American Resources Corporation Reports Significant Financial Challenges in Latest 10-Q Filing

American Resources Corporation (ARC) reported significant financial challenges in its latest 10-Q filing for the period ending September 30, 2024. The company experienced a drastic decline in revenue, with total revenue for the three months amounting to $235,443, a sharp decrease of $5,573,082 from $5,808,525 in the same period of 2023. For the nine months ended September 30, 2024, total revenue was $333,557, down $16,344,113 from $16,677,670 in the prior year. Notably, coal sales dropped to zero in both the three and nine-month periods, compared to $5,721,840 and $16,120,841, respectively, in 2023. However, metal recovery and sales increased to $154,055 for the three months, up from $5,722 in 2023.

The company reported a net loss from operations of $(8,258,336) for the three months ended September 30, 2024, compared to a loss of $(1,850,204) in 2023. The net loss attributable to ARC shareholders for the same period was $(9,206,768), an increase from $(2,360,828) in 2023. For the nine months, the net loss was $(21,909,367), significantly higher than $(13,871,222) in the previous year.

Total operating expenses for the three months increased to $8,493,779, up from $7,658,729 in 2023, driven by a rise in general and administrative expenses. Conversely, total operating expenses for the nine months decreased to $19,988,643, down from $29,444,696 in 2023, primarily due to reduced coal production costs.

As of September 30, 2024, total current assets were reported at $5,714,703, a significant drop from $34,885,493 at the end of 2023, following a restatement adjustment. Total liabilities surged to $265,985,869, compared to $91,522,320 at the end of 2023, reflecting a substantial increase in bond payable, which rose to $193,337,587 from $44,152,500.

Strategically, ARC acquired a 51% interest in TR Properties & Equipment Ltd. in February 2024, classified as an asset acquisition. The company is also navigating a complex financial landscape, with substantial doubt about its ability to continue as a going concern. Management is actively seeking additional financing through debt or equity to meet its obligations.

The company’s cash position improved, with cash and cash equivalents totaling $161,651,732 as of September 30, 2024, compared to $30,874,638 at the end of 2023. Cash used in operating activities for the nine months was $(16,317,031), compared to $(15,908,173) in 2023. The company continues to face intense competition in the coal industry and is subject to various regulatory requirements.