guaranty by the Company and personal guarantees by two officers of the Company. The agreement ends in October 2018 1,582,989 1,616,167 Kentucky New Markets Development Program Quest Processing - loan payable to Community Venture Investment XV, LLC, with interest only payments due quarterly until March 2023, at which time quarterly principal and interest payments are due. The note bears interest at 3.698554% and is due March 7, 2046. The loan is secured by all equipment and accounts of Quest Processing. See Note 4,117,139 4,117,139 Quest Processing - loan payable to Community Venture Investment XV, LLC, with interest only payments due quarterly until March 2023, at which time quarterly principal and interest payments are due. The note bears interest at 3.698554% and is due March 7, 2046. The loan is secured by all equipment and accounts of Quest Processing. See Note 1,026,047 1,026,047 Less: Debt Discounts and Loan Issuance Costs (475,333 ) (451,389 ) Affiliate Notes 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 $ 74,000 During July 2017, an officer of the Company advanced $50,000 to Quest. The advance is unsecured, non interest bearing and due on demand. $ 50,000 $ 0 14,850,842 9,469,947 Less: Current maturities 9,769,154 4,505,006 Total Long-term Debt $ 5,081,688 $ 4,964,941 Total interest expense was $558,772 in 2017 and $283,564 in 2016. Future minimum principal payments, interest payments and payments on capital leases are as follows: Payable In Loan Principal Lease Principal Total Loan and Lease Principal Lease Interest 2018 9,704,444 64,710 9,769,154 8,560 2019 312,707 125,798 438,505 3,722 2020 37,283 - 37,283 - 2021 10,491 - 10,491 - 2022 - - - - Thereafter 4,595,409 4,595,409 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
RELATED PARTY TRANSACTIONS | On June 12, 2015, the Company executed a consulting agreement with an entity with common ownership. During the three months ended March 31, 2018 and March 31, 2017, the Company incurred fees totaling $0 relating to services rendered under this agreement, respectively. The amount outstanding and payable as of March 31, 2018 and December 31, 2017, was $17,840,615 and $17,840,615, respectively. The amount is due on demand and does not accrue interest. | On June 12, 2015, the Company executed a consulting agreement with an entity with common ownership. During 2017 and 2016, the Company incurred fees totaling $0 and $12,340,615, respectively, relating to services rendered under this agreement. The amount outstanding and payable as of December 31, 2017 and 2016, was $17,840,615 and $17,840,615, respectively. The amount is due on demand and does not accrue interest. On January 1, 2016, the Company awarded stock options for 857,464 shares that were cashlessly exercised into 290,513 shares of Series A preferred stock or consulting efforts to an entity with common ownership. No stock options were awarded to related parties during 2017. During 2015, equipment purchasing was paid by an affiliate resulting in a note payable. The balance of the note was $74,000 as of December 31, 2017 and 2016, 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. (see Note 9) During July 2017, an officer of the Company advanced $50,000 to Quest. The advance is unsecured, non interest bearing and due on demand. (see Note 3) On June 12, 2015, the Company executed a consulting agreement with an entity with common ownership. During 2017 and 2016, the Company incurred fees totaling $0 and $12,340,615, respectively, relating to services rendered under this agreement. The amount outstanding and payable as of December 31, 2017 and 2016, was $17,840,615 and $17,840,615, respectively. The amount is due on demand and does not accrue interest. |
VARIABLE INTEREST ENTITY
VARIABLE INTEREST ENTITY | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
VARIABLE INTEREST ENTITY | On October 24, 2016, the Company sold certain mineral and land interests to a subsidiary of an entity, LRR, owned by members of the Companys 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. The balance as of December 31, 2016 was $130,145. As of January 28, 2017, the note was paid in full. This transaction was eliminated upon consolidation as a variable interest entity. |
KENTUCKY NEW MARKETS DEVELOPMEN
KENTUCKY NEW MARKETS DEVELOPMENT PROGRAM | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
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, 2017 and 2016 was $4,117,139 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. |
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
MANAGEMENT AGREEMENT | On April 13, 2015, ERC entered into a mining and management agreement with an unrelated entity, to operate a coal mining and processing facility in Jasonville, Indiana. Under the management agreement funds advanced for the three-month period ended March 31, 2018 and 2017are $7,000 and $40,000, respectively and the amounts repaid totaled $79,219 and $75,000, respectively. | On April 13, 2015, ERC entered into a mining and management agreement with an unrelated entity, to operate a coal mining and processing facility in Jasonville, Indiana. The agreement called for a monthly base fee of $20,000 in addition to certain per ton fees based on performance to be paid to ERC. During 2017 and 2016 no fee had been paid and due to the uncertainty of collection, no fee has been recorded. Fees earned totaled $240,000 and $240,000 for 2017 and 2016, respectively, which have been fully reserved. The agreement called for equipment payments to be made by the entity. As of December 31, 2017 and 2016 amounts owed from the entity to ERC for equipment payments amounted to $192,432 and $258,096, respectively. During 2017, ERC had advances of $77,800 and repayments of $625,227 of amounts previously advanced. During 2016, ERC had advances of $1,975,000 which is unsecured, non-interest bearing and due upon demand and repayments of previously advanced amounts of $1,175,000. Of the amounts received in 2017, $387,427 was the collection of a previously impaired amount. As part of the agreement, ERC retained the administrative rights to the underlying mining permit and reclamation liability. The entity has the right within the agreement to take the mining permits and reclamation liability at any time. In addition, all operational activity that takes place on the facility is the responsibility of the entity. ERC acts as a fiduciary and as such has recorded cash held for the entitys benefit as both an asset and an offsetting liability amounting to $82,828 and $24,987 respectively as of December 31, 2017 and 2016. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
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 assets consisted of $4,152,800 at December 31, 2017, which was fully reserved. Deferred tax assets consist of net operating loss carryforwards in the amount of $4,152,800 at December 31, 2017, which was fully reserved. The net operating loss carryforwards for years 2015, 2016 and 2017 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 Companys deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law. The Companys effective income tax rate is lower than what would be expected if the U.S. federal statutory rate (34%) 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, 2017. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
EQUITY TRANSACTIONS | There were no common or other series A preferred transactions for the three-month period ending 2018. Total preferred dividend requirement for the three month period ending March 31, 2018 and 2017 amounted to $70,157 and $0, respectively. | A new 2016 Stock Incentive Plan (2016 Plan) was approved by the Board during January 2016. The Company may grant up to 6,363,225 shares of Series A Preferred stock under the 2016 Plan. The 2016 Plan is administered by the Board of Directors, which has substantial discretion to determine persons, amounts, time, price, exercise terms, and restrictions of the grants, if any. The options issued under the 2016 Plan vest upon issuance. During 2016, the Company issued options amounting to 6,363,225 shares (which includes shares disclosed above) under an adopted stock option plan that were cashlessly exercised into 2,267,362 shares of Series A preferred stock resulting in an expense of $88,675. On May 10, 2017, the Company issued warrants amounting to 8,334 common shares to a board member. The options expire May 9, 2020 and have an exercise price of $3.60. An expense in the amount of $40,000 was recognized for this issuance. The Company had a note payable in the amount of $50,000 which was assumed as part of the share exchange agreement and accounted for as an expense in the recapitalization transaction. On February 22, 2017, the Company modified the note to add a conversion option with a price of $1.50. The conversion option was beneficial, therefore, the Company recognized $50,000 as a discount to the assumed note payable. The note was immediately converted, resulting in the issuance of 33,334 shares and the full amortization of the discount. On March 7, 2017, ARC closed a private placement whereby it issued an aggregate of 500,000 shares of ARCs Series B Preferred Stock at a purchase price of $1.00 per Series B Preferred share, and warrants to purchase an aggregate of 208,334 shares of the ARCs common stock (subject to certain adjustments), for proceeds to ARC of $500,000 (the March 2017 Private Placement). After deducting for fees and expenses, the aggregate net proceeds from the sale of the preferred series B shares and the warrants in the March 2017 Private Placement were approximately $500,000. The A warrants totaling 138,889 shares expire March 6, 2020 and hold an exercise price of $7.60 per share. The A-1 warrants totaling 69,445 shares expire March 6, 2020 and hold an exercise price of $.003 per share. On April 2, 2017, American Resources Corporation closed a private placement whereby it issued an aggregate of 100,000 shares of the ARCs Series B Preferred Stock at a purchase price of $1.00 per Series B Preferred share, and warrants to purchase an aggregate of 27,778 shares of the ARCs common stock (subject to certain adjustments), for proceeds to ARC of $100,000 (the April 2017 Private Placement). After deducting for fees and expenses, the aggregate net proceeds from the sale of the series B preferred shares and the warrants in the April 2017 Private Placement were approximately $100,000. The A warrants totaling 27,778 shares expire April 2, 2019 and hold an exercise price of $7.20 per share. On April 30, 2017, American Resources Corporation closed on a private placement agreement whereby it issued an aggregate of 250,000 shares of the ARCs Series B Preferred Stock and A warrants amounting to 69,445 to an unrelated party for the purchase of $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 were impaired. The A warrants totaling 69,445 shares expire April 29, 2019 and hold an exercise price of $7.20 per share. The Series B Preferred Stock converts into common stock of the Company at the holders discretion at a conversion price of $3.60 per common share (one share of Series B Preferred converts to common at a ratio of 0.27778). Furthermore, the Series B Preferred share purchase agreement provides for certain adjustments to the conversion value of the Series B Preferred to common shares of the Company that are based on the EBITDA (earning before interest, taxes, depreciation, and amortization) for the Company for the 12 months ended March 31, 2018. Those adjustments provide for a decrease in the conversion value based on the proportional miss of the Companys EBITDA, up to a maximum of 30.0% decrease in the conversion value of the Series B Preferred to common shares. The Series B Preferred share purchase agreement provides for an option for the investor to put the Series B Preferred investment to the Company at a premium to the Series B Preferred purchase price should the Company achieve certain hurdles, such as a secondary offering and an up-listing to a national stock exchange. Such put option expires after 20 days from notification of the Company to the Series B Preferred investor of the fulfillment of such qualifications. Total preferred dividend requirement for 2017 and 2016 amounted to $53,157 and $0, respectively. Total stock based compensation expense incurred for awards to employees during 2017 and 2016 was $0 and $88,675, respectively. Fair value was determined using the total enterprise value approach. On July 5, 2017, the Company issued 13,333 common shares and warrants to purchase 33,333 shares to an unrelated consulting company. The warrants had an exercise price of $3.60 with a three-year term. The total compensation expense related to this warrant was $10,000 which was determined using the closing stock price at the date of the grant and the Black-Sholes Option Pricing Model. In conjunction with the ARC business loan, warrants of 5,996,609 common shares were issued and 979,603 were subsequently canceled at an exercise price ranging from $.01 to $11.44 per share and with an expiration date of October 2, 2020. 2017 Expected Dividend Yield 0 % Expected volatility 13.73 % Risk-free rate 1.62 % Expected life of warrants 2-3 years Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Warrants Price Life in Years Value Outstanding December 31, 2015 - - - - Exercisable - December 31, 2015 - - - - Granted - - - - Forfeited or Expired - - - - Outstanding - December 31, 2016 - - - - Exercisable - December 31, 2016 - - - - Granted 6,343,833 $ 2.317 2.706 $ 174,253 Forfeited or Expired 979,603 $ 0.560 1.997 $ 36,184 Exercised - - - - Outstanding - December 31, 2017 5,364,230 $ 2.638 2.835 $ 138,069 Exercisable - December 31, 2017 5,364,230 $ 2.638 2.835 $ 138,069 |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
CONTINGENCIES | In the course of normal operations, the Company is involved in various claims and litigation that management intends to defend. The range of loss, if any, from potential claims cannot be reasonably estimated. However, management believes the ultimate resolution of matters will not have a material adverse impact on the Companys 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 Companys business or financial position. The company leases various office space some from an entity which we consolidate as a variable interest entity. (see note 5). The future annual rent is $6,000 through 2021. Rent expense for 2017 and 2016 amounted to $26,000 each year, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
SUBSEQUENT EVENTS | Loans During April 2018, the company drew an additional $300,000 on the ARC business loan. During May 2018, the company entered into a sale leaseback arrangement with an unrelated party to acquire new equipment. The transaction was accounted for as a financing transaction resulting in a note payable of $1,000,000 being recorded with a maturity date of September, 2018. Acquisitions On April 21, 2018, McCoy acquired two permits and entered into a surface lease and a mineral sub-lease from unrelated entities. Consideration for the acquired permits was the assumption of reclamation bonds totaling $1,036,200 and vendor payables totaling $53,771. The transaction is accounted for as an asset purchase under ASU 2017-01. Management is still gathering the information needed to complete the allocation of the purchase price to the assets acquired and liabilities assumed. On May 10, 2018, Knott County acquired a mining permit from an unrelated party. Consideration for the acquired permits was the assumption of reclamation bonds totaling $75,000 and the payment of $1.50 per ton royalty of coal sold. The transaction is accounted for as an asset purchase under ASU 2017-01. Management is still gathering the information needed to complete the allocation of the purchase price to the assets acquired and liabilities assumed. | On January 25, 2018, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $346,660. The agreement calls for monthly payments until maturity of December 25, 2020. During 2018, the company drew an additional $1,300,000 on the ARC business loan. (see note 3) On March 29, 2018, Quest entered into an equipment financing agreement with an affiliated entity, to purchase certain surface mining equipment for $135,000. Payments of $75,000 and $60,000 are due on April 6, 2018 and April 13, 2018, respectively. |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies Policies | ||
Basis of Presentation and Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Quest Energy Inc, (QEI), Deane Mining, LLC (Deane), Quest Processing LLC (Quest Processing), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy) and Knott County Coal LLC (KCC). All significant intercompany accounts and transactions have been eliminated. The accompanying Consolidated Financial Statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Quest Energy Inc (QEI), Deane Mining, LLC (Deane), Quest Processing LLC (Quest Processing), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy) and Knott County Coal LLC (KCC). All significant intercompany accounts and transactions have been eliminated. On January 5, 2017, QEI entered into a share exchange agreement with NGFC Equities, Inc (NGFC). Under the agreement, the shareholders of QEI exchanged 100% of its common stock to NGFC for 4,817,792 newly created Series A Preferred shares that is convertible into approximately 95% of outstanding common stock of NGFC. The previous NGFC shareholders retained 845,377 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. QEI was the accounting acquirer and ARC will continue the business operations of QEI, therefore, the historical financial statements presented are those of QEI and its subsidiaries. The equity and share information reflect the results of the recapitalization. On May 15, 2017 ARC initiated a one-for-thirty reverse stock split. The financial statements have been retrospectively restated to give effect to this split. 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 VIEs 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 is the primary beneficiary of Land Resources & Royalties LLC (LRR) which qualifies as a variable interest entity. Accordingly, the assets, liabilities, revenue and expenses of Land Resources & Royalties have been included in the accompanying consolidated financial statements. 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. The assets of McCoy were 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 February 17, 2016, McCoy Elkhorn Coal LLC (McCoy) acquired certain assets in exchange for $100 and for assuming certain liabilities of Fortress Resources, LLC. The fair values of the asset retirement obligation liabilities assumed were determined to be $3,561,848 respectively. The liabilities assumed do not require fair value readjustments. The assets acquired of McCoy do not represent a business as defined in FASB AS 805-10-20. McCoy does not have an integrated set of activities and assets that that is capable of being conducted and managed for the purpose of providing a return or other economic benefit to their investors, members or participants. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the liabilities assumed, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair value. The assets acquired and liabilities assumed of McCoy were as follows at the purchase date: Assets Cash $ 2,935,800 Underground Mining Equipment 531,249 Surface Mining Equipment 36,218 Coal Preparation and Loading Facilities 58,681 Liabilities Asset Retirement Obligation $ 3,561,848 On April 14, 2016, the Company acquired 100% of the membership interests of ICG Knott County, LLC, subsequently renamed Knott County Coal LLC. The fair values of the asset retirement obligation liabilities assumed were determined to be $4,499,434 respectively. The liabilities assumed do not require fair value readjustments. The assets acquired of ICG Knott County do not represent a business as defined in FASB AS 805-10-20. IGC Knott County does not have an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return or other economic benefit to their investors, members or participants. Accordingly, the assets acquired and liabilities assumed are initially recognized at the consideration paid, including direct acquisition costs. The cost is allocated to the group of assets acquired and liabilities assumed based on their relative fair value. The assets and liabilities assumed of ICG Knott County were as follows on the purchase date: Assets Cash $ 2,380,000 Underground Mining Equipment 1,533,937 Surface Mining Equipment 206,578 Land 178,683 Coal Preparation and Loading Facilities 200,236 Liabilities Asset Retirement Obligation $ 4,499,434 As a result of the KCC and McCoy acquisitions during 2016, $8,061,282 of ARO was assumed for net cash of $5,315,700 and property, equipment and land of $2,745,582. |
Interim Financial Information | Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. In the opinion of management, these interim unaudited Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair presentation of the results for the periods presented. Results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or any other period. These financial statements should be read in conjunction with the Companys 2017 audited financial statements and notes thereto which were filed on form 10K on April 23, 2018. | |
Going Concern | The Company has suffered recurring losses from operations and currently a working capital deficit. These conditions raise substantial doubt about the Companys ability to continue as a going concern. We plan to generate profits by expanding current coal operations as well as developing new coal operations. However, we will need to raise the funds required to do so through sale of our securities or through loans from third parties. We do not have any commitments or arrangements from any person to provide us with any additional capital. If additional financing is not available when needed, we may need to cease operations. We may not be successful in raising the capital needed to expand or develop operations. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty. | The Company has suffered recurring losses from operations and currently a working capital deficit. These conditions raise substantial doubt about the Companys ability to continue as a going concern. We plan to generate profits by expanding current coal operations as well as developing new coal operations. However, we will need to raise the funds required to do so through sale of our securities or through loans from third parties. We do not have any commitments or arrangements from any person to provide us with any additional capital. If additional financing is not available when needed, we may need to cease operations. We may not be successful in raising the capital needed to expand or develop operations. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty. |
Estimates | Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results could vary from those estimates. | |
Convertible Preferred Securities | We account for hybrid contracts that feature conversion options in accordance with generally accepted accounting principles in the United States. ASC 815, Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity | We account for hybrid contracts that feature conversion options in accordance with generally accepted accounting principles in the United States. ASC 815, Derivatives and Hedging Activities We also follow ASC 480-10, Distinguishing Liabilities from Equity |
Related Party Policies | In accordance with FASB ASC 850 related parties are defined as either an executive, director or nominee, greater than 10% beneficial owner, or an immediate family member of any of the proceeding. Transactions with related parties are reviewed and approved by the directors of the Company, as per internal policies. | |
Advance Royalties | Coal leases that require minimum annual or advance payments and are recoverable from future production are generally deferred and charged to expense as the coal is subsequently produced. | |
Cash | Cash is maintained in bank deposit accounts which, at times, may exceed federally insured limits. To date, there have been no losses in such accounts. | Cash As of December 31, 2017 and 2016 total cash, including restricted cash, amounted to $385,665 and $925,627, respectively. Restricted cash as of December 31, 2017 and 2016 amounted to $198,943 and $141,102, respectively. Restrictions to cash include funds held for the benefit other parties in the amount of $82,828 and $24,987 as of December 31, 2017 and 2016, respectively. The use of these funds are in conjunction with the management of the property owned by this party and the duration of the restrictions matches the duration of the management agreement. (See Note 7) As part of the Kentucky New Markets Development Program (See Note 3) an asset management fee reserve was set up in the amount of $116,115. The funds are held to pay annual asset management fees to an unrelated party through 2021. (See Note 6) |
Restricted cash | As part of the Kentucky New Markets Development Program (See Note 3) an asset management fee reserve was set up in the amount of $116,115. The funds are held to pay annual asset management fees to an unrelated party through 2021. The balance as of March 31, 2018 and December 31, 2017 was $85,786 and $198,943, respectively. The total balance of restricted cash also includes amounts held under the management agreement. See note 6. The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that agrees to the total of those amounts as presented in the consolidated statement of cash flows for the three months ended March 31, 2018 and March 31, 2017. March 31, 2018 March 31, 2017 Cash $ 9,006 $ 756,160 Restricted Cash 85,786 220,602 Total cash and restricted cash presented in the consolidated statement of cash flows $ 94,792 $ 976,762 | |
Concentration | As of December 31, 2017 and 2016 63% and 78% of revenue and 99% and 97% of outstanding accounts receivable came from three and two customers, respectively. | |
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. Costs related to maintenance and repairs which do not prolong the assets useful life are expensed as incurred. | |
Mine Development | Costs of developing new coal mines, including asset retirement obligation assets, or significantly expanding the capacity of existing mines, are capitalized and amortized using the units-of-production method over estimated recoverable reserves. Costs not incurred for development of existing reserves are expensed as incurred. | |
Asset Retirement Obligations (ARO) - Reclamation | At the time they are incurred, legal obligations associated with the retirement of long-lived assets are reflected at their estimated fair value, with a corresponding charge to mine development. Obligations are typically incurred when we commence development of underground and surface mines, and include reclamation of support facilities, refuse areas and slurry ponds or through acquisitions. Obligations are reflected at the present value of their future cash flows. We reflect accretion of the obligations for the period from the date they incurred through the date they are extinguished. The asset retirement obligation assets are amortized using the units-of-production method over estimated recoverable (proved and probable) reserves. We are using a discount rate of 10%. Federal and State laws require that mines be reclaimed in accordance with specific standards and approved reclamation plans, as outlined in mining permits. Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry ponds. We assess our ARO at least annually and reflect revisions for permit changes, change in our estimated reclamation costs and changes in the estimated timing of such costs. During the period ending March 31, 2018 and 2017, $- and $155,922 were incurred for loss on settlement on ARO, respectively. The table below reflects the changes to our ARO: Balance at December 31, 2017 $ 19,885,057 Accretion 3 months March 31, 2018 447,762 Reclamation work 3 months March 31, 2018 - Balance at March 31, 2018 $ 20,343,619 | At the time they are incurred, legal obligations associated with the retirement of long-lived assets are reflected at their estimated fair value, with a corresponding charge to mine development. Obligations are typically incurred when we commence development of underground and surface mines, and include reclamation of support facilities, refuse areas and slurry ponds or through acquisitions. Obligations are reflected at the present value of their future cash flows. We reflect accretion of the obligations for the period from the date they incurred through the date they are extinguished. The asset retirement obligation assets are amortized using the units-of-production method over estimated recoverable (proved and probable) reserves. We are using a discount rate of 10%. Federal and State laws require that mines be reclaimed in accordance with specific standards and approved reclamation plans, as outlined in mining permits. Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry ponds. We assess our ARO at least annually and reflect revisions for permit changes, change in our estimated reclamation costs and changes in the estimated timing of such costs. During 2017 and 2016, $0 and $71,245 were incurred for loss on settlement on ARO. The table below reflects the changes to our ARO: 2017 2016 Beginning Balance $ 18,126,873 $ 8,586,464 Accretion 1,791,051 1,664,774 Reclamation work (32,867 ) (185,647 ) McCoy Acquisition - 3,561,848 KCC Acquisition - 4,499,434 Ending balance $ 19,885,057 $ 18,126,873 Current portion of reclamation liability $ 2,033,862 $ 519,489 Long-term portion of reclamation liability $ 17,851,195 $ 17,607,384 |
Income Taxes | Income Taxes The Company filed an initial tax return in 2015. Management believes that the Companys 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 Companys 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 | The Company recognizes revenue in accordance with ASC 605 when the terms of the contract have been satisfied; generally, this occurs when delivery has been rendered, the fee is fixed or determinable, and collectability is reasonably assured. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Our revenue is comprised of sales of mined coal and services for processing coal. All of the activity is undertaken in eastern Kentucky. We recognize revenue from coal sales at the time risk of loss passes to the customer at contracted amounts and amounts are deemed collectible. Revenue from coal processing and loading are recognized when services have been performed according to the contract in place. | |
Leases | Leases are reviewed by management based on the provisions of ASC 840 and examined to see if they are required to be categorized as an operating lease, a capital lease or a financing transaction. The Company leases certain equipment and other assets under noncancelable operating leases, typically with initial terms of 3 to 7 years. Minimum rent on operating leases is expensed on a straight-line basis over the term of the lease. In addition to minimum rental payments, certain leases require additional payments based on sales volume, as well as reimbursement of real estate taxes, which are expensed when incurred. Capital leases are recorded at the present value of the future minimum lease payments at the inception of the lease. | |
Loan Issuance Costs and Discounts | Loan Issuance Costs and Discounts | |
Allowance For Doubtful Accounts | The Company recognizes an allowance for losses on trade and other accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable amounts considered at risk or uncollectible. Allowance for trade receivables as of March 31, 2018 and December 31, 2017 amounted to $0, for both periods. Allowance for other accounts receivables as of March 31, 2018 and December 31, 2017 amounted to $0 and $92,573, respectively. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of March 31, 2018 and December 31, 2017. | The Company recognizes an allowance for losses on trade and other accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable amounts considered at risk or uncollectible. Allowance for trade receivables as of December 31, 2017 and 2016 amounted to $0 and $0, respectively. Allowance for other accounts receivables as of December 31, 2017 and 2016 amounted to $92,573 and $640,000, respectively. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of December 31, 2017 and 2016. |
Inventory | Inventory consisting of mined coal is stated at the lower of cost (first in, first out method) or net realizable value. | |
Stock-based Compensation | Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable vesting period of the stock award (generally 0 to 5 years) using the straight-line method. Stock compensation to employees is accounted for under ASC 718 and stock compensation to non-employees is accounted for under ASC 505. | |
Earnings Per Share | The Companys basic earnings per share (EPS) amounts have been computed based on the average number of shares of common stock outstanding for the period and include the effect of any participating securities as appropriate. Diluted EPS includes the effect of the Companys outstanding stock options, restricted stock awards, restricted stock units and performance-based stock awards if the inclusion of these items is dilutive. For the years ended December 31, 2017 and 2016, the Company had 5,364,230 and 0 outstanding stock warrants, respectively. For the years ended December 31, 2017 and 2016, the Company did not have any restrictive stock awards, restricted stock units, or performance-based awards. | |
Reclassifications | Reclassifications have been made to conform with current year presentation. | Reclassifications have been made to conform with current year presentation. |
New Accounting Pronouncements | Management has determined that the impact of the following recent FASB pronouncements will not have a material impact on the financial statements. - Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers - ASU 2015-11, Simplifying the Measurement of Inventory - ASU 2015-17, Balance Sheet Classification of Deferred Taxes - ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities - ASU 2016-02, Leases - ASU 2016-18, Statement of Cash Flows: Restricted Cash, - ASU 2017-01, Business Combinations, - ASU 2017-09, Compensation Stock Compensation, - ASU 2017-11, Earnings Per Share, - ASU 2018-05, Income Taxes, Management has elected to early adopt ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ASU 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230). ASU 2014-09, Revenue from Contracts with Customers (Topic 606). | Management has determined that the impact of the following recent FASB pronouncements will not have a material impact on the financial statements. · Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers · ASU 2015-11, Simplifying the Measurement of Inventory · ASU 2015-17, Balance Sheet Classification of Deferred Taxes · ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities · ASU 2016-02, Leases · ASU 2016-18, Statement of Cash Flows: Restricted Cash, · ASU 2017-01, Business Combinations, · AUS 2017-09, Compensation Stock Compensation, · ASU 2017-11, Earnings Per Share, · ASU 2018-05, Income Taxes, Management has elected to early adopt ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ASU 2014-09, Revenue from Contracts with Customers (Topic 606). |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule of restricted cash and cash equivalents | March 31, 2018 March 31, 2017 Cash $ 9,006 $ 756,160 Restricted Cash 85,786 220,602 Total cash and restricted cash presented in the consolidated statement of cash flows $ 94,792 $ 976,762 | |
Schedule of Asset Retirement Obligations | Balance at December 31, 2017 $ 19,885,057 Accretion 3 months March 31, 2018 447,762 Reclamation work 3 months March 31, 2018 - Balance at March 31, 2018 $ 20,343,619 | 2017 2016 Beginning Balance $ 18,126,873 $ 8,586,464 Accretion 1,791,051 1,664,774 Reclamation work (32,867 ) (185,647 ) McCoy Acquisition - 3,561,848 KCC Acquisition - 4,499,434 Ending balance $ 19,885,057 $ 18,126,873 Current portion of reclamation liability $ 2,033,862 $ 519,489 Long-term portion of reclamation liability $ 17,851,195 $ 17,607,384 |
ICG Knott County [Member] | ||
Schedule of assets acquired and liabilities assumed | Assets Cash $ 2,380,000 Underground Mining Equipment 1,533,937 Surface Mining Equipment 206,578 Land 178,683 Coal Preparation and Loading Facilities 200,236 Liabilities Asset Retirement Obligation $ 4,499,434 | |
McCoy [Member] | ||
Schedule of assets acquired and liabilities assumed | Assets Cash $ 2,935,800 Underground Mining Equipment 531,249 Surface Mining Equipment 36,218 Coal Preparation and Loading Facilities 58,681 Liabilities Asset Retirement Obligation $ 3,561,848 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Property And Equipment Tables | ||
Property, Plant and Equipment | March 31, 2018 December 31, 2017 Processing and rail facility $ 2,914,422 $ 2,914,422 Underground equipment 8,887,045 8,887,045 Surface equipment 4,439,263 3,957,603 Land 178,683 178,683 Less: Accumulated depreciation (5,300,140 ) (4,820,569 ) Total Property and Equipment, Net $ 11,119,273 $ 11,117,184 | 2017 2016 Processing and rail facility $ 2,914,422 $ 2,914,422 Underground equipment 8,887,045 7,500,512 Surface equipment 3,957,603 3,751,054 Land 178,683 178,683 Less: Accumulated depreciation (4,820,569 ) (2,262,855 ) Total Property and Equipment, Net $ 11,117,184 $ 12,081,816 |
Property, Plant and Equipment, Estimated Useful Lives | Processing and Rail Facilities 20 years Surface Equipment 7 years Underground Equipment 5 years | Processing and Rail Facilities 20 years Surface Equipment 7 years Underground Equipment 5 years |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable Tables | |
Schedule of note payable | 2017 2016 Equipment Loans - QEI Note payable to an unrelated company in monthly installments of $2,064, with interest at 8.75%, through maturity in March 2019, when the note is due in full. The note is secured by equipment and a personal guarantee by an officer of the Company. $ 30,962 $ 50,235 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 57,290 64,175 On September 8, 2017, Quest entered into an equipment purchase agreement with an unaffiliated entity, to purchase certain underground mining equipment for $600,000. The agreement provided for $80,000 paid upon execution, $30,000 monthly payments until the balance is paid in full. 460,000 0 On October 19, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $90,400. The agreement calls for monthly payments until maturity of October 19, 2019 and interest of 9.95%. 88,297 0 On October 20, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $50,250. The agreement calls for monthly payments until maturity of October 20, 2019 and interest of 10.60%. 51,320 0 On December 4, 2017, Quest entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $56,900. The agreement calls for monthly payments until maturity of January 7, 2021. 56,900 0 Business Loan - ARC On October 4, 2017, ARC entered into a consolidated loan agreement with an unaffiliated entity. $5,444,632 has been advanced under the note. $1,300,000 of the note was advanced after December 31, 2017. The agreement calls for interest of 7% and with all outstanding amounts due on demand. The note is secured by all assets of Quest and subsidiaries. In conjunction with the loan, a warrants for up to 5,017,006 common shares were issued at an exercise price ranging from $.01 to $11.44 per share and with an expiration date of October 2, 2020. The loan consolidation was treated as a loan modification for accounting purposes giving rise to a discount of $140,000. The discount was amortized over the life of the loan with $105,000 included as interest expense and $35,000 included as a note discount as of December 31, 2017. 4,444,632 175,000 Equipment Loans ERC Equipment lease payable to an unrelated company in 48 equal payments of $771 with an interest rate of 5.25% with a balloon payment at maturity of June 30, 2019. The note is secured by equipment and a corporate guarantee from Quest Energy Inc. The equipment is being utilized as part of the management agreement referred to in Note 7. Therefore, the title of the assets are not held with ERC and there is a corresponding receivable due for the payment of this note. 27,288 35,644 Equipment lease payable to an unrelated company in 48 equal payments of $3,304 with an interest rate of 5.25% with a balloon payment at maturity of June 30, 2019. The note is secured by equipment and a corporate guarantee from Quest Energy Inc. The equipment is being utilized as part of the management agreement referred to in Note 7. Therefore, the title of the assets are not held with ERC and there is a corresponding receivable due for the payment of this note. 128,254 161,738 Equipment lease payable to an unrelated company in 48 equal payments of $2,031 with an interest rate of 5.25% with a balloon payment at maturity of August 13, 2019. The note is secured by equipment and a corporate guarantee from Quest Energy Inc. The equipment is being utilized as part of the management agreement referred to in Note 7. Therefore, the title of the assets are not held with ERC and there is a corresponding receivable due for the payment of this note. 36,890 60,541 Equipment Loans - McCoy Equipment note payable to an unrelated company, with monthly payments of $150,000 in September 2016, October 2016, November 2016 and a final payment of $315,000 due in December 2016. No extensions have been entered into subsequent to December 31, 2017 resulting in the note being in default. 540,000 540,000 On May 2, 2017, Quest entered into an equipment purchase agreement with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $250,000. Full payment was due September 12, 2017. 135,000 0 On June 12, 2017, Quest entered into an equipment purchase agreement with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $22,500. Full payment was due September 12, 2017. 22,500 0 On September 25, 2017, Quest entered into an equipment purchase agreement 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. 330,000 0 Business Loans - McCoy Business loan agreement with Crestmark Bank in the amount of $200,000, with monthly payments of 23,000, with an interest rate of 12%, through maturity in January 1, 2018. The note is secured by a corporate guaranty by the Company and a personal guaranty. 66,667 0 Seller Note - Deane Deane Mining - promissory note payable to an unrelated company, with monthly interest payments of $10,000, at an interest rate of 6%, beginning June 30, 2016. The note is due December 31, 2017. No payments have been made on the note and no extensions have been entered into subsequent to December 31, 2017, resulting in the note being in default. 2,000,000 2,000,000 Accounts Receivable Factoring Agreement McCoy, Deane and Knott County secured accounts receivable note payable to a bank. The agreement calls for interest of .30% for each 10 days of outstanding balances. The advance is secured by the accounts receivable, corporate guaranty by the Company and personal guarantees by two officers of the Company. The agreement ends in October 2018 1,582,989 1,616,167 Kentucky New Markets Development Program Quest Processing - loan payable to Community Venture Investment XV, LLC, with interest only payments due quarterly until March 2023, at which time quarterly principal and interest payments are due. The note bears interest at 3.698554% and is due March 7, 2046. The loan is secured by all equipment and accounts of Quest Processing. See Note 4,117,139 4,117,139 Quest Processing - loan payable to Community Venture Investment XV, LLC, with interest only payments due quarterly until March 2023, at which time quarterly principal and interest payments are due. The note bears interest at 3.698554% and is due March 7, 2046. The loan is secured by all equipment and accounts of Quest Processing. See Note 1,026,047 1,026,047 Less: Debt Discounts and Loan Issuance Costs (475,333 ) (451,389 ) Affiliate Notes 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 $ 74,000 During July 2017, an officer of the Company advanced $50,000 to Quest. The advance is unsecured, non interest bearing and due on demand. $ 50,000 $ 0 14,850,842 9,469,947 Less: Current maturities 9,769,154 4,505,006 Total Long-term Debt $ 5,081,688 $ 4,964,941 |
Schedule of Future Minimum Lease Payments for Capital Leases | Payable In Loan Principal Lease Principal Total Loan and Lease Principal Lease Interest 2018 9,704,444 64,710 9,769,154 8,560 2019 312,707 125,798 438,505 3,722 2020 37,283 - 37,283 - 2021 10,491 - 10,491 - 2022 - - - - Thereafter 4,595,409 4,595,409 |
EQUITY TRANSACTIONS (Table)
EQUITY TRANSACTIONS (Table) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Transactions Table | |
Schedule of Stockholders' Equity Note, Warrants | 2017 Expected Dividend Yield 0 % Expected volatility 13.73 % Risk-free rate 1.62 % Expected life of warrants 2-3 years Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Warrants Price Life in Years Value Outstanding December 31, 2015 - - - - Exercisable - December 31, 2015 - - - - Granted - - - - Forfeited or Expired - - - - Outstanding - December 31, 2016 - - - - Exercisable - December 31, 2016 - - - - Granted 6,343,833 $ 2.317 2.706 $ 174,253 Forfeited or Expired 979,603 $ 0.560 1.997 $ 36,184 Exercised - - - - Outstanding - December 31, 2017 5,364,230 $ 2.638 2.835 $ 138,069 Exercisable - December 31, 2017 5,364,230 $ 2.638 2.835 $ 138,069 |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||
Underground Mining Equipment | $ 8,887,045 | $ 8,887,045 | $ 7,500,512 |
ICG Knott County [Member] | |||
Assets | |||
Cash | 2,380,000 | ||
Underground Mining Equipment | 1,533,937 | ||
Surface Mining Equipment | 206,578 | ||
Coal Preparation and Loading Facilities | 200,236 | ||
Liabilities | |||
Asset Retirement Obligation | 4,499,434 | ||
McCoy [Member] | |||
Assets | |||
Cash | 2,935,800 | ||
Underground Mining Equipment | 531,249 | ||
Surface Mining Equipment | 36,218 | ||
Coal Preparation and Loading Facilities | 58,681 | ||
Liabilities | |||
Asset Retirement Obligation | $ 3,561,848 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||
Underground Mining Equipment | $ 8,887,045 | $ 8,887,045 | $ 7,500,512 |
Land | $ 178,683 | 178,683 | $ 178,683 |
ICG Knott County [Member] | |||
Assets | |||
Cash | 2,380,000 | ||
Underground Mining Equipment | 1,533,937 | ||
Surface Mining Equipment | 206,578 | ||
Land | 178,683 | ||
Coal Preparation and Loading Facilities | 200,236 | ||
Liabilities | |||
Asset Retirement Obligation | 4,499,434 | ||
McCoy [Member] | |||
Assets | |||
Cash | 2,935,800 | ||
Underground Mining Equipment | 531,249 | ||
Surface Mining Equipment | 36,218 | ||
Coal Preparation and Loading Facilities | 58,681 | ||
Liabilities | |||
Asset Retirement Obligation | $ 3,561,848 |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Summary Of Significant Accounting Policies Details 2 | |||||
Cash | $ 9,006 | $ 186,722 | $ 756,160 | $ 784,525 | |
Restricted Cash | 85,786 | $ 198,943 | 220,602 | $ 141,102 | |
Total cash and restricted cash presented in the consolidated statement of cash flows | $ 94,792 | $ 976,762 |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Details 2Abstract | ||||
Beginning Balance | $ 19,885,057 | $ 18,126,873 | $ 18,126,873 | $ 8,586,464 |
Accretion | 447,762 | $ 328,061 | 1,791,051 | 1,664,774 |
Reclamation work | (32,867) | (185,647) | ||
McCoy Acquisition | 3,561,848 | |||
KCC Acquisition | 4,499,434 | |||
Ending Balance | 20,343,619 | 19,885,057 | 18,126,873 | |
Current portion of reclamation liability | 2,379,352 | 2,033,862 | 519,489 | |
Long-term portion of reclamation liability | $ 17,964,267 | $ 17,851,195 | $ 17,607,384 |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | May 15, 2017 | Jan. 05, 2017 | Apr. 14, 2016 | Feb. 17, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Date of incorporation | Jun. 30, 2015 | ||||||||
Assumption of net property, equipment and land | $ 2,745,582 | ||||||||
Cash received from acquisitions | 5,315,700 | ||||||||
Total acquisition | 8,061,282 | ||||||||
Cash - restricted | $ 85,786 | $ 220,602 | $ 198,943 | 141,102 | |||||
Funds held for others | 12,056 | 82,828 | 24,987 | ||||||
Cash | 385,665 | 925,627 | |||||||
Asset management fee | 116,115 | $ 116,115 | 116,115 | ||||||
Terms of asset management fee pay | The funds are held to pay annual asset management fees to an unrelated party through 2021. | ||||||||
Loss on reclamation settlements | (155,922) | (71,245) | |||||||
Amortization of debt discount and debt issuance costs | 37,841 | $ 52,841 | $ 477,056 | $ 9,406 | |||||
Amortization expense 2018 | 11,520 | ||||||||
Amortization expense 2019 | 11,520 | ||||||||
Amortization expense 2020 | 11,520 | ||||||||
Amortization expense 2021 | 11,520 | ||||||||
Amortization expense 2022 | $ 11,520 | ||||||||
Earnings per share outstanding stock warrants | 5,364,230 | ||||||||
Allowance for trade receivables | 0 | $ 0 | $ 0 | ||||||
Allowance for other accounts receivables | $ 0 | $ 92,573 | $ 640,000 | ||||||
Discount rate | 10.00% | 10.00% | |||||||
ARC [Member] | |||||||||
Reverse stock split | one-for-thirty | ||||||||
Variable interest entity | Ownership is less than 100% | ||||||||
McCoy Elkhorn Coal LLC [Member] | |||||||||
Fair value exchange assets acquired | $ 100 | ||||||||
Fair values of liabilities | $ 3,561,848 | ||||||||
NGFC Equities [Member] | |||||||||
Description of shares exchange agreement | Under the agreement, the shareholders of QEI exchanged 100% of its common stock to NGFC for 4,817,792 newly created Series A Preferred shares that is convertible into approximately 95% of outstanding common stock of NGFC. The previous NGFC shareholders retained 845,370 common shares as part of the agreement. The conditions to the agreement were fully satisfied on February 7, 2017, at which time the Company took full control of NGFC. | ||||||||
Maximum [Member] | |||||||||
Operating leases terms | 7 years | ||||||||
Minimum [Member] | |||||||||
Operating leases terms | 3 years | ||||||||
Accounts Receivable [Member] | Customers Credit Concentration Risk [Member] | |||||||||
Concentration Risk, Percentage | 63.00% | 78.00% | |||||||
Sales Revenue, Net [Member] | Customers Credit Concentration Risk [Member] | |||||||||
Concentration Risk, Percentage | 99.00% | 97.00% | |||||||
ICG Knott County [Member] | |||||||||
Fair values of liabilities | $ 4,499,434 | ||||||||
Equity acquired ownership Percentage | 100.00% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Less: Accumulated depreciation | $ (5,300,140) | $ (4,820,569) | $ (2,262,855) |
Total Property and Equipment, Net | 11,119,273 | 11,117,184 | 12,081,816 |
Land [Member] | |||
Property and equipment | 178,683 | 178,683 | 178,683 |
Processing and rail facility [Member] | |||
Property and equipment | 2,914,422 | 2,914,422 | 2,914,422 |
Underground equipment [Member] | |||
Property and equipment | 8,887,045 | 8,887,045 | 7,500,512 |
Surface equipment [Member] | |||
Property and equipment | $ 4,439,263 | $ 3,957,603 | $ 3,751,054 |
PROPERTY AND EQUIPMENT (Detai29
PROPERTY AND EQUIPMENT (Details 1) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Processing and rail facility [Member] | ||
Estimated useful lives | 20 years | 20 years |
Surface equipment [Member] | ||
Estimated useful lives | 7 years | 7 years |
Underground equipment [Member] | ||
Estimated useful lives | 5 years | 5 years |
PROPERTY AND EQUIPMENT (Detai30
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property And Equipment Details Narrative | ||||
Depreciation expense | $ 479,571 | $ 459,644 | $ 2,557,714 | $ 2,262,855 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt | $ 14,850,842 | $ 9,469,947 | |
Less: Debt Discounts and Loan Issuance Costs | (475,333) | (451,389) | |
Less: Current maturities | 9,769,154 | 4,505,006 | |
Total Long-term Debt | $ 5,782,253 | 5,081,688 | 4,964,941 |
Note payable 1 [Member] | Affiliate Notes [Member] | |||
Long-term debt | 50,000 | 0 | |
Note payable 1 [Member] | Equipment Loans - QEI [Member] | |||
Long-term debt | 57,290 | 64,175 | |
Note payable 1 [Member] | Kentucky New Markets Development Program [Member] | |||
Long-term debt | 1,026,047 | 1,026,047 | |
Note payable 1 [Member] | Equipment Loans - McCoy [Member] | |||
Long-term debt | 135,000 | 0 | |
Note payable 1 [Member] | Equipment Loans ERC [Member] | |||
Long-term debt | 128,254 | 161,738 | |
Note payable [Member] | Affiliate Notes [Member] | |||
Long-term debt | 74,000 | 74,000 | |
Note payable [Member] | Equipment Loans - QEI [Member] | |||
Long-term debt | 30,962 | 50,235 | |
Note payable [Member] | Kentucky New Markets Development Program [Member] | |||
Long-term debt | 4,117,139 | 4,117,139 | |
Note payable [Member] | Accounts Receivable Factoring Agreement [Member] | |||
Long-term debt | 1,582,989 | 1,616,167 | |
Note payable [Member] | Seller Note - Deane [Member] | |||
Long-term debt | 2,000,000 | 2,000,000 | |
Note payable [Member] | Business Loans - McCoy [Member] | |||
Long-term debt | 66,667 | 0 | |
Note payable [Member] | Equipment Loans - McCoy [Member] | |||
Long-term debt | 540,000 | 540,000 | |
Note payable [Member] | Business Loan - ARC [Member] | |||
Long-term debt | 4,444,632 | 175,000 | |
Note payable [Member] | Equipment Loans ERC [Member] | |||
Long-term debt | 27,288 | 35,644 | |
Note payable 2 [Member] | Equipment Loans - QEI [Member] | |||
Long-term debt | 460,000 | 0 | |
Note payable 2 [Member] | Equipment Loans - McCoy [Member] | |||
Long-term debt | 22,500 | 0 | |
Note payable 2 [Member] | Equipment Loans ERC [Member] | |||
Long-term debt | 36,890 | 60,541 | |
Note payable 3 [Member] | Equipment Loans - QEI [Member] | |||
Long-term debt | 88,297 | 0 | |
Note payable 3 [Member] | Equipment Loans - McCoy [Member] | |||
Long-term debt | 330,000 | 0 | |
Note payable 4 [Member] | Equipment Loans - QEI [Member] | |||
Long-term debt | 51,320 | 0 | |
Note payable 5 [Member] | Equipment Loans - QEI [Member] | |||
Long-term debt | $ 56,900 | $ 0 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) | Dec. 31, 2017USD ($) |
Lease Principal [Member] | |
2,018 | $ 64,710 |
2,019 | 125,798 |
2,020 | |
2,021 | |
2,022 | |
Thereafter | |
Total Loan and Lease Principal [Member] | |
2,018 | 9,769,154 |
2,019 | 438,505 |
2,020 | 37,283 |
2,021 | 10,491 |
2,022 | |
Thereafter | 4,595,409 |
Lease Interest [Member] | |
2,018 | 8,560 |
2,019 | 3,722 |
2,020 | |
2,021 | |
2,022 | |
Thereafter | |
Loan Principal [Member] | |
2,018 | 9,704,444 |
2,019 | 312,707 |
2,020 | 37,283 |
2,021 | 10,491 |
2,022 | |
Thereafter | $ 4,595,409 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | Dec. 04, 2017USD ($) | Sep. 08, 2017USD ($) | Jun. 12, 2017USD ($) | May 02, 2017USD ($) | Mar. 13, 2013 | Oct. 20, 2017USD ($) | Oct. 19, 2017USD ($) | Sep. 25, 2017USD ($) | Nov. 30, 2016USD ($) | Oct. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)number$ / sharesshares | Dec. 31, 2016USD ($) | Oct. 04, 2017USD ($) | Jul. 31, 2017USD ($) |
Principal payments on long term debt | $ 191,517 | $ 4,893 | $ 392,002 | $ 303,706 | |||||||||||||
Proceeds from new debt issuance | 5,909,650 | 5,824,816 | |||||||||||||||
Proceeds from long term debt | 1,000,000 | 4,440,000 | 4,857,391 | ||||||||||||||
Equipment for notes payable | 481,660 | 1,419,650 | 904,425 | ||||||||||||||
Proceeds from the factoring agreement | 6,714,836 | 2,039,226 | 32,985 | 1,616,067 | |||||||||||||
Cash proceeds | 200,000 | ||||||||||||||||
Amortized discount | 455,000 | ||||||||||||||||
Unamortized discount | 35,000 | ||||||||||||||||
Debt discount | 490,000 | ||||||||||||||||
Underground equipment | 8,887,045 | 8,887,045 | 7,500,512 | ||||||||||||||
Surface equipment cost | $ 4,439,263 | $ 3,957,603 | 3,751,054 | ||||||||||||||
Interest rate | 7.00% | ||||||||||||||||
Debt instrument maturity date | May 2, 2018 | ||||||||||||||||
Interest expense | $ 247,154 | $ 128,533 | $ 558,772 | 283,564 | |||||||||||||
First Note [Member] | |||||||||||||||||
Debt instrument maturity date | Jan. 17, 2016 | ||||||||||||||||
Kentucky New Markets Development Program [Member] | |||||||||||||||||
Proceeds from long term debt | 4,490,000 | 4,688,152 | |||||||||||||||
Equipment for notes payable | 1,419,650 | 967,425 | |||||||||||||||
Note payable 2 [Member] | Equipment Loans - McCoy [Member] | Equipment purchase agreement [Member] | |||||||||||||||||
Underground equipment | $ 250,000 | ||||||||||||||||
Debt instrument maturity date | Sep. 12, 2017 | ||||||||||||||||
Note payable 2 [Member] | Equipment Loans - QEI [Member] | Equipment purchase agreement [Member] | |||||||||||||||||
Equipment for notes payable | $ 80,000 | ||||||||||||||||
Underground equipment | 600,000 | ||||||||||||||||
Note payable monthly payments | $ 30,000 | ||||||||||||||||
Note payable 2 [Member] | Equipment Loans - QEI [Member] | Equipment financing agreement [Member] | |||||||||||||||||
Surface equipment cost | $ 90,400 | ||||||||||||||||
Interest rate | 9.95% | ||||||||||||||||
Debt instrument maturity date | Oct. 19, 2019 | ||||||||||||||||
Note payable 2 [Member] | Equipment Loans ERC [Member] | |||||||||||||||||
Note payable monthly payments | $ 2,031 | ||||||||||||||||
Interest rate | 5.25% | ||||||||||||||||
Debt instrument maturity date | Aug. 13, 2019 | ||||||||||||||||
Number of instalments | number | 48 | ||||||||||||||||
Note payable 4 [Member] | Equipment Loans - McCoy [Member] | Equipment purchase agreement [Member] | |||||||||||||||||
Underground equipment | $ 350,000 | ||||||||||||||||
Note payable monthly payments | $ 20,000 | ||||||||||||||||
Note payable 4 [Member] | Equipment Loans - QEI [Member] | Equipment financing agreement [Member] | |||||||||||||||||
Surface equipment cost | $ 56,900 | ||||||||||||||||
Debt instrument maturity date | Jan. 7, 2021 | ||||||||||||||||
Note payable 3 [Member] | Equipment Loans - McCoy [Member] | Equipment purchase agreement [Member] | |||||||||||||||||
Underground equipment | $ 22,500 | ||||||||||||||||
Debt instrument maturity date | Sep. 12, 2017 | ||||||||||||||||
Note payable 3 [Member] | Equipment Loans - QEI [Member] | Equipment financing agreement [Member] | |||||||||||||||||
Surface equipment cost | $ 50,250 | ||||||||||||||||
Interest rate | 10.60% | ||||||||||||||||
Debt instrument maturity date | Oct. 20, 2019 | ||||||||||||||||
Note payable [Member] | Equipment Loans - McCoy [Member] | |||||||||||||||||
Equipment for notes payable | $ 315,000 | ||||||||||||||||
Note payable monthly payments | $ 150,000 | $ 150,000 | $ 150,000 | ||||||||||||||
Note payable [Member] | Equipment Loans - QEI [Member] | |||||||||||||||||
Note payable monthly payments | $ 2,064 | ||||||||||||||||
Interest rate | 8.75% | ||||||||||||||||
Debt instrument maturity date | Mar. 31, 2019 | ||||||||||||||||
Note payable [Member] | Equipment Loans ERC [Member] | |||||||||||||||||
Note payable monthly payments | $ 771 | ||||||||||||||||
Interest rate | 5.25% | ||||||||||||||||
Debt instrument maturity date | Jun. 30, 2019 | ||||||||||||||||
Number of instalments | number | 48 | ||||||||||||||||
Note payable [Member] | Business Loans - McCoy [Member] | |||||||||||||||||
Note payable monthly payments | $ 23,000 | ||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Debt instrument maturity date | Jan. 1, 2018 | ||||||||||||||||
Notes payable in advance | $ 200,000 | ||||||||||||||||
Note payable [Member] | Business Loan - ARC [Member] | Consolidated loan agreement [Member] | |||||||||||||||||
Amortized discount | 105,000 | ||||||||||||||||
Debt discount | $ 140,000 | ||||||||||||||||
Interest rate | 7.00% | 7.00% | |||||||||||||||
Debt instrument maturity date | Oct. 2, 2020 | ||||||||||||||||
Notes payable in advance | $ 1,300,000 | $ 5,444,632 | |||||||||||||||
Issue of warrant | shares | 5,017,006 | ||||||||||||||||
Discount on notes | $ 35,000 | ||||||||||||||||
Note payable [Member] | Business Loan - ARC [Member] | Consolidated loan agreement [Member] | Minimum [Member] | |||||||||||||||||
Exercise price of warrant | $ / shares | $ 0.01 | ||||||||||||||||
Note payable [Member] | Business Loan - ARC [Member] | Consolidated loan agreement [Member] | Maximum [Member] | |||||||||||||||||
Exercise price of warrant | $ / shares | $ 11.44 | ||||||||||||||||
Note payable [Member] | Accounts Receivable Factoring Agreement [Member] | |||||||||||||||||
Debt instrument maturity date | Oct. 31, 2018 | ||||||||||||||||
Accounts receivable factoring agreement description | The agreement calls for interest of .30% for each 10 days of outstanding balances. | ||||||||||||||||
Note payable [Member] | Kentucky New Markets Development Program [Member] | Community Venture Investment XV, LLC [Member] | |||||||||||||||||
Interest rate | 3.6985% | ||||||||||||||||
Debt instrument maturity date | Mar. 7, 2046 | ||||||||||||||||
Note payable [Member] | Affiliate Notes [Member] | Officer [Member] | |||||||||||||||||
Notes payable in advance | $ 50,000 | ||||||||||||||||
Note payable 1 [Member] | Equipment Loans - QEI [Member] | |||||||||||||||||
Note payable monthly payments | $ 1,468 | ||||||||||||||||
Interest rate | 6.95% | ||||||||||||||||
Debt instrument maturity date | Mar. 31, 2021 | ||||||||||||||||
Note payable 1 [Member] | Equipment Loans ERC [Member] | |||||||||||||||||
Note payable monthly payments | $ 3,304 | ||||||||||||||||
Interest rate | 5.25% | ||||||||||||||||
Debt instrument maturity date | Jun. 30, 2019 | ||||||||||||||||
Number of instalments | number | 40 | ||||||||||||||||
Note payable 1 [Member] | Kentucky New Markets Development Program [Member] | Community Venture Investment XV, LLC [Member] | |||||||||||||||||
Interest rate | 3.6985% | ||||||||||||||||
Debt instrument maturity date | Mar. 7, 2046 | ||||||||||||||||
Promissory note payable [Member] | Seller Note - Deane [Member] | |||||||||||||||||
Note payable monthly payments | $ 10,000 | ||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||
Debt instrument maturity date | Dec. 31, 2017 |
NOTES PAYABLE (Details Narrat34
NOTES PAYABLE (Details Narrative 2) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Principal payments on long term debt | $ 191,517 | $ 4,893 | $ 392,002 | $ 303,706 |
Increases in long term debt | 1,481,660 | 0 | ||
Proceeds from long term debt | 1,000,000 | 4,440,000 | 4,857,391 | |
Equipment for notes payable | 481,660 | 1,419,650 | 904,425 | |
Proceeds from the factoring agreement | 6,714,836 | 2,039,226 | $ 32,985 | $ 1,616,067 |
Repayments of factoring agreement | $ 6,827,126 | $ 2,454,430 | ||
Interest rate | 7.00% | |||
Secured loan maturity date | May 2, 2018 | |||
Note payable [Member] | Equipment Loans [Member] | ||||
Equipment for notes payable | $ 346,660 | |||
Interest rate | 9.00% | |||
Note payable [Member] | Business Loan - ARC [Member] | Consolidated loan agreement [Member] | ||||
Interest rate | 7.00% | 7.00% | ||
Secured loan maturity date | Oct. 2, 2020 | |||
Note payable One [Member] | Equipment Loans [Member] | ||||
Equipment for notes payable | $ 135,000 | |||
Interest rate | 0.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Mar. 13, 2013 | Jul. 31, 2017 | Apr. 30, 2017 | Jul. 17, 2013 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Consulting fees - related party | $ 12,340,615 | |||||||
Accrued related party management fee | $ 17,840,615 | 17,840,615 | 17,840,615 | |||||
Principal balance of note | 74,000 | 74,000 | ||||||
Proceeds from related party | $ 50,000 | |||||||
Management fees | $ 0 | $ 0 | ||||||
First Note [Member] | ||||||||
Line of credit amount | $ 150,000 | |||||||
Interst rate | 12.00% | |||||||
Secuured debt due date | Sep. 13, 2015 | |||||||
Second Note [Member] | ||||||||
Line of credit amount | $ 100,000 | |||||||
Interst rate | 12.00% | |||||||
Secuured debt due date | Jan. 17, 2016 | |||||||
Officer [Member] | ||||||||
Proceeds from related party | $ 50,000 | |||||||
Secured Debt [Member] | ||||||||
Purchase of related party note receivable in exchange for Equity | $ 250,000 | |||||||
On January 1, 2016 [Member] | ||||||||
Stock options awarded | 857,464 | |||||||
On January 1, 2016 [Member] | Series A Preferred Stock [Member] | ||||||||
Stock options awarded | 290,513 |
VARIABLE INTEREST ENTITY (Detai
VARIABLE INTEREST ENTITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 24, 2016 | Oct. 21, 2016 | Dec. 31, 2016 | |
Variable Interest Entity Details Narrative | |||
Note bears due date | 2,026 | ||
Variable interest entity, amount | $ 178,683 | $ 130,145 |
KENTUCKY NEW MARKETS DEVELOPM37
KENTUCKY NEW MARKETS DEVELOPMENT PROGRAM (Details Narrative) - USD ($) | 1 Months Ended | |||
Mar. 18, 2016 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Note Receivable | $ 4,117,139 | $ 4,117,139 | $ 4,117,139 | |
ERC Mining LLC [Member] | ||||
Note Receivable | $ 4,117,139 | |||
Interest on note receivable | 4.00% | |||
Note receviable due date | Mar. 7, 2046 | |||
Payments of interest quterly due date | Mar. 18, 2023 | |||
Quest Processing [Member] | ||||
Total loan amount | $ 5,143,186 | |||
Payment of debt issuance | 460,795 | |||
Net proceeds for loan cost | $ 4,682,391 | |||
Description for company rights | The Company retains the right to call $5,143,186 of the loans in March 2023. | |||
Income tax credits value | $ 2,005,843 |
MANAGEMENT AGREEMENT (Details N
MANAGEMENT AGREEMENT (Details Narrative) - USD ($) | Apr. 13, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Advances made in connection with management agreement | $ (7,000) | $ (40,000) | $ (77,800) | $ (1,845,902) | |
Advance repayment in connection with management agreement | 79,219 | $ 75,000 | 625,227 | 1,175,000 | |
Offsetting liability | $ 12,056 | 82,828 | 24,987 | ||
ERC [Member] | |||||
Advances made in connection with management agreement | 77,800 | 1,975,000 | |||
Advance repayment in connection with management agreement | 625,227 | 1,175,000 | |||
Received of previously impaired amount | 387,427 | ||||
Monthly base fee | $ 20,000 | ||||
Total fee earned | 240,000 | 240,000 | |||
Payment of equipment | 192,432 | 258,096 | |||
Offsetting liability | $ 82,828 | $ 24,987 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Deferred tax assets | $ 4,152,800 |
Net operating loss carryforwards | $ 4,152,800 |
Expire date | 2,035 |
Maximum [Member] | |
Corporate income tax rate | 34.00% |
Minimum [Member] | |
Corporate income tax rate | 21.00% |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Expected Dividend Yeild | 0.00% |
Expected volatility | 13.73% |
Risk-free rate | 1.62% |
Minimum [Member] | |
Expected life of warrants | 2 years |
Maximum [Member] | |
Expected life of warrants | 3 years |
EQUITY TRANSACTIONS (Details 1)
EQUITY TRANSACTIONS (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Equity Transactions Details 1 | ||
Beginning Outstanding | ||
Beginning Exercisable | ||
Granted | 6,343,833 | |
Forfeited or Expired | 979,603 | |
Exercised | ||
Ending Outstanding | 5,364,230 | |
Ending Exercisable | 5,364,230 | |
Weighted Average Exercise Price | ||
Beginning Outstanding | ||
Beginning Exercisable | ||
Granted | 2.317 | |
Forfeited or Expired | 0.560 | |
Exercised | ||
Ending Outstanding | 2.638 | |
Ending Exercisable | $ 2.638 | |
Weighted Average Contractual Life in Years | ||
Weighted average remaining contractual terms of share granted | 2 years 8 months 15 days | |
Weighted average remaining contractual terms of forfeited or Expired | 1 year 29 months 27 days | |
Weighted average remaining contractual terms of share Outstanding | 2 years 10 months | |
Weighted average remaining contractual terms of share exercisable | 2 years 10 months | |
Aggregate Intrinsic Value | ||
Beginning Outstanding | ||
Beginning Exercisable | ||
Granted | 174,253 | |
Forfeited or Expired | 36,184 | |
Ending Outstanding | 138,069 | |
Ending Exercisable | $ 138,069 |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | Jul. 05, 2017 | May 10, 2017 | Apr. 02, 2017 | Mar. 07, 2017 | Mar. 13, 2013 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 30, 2017 | Feb. 22, 2017 | Jan. 31, 2016 | Dec. 31, 2015 | Jul. 17, 2013 |
Compensation expense | $ 50,000 | $ 88,675 | ||||||||||||
Expected life of warrants | 2 years | |||||||||||||
Common stock, for proceeds | $ 500,000 | |||||||||||||
Equity, Description | Such put option expires after 20 days from notification | |||||||||||||
Terms of conversion feature | The Series B Preferred Stock converts into common stock of the Company at the holders discretion at a conversion price of $3.60 per common share (one share of Series B Preferred converts to common at a ratio of 0.27778). Furthermore, the Series B Preferred share purchase agreement provides for certain adjustments to the conversion value of the Series B Preferred to common shares of the Company that are based on the EBITDA (earning before interest, taxes, depreciation, and amortization) for the Company for the 12 months ended March 31, 2018. Those adjustments provide for a decrease in the conversion value based on the proportional miss of the Companys EBITDA, up to a maximum of 30.0% decrease in the conversion value of the Series B Preferred to common shares. | |||||||||||||
Accrued dividend on Series B | $ 70,157 | $ 53,157 | ||||||||||||
Stock based compensation expense | $ 0 | $ 88,675 | ||||||||||||
Maturity date | May 2, 2018 | |||||||||||||
First Note [Member] | ||||||||||||||
Maturity date | Jan. 17, 2016 | |||||||||||||
Line of credit amount | $ 150,000 | |||||||||||||
Interest rate | 12.00% | |||||||||||||
Second Note [Member] | ||||||||||||||
Line of credit amount | $ 100,000 | |||||||||||||
Interest rate | 12.00% | |||||||||||||
Private Placement [Member] | ARC [Member] | ||||||||||||||
Purchase price per share | $ 1 | |||||||||||||
Proceeds from the sale of preferred stock | $ 100,000 | |||||||||||||
Private placement agreement [Member] | ||||||||||||||
Amount of secured debt purchased from unrelated debt holder of related party | $ 250,000 | |||||||||||||
Warrant [Member] | ||||||||||||||
Warrants | $ 40,000 | |||||||||||||
Class of warrants or rights issued | 33,333 | 8,334 | ||||||||||||
Common stock shares issued | 13,333 | |||||||||||||
Compensation expense | $ 10,000 | |||||||||||||
Expected life of warrants | 3 years | |||||||||||||
Exercise price | $ 3.60 | $ 3.60 | ||||||||||||
Maturity date | May 9, 2020 | |||||||||||||
Exercise price of warrant | $ 3.60 | |||||||||||||
Preferred Stock A | ||||||||||||||
Common stock shares issued | 4,817,792 | 4,817,792 | 2,550,430 | |||||||||||
Preferred Stock B | ||||||||||||||
Common stock shares issued | 850,000 | |||||||||||||
Common Stock | ||||||||||||||
Common stock shares issued | 892,044 | |||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||
Preferred stock shares issued | 850,000 | 850,000 | 850,000 | |||||||||||
Series B Preferred Stock [Member] | Private Placement [Member] | ||||||||||||||
Proceeds from the sale of preferred stock | $ 500,000 | |||||||||||||
Series B Preferred Stock [Member] | Private Placement [Member] | ARC [Member] | ||||||||||||||
Issuance of shares | 500,000 | |||||||||||||
Purchase price per share | $ 1 | |||||||||||||
Common stock shares issuable upon exercise of warrants or rights | 27,778 | 208,334 | ||||||||||||
Preferred stock shares issued | 100,000 | |||||||||||||
Common stock, for proceeds | $ 500,000 | |||||||||||||
Series B Preferred Stock [Member] | Private placement agreement [Member] | ARC [Member] | ||||||||||||||
Common stock shares issuable upon exercise of warrants or rights | 69,445 | |||||||||||||
Preferred stock shares issued | 250,000 | |||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Cashlessly shares exercised | 2,267,362 | |||||||||||||
Preferred stock shares issued | 4,817,792 | 4,817,792 | 4,817,792 | |||||||||||
Stock Option Plan [Member] | ||||||||||||||
Issuance of shares | 6,363,225 | |||||||||||||
ARC Business Loan [Member] | Warrant [Member] | ||||||||||||||
Common stock shares issued | 979,603 | |||||||||||||
Common stock shares issuable upon exercise of warrants or rights | 5,996,609 | |||||||||||||
Maturity date | Oct. 2, 2020 | |||||||||||||
ARC Business Loan [Member] | Minimum [Member] | Warrant [Member] | ||||||||||||||
Exercise price of warrant | $ 0.01 | $ 11.44 | ||||||||||||
Conversion option [Member] | ||||||||||||||
Issuance of shares | 33,334 | |||||||||||||
Note payable | $ 50,000 | |||||||||||||
Conversion price | $ 1.50 | |||||||||||||
Discount on note payable | $ 50,000 | |||||||||||||
April 2, 2019 [Member] | Series B Preferred Stock [Member] | Private Placement [Member] | ||||||||||||||
Warrants | $ 27,778 | |||||||||||||
Exercise price | $ 7.20 | |||||||||||||
A Expire March 6, 2020 [Member] | Series B Preferred Stock [Member] | Private Placement [Member] | ||||||||||||||
Class of warrants or rights issued | 138,889 | |||||||||||||
Exercise price | $ 7.60 | |||||||||||||
A-1 Expire March 6, 2020 [Member] | Series B Preferred Stock [Member] | Private Placement [Member] | ||||||||||||||
Warrants | $ 69,445 | |||||||||||||
Exercise price | $ 0.003 | |||||||||||||
April 29, 2019 [Member] | Series B Preferred Stock [Member] | Private Placement [Member] | ||||||||||||||
Exercise price | $ 7.20 | |||||||||||||
TwentyNineAprilTwoThousandNinteenMember | Series B Preferred Stock [Member] | Private Placement [Member] | ||||||||||||||
Warrants | $ 69,445 | |||||||||||||
2016 Plan [Member] | Series A Preferred Stock [Member] | ||||||||||||||
Issuance of shares | 6,363,225 |
CONTINGENCIES (Details Narrativ
CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Contingencies Details Narrative | ||
Future annual rent | $ 6,000 | |
Rent expense | $ 26,000 | $ 26,000 |
Annual rent Maturity date | through 2,021 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Apr. 13, 2018 | Apr. 06, 2018 | Jan. 25, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Mar. 29, 2018 |
Maturity date | May 2, 2018 | |||||
Quest [Member] | Subsequent Event [Member] | ||||||
Payments to acquire mining equipment | $ 75,000 | |||||
Payments due to acquire mining equipment | $ 60,000 | |||||
SurfaceEquipmentsMember | Quest [Member] | Subsequent Event [Member] | ||||||
Credit facility maximum borrowing capacity | $ 346,660 | $ 135,000 | ||||
Maturity date | Dec. 25, 2020 | |||||
ARC Business Loan [Member] | Unaffiliated entity [Member] | Subsequent Event [Member] | ||||||
Amount receivable under agreement | $ 1,300,000 |
SUBSEQUENT EVENTS (Details Na45
SUBSEQUENT EVENTS (Details Narrative 2) - USD ($) | May 10, 2018 | May 30, 2018 | Mar. 31, 2018 | May 31, 2018 | Apr. 30, 2018 | Apr. 21, 2018 |
Maturity date | May 2, 2018 | |||||
Subsequent Event [Member] | ||||||
Consideration for acquired permits | $ 75,000 | |||||
Royalty cost Per ton description | The payment of $1.50 per ton royalty of coal sold | |||||
ARC Business Loan [Member] | Subsequent Event [Member] | ||||||
Additional loan | $ 300,000 | |||||
Surface Lease And Mineral Sub-Lease [Member] | Subsequent Event [Member] | ||||||
Consideration for acquired permits | $ 1,036,200 | |||||
Vendor payables | $ 53,771 | |||||
Financing Transaction [Member] | Subsequent Event [Member] | ||||||
Note payable | $ 1,000,000 | |||||
Maturity date | Sep. 30, 2018 |