American Resources Corp 10-K

Item 9A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures. The management, with participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 12a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply is judgement in evaluating the benefits of possible controls and procedures relative to their costs. Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, due to the weakness in internal control over financial reporting described below, our disclosure controls and procedures are not designed at a reasonable assurance level or effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As discussed below, we plan on increasing the size of our accounting staff at the appropriate time for our business and its size to ameliorate the concern that the Company does not effectively segregate certain accounting duties, which we believe would resolve the material weakness in internal control over financial reporting and similarly improve disclosure controls and procedures, but there can be no assurances as to the timing of any such action or that the Company will be able to do so. (b) Management’s Annual Report on Internal Control over Financial Reporting. The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Principal Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with the U.S. generally accepted accounting principles. As of December 31, 2023, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934 and based on the criteria for effective internal control described Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.. Based on this evaluation, management concluded that our internal controls over financial reporting were not effective for the purposes for which it is intended. Specifically, managements determination was based on the following material weakness which existed as of December 31, 2023: 34 Table of Contents Due to the Company’s insufficient number of staff performing accounting and reporting functions, there is a lack of segregation of duties within the financial reporting function resulting in limited level of multiple reviews among those tasked with preparing the financial statements, resulting in the need for adjustments. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Notwithstanding the determination that our internal control over financial reporting was not effective, as of December 31, 2023, and that there was a material weakness as identified in this Annual Report, we believe that our consolidated financial statements contained in this Annual Report fairly present our financial position, results of operations and cash flows for the years covered hereby in all material respects. The management, including its Principal Executive Officer and Principal Financial Officer, does not expect that its disclosure controls and procedures, or its internal controls over financial reporting will prevent all error and all fraud. A control system no matter how well conceived and operated, can provide only reasonable not absolute assurance that the objectives of the control system are met. Further, the design of control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any within the Company have been detected. This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the temporary rules of the SEC that permit the Company to provide only management’s report in this Annual Report. This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of this section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. (c) Changes in Internal Control Over Financial Reporting There have been no changes in the Company’s internal control over financial reporting during the period ended December 31, 2023 that have materially affected the Company’s internal controls over financial reporting. Item 9B. Other Information. None. 35 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. Directors and Executive Officers. The following individuals serve as our executive officers and members of our board of directors as of December 31, 2022: Name Age Positions Mark C. Jensen 44 Chief Executive Officer, Chairman of the Board of Directors Thomas M. Sauve 45 President, Director Kirk P. Taylor 44 Chief Financial Officer Tarlis R. Thompson 41 Chief Operating Officer Josh Hawes 31 Director Gerardine Botte, PH.D. 52 Director Courtenay O. Taplin 72 Director Mark C. Jensen (age 44) – Chief Executive Officer Mark has been an operator, investor and consultant in various natural resources and energy businesses. He has been highly involved in the navigation of numerous growth businesses to mature businesses, working as a managing member at T Squared Capital LLC since 2007, an investment firm focused on private equity styled investing in start-up businesses. Mark has significant experience with major Wall Street firms such as Citigroup and graduated from the Kelley School of Business at Indiana University with a BS in Finance and International Studies with a focus on Business. Mark also studied in Sydney Australia through Boston University completing his International Studies degree with a focus on East Asian culture and business. There are no arrangements or understandings between Mark and any other persons pursuant to which he was selected as an officer. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Thomas M. Sauve (age 45) – President Tom has been involved a number of energy related businesses. Prior he had been an investor and partner in various natural resources assets over the last seven years including coal mining operations and various oil and gas wells throughout Texas and the Appalachia region. Since 2007, Tom also worked as a managing member at T Squared Capital LLC, an investment firm focused on private equity styled investing in start-up businesses Tom received his Bachelor’s degree in Economics, magna cum laude, from the University of Rochester, New York, with additional studies at the Simon Graduate School of Business. There are no arrangements or understandings between Tom and any other persons pursuant to which he was selected as an officer. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. 36 Table of Contents Kirk Taylor, CPA (age 44) – Chief Financial Officer Kirk conducts all tax and financial accounting roles of the organization, and has substantial experience in tax credit analysis and financial structure. Kirk’s main focus over his 13 years in public accounting had been the auditing, tax compliance, financial modeling and reporting on complex real estate and business transactions utilizing numerous federal and state tax credit and incentive programs. Prior to joining American Resources Corporation, Kirk was Chief Financial Officer of Quest Energy, Inc., ARC’s wholly-owned subsidiary. Prior to joining Quest Energy in 2015, he was a Manager at K.B. Parrish & Co. LLP where he worked since 2014. Prior to that, he worked at Katz Sapper Miller since 2012 as Manager. In addition, Kirk is an instructor for the CPA examination and has spoken at several training and industry conferences. He received a BS in Accounting and a BS in Finance from the Kelley School of Business at Indiana University, Bloomington Indiana and is currently completing his Masters of Business Administration from the University of Saint Francis at Fort Wayne, Indiana. Kirk serves his community in various ways including as the board treasurer for a community development corporation in Indianapolis, Indiana. Kirk does not have any family relationships with any of the Company’s directors or executive officers. There are no arrangements or understandings between Kirk and any other persons pursuant to which he was selected as an officer. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Tarlis R. Thompson (age 41) – Chief Operating Officer Tarlis overseas all operations at American Resources’ Central Appalachian subsidiaries, which includes McCoy Elkhorn, Deane Mining, and Knott County Coal. In this role, Tarlis manages the activities at the company’s various coal processing facilities and loadout, coordinates coal production at the company’s various mines, manages environmental compliance and reclamation, and is responsible for coal quality control and shipments to customers. Tarlis graduated from Millard High School in Kentucky in 2001 and subsequently worked for Commercial Testing and Engineering, working underground, performing surveying services and coal sampling. In 2002 he joined SGS Minerals, working as a Quality Control Manager. Shortly thereafter, he joined Massey Energy, working as logistics manager for coal shipments via truck and train, as well as a coal quality manager, working under Jim Slater and Mike Smith. After several years at Massey, Tarlis joined Central Appalachian Mining (CAM), in charge of lab analysis and environmental compliance at CAM’s various processing plants and loadouts. Tarlis graduated from Millard High School and has additional courses in Mining Engineering from Virginia Tech (Training), Business Administration Management from National College in Pikeville, and LECO Certified Course from West Virginia Training Institute. Tarlis does not have any family relationships with any of the Company’s directors or executive officers. There are no arrangements or understandings between Tarlis and any other persons pursuant to which he was selected as an officer. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Directors: Mark C. Jensen – Chairman of Board & Director Mark has been an operator, investor and consultant in various natural resources and energy businesses. He has been highly involved in the navigation of numerous growth businesses to mature businesses, working as a managing member at T Squared Capital LLC since 2007, an investment firm focused on private equity styled investing in start-up businesses. Mark has significant experience with major Wall Street firms such as Citigroup and graduated from the Kelley School of Business at Indiana University with a BS in Finance and International Studies with a focus on Business. Mark also studied in Sydney Australia through Boston University completing his International Studies degree with a focus on East Asian culture and business. There are no arrangements or understandings between Mark and any other persons pursuant to which he was selected as an officer. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Thomas M. Sauve – Director Tom has been involved a number of energy related businesses. Prior he had been an investor and partner in various natural resources assets over the last seven years including coal mining operations and various oil and gas wells throughout Texas and the Appalachia region. Since 2007, Tom also worked as a managing member at T Squared Capital LLC, an investment firm focused on private equity styled investing in start-up businesses Tom received his Bachelor’s degree in Economics, magna cum laude, from the University of Rochester, New York, with additional studies at the Simon Graduate School of Business. There are no arrangements or understandings between Tom and any other persons pursuant to which he was selected as an officer. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. 37 Table of Contents Josh Hawes – Director Josh Hawes is an Independent Board Director at American Resources Corporation (AREC). He brings over 15+ years of leadership experience, specializing in commodities, buy-side/sell-side investments, and advanced technologies, to assist AREC with its capital markets plan and corporate strategy. He has a vast knowledge of capital markets integration with strategic vision and vertical integration. Josh is currently the chair of the Audit and Compensation committees for AREC. His prior experience includes chief strategy officer of USA Rare Earth, CEO of Delta1x and Hawking Alpha. Hawes holds licenses spanning commodities, investment banking, public, and private securities, including Series 3, 63, 65, 7, 79, 82, and SIE. As well, Josh holds several professional designations, such as Wharton Business School’s Corporate Governance program certificate , “Maximizing Your Effectiveness in the Boardroom,” and University of Cambridge Judge Business School, “ Circular Economy and Sustainability Strategies.” He is also holder of the Chartered Market Technician, Certified Hedge Fund Professional, and Qualified Family Office Professional A Wireless Software Engineering graduate from Auburn University. The Board nominated Josh to serve as a director because of his experience and relationships in the critical minerals sector, banking sector and his experience in growth businesses. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Gerardine Botte, PH.D. – Director Dr. Botte has over 21 years of experience in the development of electrochemical processes and advanced water treatment. She has served in leadership roles for the Electrochemical Society and is currently the Chair of the Electrochemical Process Engineering and Technology Division of the International Society of Electrochemistry. Dr. Botte also serves as the Editor in Chief of the Journal of Applied Electrochemistry. In 2014, she was named a Fellow of the Electrochemical Society for her contributions and innovation in electrochemical processes and engineering. She became a Chapter Fellow of the National Academy of Inventors in 2012. In 2010, she was named a Fellow of the World Technology Network for her contributions on the development of sustainable and environmental technologies. Prior to Texas Tech, Dr. Botte was University Distinguished Professor and Russ Professor of Chemical and Biomolecular Engineering at Ohio University, the founder and Director of Ohio University’s Center for Electrochemical Engineering Research, and the founder and Director of the Consortium for Electrochemical Processes and Technology – an Industry University Cooperative Research Center. Her entrepreneurial spirit has led to the commercialization of various technologies and has founded and co-founded various companies to help achieve this goal. The Board nominated Dr. Botte to serve as a director because of her thought leadership in the technical innovations of in carbon and rare earth elements. She has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Courtenay O. Taplin – Director Courtenay serves as Director of American Resources Corporation. He brings over 40 years of experience of sourcing and supplying iron ore, coke and metallurgical coal to the steel industry to assist American Resources with their supply chain, logistics, customers, overall corporate strategy. He has a vast knowledge of both the global and domestic marketplace where he works with both suppliers and consumers. Courtenay is currently Managing Director of Compass Point Resources, LLC which he founded in 2007. Mr. Taplin also acts as Managing Director for Clay Resources LLC, a commodities firm trading in African origin minerals and metals with sales to the world’s merchant consumers from its offices in the U. S. and Durban, South Africa. His prior experience includes Crown Coal & Coke Company and Pickands Mather & Company out of Cleveland, OH. Mr. Taplin attended Hobart College and received his degree from Case Western Reserve University. The Board nominated Courtenay to serve as a director because of his experience and relationships in the raw materials and coking sector and his experience in managing growing businesses. He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. 38 Table of Contents None of the directors have been involved in any legal proceedings that would require a disclosure under Item 401 of Regulation SK. During the past ten years, none of our directors or executive officers has been: · the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; · convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); · subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; · found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, that has not been reversed, suspended, or vacated; · subject of, or a party to, any order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of a federal or state securities or commodities law or regulation, law or regulation respecting financial institutions or insurance companies, law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or · subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. None of our directors, executive officers or affiliates, or any beneficial owner of 5% or more of our common stock, or any associate of such persons, is an adverse party in any material proceeding to, or has a material interest adverse to, us. 39 Table of Contents Separation of Duties of the Chairman of the Board, the Chief Executive Officer and the President Due to the inherent limitations of nonexecutive chairs, the duties of the Chairman of the Board and the Chief Executive Officer have not been separated. In order to increase objectivity and fiduciary responsibilities to the shareholders both in appearance and operation, the duties of the Chief Executive Officer and the President have been separated. Director Independence Currently our board of directors consist of Mark C. Jensen, our Chief Executive Officer, Thomas M. Sauve, our President, Josh Hawes, Gerardine Botte, PHD, and Courtenay O. Taplin, of which Ms. Botte and Messrs Hawes and Taplin are considered independent in accordance under the requirements of the NASDAQ, NYSE and SEC. Limitation of Director Liability; Indemnification Indemnity To the fullest extent permitted by the Florida Business Corporation Act, the Company shall indemnify, or advance expenses to, any person made, or threatened to be made, a party to any action, suit or proceeding by reason of the fact that such person (i) is or was a director of the Company; (ii) is or was serving at the request of the Company as a director of another Company, provided that such person is or was at the time a director of the Company; or (iv)is or was serving at the request of the Company as an officer of another Company, provided that such person is or was at the time a director of the Company or a director of such other Company, serving at the request of the Company. Unless otherwise expressly prohibited by the Florida Business Corporation Act, and except as otherwise provided in the previous sentence, the Board of Directors of the Company shall have the sole and exclusive discretion, on such terms and conditions as it shall determine, to indemnify, or advance expenses to, any person made, or threatened to be made, a party to any action, suit, or proceeding by reason of the fact such person is or was an officer, employee or agent of the Company as an officer, employee or agent of another Company, partnership, joint venture, trust or other enterprise. No person falling within the purview of this paragraph may apply for indemnification or advancement of expenses to any court of competent jurisdiction. Section 16(a) Beneficial Ownership Reporting Compliance Our shares of common stock are registered under the Exchange Act, and therefore our officers, directors and holders of more than 10% of our outstanding shares are subject to the provisions of Section 16(a) which requires them to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and our other equity securities. Officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. During the fiscal year ended December 31, 2021, none of our officers, directors or 10% shareholders failed to file any Section 16 report on a timely basis. Code of Ethics We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors. In addition to the Code of Business Conduct and Ethics, our principal executive officer, principal financial officer and principal accounting officer are also subject to written policies and standards that are reasonably designed to deter wrongdoing and to promote: honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to the SEC and in other public communications made by us; compliance with applicable government laws, rules and regulations; the prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and accountability for adherence to the code. We have posted the text of our Code of Business Conduct and Ethics on our internal website. We intend to disclose future amendments to, or waivers from, certain provisions of our Code of Business Conduct and Ethics as applicable. 40 Table of Contents Legal Proceedings. To the best of our knowledge, except as set forth herein, none of the directors or director designees to our knowledge has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Committees of the Board of Directors Currently, our board of directors has four committees: an Audit Committee, a Compensation Committee, a Nomination Committee, and a Safety and Environmental Committee. The Audit Committee and Compensation Committee are both comprised of the three independent directors of the Company. The Safety and Environmental Committee and Nomination Committee are both comprised of Thomas M. Sauve and Mark C. Jensen. The composition and responsibilities of the three committees are described below. Audit Committee As required by the rules of the SEC, the audit committee consists solely of independent directors, who are Ms. Botte and Messrs Hawes, and Taplin. SEC rules also require that a public company disclose whether its audit committee has an “audit committee financial expert” as a member. An “audit committee financial expert” is defined as a person who, based on his or her experience, possesses the attributes outlined in such rules. This committee oversees, reviews, acts on and reports on various auditing and accounting matters to our board of directors, including: the selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices. In addition, the audit committee oversees our compliance programs relating to legal and regulatory requirements. We have adopted an audit committee charter defining the committee’s primary duties in a manner consistent with the rules of the SEC and applicable stock exchange or market standards. Compensation Committee As required by the rules of the SEC, the compensation committee consists solely of independent directors, who are Ms. Botte and Mr. Hawes. The purpose of this committee shall be to (i) assist the board of directors in the oversight of the Company’s executive officer and director compensation programs, (ii) discharge the board of director’s duties relating to administration of the Company’s incentive compensation and any other stock- based plans, and (iii) act on specific matters within its delegated authority, as determined by the board of directors from time to time. Nomination Committee The board of directors formed the Nomination Committee, which is comprised of Mr. Sauve and Mr. Jensen. The purpose of this committee shall be to (i) assist the board of directors in cultivating valuable board of director nominees and (ii) navigating the onboarding for selected directors. Safety and Environmental Committee The board of directors formed a Safety and Environmental Committee, which is comprised of Messrs Jensen and Sauve. The purpose of this committee is to assist the board in fulfilling its responsibilities by providing oversight and support in assessing the effectiveness of the Company’s environmental, health, and safety policies, programs and initiatives. This committee will monitor the continued effectiveness of these policies and procedures by periodically reviewing the applicable environmental, health and safety laws, rules and regulations. The Committee will also perform such other functions as the Board may assign to the Committee from time to time. 41 Table of Contents Item 11. Executive Compensation. The following table sets forth information concerning the annual and long-term compensation of our executive officers for services rendered in all capacities to us during the last two completed fiscal years. The listed individuals shall hereinafter be referred to as the “Named Executive Officers.” We also have included below a table regarding compensation paid to our directors who served during the last completed fiscal year. The address for all individuals identified in the following tables is 12115 Visionary Way, Suite 174, Fishers, IN 46038. Summary Compensation Table - Officers (a) (b) (c) (d) (e) (f) (g) (h) (I) (j) Name and principal position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-equity Incentive plan Compensation ($) Nonqualified deferred compensation earnings ($) All other Compensation ($) Total ($) Mark C. Jensen, (1) CEO 2022 375,000 -0- -0- -0- -0- -0- -0- 375,000 2022 350,000 -0- -0- 262,625 -0- -0- -0- 612,625 Thomas M. Sauve, (2) President 2022 300,000 -0- -0- -0- -0- -0- 8,074 308,074 2022 275,000 -0- -0- 137,375 -0- -0- 7,335 419,710 Kirk P. Taylor, (3) CFO 2022 300,000 -0- -0- -0- -0- -0- 25,298 325,298 2022 275,000 -0- -0- 95,500 -0- -0- 23,135 393,635 Tarlis R Thompson, (4) COO 2022 197,837 -0- -0- -0- -0- -0- -0- 197,837 2022 197,837 -0- -0- -0- -0- -0- -0- 197,837 _____________ (1) On October 1, 2020, the Company entered into an employment agreement, beginning January 1, 2021 and expiring on December 31, 2021, with Mr. Jensen increasing base pay to $250,000 and carrying certain performance bonuses which would be awarded by the board of directors. 60,976 options were issued under the new contract and vest immediately. 25,000 Options issued on January 28, 2021 and 450,000 Options were issued on December 13, 2021. On November 23, 2021, the Company entered into an employment agreement, beginning January 1, 2022 and expiring on December 31, 2022, with Mr. Jensen increasing base pay to $350,000 any carrying certain performance bonuses which would be awarded by the board of directors and stock options totaling 150,000. The value in the option awards represents Black-Scholes Option Pricing Model. No bonus was awarded during 2021 and 2022. (2) On October 1, 2020, the Company entered into an employment agreement with Mr. Sauve increasing base pay to $200,000 and carrying certain performance bonuses which would be awarded by the board of directors.49,342 options were issued under the new contract and vest immediately. 25,000 Options issued on January 28, 2021 and 275,000 Options were issued on December 13, 2021. On November 23, 2021, the Company entered into an employment agreement, beginning January 1, 2022 and expiring on December 31, 2022, with Mr. Sauve increasing base pay to $275,000 any carrying certain performance bonuses which would be awarded by the board of directors and stock options totaling 100,000. The value in the option awards represents Black-Scholes Option Pricing Model. No bonus was awarded during 2021 and 2022. During 2021, other compensation included $2,865 health insurance reimbursement. During 2022 and 2021, other compensation totaling $2,865 and $7,335 included health insurance reimbursement. (3) On October 1, 2020, the Company entered into an employment agreement with Mr. Taylor increasing base pay to $200,000 and carrying certain performance bonuses which would be awarded by the board of directors. 49,342 options were issued under the new contract and vest immediately. 25,000 Options issued on January 28, 2021 and 100,000 Options were issued on December 13, 2021. On November 23, 2021, the Company entered into an employment agreement, beginning January 1, 2022, and expiring on December 31, 2022, with Mr. Taylor increasing base pay to $275,000 any carrying certain performance bonuses which would be awarded by the board of directors and stock options totaling 100,000. The value in the option awards represents Black-Scholes Option Pricing Model. No bonus was awarded during 2020 and 2021. During 2021, other compensation totaling included $4,973 health insurance reimbursement. During 2022 and 2021, other compensation totaling $4,973 and $23,045 included health insurance reimbursement. (4) There is no employment agreement in place for Mr. Thompson. 0 Options were issued during 2022. The value in the option awards represents Black-Scholes Option Pricing Model. 42 Table of Contents Director Compensation (a) (b) (c) (d) (e) (f) (g) (h) Name and principal position Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified deferred compensation earnings ($) All Other Compensation ($) Total ($) Mark C. Jensen (1) 2023 -0- -0- -0- -0- -0- -0- -0- 2022 -0- -0- -0- -0- -0- -0- -0- Thomas M. Sauve (2) 2023 -0- -0- -0- -0- -0- -0- -0- 2022 -0- -0- -0- -0- -0- -0- -0- Courtenay O. Taplin (3) 2023 -0- -0- -0- -0- -0- -0- -0- 2022 -0- -0- 199,500 -0- -0- -0- 199,500 Michael Layman (4) 2023 -0- -0- -0- -0- -0- -0- -0- 2022 -0- -0- 332,500 -0- -0- -0- 332,500 Dr. Gerardine Botte (5) 2023 -0- -0- -0- -0- -0- -0- -0- 2022 -0- -0- 266,000 -0- -0- -0- 266,000 Josh Hawes (6) 2023 -0- -0- -0- -0- -0- -0- -0- 2022 -0- -0- -0- -0- -0- -0- -0- ___________ (1) The value of the Option Award to Directors in Column (d) represents the amortized book value of warrants priced using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder. During 2021, 300,000 of options were issued to Mr. Jensen for his service on the board and as serving as chairman. The value of the options have been included in the officer compensation table. During 2024, 450,000 of options were issued to Mr. Jensen for his service on the board and as serving as chairman and member of the strategic committee. During 2022, 400,000 of options were issued to Mr. Jensen for his service on the board and as serving as chairman and member of the strategic committee. The value of the options have been included in the officer compensation table. (2) The value of the Option Award to Directors in Column (d) represents the amortized book value of warrants priced using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder. During 2024, 300,000 of options were issued to Mr. Sauve for his service on the board. The value of the options have been included in the officer compensation table. During 2022, 300,000 of options were issued to Mr. Sauve for his service on the board and as serving member of the strategic committee. The value of the options have been included in the officer compensation table. (3) Mr. Taplin was appointed as a director on November 15, 2018. The value of the Option Award to Directors in Column (d) represents the amortized book value of warrants priced using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder. During 2021, 150,000 options were issued to Mr. Taplin for his service on the board. During 2024, 150,000 options were issued to Mr. Taplin for his service on the board. During 2022, 150,000 options were issued to Mr. Taplin for his service on the board. (4) Mr. Layman was appointed as a director on July 16, 2020. The value of the Option Award to Directors in Column (d) represents the amortized book value of warrants valued using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder. During 2021, 250,000 options were issued to Mr. Layman for his service on the board and as chairs of the Audit Committee and Compensation Committee. During 2022, 450,000 options were issued to Mr. Layman for his service on the board and as chairs of the Strategic, Audit Committee and Compensation Committee. (5) Dr. Botte was appointed as a director on November 23, 2020. The value of the Option Award to Directors in Column (d) represents the amortized book value of warrants priced using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder. During 2021, 200,000 options were issued to Dr. Botte for her service on the board. During 2024, 150,000 options were issued to Dr. Botte for her service on the board. During 2022, 200,000 options were issued to Dr. Botte for her service on the board. (6) Mr. Hawes was appointed as a director on XX, 2023. During 2024, 250,000 options were issued to Mr. Hawes for his service on the board and chair of the audit and compensation committees. No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees. There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this table, or otherwise. 43 Table of Contents Employment Agreements Except for our Chief Operating Officer, we have employment agreements with the Named Executive Officers that provide for the base salaries and a discretionary annual performance bonus of up to three times their annual base salary, plus potential participation in the Company’s Employee Incentive Stock Option Plan. The payment of such bonus and/or incentive stock options shall be in the sole discretion of the Company’s Board of Directors. The in-place contracts we effective beginning January 1, 2023 and expired December 31, 2023 with one year automatic extensions effective through December 31, 2024. Outstanding Equity Awards The following equity awards, including, options, restricted stock or other equity incentives from the Company to current officers are as follows: - Chief Executive Officer: · November 23, 2020 to purchase up to 85,976 shares of our Company at $1.64 per share. Those options vest upon issuance. · February 3, 2021 to purchase up to 25,000 shares of our Company at $2.56 per share. Those options vest upon issuance. · December 13, 2021 to purchase up to 450,000 shares of our Company at $1.74 per share. Those options vest over 9 years. · September 26, 2022 to purchase 550,000 shares of our Company at $2.44 per share. Those options vest over 7 years. - President: · November 23, 2020 to purchase up to 70,732 shares of our Company at $1.64 per share. Those options vest upon issuance. · February 3, 2021 to purchase up to 25,000 shares of our Company at $2.56 per share. Those options vest upon issuance. · December 13, 2021 to purchase up to 275,000 shares of our Company at $1.74 per share. Those options vest over 7 years. · September 26, 2022 to purchase 350,000 shares of our Company at $2.44 per share. Those options vest over 7 years. - Chief Financial Officer: · November 23, 2020 to purchase up to 45,732 shares of our Company at $1.64 per share. Those options vest upon issuance. · February 3, 2021 to purchase up to 25,000 shares of our Company at $2.56 per share. Those options vest upon issuance. · December 13, 2021 to purchase up to 100,000 shares of our Company at $1.74 per share. Those options vest over 7 years. · September 26, 2022 to purchase 200,000 shares of our Company at $2.44 per share. Those options vest over 7 years. - Chief Operating Officer, who was issued options under our Employee Incentive Stock Option Plan on · June 18, 2020 to purchase up to 500,000 shares of our Company at $1.13 per share · June 5, 2019 to purchase up to 75,000 shares of our Company at $2.63 per share · September 12, 2018 to purchase up to 136,830 shares of our Company at $1.00 per share. Those options vest equally over the course of three years. · December 13, 2021 to purchase up to 200,000 shares of our Company at $1.74 per share. Those options vest over 7 years. 44 Table of Contents Item 12 . Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table lists, as of December 31, 2021, the number of shares of our Class A Common Stock and Series A Convertible Preferred Stock that are beneficially owned by (i) each person or entity known to us to be the beneficial owner of more than 5% of our common stock; (ii) each executive officer and director of our company; and (iii) all executive officers and directors as a group. Information relating to beneficial ownership of Common Stock and our Convertible Preferred Stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days under any contract, option or warrant. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power. Unless otherwise specified, the address of each beneficial owner listed in the tables is c/o American Resources Corporation, 12115 Visionary Way, Fishers, IN 46038. Name and Address of Shareholder Number of Shares of Common Stock Beneficially Owned (1) Percent of Common Stock Owned Golden Properties, Ltd. (2) (3) 14,350,711 18.35 % White River Ventures LLC (2) (4) 5,199,896 7.56 % Midwest General Investment Company LLC (2) (5) 4,429,501 6.44 % _________ (1) A person is deemed to be the beneficial owner of securities that can be acquired by such a person within 60 days upon exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such a person (but not those held by any other person) and are exercisable within 60 days from that date have been exercised; (2) Based on 78,213,454 shares of Common Stock deemed to be outstanding as of December 31, 2023. This percentage has been rounded for convenience; (3) Golden Properties, Ltd. is the owner of several Company common stock warrants for the purchase of shares of our Common Stock, which warrants are exercisable at such company’s discretion, subject to the following limitation on amount. The warrant agreements provide that at no time may Golden Properties, Ltd. or its affiliates exercise any warrant that would result in their ownership of more than 9.99% of the issued and outstanding shares of our Common Stock on the date of exercise. Additionally, as of December 31, 2023 Alexander Lau, who is a principal of Golden Properties and a beneficial owner through Golden Properties and a beneficial owner through TAU Holdings LTD., is believed to be a holder of 199,373 Class A Common shares. Accordingly, Golden Properties, Ltd. is presently deemed the beneficial owner of 14,350,711 shares of our Common Stock pursuant to Securities and Exchange Commission Rule 13d-3, promulgated under the Securities Exchange Act of 1934. (4) Represents shares gifted in an exempt transaction under Rule 16b-5 by Mark Jensen for no consideration to White River Ventures LLC, which is wholly owned by a family trust of which certain members of the Jensen family are beneficiaries. Thomas Sauve serves as sole manager of this entity. (5) Represents shares gifted in an exempt transaction under Rule 16b-5 by Thomas Sauve for no consideration to Midwest General Investment Company LLC, which is wholly owned by a family trust of which certain members of the Sauve family. Mark Jensen serves as sole manager of this entity. 45 Table of Contents Name Number of Shares of Series A Preferred Stock Beneficially Owned (4) Percent of Series A Preferred Stock Owned (5) Common Stock Beneficially Owned (4) Percent of Common Stock Beneficially Owned (6) Officers and Directors Mark C. Jensen, ( 7) Chief Executive Officer, Director - 0 % 89,981 0.13 % Thomas M. Sauve, (8) President, Director - 0 % 59,988 0.09 % Kirk P. Taylor, Chief Financial Officer - 0 % 1,624,883 2.08 % Tarlis R. Thompson, Chief Operating Officer - 0 % 163,170 0.00 % All Directors and Officers as a Group (4 persons) - 0 % 11,554,919 16.80 % 5% Holders All Directors, Officers and 5% Holders as a Group (5 persons) - 0 % 11,554,919 16.80 % ____________ (4) A person is deemed to be the beneficial owner of securities that can be acquired by such a person within 60 days from December 31, 2023, upon exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such a person (but not those held by any other person) and are exercisable within 60 days from that date have been exercised; (5) Based on 0 shares of Series A Convertible Preferred Stock outstanding as of December 31, 2023; (6) Based on 78,213,454 Class A Common Stock outstanding as of December 31, 2023. These percentages have been rounded for convenience; (7) Mr. Jensen beneficially owns 89,981 shares of our Class A Common Stock through his equity ownership in Westside Advisors LLC,. (8) Mr. Sauve beneficially owns 59,988 shares of our Class A Common Stock through his equity ownership in T Squared Capital LLC and Westside Advisors LLC. Item 13. Certain Relationships and Related Transactions, and Director Independence. Transactions with Related Persons, Promoters and Certain Control Persons. During 2015, equipment purchasing was paid by an affiliate resulting in a note payable. The balance of the note was $0 and $74,000 as of December 31, 2022 and 2021, respectively. On April 30, 2017, the Company purchased $250,000 of secured debt that had been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the notes. The first note in the amount of $150,000 is dated March 13, 2013, carries an interest rate of 12% and was due on September 13, 2015. The second note in the amount of $100,000 is dated July 17, 2013, carries an interest rate of 12% and was due January 17, 2016. Both notes are in default and have been fully impaired due to collectability uncertainty. 46 Table of Contents On October 24, 2016, the Company sold certain mineral and land interests to a subsidiary of an entity, LRR, owned by members of the Company’s management. LRR leases various parcels of land to QEI and engages in other activities creating miscellaneous income. The consideration for the transaction was a note in the amount of $178,683. The note bears no interest and is due in 2026. As of January 28, 2017, the note was paid in full. From October 24, 2016. this transaction was eliminated upon consolidation as a variable interest entity. As of July 1, 2018, the accounts of Land Resources & Royalties, LLC have been deconsolidated from the financial statements based upon the ongoing review of its status as a variable interest entity. As of December 31, 2022, and 2021, amounts owed to LRR totaled $338,246 and $45,359, respectively. On February 13, 2020, the Company entered into a Contract Services Agreement with Land Betterment Corp, an entity controlled by certain members of the Company’s management who are also directors and shareholders. The contract terms state that service costs are passed through to the Company with a 10% mark-up and a 50% share of cost savings. The agreement covers services across all of the Company’s properties. During 2022 and 2021, the amount incurred under the agreement amounted to $5,572,644 and $4,296,266 and the amount paid amounted to $3,080,783 and $2,578,335. As of December 31, 2022 and 2021, the amount due under the agreement amounted to $4,481,922 and $2,073,830. The Company is the holder of 2,000,000 LBX Tokens with a par value of $250 for each token. The token issuance process is undertaken by a related party, Land Betterment, and is predicated on proactive environmental stewardship and regulatory bond releases. As of December 31, 2022, there is no market for the LBX Token and therefore no value has been assigned. On June 11, 2020 the Company purchased $1,494,570 of secured debt included accrued interest that had been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the four notes. The first note in the amount of $75,000 is dated June 28, 2013, carries an interest rate of 12% and was due on June 28, 2015. The second note in the amount of $150,000 is dated June 28, 2013, carries an interest rate of 12% and was due June 28, 2015. The third note in the amount of $199,500 is dated March 18, 2014, carries an interest rate of 4% and was due on March 18, 2016. The fourth note in the amount of $465,500 is dated March 18, 2014, carries an interest rate of 4% and was due on March 18, 2016. The notes are in default and have been fully impaired due to collectability uncertainty. On January 1, 2021, the Company purchased $250,000 of secured debt including accrued interest that has been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the note. The note is in default and has been fully impaired due to collectability uncertainty. Director Independence. The Board of Directors determined that Ms. Botte and Messrs. Hawes, Taplin are independent are independent within the meaning of the listing standards for general independence of the NASDAQ Capital Market. Under the listing standards, the Audit Committee is required to be composed solely of independent directors. The standards for audit committee membership include additional requirements under rules of the Securities and Exchange Commission. The Board has determined that all of the members of the audit committee meet the applicable independence requirements. To the extent required by the trading market on which our shares are listed, we will ensure that the overall composition of our Board complies with the Sarbanes-Oxley Act, and the rules thereunder, and the listing requirements of the trading market, including the requirement that one member of the Board qualifies as a “financial expert.” Item 14. Principal Accounting Fees and Services. B.F. Borgers CPA, PC (PCAOB ID: 5041), services as the Company’s independent registered public accounting firm. The following is a summary of fees paid or to be paid to B.F. Borgers CPA, PC, for services rendered for the years ended December 31, 2023 and 2022. 2023 2022 Audit fees – BF Borgers, PC $ 225,000 $ 210,000 Tax fees - - All other fees - - 47 Table of Contents Audit Fees — This category includes the audit of our annual financial statements, review of financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. Audit Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting. Tax Fees — This category consists of professional services rendered for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice. All Other Fees — This category consists of fees for other miscellaneous items. Pre-Approval Policy Our audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not preapprove all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going forward basis, the audit committee has and will preapprove all auditing services and permitted nonaudit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for nonaudit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). 48 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedule. The following exhibits are filed herewith except as otherwise noted. Exhibits referenced in previous filings by the Company with the SEC are incorporated by reference herein. Exhibit Number Description Location Reference 3.1 Articles of Incorporation of Natural Gas Fueling and Conversion Inc. Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on November 27, 2013. 3.2 Amended and Restated Articles of Incorporation of NGFC Equities Inc. Incorporated herein by reference to Exhibit 3.1 to the Company’s 8k filed on February 25, 2015. 3.3 Articles of Amendment to Articles of Incorporation of NGFC Equities, Inc. Incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K on February 21, 2017. 3.4 Articles of Amendment to Articles of Incorporation of American Resources Corporation dated March 24, 2017. Incorporated herein by reference to Exhibit 3.4 to the Company’s Form 10-Q, filed with the SEC on February 20, 2018. 3.5 Bylaws of Natural Gas Fueling and Conversion Inc. Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, filed with the SEC on November 27, 2013. 3.6 Bylaws, of NGFC Equities Inc., as amended and restated. Incorporated herein by reference to Exhibit 3.2 to the Company’s 8k filed on February 25, 2015. 3.7 Articles of Amendment to Articles of Incorporation of American Resources Corporation dated November 8, 2018. Filed as Exhibit 99.1 to the Company’s 8k filed on November 13, 2018, incorporated herein by reference. 3.8 Bylaws of American Resources Corporation, as amended and restated Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on November 13, 2018. 4.1 Common Stock Purchase Warrant “B-4” dated October 4, 2017 Incorporated herein by reference to Exhibit 4.1 to the Company’s 8k filed on October 11, 2017. 4.2 Common Stock Purchase Warrant “C-1” dated October 4, 2017 Incorporated herein by reference to Exhibit 4.2 to the Company’s 8k filed on October 11, 2017. 4.3 Common Stock Purchase Warrant “C-2” dated October 4, 2017 Incorporated herein by reference to Exhibit 4.3 to the Company’s 8k filed on October 11, 2017. 4.4 Common Stock Purchase Warrant “C-3” dated October 4, 2017 Incorporated herein by reference to Exhibit 4.4 to the Company’s 8k filed on October 11, 2017. 4.5 Common Stock Purchase Warrant “C-4” dated October 4, 2017 Incorporated herein by reference to Exhibit 4.5 to the Company’s 8k filed on October 11, 2017. 4.6 Promissory Note for $600,000.00 dated October 4, 2017 Incorporated herein by reference to Exhibit 4.6 to the Company’s 8k filed on October 11, 2017. 4.7 Promissory Note for $1,674,632.14 dated October 4, 2017 Incorporated herein by reference to Exhibit 4.7 to the Company’s 8k filed on October 11, 2017. 4.8 Loan Agreement for up to $6,500,000 dated December 31, 2018 Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on January 3, 2019. 4.9 Promissory Note for up to $6,500,000 dated December 31, 2018 Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on January 3, 2019. 10.1 Secured Promissory Note Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on May 15, 2018. 10.2 Security Agreement Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on May 15, 2018. 10.3 Pledge Agreement Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on May 15, 2018. 10.4 Guaranty Agreement Incorporated herein by reference to Exhibit 99.4 to the Company’s 8k filed on May 15, 2018. 10.5 Bill of Sale Incorporated herein by reference to Exhibit 99.5 to the Company’s 8k filed on May 15, 2018. 10.6 Sublease Agreement Between Colonial Coal Company, Inc. and McCoy Elkhorn Coal LLC Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on May 1, 2018 10.7 Interim Operating Agreement Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on May 1, 2018 10.8 Consolidated and Restated Loan and Security Agreement dated October 4, 2017 Incorporated herein by reference to Exhibit 10.1 to the Company’s 8k filed on October 11, 2017 10.9 Asset Purchase Agreement between Wyoming County Coal LLC and Thomas Shelton dated November 7, 2018 Incorporated herein by reference to Exhibit 10.9 to the Company’s registration statement filed on February 14, 2019. 49 Table of Contents 10.10 Asset Purchase Agreement between Wyoming County Coal LLC and Synergy Coal, LLC dated November 7, 2018 Incorporated herein by reference to Exhibit 10.10 to the Company’s registration statement filed on February 14, 2019. 10.11 Security Agreement Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on January 3, 2019. 10.12 Purchase Order Incorporated herein by reference to Exhibit 99.4 to the Company’s 8k filed on January 3, 2019. 10.13 Employment Agreement with Mark C. Jensen Incorporated herein by reference Form 8-K filed on November 25, 2020. 10.14 Employment Agreement with Thomas M. Sauve Incorporated herein by Form 8-K filed on November 25, 2020. 10.15 Employment Agreement with Kirk P. Taylor Incorporated herein by reference Form 8-K filed on November 25, 2020. 10.16 Employee Stock Option Plan Incorporated herein by reference to Exhibit 10.16 to the Company’s registration statement filed on February 14, 2019. 10.17 Letter of Intent Incorporated herein by reference to Exhibit 10.17 to the Company’s registration statement filed on February 14, 2019. 10.18 Merger Agreement with Colonial Coal Incorporated herein by reference to Exhibit 10.18 to the Company’s registration statement filed on February 14, 2019. 10.19 Share Exchange Agreement to replace Merger Agreement with Colonial Coal Incorporated herein by reference to Exhibit 10.19 to the Company’s registration statement filed on February 14, 2019. 14.1 Code of Conduct Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on November 13, 2018. 14.2 Financial Code of Ethics Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on November 13, 2018. 31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed Herewith 31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed Herewith 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed Herewith 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed Herewith 95.1 Mine Safety Disclosure pursuant to Regulation S-K, Item 104 Filed Herewith. 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 50 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN RESOURCES CORPORATION NAME TITLE DATE /s/ Mark C. Jensen Principal Executive Officer, April 15, 2024 Mark C. Jensen Chief Executive Officer, Chairman of the Board of Directors Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. NAME TITLE DATE /s/ Mark C. Jensen Principal Executive Officer, April 15, 2024 Mark C. Jensen Chief Executive Officer, Chairman of the Board of Directors /s/ Kirk P. Taylor Principal Financial Officer, Chief Financial Officer April 15, 2024 Kirk P. Taylor /s/ Thomas M. Sauve Director, President April 15, 2024 Thomas M. Sauve /s/ Josh Hawes Director April 15, 2024 Josh Hawes /s/ Gerardine Botte Director April 15, 2024 Gerardine Botte, PHD /s/ Courtenay O. Taplin Director April 15, 2024 Courtenay O. Taplin 51 Table of Contents Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act None. 52 Table of Contents AMERICAN RESOURCES CORPORATION CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 AMERICAN RESOURCES CORPORATION CONTENTS Page CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Changes Stockholders’ Equity F-4 Consolidated Statements of Cash Flows F-5 Notes to Consolidated Financial Statements F-6 53 Table of Contents Report of Independent Registered Public Accounting Firm To the shareholders and the board of directors of American Resources Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of American Resources Corporation as of December 31, 2023 and 2022, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matter Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /S/ BF Borgers CPA PC (PCAOB ID 5041 ) We have served as the Company's auditor since 2020 Lakewood, CO April 15, 2024 F-1 Table of Contents AMERICAN RESOURCES CORPORATION CONSOLIDATED BALANCE SHEETS December 31, December 31, 2023 2022 Assets Current assets: Cash $ 2,666,638 $ 10,873,432 Accounts receivable - 660,755 Short-term investments held in Trust Account - restricted 30,297,204 - Inventories 54,000 446,690 Prepaid expenses and other current assets 1,867,651 786,576 Total Current Assets 34,885,493 12,767,453 Cash - restricted 6,798,029 2,122,263 Property and Equipment, net 15,337,004 9,113,722 Right-of-use assets, net 18,276,913 13,033,889 Investment in LLC- Related Party 18,780,000 18,780,000 Notes receivables 99,022 99,022 Total Assets $ 91,746,164 $ 55,916,349 Liabilities And Equity Current liabilities: Trade payables $ 6,709,224 $ 4,916,243 Non-trade payables 2,607,942 2,524,243 Accounts payable - related party 2,371,697 4,295,232 Accrued interest 512,558 106,886 Other Liabilities 200,000 - Current portion of long term debt 804,656 1,917,506 Current portion of convertible debt - 9,787,423 Operating lease liabilities 57,663 82,669 Finance lease liabilities 4,806,822 3,803,175 Total current liabilities 18,070,562 27,433,377 Remediation liability 21,288,799 20,295,634 Bond payable, net 44,152,500 - Operating lease liabilities, non-current 495,611 547,667 Finance lease liabilities, non-current 7,514,848 7,354,975 Total liabilities 91,522,320 55,631,653 Commitments and contingencies (Note 9) Stockholders' equity: Common stock, $ 0.0001 par value; 230,000,000 shares authorized, 892,044 and 0 shares issued and outstanding 7,627 6,680 Additional paid-in capital 178,910,546 167,517,259 Accumulated deficit ( 178,694,329 ) ( 167,239,243 ) Total stockholders' equity 223,844 284,696 Total liabilities and stockholders' equity $ 91,746,164 $ 55,916,349 The accompanying footnotes are integral to the consolidated financial statements. F-2 Table of Contents AMERICAN RESOURCES CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, 2023 2022 Revenue Coal sales $ 16,120,841 $ 39,103,995 Metal recovery and sales 66,552 48,199 Royalty income 556,682 322,075 Total revenue 16,744,075 39,474,269 Operating expenses (income) Cost of coal sales and processing 11,611,886 21,687,656 Accretion 993,165 1,344,047 Depreciation 46,953 2,157,763 Amortization of mining rights 1,240,914 1,238,449 General and administrative 7,013,833 4,020,464 Professional fees 1,340,745 1,103,322 Production taxes and royalties 2,647,655 3,785,049 Gain on sale of equipment ( 8,475,468 ) ( 4,510,043 ) Development 11,746,725 28,134,883 Total operating expenses 28,166,408 58,961,590 Net loss from operations ( 11,422,333 ) ( 19,487,321 ) Other income (expense) Other income and (expense) 423,281 317,045 Unrealized gain on short-term investments 499,639 - Gain on cancelation of debt - 3,119,775 Gain on sales of patents - 16,000,000 Interest income 381,324 30,982 Interest expense ( 1,336,997 ) ( 1,426,153 ) Total other (expenses) income ( 32,753 ) 18,041,649 Net loss $ ( 11,455,086 ) $ ( 1,445,672 ) Net loss per share - basic $ ( 0.15 ) $ ( 0.02 ) Weighted average shares outstanding - basic 75,422,390 66,777,620 The accompanying footnotes are integral to the consolidated financial statements. F-3 Table of Contents AMERICAN RESOURCES CORPORATION CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY DECEMBER 31, 2023 Common Stock Additional Par Value Shares Amount Paid-in Capital Accumulated Deficit Total Equity Balance as of December 31, 2021 65,084,992 $ 6,508 $ 163,441,655 $ ( 165,793,571 ) $ ( 2,345,408 ) Shares issued in connection with warrant and option conversions 549,395 55 756,556 - 756,611 Shares issued in connection with debt and payable conversions 1,209,643 124 2,428,795 - 2,428,919 Shares issued for services 20,000 2 38,798 - 38,800 Amortization of debt discount - - ( 40,655 ) - ( 40,655 ) Stock compensation – options - - 985,536 - 985,536 Repurchase of Shares Outstanding ( 86,410 ) ( 9 ) ( 93,426 ) - ( 93,435 ) Net loss - - - ( 1,445,672 ) ( 1,445,672 ) Balance as of December 31, 2022 66,777,620 $ 6,680 $ 167,517,259 $ ( 167,239,243 ) $ 284,696 Issuance of common shares for Convertible Debt Conversion 9,420,730 942 9,787,000 - 9,787,942 Issuance of common shares for consulting services 49,020 5 99,995 - 100,000 Stock compensation – options - - 1,506,292 - 1,129,717 Net loss - - - ( 11,455,086 ) ( 11,455,086 ) Balance as of December 31, 2023 76,247,370 $ 7,627 $ 178,910,546 $ ( 178,694,329 ) $ 223,844 The accompanying footnotes are integral to the consolidated financial statements. F-4 Table of Contents AMERICAN RESOURCES CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended December 31 2023 2022 Cash Flows from Operating activities: Net loss $ ( 11,455,086 ) $ ( 1,445,672 ) Adjustments to reconcile net income loss) to net cash Depreciation expense 46,953 2,157,763 Amortization of mining rights 1,240,914 1,238,449 Accretion expense 993,165 1,344,047 Amortization of right-to-use assets 626,253 128,926 Accretion of right-to-use assets 64,386 73,475 Amortization of issuance costs and debt discount 52,500 - Option Expense 1,506,292 1,742,145 Gain on sale of equipment ( 8,475,468 ) ( 4,510,043 ) Unrealized gain on short-term investments ( 499,639 ) ( 9,562 ) Gain on debt forgiveness - ( 3,046,062 ) Issuance of common shares for services 100,000 38,800 Change in current assets and liabilities: Accounts receivable 660,755 2,514,880 Inventories 392,690 ( 446,690 ) Prepaid expenses and other current assets ( 1,081,075 ) ( 161,971 ) Accounts payable 1,876,680 2,428,974 Accrued interest 406,191 363,684 Accounts payable related party ( 1,923,535 ) 293,516 Right of use assets 752,783 ( 165,032 ) Other Liabilities 200,000 - Cash provided by operating activities ( 14,515,241 ) 2,549,189 Cash Flows from Investing activities: Purchases of short-term investments ( 51,865,545 ) - Proceeds from sales and maturities of short-term investments 22,067,980 - Cash received (paid) for PPE, net 964,319 16,908,129 Cash invested in note receivable - 250,978 Investment in LLCs - ( 18,284,866 ) Cash used in investing activities ( 28,833,246 ) ( 1,125,759 ) Cash Flows from Financing activities: Repayments on long term debt ( 1,112,850 ) ( 2,214,603 ) Proceeds from long term debt - 2,563,000 Cash used to repurchase shares - ( 93,435 ) Repayments of finance lease liabilities ( 5,599,988 ) ( 1,270,810 ) Proceeds from tax exempt bonds, net 44,100,000 - Cash provided by (used for) financing activities 37,387,162 ( 1,015,848 ) Increase (decrease) in cash ( 5,599,988 ) 407,582 Cash and cash equivalents, including restricted cash, beginning of period 12,995,695 12,588,113 Cash and cash equivalents, including restricted cash, end of period $ 7,034,370 $ 12,995,695 The accompanying footnotes are integral to the consolidated financial statements. F-5 Table of Contents AMERICAN RESOURCES CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES American Resources Corporation (ARC or the Company) operates through subsidiaries that were formed or acquired in 2020, 2019, 2018, 2016 and 2015 for the purpose of acquiring, rehabilitating and operating various natural resource assets including coal used in the steel making and industrial markets, critical and rare earth elements used in the electrification economy and aggregated metal and steel products used in the recycling industries. Basis of Presentation and Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries American Carbon Corp (ACC), Deane Mining, LLC (Deane), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy), Knott County Coal LLC (KCC), Wyoming County Coal (WCC),Perry County Resources LLC (PCR), reElement Technologies LLC (RLMT), American Metals LLC (AM), American Opportunity Venture, LLC (AOV) and American Opportunity Venture II, LLC (AOV II). All significant intercompany accounts and transactions have been eliminated. On January 5, 2017, ACC entered into a share exchange agreement with NGFC Equities, Inc (NGFC). Under the agreement, the shareholders of ACC exchanged 100% of its common stock to NGFC for 4,817,792 newly created Series A Preferred shares that is convertible into approximately 95% of outstanding common stock of NGFC. The previous NGFC shareholders retained 845,377 common shares as part of the agreement. The conditions to the agreement were fully satisfied on February 7, 2017, at which time the Company took full control of NGFC. NGFC has been renamed to American Resources Corporation ARC. The transaction was accounted for as a recapitalization. ACC was the accounting acquirer and ARC will continue the business operations of ACC, therefore, the historical financial statements presented are those of ACC and its subsidiaries. The equity and share information reflect the results of the recapitalization. On May 15, 2017, ARC initiated a one-for-thirty reverse stock split. The financial statements have been retrospectively restated to give effect to this split. Entities for which ownership is less than 100% a determination is made whether there is a requirement to apply the variable interest entity (VIE) model to the entity. Where the company holds current or potential rights that give it the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, combined with a variable interest that gives the Company the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company would be deemed to have a controlling interest. The company is the primary beneficiary of Advanced Carbon Materials LLC (ACM), which qualifies as a variable interest entity. Accordingly, the assets, liabilities, revenue and expenses of ACM have been included in the accompanying consolidated financial statements. The company is a 49.9% owner in ACM and has control of 90 % of the cash flow which led to the determination of the company as the primary beneficiary. As of December 31, 2023, ACM had no assets, liabilities or operations. Deane was formed in November 2007 for the purpose of operating underground coal mines and coal processing facilities. Deane was acquired on December 31, 2015 and as such no operations are presented prior to the acquisition date. F-6 Table of Contents Quest Processing was formed in November 2014 for the purpose of operating coal processing facilities and had no operations before March 8, 2016. Quest Processing was dissolved on December 6, 2021. ERC was formed in April 2015 for the purpose managing an underground coal mine and coal processing facility. Operations commenced in June 2015. McCoy was formed in February 2016 for the purpose of operating underground coal mines and coal processing facilities. McCoy was acquired on February 17, 2016 and as such no operations are presented prior to the acquisition date. KCC was formed in September 2004 for the purpose of operating underground coal mines and coal processing facilities. KCC was acquired on April 14, 2016 and as such no operations are presented prior to the acquisition date. On August 23, 2018, KCC disposed of certain non-operating assets totaling $ 111,567 and the corresponding asset retirement obligation totaling $919,158 which resulted in a gain of $ 807,591 . WCC was formed in October 2018 for the purpose of acquiring and operating underground and surface coal mine and a coal processing facility. No operations were undergoing at the time of formation or acquisition. On September 25, 2019, Perry County Resources LLC (PCR) was formed as a wholly owned subsidiary of ACC. On June 8, 2020, American Rare Earth LLC was created as a wholly owned subsidiary of ARC for the purpose of developing and monetizing rare earth mineral deposits. During 2022, American Rare Earth LLC was renamed to reElement Technology LLC. During 2023, reElement’s corporate designation was converted to a corporation. On June 28, 2020, American Metals LLC was created as a wholly owned subsidiary of ARC for the purpose of aggregating, processing and selling recovered steel and metals. During January 2021, the Company invested $ 2,250,000 for 50 % ownership and become the managing member of American Opportunity Venture, LLC. (AOV) It has been determined that AOV is a variable interest entity and that the Company is not primary beneficiary. As such, the investment in AOV will be accounted for using the equity method of accounting. (Note 5) During March 2021, the Company invested $ 25,000 for 100 % ownership and become the managing member of American Opportunity Venture II, LLC. (AOVII). As such, the investment in AOVII has been eliminated in the accompanying financial statements. As of September 30, 2021, AOVII has had no operational activity. (Note 5) During March 2021, the Company licensed certain technology to an unrelated entity, Novusterra, Inc. According to the commercial terms of the license, the Company is to receive 50% of future cash flows and 15,750,000 common shares of Novusterra, Inc. During August 22, 2022, the Company sold the licensed patents to Novusterra, Inc. All prior licensing obligations were voided upon the sale. It has been determined that Novusterra is a variable interest entity and that the Company is not the primary beneficiary. As such, the investment in Novusterra will be accounted for using the equity method of accounting. (Note 5) Going Concern: These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses and as of December 31, 2023, had an accumulated deficit of $178,694,329. For the year ending December 31, 2023, the Company sustained a net loss of $ 11,455,086 . These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date these financial statements were issued. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. The Company will continue to seek to raise additional funding through debt or equity financing during the next twelve months from the date of issuance of these financial statements. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives. 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 (“ASC 815”) requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. We also follow ASC 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) in its evaluation of the accounting for a hybrid instrument. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives, and are carried as a liability at fair value at each balance sheet date with remeasurements reported in interest expense in the accompanying Consolidated Statements of Operations. F-7 Table of Contents 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 is maintained in bank deposit accounts which, at times, may exceed federally insured limits. To date, there have been no losses in such accounts. Restricted cash: Consist of reclamation bonding collateral fund and approximately $2.2 million held in trust related to the Tax Exempt Bond as of December 31, 2023. Consist of reclamation bonding collateral funds as of December 31, 2022. The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that agrees to the total of those amounts as presented in the consolidated statement of cash flows for the year ended December 31, 2023 and December 31, 2022. December 31, 2023 December 31, 2022 Cash $ 2,666,638 $ 10,873,432 Restricted Cash 4,367,732 2,122,263 Total cash and restricted cash presented in the consolidated statement of cash flows $ 7,034,370 $ 12,995,695 Short-term investment held in Trust Account – restricted: Consist of U.S. government securities, corporate fixed income, and U.S. government securities that are held in trust related to the Tax Exempt Bond and are restricted as to withdrawal as required by the agreement entered into by the Company. All investments are classified as trading securities as of December 31, 2023 and 2022. Trading securities are recorded initially at cost and are adjusted to fair value at each reporting period with unrealized gains and losses recorded in current period earnings or loss. Property and Equipment: Property and Equipment are recorded at cost. For equipment, depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally ranging from three to seven years. Amortization of the equipment under capital lease is included with depreciation expense. Property and equipment and amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net undiscounted cash flows expected to be generated by the related assets. If these assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the assets. There was no impairment loss recognized during the period ending December 31, 2023 and 2022. Costs related to maintenance and repairs which do not prolong the asset’s useful life are expensed as incurred. F-8 Table of Contents Mine Development: Costs of developing new coal mines, including asset retirement obligation assets, are capitalized and amortized using the units-of-production method over estimated coal deposits or proven reserves. Costs incurred for the development and expansion of existing reserves are expensed as incurred. Cost of Goods Sold and Gross Profit: Cost of Goods Sold for coal mined and processed include direct labor, materials and utilities. Activities related to metal recover are inherent in both direct coal labor and overhead labor and does not require additional variable costs. 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 based on expected reclamation outflows over estimated recoverable coal deposit lives. We are using discount rates ranging from 6.16% to 7.22%, risk free rates ranging from 1.76% to 2.92% and inflation rate of 2% . Revisions to estimates are a result of changes in the expected spending estimate or the timing of the spending estimate associated with planned reclamation. Federal and State laws require that mines be reclaimed in accordance with specific standards and approved reclamation plans, as outlined in mining permits. Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry ponds. We assess our ARO at least annually and reflect revisions for permit changes, changes in our estimated reclamation costs and changes in the estimated timing of such costs. During 2023 and 2022, $ 0 were incurred for gain or loss on settlement on ARO. The table below reflects the changes to our ARO: 2023 2022 Beginning Balance $ 20,295,634 $ 18,951,587 Accretion 993,165 1,344,047 Ending Balance $ 21,288,799 $ 20,295,634 Income Taxes include U.S. federal and state income taxes currently payable and deferred income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period of enactment. Deferred income tax expense represents the change during the year in the deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company filed an initial tax return in 2015. Management believes that the Company’s income tax filing positions will be sustained on audit and does not anticipate any adjustments that will result in a material change. Therefore, no reserve for uncertain income tax positions has been recorded. The Company’s policy for recording interest and penalties, if any, associated with income tax examinations will be to record such items as a component of income taxes. F-9 Table of Contents Revenue Recognition: Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied; for all contracts this occurs when control of the promised goods have been transferred to our customers. For coal shipments to domestic and international customers via rail, control is transferred when the railcar is loaded. Our revenue is comprised of sales of mined coal, sales of recovered metals and services for processing coal. All the activity is undertaken in eastern Kentucky and Southern Indiana. Revenue from metal recovery and sales are recognized when conditions within the contract or sales agreement are met including transfer of title. Revenue from coal processing and loading are recognized when services have been performed according to the contract in place. Our coal sales generally include 10 to 30-day payment terms following the transfer of control of the goods to the customer. We typically do not include extended payment terms in our contracts with customers. Our contracts with customers typically provide for minimum specifications or qualities of the coal we deliver. Variances from these specifications or quantities are settled by means of price adjustments. Generally, these price adjustments are settled within 30 days of delivery and are insignificant. Customer Concentration and Disaggregation of Revenue : The Company’s concentration of contract receivables are as follows: As of December 31, 2023 2022 Customer A * 84 % Customer B * 16 % Customer C 100 % * * Represents amounts less than 10% The Company’s concentration of revenues are as follows: For the Year Ended December 31, 2023 2022 Customer A $ 11,929,422 $ 24,244,477 Customer B * $ 11,183,743 Customer C * $ 3,402,048 Customer D $ 4,191,419 * For the Year Ended December 31, 2023 2022 Customer A 74 % 62 % Customer B * 29 % Customer C * 9 % Customer D 26 % * * Represents amounts less than 10% F-10 Table of Contents As of December 31, 2023, and 2022 100 % and 99.7 % of revenue came from two coal customers and three coal customers, respectively. During December 31, 2023 and 2022, 100 % and 100 % of revenue came from two and three metal recovery customers. As of December 31, 2023, and 2022, 100 % and 100 % of outstanding accounts receivable came from two and two customers, respectively. For the year ended December 31, 2022 and 2021, 100 % and 100 % of generated from sales to the steel and industrial industry, respectively. For the year ended December 31, 2022 and 2021, 0 % and 0 % of generated from sales to the utility industry, respectively. For the Year Ended December 31, 2023 2022 MET $ 16,120,841 $ 35,584,635 PCI - 3,402,048 High BTU - 117,312 $ 16,120,841 $ 39,103,995 Leases: The Company reviews all arrangements for potential leases, and at inception, determines whether a lease is an operating or finance lease. Lease assets and liabilities, which generally represent the present value of future minimum lease payments over the term of the lease, are recognized as of the commencement date. Leases with an initial lease term of twelve months or less are classified as short-term leases and are not recognized in the balance sheets unless the lease contains a purchase option that is reasonably certain to be exercised. Lease term, discount rate, variable lease costs and future minimum lease payment determinations require the use of judgment and are based on the facts and circumstances related to the specific lease. Lease terms are generally based on their initial non-cancelable terms, unless there is a renewal option that is reasonably certain to be exercised. Various factors, including economic incentives, intent, past history and business needs are considered to determine if a renewal option is reasonably certain to be exercised. The implicit rate in a lease agreement is used when it can be determined to value the lease obligation. Otherwise, the Company’s incremental borrowing rate, which is based on information available as of the lease commencement date, including applicable lease terms and the current economic environment, is used to determine the value of the lease obligation. Beneficial Conversion Features of Convertible Securities: Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. In addition, our preferred stock issues contain conversion terms that may change upon the occurrence of a future event, such as antidilution adjustment provisions. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. The Company’s convertible notes including principal and accrued interest was converted into common shares at $ 1.05 per share during January 2023. F-11 Table of Contents Loan Issuance Costs and Discounts are amortized using the effective interest method. Amortization expense amounted to $52,500 and $0 as of December 31, 2023 and 2022, respectively. Amortization expense for the next five years is expected to be approximately $ 90,000 , annually. 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 December 31, 2023 and 2022 amounted to $ 253,764 and 0 , respectively. Allowance for other accounts receivables, including note receivables as of December 31, 2023 and 2022 amounted to $ 0 and $ 1,744,570 , respectively. The allowance as of December 31, 2022 related to the purchase of a note receivable from a third party. The note receivable has collateral in certain mining permits which are strategic to KCC. Timing of payment on the note is uncertain resulting a full allowance for the note. Trade and loan receivables are carried at amortized cost, net of allowance for losses. Amortized cost approximated book value as of December 31, 2023 and 2022. 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-based compensation to employees is accounted for under ASC 718, Compensation-Stock Compensation. Stock-based compensation expense related to stock awards granted to an employee is recognized based on the grant-date estimated fair values of the awards using the Black Scholes option pricing model (“Black Scholes”). The value is recognized as expense ratably over the requisite service period, which is generally the vesting term of the award. We adjust the expense for actual forfeitures as they occur. Stock-based compensation expense is classified in the accompanying consolidated statements of operations based on the function to which the related services are provided. Black-Scholes requires a number of assumptions, of which the most significant are expected volatility, expected option term (the time from the grant date until the options are exercised or expire) and risk-free rate. Expected volatility is determined using the historical volatility for the Company. The risk-free interest rate is based on the yield of US treasury government bonds with a remaining term equal to the expected life of the option. Expected dividend yield is zero because we have never paid cash dividends on common shares, and we do not expect to pay any cash dividends in the foreseeable future. Earnings Per Share: The Company’s 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 Company’s 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, 2023 and 2022, the Company had 5,200,000 and 8,186,250 outstanding stock warrants, respectively. For the years ended December 31, 2022 and 2022, the Company had 9,626,770 and 5,990,270 outstanding stock options, respectively. For the years ended December 31, 2023 and 2022, the Company had 0 shares of Series A Preferred Stock, that has the ability to convert at any time into 0 shares of common stock. For the years ended December 31, 2023 and 2022, the Company had 0 shares of Series B Preferred Stock, that has the ability to convert at any time into 0 shares of common stock. For the years ended December 31, 2023 and 2022, the Company had 6,364,269 and 6,364,269 restrictive stock awards, restricted stock units, or performance-based awards. Reclassifications: Reclassifications have been made to conform with current year presentation. New Accounting Pronouncements: Management has determined that the impact of the following recent FASB pronouncements will not have a material impact on the financial statements. ASU 2020-10, Codification Improvements , effective for years beginning after December 15, 2020. ASU 2020-09, Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 , effective for years beginning after December 31, 2021. ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable and other Costs , effective for years beginning after December 15, 2020. ASU 2020-06, Debt – Debt with Conversion and Other Options , effective for years beginning after December 15, 2021. Management is still evaluating the effects of this pronouncement ahead of its effective date. F-12 Table of Contents NOTE 2 - PROPERTY AND EQUIPMENT As of December 31, 2023 and 2022, property and equipment were comprised of the following: 2023 2022 Mine development $ 749,115 $ 561,575 Coal refuse storage 12,134,192 12,134,192 Rare Earth Processing 553,105 - Construction in Progress 6,770,504 - Land 1,617,435 1,617,435 Less: Accumulated depreciation ( 6,487,347 ) ( 5,199,480 ) Total Property and Equipment, Net $ 15,337,004 $ 9,113,722 Depreciation expense amounted to $ 46,953 and $ 2,157,763 for the years of December 31, 2023 and 2022, respectively. Amortization of mining rights amounted to $ 1,240,914 and $ 1,238,449 for the years of December 31, 2023 and 2022, respectively. The estimated useful lives are as follows: Processing and Rail Facilities 7 - 20 years Surface Equipment 7 years Underground Equipment 5 years Mine Development 5 - 10 years Coal Refuse Storage 10 years NOTE 3 – RIGHT OF USE ASSETS Our principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038. We pay $ 5,869 per month in rent for the office space and the rental lease expires December 2032. We also rent office space from an affiliated entity, LRR, at 11000 Highway 7 South, Kite, Kentucky 41828 and pay $ 1,702 per month rent and the rental lease expires January 1, 2030 . On August 17, 2021, American Rare Earth entered into a Commercial Land Lease sublease agreement with Land Betterment for nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility. The sublease is for the period of 5 years with a rate of $ 3,500 a month. On October 8, 2021, American Rare Earth entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility. The is for the period of 2 years with a rate of $ 4,745 .83 a month. F-13 Table of Contents On June 22, 2022 ReElement Technologies LLC entered into a Financial Lease for equipment at 2069 Highway 194 E., Meta, KY 41501 with Maxus Capital Group. On August 16, 2022 the Company entered into a Financial Lease for equipment for it facilitates with Maxus Capital Group. As of December 31, 2023 and 2022 Right of use assets and liabilities were comprised of the following: Expense Classification 2023 2022 Operating lease expense: Amortization of ROU asset General and administrative $ 91,354 $ 89,392 Accretion of Operating lease liability General and administrative 64,386 73,475 Total operating lease expense $ 155,740 $ 162,866 Finance lease expense: Amortization on lease assets Development 534,899 39,535 Interest on lease liabilities Development 1,055,818 91,233 Total finance lease expense $ 1,590,717 $ 130,768 Total $ 1,746,457 $ 293,634 Other information related to leases is as follows: For Year End December 31, 2023 2022 Weighted-average remaining lease term: Operating leases (in years) 7.32 7.69 Financing leases (in years) 2.35 2.67 Weighted-average discount rate: Operating leases 10.82 % 10.82 % Financing leases 8.15 % 8.15 % Amounts relating to leases were presented on the Balance Sheets as of December 31, 2023 and 2022 in the following line items: For Year End December 31, Balance Sheet Classification 2023 2022 Assets: Operating lease assets Right-of-use assets $ 545,449 $ 636,803 Finance lease assets, net Right-of-use assets 17,731,464 12,404,756 Total non-current assets $ 18,276,913 $ 13,041,560 Liabilities: Current Operating lease liabilities Operating lease liabilities $ 57,663 $ 82,669 Finance lease liabilities Finance lease liabilities 4,806,822 3,803,175 Non-current Operating lease liabilities Operating lease liabilities, non-current 495,611 547,667 Finance lease liabilities Finance lease liabilities, non-current 7,514,848 7,354,975 Total lease liabilities $ 12,874,944 $ 11,788,486 F-14 Table of Contents The future minimum lease payments required under leases as of December 31, 2023 were as follows: Fiscal Year Operating Leases Finance Leases Total 2024 114,768 6,240,731 6,355,499 2025 116,595 5,057,198 5,173,793 2026 109,372 1,661,272 1,770,644 2027 93,095 661,864 754,959 2028 95,065 - 95,065 Thereafter 282,755 - 282,755 Undiscounted cash flows 811,650 13,621,065 14,432,715 Less imputed interest ( 258,376 ) ( 1,299,395 ) ( 1,557,771 ) Present value of lease liabilities $ 553,274 $ 12,321,670 $ 12,874,944 NOTE 4 – NOTES & BONDS PAYABLE During the year ended December 31, 2023 and 2022, principal payments on long term debt totaled $ 1,112,850 and $ 2,214,603 , respectively. During the year ended December 31, 2023 and 2021, new debt issuances totaled $ 0 and $ 2,563,000 , respectively. F-15 Table of Contents Short-term and Long-term debt consisted of the following as of December 31, 2023 and 2022: 2023 2022 Equipment Loans - ACC On December 7, 2017, ACC entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $56,900. The agreement calls for an interest rate of 8.522%, monthly payments until maturity of January 7, 2021. The note is secured by the equipment purchased. The balance of the note was repaid with cash during 2021. 11,082 11,082 On January 25, 2018, ACC entered into an equipment loan agreement with an unrelated party in the amount of $346,660. The agreement calls for monthly payments of $11,360 until maturity date of December 24, 2020 and carries an interest rate of 9%. The loan is secured by the underlying surface equipment purchased by the loan. Loan proceeds were used directly to purchase equipment. 1,390 57,509 ARC Corporate Loan On June 3, 2022, the Company entered into a loan agreement with an unrelated party in the amount of $2,500,000 with a maturity date of June 27, 2023. The interest rate is 5% and payments are based on coal sales. 547,448 1,604,180 On April 20, 2022 the Company entered into a loan agreement with an unrelated party in the amount of $45,000 and will repay $63,000. 63,000 63,000 Equipment Loans - McCoy On September 25, 2017, ACC entered into an equipment purchase Agreement, which carries 0% interest with an unaffiliated entity, Inc. to purchase certain underground mining equipment for $350,000. The agreement provided for $20,000 monthly payments until the balance is paid in full. The note matures on September 25, 2019, and the note is in default. The note is secured by the equipment purchased with the note. 181,736 181,736 Total notes payable - current 804,656 1,917,507 F-16 Table of Contents Convertible notes payable consisted of the following as of December 31, 2023 and 2022: 2023 2022 ARC In 2020, the Company created a convertible debt offering. The debt matures in two years, with interest at 12.5% capitalizing monthly. The remaining portion of convertible debt outstanding was converted to common shares during January 2023. 9,797,423 9,797,423 Less: Debt Discounts - - Total convertible note payables, net of discount 9,797,423 9,797,423 Total interest expense was $ 1,336,997 in 2023 and $ 1,426,153 in 2022. On May 31, 2023, the West Virginia Economic Development Authority (the “Issuer”) issued $45 million aggregate principal amount of Solid Waste Disposal Facility Revenue Bonds, Series 2023 (the “2023 Tax Exempt Bonds”) pursuant to an Indenture of Trust dated as of June 8, 2023 between the Issuer and UMB Bank N.A., as trustee (the “Trustee”). The Tax Exempt Bonds are payable solely from payments to be made by the Company under the Loan Agreement as evidenced by a Note from the Company to the Trustee. The proceeds of the Tax Exempt Bonds were used to finance certain costs of the acquisition, construction, reconstruction, and equipping of solid waste disposal facilities at the Company’s Wyoming County, West Virgina development, and for capitalized interest and certain costs related to issuance of the Tax Exempt Bonds. The Tax Exempt Bonds bear interest of 9% and have a final maturity of June 8, 2038. The Tax Exempt Bonds are subject to redemption (i) in whole or in part at any time on or after June 1, 2030 at the option of the Issuer, upon the Company’s direction at a redemption price of 103% between June 1, 2030, through May 31, 2031, 102% between June 1, 2031, through May 31, 2032, 101% between June 1, 2032, through May 31, 2033, 100% from June 1, 2033 and thereafter, plus interest accrued to the redemption date; and (ii) at par plus interest accrued to the redemption date from certain excess Tax Exempt Bonds proceeds as further described in the Indenture of Trust. The Company’s obligations under the Loan Agreement are (i) except as otherwise described below, secured by first priority liens on and security interests in substantially all of the Company’s and Subsidiary Guarantors’ real property and other assets, subject to certain customary exceptions and permitted liens, and in any event excluding accounts receivable and inventory; and (ii) jointly and severally guaranteed by the Subsidiary Guarantors, subject to customary exceptions. The Loan Agreement contains certain affirmative covenants and representations, including but not limited to: (i) maintenance of a rating on the Tax Exempt Bonds; (ii) maintenance of proper books of records and accounts; (iii) agreement to add additional guarantors to guarantee the obligations under the Loan Agreement in certain circumstances; (iv) procurement of customary insurance; and (v) preservation of legal existence and certain rights, franchises, licenses and permits. The Loan Agreement also contains certain customary negative covenants, which, among other things, and subject to certain exceptions, include restrictions on (i) release of collateral securing the Company’s obligations under the Loan Agreement; (ii) mergers and consolidations and disposition of assets, and (iii) restrictions on actions that may jeopardize the tax-exempt status of the Tax Exempt Bonds. The Loan Agreement contains customary events of default, subject to customary thresholds and exceptions, including, among other things: (i) nonpayment of principal, purchase price, interest and other fees (subject to certain cure periods); (ii) bankruptcy or insolvency proceedings relating to us; (iii) material inaccuracy of a representation or warranty at the time made; and (v) cross defaults to the Indenture of Trust, the guaranty related to the Tax Exempt Bonds or any related security documents. NOTE 5 - RELATED PARTY TRANSACTIONS On April 30, 2017, the Company purchased $ 250,000 of secured debt that had been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the notes. The first note in the amount of $ 150,000 is dated March 13, 2013 , carries an interest rate of 12 % and was due on September 13, 2015. The second note in the amount of $ 100,000 is dated July 17, 2013 , carries an interest rate of 12 % and was due January 17, 2016. Both notes are in default and have been fully impaired due to collectability uncertainty. On October 24, 2016, the Company sold certain mineral and land interests to a subsidiary of an entity, LRR, owned by members of the Company’s management. LRR leases various parcels of land to QEI and engages in other activities creating miscellaneous income. The consideration for the transaction was a note in the amount of $ 178,683 . The note bears no interest and is due in 2026. As of January 28, 2017, the note was paid in full. From October 24, 2016. this transaction was eliminated upon consolidation as a variable interest entity. As of July 1, 2018, the accounts of Land Resources & Royalties, LLC have been deconsolidated from the financial statements based upon the ongoing review of its status as a variable interest entity. As of December 31, 2023, and 2022, amounts owed to LRR totaled $ 509,130 and $ 338,246 , respectively. On February 13, 2020, the Company entered into a Contract Services Agreement with Land Betterment Corp, an entity controlled by certain members of the Company’s management who are also directors and shareholders. The contract terms state that service costs are passed through to the Company with a 10% mark-up and a 50% share of cost savings . The agreement covers services across all of the Company’s properties. During 2023 and 2022, the amount incurred under the agreement amounted to $ 5,572,644 and $ 5,572,644 and the amount paid amounted to $ 3,080,783 and $ 3,080,783 . As of December 31, 2023 and 2022, the amount due under the agreement amounted to $ 2,696,181 and $ 4,481,922 . F-17 Table of Contents The Company is the holder of 2,000,000 LBX Tokens with a par value of $ 250 for each token. The token issuance process is undertaken by a related party, Land Betterment, and is predicated on proactive environmental stewardship and regulatory bond releases. As of December 31, 2023, there is no market for the LBX Token and therefore no value has been assigned. On June 11, 2020 the Company purchased $ 1,494,570 of secured debt included accrued interest that had been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the four notes. The first note in the amount of $ 75,000 is dated June 28, 2013 , carries an interest rate of 12 % and was due on June 28, 2015. The second note in the amount of $ 150,000 is dated June 28, 2013 , carries an interest rate of 12 % and was due June 28, 2015. The third note in the amount of $ 199,500 is dated March 18, 2014 , carries an interest rate of 4 % and was due on March 18, 2016. The fourth note in the amount of $ 465,500 is dated March 18, 2014 , carries an interest rate of 4 % and was due on March 18, 2016. The notes are in default and have been fully impaired due to collectability uncertainty. On January 1, 2021, the Company purchased $ 250,000 of secured debt including accrued interest that has been owed to that party, by an operating subsidiary of a related party. As a result of the transaction, the Company is now the creditor on the note. The note is in default and has been fully impaired due to collectability uncertainty. American Opportunity Venture, LLC During January 2021, the company invested $ 2,250,000 for 50% ownership and become the managing member of American Opportunity Venture, LLC. (AOV) It has been determined that AOV is a variable interest entity and that the Company is not primary beneficiary. As such, the investment in AOV will be accounted for using the equity method of accounting. Condensed Summary Financials as Of December 31, 2023: AOV December 31, 2023 Balance Sheet Assets Investment in American Acquisition Opportunity Inc $ 4,500,000 Assets $ 4,500,000 Liabilities $ - Members Equity $ 4,500,000 Total Liabilities and Members' Equity $ 4,500,000 F-18 Table of Contents American Opportunity Venture II, LLC During March 2021, the Company invested $ 25,000 for 100% ownership and become the managing member of American Opportunity Venture II, LLC. (AOVII). As such, the investment in AOVII has been eliminated in the accompanying financial statements. As of December 31, 2023, AOVII has had no operational activity. Condensed Summary Financials as Of December 31, 2023: AOV II December 31, 2023 Balance Sheet Assets Deposits $ 25,000 Assets $ 25,000 Liabilities $ - Members Equity $ 25,000 Total Liabilities and Members' Equity $ 25,000 Novusterra, Inc. During March 2021, the Company licensed certain technology to an unrelated entity, Novusterra, Inc. According to the commercial terms of the license, the Company is to receive 50% of future cash flows and 15,750,000 common shares of Novusterra, Inc. During August 22, 2022, the Company sold the licensed patents to Novusterra, Inc. All prior licensing obligations were voided upon the sale. It has been determined that Novusterra is a variable interest entity and that the Company is not the primary beneficiary. As such, the investment in Novusterra will be accounted for using the equity method of accounting. F-19 Table of Contents Condensed Summary Financials as Of December 31, 2023: ASSETS December 31, 2023 December 31, 2023 Current assets: Cash and cash equivalents $ 186,106 $ 186,106 Accounts receivable 27,000 Prepaid expenses 54,003 Total current assets 186,106 186,106 Non-current assets: Intangible assets 2,026,167 422,515 Operating lease right-of-use asset 394,404 437,352 Total non-current assets - 859,868 Total Assets $ 2,520,378 $ 1,050,974 Liabilities and Stockholders’ Equity Current liabilities: Accounts payables $ 10,342 $ 9,500 Accrued interest 49,299 6,022 Other current liabilities 609,347 247,827 Current portion of operating lease liabilities 43,162 40,165 Total current liabilities 712,150 273,514 Long term debt, net of current portion 241,332 208,029 Operating lease liabilities, less current portion 360,177 403,339 Total liabilities 1,313,659 914,881 Commitments and contingencies Stockholders’ Equity Preferred stock - no par value; 400,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020 - - Class A Common stock - no par value; 2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 2,590,776 806,777 Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively - - Additional paid-in capital 19,800 Accumulated deficit ( 1,403,857 ) ( 670,685 ) Total stockholders’ equity 1,206,719 136,092 Total Liabilities and Stockholders’ Equity $ 2,520,378 $ 1,050,974 F-20 Table of Contents NOTE 6 – INVESTMENTS The Company has invested in marketable debt securities, primarily highly liquid U.S. Treasury securities and investment grade corporate bonds. These investments are held in the custody of a major financial institution. These securities are classified as available-for-sale securities and, accordingly, the unrealized gains and losses are recorded through other comprehensive income. The Company’s investments in available-for-sale marketable securities are as follows: December 31, 2023 Gross Allowance Unrealized for - Credit Fair Cost Basis Gains Losses Losses Value Available-for-sale: U.S. government and agency securities $ 29,797,564 $ 499,639 $ - $ — $ 30,297,203 The Company classifies its investments as current based on the nature of the investments and their availability to provide cash for use in current operations, if needed. NOTE 7 - INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The primary temporary differences that give rise to the deferred tax assets and liabilities are as follows: accrued expenses. Deferred tax liability and assets consisted of $ 1,827,392 and $ 344,509 as of December 31, 2023 and 2022, respectively, which was fully reserved. Deferred tax assets consist of net operating loss carryforwards in the amount of $ 25,658,401 and $ 23,831,009 as of December 31, 2023 and 2022, respectively, which was fully reserved. The net operating loss carryforwards for years 2015, 2016, 2017, 2018, 2019, 2020, and 2021 begin to expire in 2035 . The application of net operating loss carryforwards are subject to certain limitations as provided for in the tax code. The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and reduced the corporate income tax rate from 34% to 21% . The Company’s deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law. On March 25, 2020, the CARES Act was established with implications of corporate tax treatment. The CARES Act provides that NOLs arising in a tax year beginning after December 31, 2018 and before January 1, 2021 can be carried back to each of the five tax years preceding the tax year of such loss. The CARES Act temporarily and retroactively increases the limitation on the deductibility of interest expense under Code Sec. 163(j)(1) from 30% to 50% for the tax years beginning in 2019 and 2020 . The Company’s effective income tax rate is lower than what would be expected if the U.S. federal statutory rate ( 21 %) were applied to income before income taxes primarily due to certain expenses being deductible for tax purposes but not for financial reporting purposes. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. All years are open to examination as of December 31, 2023. NOTE 8 – EQUITY TRANSACTIONS As of December 31, 2023, the following describes the various types of the Company’s securities: Common Stock Voting Rights . Holders of shares of common stock are entitled to one vote per share held of record on all matters to be voted upon by the stockholders. The holders of common stock do not have cumulative voting rights in the election of directors. Dividend Rights . Holders of shares of our common stock are entitled to ratably receive dividends when and if declared by our board of directors out of funds legally available for that purpose, subject to any statutory or contractual restrictions on the payment of dividends and to any prior rights and preferences that may be applicable to any outstanding preferred stock. Please read “Dividend Policy.” Liquidation Rights . Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities and the liquidation preference of any of our outstanding shares of preferred stock. Other Matters . The shares of common stock have no preemptive or conversion rights and are not subject to further calls or assessment by us. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of our common stock, are fully paid and non-assessable. Series A Preferred Stock Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series A Preferred stock, par value $ 0.0001 per share, covering up to an aggregate of 100,000 shares of Series A Preferred stock. The Series A Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Additionally, the holders of preferred stock will entitled to vote at or receive notice of any meeting of stockholders. As of the date of this filing, no shares of Series A Preferred stock are outstanding. See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series A Preferred stockholders. Voting Rights . The holders of Series A Preferred Stock shall be entitled to vote on an “as-converted” basis for any matters that require voting of the Class A Common Stock. F-21 Table of Contents Dividend Rights . The holders of the Series A Preferred stock are entitled to receive its proportional distribution or accrual of the cash dividend as if the Series A Preferred Stock were converted to Class A Common Stock (plus any Class A Common Stock equivalents that may be entitled to receive a dividend). Conversion Rights . The holders of the Series A Preferred stock are entitled to convert into common shares, at the holder’s discretion, Into Forty Percent (40.0%) of the outstanding amount of Class A Common Stock plus common stock equivalents that are existing at the time of the conversion, at any time and from time to time. No additional consideration is required for the conversion . Liquidation Rights . Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of the Series A Preferred shares shall be entitled to receive in preference to the holders of the Common Stock a per share amount equal to $ 1.00 per share. Anti-Dilution Protections . The Series A Preferred stock shall have full anti-dilution protection until March 1, 2020, such that, when the sum of the shares of the common stock plus the Series A Convertible stock that are held by the Series A Preferred stock holders as of the date of the Articles of Amendment are summed (the sum of which is defined as the “Series A Holdings”, and the group defined as the “Series A Holders”), the Series A Holdings held by the Series A Holders shall be convertible into, and/or equal to, no less than Seventy-Two Percent (72.0%) of the fully-diluted common stock outstanding of the company (inclusive of all outstanding “in-the-money” options and warrants). Any amount that is less than Seventy-Two Percent (72.0%) shall be adjusted to Seventy-Two Percent (72.0%) through the immediate issuance of additional common stock to the Series A Holders to cure the deficiency , which shall be issued proportionally to each respective Series A Holder’s share in the Series A Holdings at the time of the adjustment. This anti-dilution protection shall include the effect of any security, note, common stock equivalents, or any other derivative instruments or liability issued or outstanding during the anti-dilution period that could potential cause dilution during the anti-dilution period or in the future. As of February 14, 2019, all Series A Preferred stock has been converted into Common shares of the company. Series B Preferred Stock Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series B Preferred stock, par value $ 0.001 per share, covering up to an aggregate of 20,000,000 shares of Series B Preferred stock. The Series B Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of stockholders. As of the date of this filing, no shares of Series B Preferred stock are outstanding. See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series B Preferred stock holders. Voting Rights . The holders of Series B Preferred shares have no voting rights. Dividend Rights . The holders of the Series B Preferred shall accrue a dividend based on an 8.0 % annual percentage rate, compounded quarterly in arrears, for any Series B Preferred stock that is outstanding at the end of such prior quarter. Conversion Rights . The holders of the Series B Preferred stock are entitled to convert into common shares, at the holder’s discretion, at a conversion price of Three Dollars and Sixty Cents ($ 3.60 ) per share of common stock, subject to certain price adjustments found in the Series B Preferred stock purchase agreements. Liquidation Rights . Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of Series B Preferred shares shall have a liquidation preference to the Series A Preferred and Common shares at an amount equal to the holders’ investment in the Series B Preferred stock. Series C Preferred Stock Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series C Preferred stock, par value $ 0.0001 per share, covering up to an aggregate of 20,000,000 shares of Series C Preferred stock. The Series C Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of stockholders. As of the date of this filing, no shares of Series C Preferred stock are outstanding. See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series C Preferred stock holders. Voting Rights . The holders of Series C Preferred shares are entitled to vote on an “as-converted” basis of one share of Series C Preferred Stock voting one vote of common stock. Dividend Rights . The holders of the Series C Preferred shall accrue a dividend based on an 10.0% annual percentage rate, compounded annually in arrears, for any Series C Preferred stock that is outstanding at the end of such prior year. F-22 Table of Contents Conversion Rights . The holders of the Series C Preferred stock are entitled to convert into common shares, at the holder’s discretion, at a conversion price of Six Dollars ($ 6.00 ) per share of common stock, subject to certain price adjustments found in the Series C Preferred stock purchase agreements. Should the company complete an equity offering (including any offering convertible into equity of the Company) of greater than Five Million Dollars ($ 5,000,000 ) (the “Underwritten Offering”), then the Series C Preferred stock shall be automatically and without notice convertible into Common Stock of the company concurrently with the subsequent Underwritten Offering at the same per share offering price of the Underwritten Offering. If the Underwritten Offering occurs within twelve months of the issuance of the Series C Preferred stock to the holder, the annual dividend of 10.0% shall become immediately accrued to the balance of the Series C Preferred stock and converted into the Underwritten Offering. Liquidation Rights . Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of Series C Preferred shares shall have a liquidation preference to the Common shares at an amount equal to $ 1.00 per share. As of February 21, 2019, all Series C Preferred stock has been converted into Common shares of the company. Common Share Transactions During 2022, the Company issued 549,395 share of Class A Common Stock pursuant to warrant conversions. During 2022, the Company issued 1,209,643 shares of Class A Common Stock pursuant to debt conversions. During 2022, the Company issued 20,000 shares of Class A Common Stock pursuant to various consulting arrangements. During 2022, the Company repurchased 86,410 shares of Class A Common Stock. During 2023, the Company issued 0 share of Class A Common Stock pursuant to warrant conversions. During 2022, the Company issued 9,426,094 shares of Class A Common Stock pursuant to debt conversions. During 2022, the Company issued 49,020 shares of Class A Common Stock pursuant to various consulting arrangements. Common Stock Option Transactions A 2016 Stock Incentive Plan (2016 Plan) was approved by the Board during January 2016. The Company may grant up to 6,363,225 shares of Series A Preferred stock under the 2016 Plan. The 2016 Plan is administered by the Board of Directors, which has substantial discretion to determine persons, amounts, time, price, exercise terms, and restrictions of the grants, if any. The options issued under the 2016 Plan vest upon issuance. A new 2018 Stock Option Plan (2018 Plan) was approved by the Board on July 1, 2018 and amended on July 16, 2020. The Company may grant up to 4,000,000 shares of common stock under the 2018 Plan. The 2018 Plan is administered by the Board of Directors, which has substantial discretion to determine persons, amounts, time, price, vesting schedules, exercise terms, and restrictions of the grants, if any. On September 12, 2018, the Board issued a total of 636,830 options to four employees of the Company under the 2018 Plan. The options have an expiration date of September 10, 2025 and have an exercise price of $ 1.00 per share. Of the total options issued, 25,000 vested immediately, with the balance of 611,830 options vesting equally over the course of three years, subject to restrictions regarding the employee’s continued employment by the Company. On June 18, 2020, the Board issued a total of 750,000 options to 2 employees of the Company under the 2018 Plan. The options have an expiration date of June 17, 2027 and have an exercise price of $2.630. The options vested equally over the course of seven years, subject to restrictions regarding the employee’s continued employment by the Company. On July 16, 2020, the Board issued a total of 50,000 options to a director of the Company under the 2018 Plan as amended. The options have an expiration date of March 15, 2021 and vest immediately. On November 23, 2020, the Board issued a total of 302,439 options to 3 employees and 4 directors. The options have an expiration of November 22, 2027 and vest immediately . F-23 Table of Contents During July and September 2022, the Company issued 2,675,000 Employee Stock options under the current plan. The individual option awards vest over a period of 1 to 9 years . During July and September 2023, the Company issued 3,736,500 Employee Stock options under the current plan. The individual option awards vest over a period of 1 to 9 years . Warrant Transactions On June 12, 2019, we entered into an agreement with Golden Properties Ltd., a British Columbia company based in Vancouver, Canada (“Golden Properties”) to amend warrants “C-1”, “C-2” “C-3”, and “C-4” that were originally part of a October 4, 2017 agreement with Golden Properties that involved a series of loans made by Golden Properties to the Company. As a result, the following warrants are issued to Golden Properties: · Warrant B-4, for the purchase of 3,417,006 shares of common stock at $ 0.01 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $ 34,170 in cash proceeds should all the warrants be exercised. There was no change to Warrant B-4 as part of the June 12, 2019 amendment; · Warrant C-1, for the purchase of 750,000 shares of common stock at $ 3.55 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $ 2,662,500 in cash proceeds should all the warrants be exercised; · Warrant C-2, for the purchase of 750,000 shares of common stock at $ 4.25 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $ 2,836,000 in cash proceeds should all the warrants be exercised; · Warrant C-3, for the purchase of 750,000 shares of common stock at $ 4.50 per share, as adjusted from time to time, expiring April 4, 2022, and providing the Company with up to $ 3,375,000 in cash proceeds should all the warrants be exercised; and · Warrant C-4, for the purchase of 750,000 shares of common stock at $ 5.00 per share, as adjusted from time to time, expiring April 4, 2022, and providing the Company with up to $ 3,750,000 in cash proceeds should all the warrants be exercised. On February 3 2020, we entered into a warrant adjustment agreement with Golden Properties Ltd., a British Columbia company based in Vancouver, Canada (“Golden Properties”) to amend warrants “C-1”, “C-2” “C-3”, and “C-4” that were originally part of a October 4, 2017 agreement with Golden Properties that involved a series of loans made by Golden Properties to the Company. As a result, the following warrants modified for Golden Properties: · Warrant C-1, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring on January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised; · Warrant C-2, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring on January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised; · Warrant C-3, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised; and · Warrant C-4, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised. F-24 Table of Contents New Warrant Issuances On July 28, 2022, the Company issued Common Stock Purchase Warrant “A-12” in conjunction with a IR Services. The warrant provides the option to purchase 60,000 Class A Common Shares at a price of $ 3.50 . The warrants expire on July 28, 2026 . The company uses the black Scholes option pricing model to value its warrants and options. The significant inputs are as follows: 2023 2022 Expected Dividend Yield 0 % 0 % Expected volatility 87.97 % 87.97 % Risk-free rate 2.37 % 0.98 % Expected life of warrants .47 - 9 years 1 - 9 years Company Warrants: Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Warrants Price Life in Years Value Exercisable (Vested) - December 31, 2021 11,126,679 $ 2.66 2.15 $ 834,000 Granted 260,000 2.30 1.85 $ - Forfeited or Expired 2,881,034 3.25 - $ - Exercised 379,395 1.5 - $ - Outstanding - December 31, 2022 8,186,250 2.49 2.07 $ - Exercisable (Vested) - December 31, 2022 8,126,250 2.48 2.06 $ 834,000 Granted 330,000 1.57 1.86 $ 36,750 Forfeited or Expired 3,316,250 1.18 - $ 1,393,500 Exercised - - - - Outstanding - December 31, 2023 5,200,000 $ 3.27 2.44 $ - Exercisable (Vested) - December 31, 2023 5,075,000 $ 3.30 2.41 $ - F-25 Table of Contents Company Options: Number of Weighted Average Exercise Weighted Average Contractual Aggregate Intrinsic Options Price Life in Years Value Exercisable (Vested) - December 31, 2021 4,014,270 $ 1.6187 5.05 $ 298,285 Granted 2,206,000 $ 1.6870 2.61 $ 3,890 Forfeited or Expired 50,000 $ 3.5200 - - Exercised - - - - Outstanding - December 31, 2022 5,990,270 $ 1.6259 5.58 $ 302,175 Granted 3,736,500 $ 1.4689 3.48 $ 550,325 Forfeited or Expired 100,000 $ 1.0000 - $ 49,000 Exercised - - - - Outstanding - December 31, 2023 9,626,770 $ 1.5715 5.39 $ 1,035,181 Exercisable (Vested) - December 31, 2023 3,681,245 $ 1.6142 4.46 $ 402,881 F-26 Table of Contents NOTE 9 – CONTINGENCIES AND COMMITMENTS In the course of normal operations, the Company is involved in various claims and litigation that management intends to defend. The range of loss, if any, from potential claims cannot be reasonably estimated. However, management believes the ultimate resolution of matters will not have a material adverse impact on the Company’s business or financial position. In the course of normal operations, the Company is involved in various claims and litigation that management intends to defend. The range of loss, if any, from potential claims cannot be reasonably estimated. However, management believes the ultimate resolution of matters will not have a material adverse impact on the Company’s business or financial position. These claims include amounts assessed by the Kentucky Energy Cabinet totaling $ 1,242,000 , the Company has accrued $ 1,393,107 as a payable to the Commonwealth of Kentucky including amounts owed to the Kentucky Energy Cabinet. Claims assessed by the Mine Health Safety Administration amount to $ 671,300 of which the Company has accrued $ 351,071 as a payable. During 2019, McCoy and Deane, received notice of intent to place liens for amounts owed on federal excise taxes. The amounts associated with the notices are included in the company’s trade payables. On November 7, 2018, Wyoming County Coal LLC, acquired 5 permits, coal processing and loading facilities, surface ownership, mineral ownership, and coal refuse storage facilities from unrelated entities. Consideration for the acquired assets was the assumption of reclamation bonds totaling $ 234,240 , 1,727,273 shares of common stock of the company, a seller note of $ 350,000 and a seller note of $ 250,000 . As of the balance sheet date, the West Virginia permit transfers have not yet been approved. On September 26, 2019, the Company received notice that a certain lease assumption as part of the PCR acquisition was being disputed by the lessor. Our principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038. We pay $ 5,726 per month in rent for the office space and the rental lease expires December 2026 . On January 1, 2022, the Company entered into an expansion lease for the site. The amended lease has a ten year term and $ 5,869 per month rate. We also rent office space from an affiliated entity, LRR, at 11000 Highway 7 South, Kite, Kentucky 41828 and pay $ 1,702 per month rent and the rental lease expires January 1, 2030 . On August 17, 2021, ReElement entered into a Commercial Land Lease sublease agreement with Land Betterment for nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility. The sublease is for the period of 5 years with a rate of $ 3,500 a month. On October 8, 2021, ReElement entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility. The is for the period of 2 years with a rate of $4,745.83 a month. On August 17, 2022, American Rare Earth entered into a Commercial Land Lease sublease agreement with Land Betterment for nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility. The sublease is for the period of 5 years with a rate of $3,500 a month. On October 8, 2022, American Rare Earth entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility. The is for the period of 2 years with a rate of $4,745.83 a month. The Company also utilizes various office spaces on-site at its coal mining operations and coal preparation plant locations in eastern Kentucky, with such rental payments covered under any surface lease contracts with any of the surface land owners. F-27 Table of Contents On August 11, 2023 American Carbon Corp (“ACC”) entered into a coal sale agreement with Marco International Corporation. The agreement is for an amount up to $ 20,000,000 and is based on an advance rate of 70 % of the index pricing value of accepted coal and the agreement carries a premium of 3.25 % of the index pricing. As of the report date, $ 2,020,311 has been sold under this agreement. On August 13, 2023 American Resources Corporation (“American Resources” or the “Company”), received a non-binding letter of interest for the assets of American Carbon Corporation (“American Carbon” or “ACC”), from a non-affiliated party. Total consideration for ACC’s assets is approximately $ 300,000,000 of cash value which consists of: (i) $ 20,000,000 cash at closing and (2) balance to be paid out as a royalty agreement at a rate of 10 % plus a profit split to determined subject to further diligence. NOTE 10 - SUBSEQUENT EVENTS On February 5, 2024, American Carbon entered into a Share Purchase Agreement (“Purchase Agreement”) with T.R. Mining & Equipment Ltd. (“TR Mining”), to where ACC has purchased 51 % of the fully diluted shares outstanding of TR Mining in exchange for approximately 6% of the primary shares outstanding of ACC. The Purchase Agreement was fully executed and closed on February 5, 2024 . On March 4, 2024, members of the American Resources Corporation’s (“American Resources” or the “Company”) Board of Directors received an unsolicited investment letter (“Shareholder Investment Letter”) from a current shareholder and former board member of American Resources Corporation. The letter references the strategic direction of the Company along with to its wholly owned subsidiary, ReElement Technologies Corporation (“ReElement”). The investment letter is currently under review and carries the following details: - The spinout or sale of American Carbon Corporation - The spinout of ReElement Technologies Corporation - The spinout of interest in Novusterra Inc. - The focus of American Resources Corporation post such events on the critical mineral industry growth. The ReElement Technologies Corporation Term Sheet is currently under review and carries the following details: - Pre Money Valuation: $ 300 million - Financing Size: Minimum of $7 million up to $50 million - Structure: Common Stock - Management Participation: Requirement of members of current management to participate in the round, which is agreeable by certain members On March 28, 2024, American Resources Corporation’s (“American Resources” or the “Company”) wholly owned subsidiary, ReElement Technologies Corporation (“ReElement”), closed a Bond Purchase Agreement (“Purchase Agreement”) with Hilltop Securities Inc. (the “Underwriter”), Knott County, Kentucky (the “Issuer”), a county and political subdivision organized and existing under the laws of the Commonwealth of Kentucky (the “Commonwealth”), whereby the Underwriter agrees to purchase from the Issuer, and the Issuer agrees to sell and deliver to the Underwriter, all (but not less than all) of the Knott County, Kentucky Industrial Building Revenue Bonds (Solid Waste Project), Series 2024 (the “Bonds”), at the purchase price of $ 150,000,000 (which is equal to the aggregate principal amount of the Bonds). The Bonds have been authorized pursuant to the laws of the Commonwealth. The proceeds of the sale of the Bonds will be used to develop ReElement’s Kentucky Lithium refining facility which is being designed with an initial capacity to produce 15,000 metric ton per annum of battery-grade lithium carbonate and/or lithium hydroxide. The Bonds are being offered and sold only to a limited number of “Qualified Institutional Buyers” within the meaning of Rule 144A of the Securities Act of 1933, as amended (the “1933 Act”), or “Accredited Investors” within the meaning of Regulation D promulgated under the 1933 Act. F-28