United States securities and exchange commission logo
August 31, 2022
Kirk P. Taylor
Chief Financial Officer
American Resources Corporation
12115 Visionary Way
Fishers, IN 46038
Re: American Resources
Corporation
Form 10-K for the
fiscal year ended December 31, 2021
Form 8-K filed on
August 15, 2022
File No. 001-38816
Dear Mr. Taylor:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the fiscal year ended December 31, 2021
Overview, page 4
1. We note your reference
to Industry Guide 7 in this section and elsewhere in your filing.
Industry Guide 7 is no
longer valid and mining property disclosure should conform to the
requirements of Items
1300 through 1305 of Regulation S-K. Please revise your filing to
conform to these Items
and remove references to Industry Guide 7.
McCoy Elkhorn Coal LLC, page 5
2. We have reviewed your
filing and your summary disclosure of your mining properties,
beginning in this
section. Please revise your filing to conform to the summary disclosure
requirements of Item
1303 of Regulation S-K.
Kirk P. Taylor
FirstName LastNameKirk P. Taylor
American Resources Corporation
Comapany
August 31, NameAmerican
2022 Resources Corporation
August
Page 2 31, 2022 Page 2
FirstName LastName
Perry County Resources LLC, page 12
3. We note two of your properties are active and provide revenues. Please
modify your
filing and state whether any of your mining operations are material to
your company or
not. For you material properties, please provide the individual
property disclosure as
required by Item 1304 of Regulation S-K.
Mine Safety Disclosures, page 24
4. Our review found that Exhibit 95.1 was not filed with your filing.
Please add this exhibit
to your amended filing.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of
Operations, page 32
5. You disclose that for the year ended December 31, 2021, you sold
60,512 tons to steel
making end users with a realized sales price of $75.39, as compared
with 6,569 tons sold
with a realized sales price of $59.09. Please expand your discussion
to describe the
significant components of consolidated revenue or expenses as well as
changes in
trends that would be material to an investor s understanding of your
results of operations.
We refer you to Item 303(b)(2) of Regulation S-K. For example, to the
extent material
please disclose how year-over-year changes in operating results were
impacted by the
following:
Explain the extent of contribution that each mine has had on total
coal sales,
describing the underlying reasons for changes in prices and
volumes. For example,
we note in 2021 that the Carnegie 1 mine produced approximately
7,889.63 tons and
sold coal at an average of $138 per ton and the E4-2 mine
produced approximately
79,546.75 tons and sold coal at an average price of $83.17. In
2020 Carnegie 1
produced 0 tons and E4-2 produced approximately 1,200 tons and
sold coal at an
average price of $52.30.
Include a discussion that discloses the mines that have not
contributed during this
period of additional demand following COVID-19 and the reasons
these mines have
not experienced a corresponding increase in the demand for coal.
For example, we
note that you disclosed on pages 7 and 9 that the Wayland Surface
Mine and Access
Energy Mine were idled due to the Company s focus on the
metallurgical and
industrial markets.
Development expenses increased to $18,098,670 in 20201, up from
$3,998,885 in
2020. Please identify the component costs and explain the reasons
that caused the
material year-over-year increase as well as the change in the
amount of development
expense in proportion to coal sales.
Liquidity and Capital Resources, page 33
6. Please expand your discussion of liquidity and capital resources to
address your liquidity
requirements, including a discussion of your sources and uses of cash
and your short term
Kirk P. Taylor
FirstName LastNameKirk P. Taylor
American Resources Corporation
Comapany
August 31, NameAmerican
2022 Resources Corporation
August
Page 3 31, 2022 Page 3
FirstName LastName
and long term plans to fund your operational and capital needs to meet
your cash
requirements. Please also discuss your plans to resolve loan amounts
that in default and
any impacts it may have on your liquidity. Refer to Item 303(b)(1) of
Regulation S-K.
Notes to the Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies, page F-6
7. We refer to your disclosures on page F-7 about the $2,500,000 invested
in American
Opportunity Venture, LLC, American Opportunity Venture II, LLC, and
Novusterra, Inc.
We note that you apply the equity method of accounting to each of
these investments.
Please tell us the results of your assessment of the significance of
the individual or any
combination of investments and the requirement to provide summarized
financial
information in your financial statement footnotes under ASC
323-10-50-3(c) and Rule 8-
03 of Regulation S-X. Please note that Rule 8-03 of Regulation S-X
applies to both
annual and interim financial statements.
Note 2 - Property and Equipment, page F-14
8. You disclose that since 2019 the Company has not mined or sold coal
into thermal coal
markets and all production and future investment will be for the
mining of metallurgical
coal. We note that you disclose that certain long-lived assets of
Wayland and ERC
Mining Indiana were impaired because they were exclusively used in the
thermal coal
market and the Access Energy Mine is idled and not expected to produce
again due to the
continued focus on the metallurgical and industrial markets. Please
identify any other
long-lived assets related to the thermal coal market that have not
been fully impaired as of
the balance sheet date. If so, please tell us how you determined the
carrying values for
these long-lived assets were recoverable including how you determined
the future net
undiscounted flows expected to be generated by the related assets to
determine their
recoverability.
Note 4 - Notes Payable, page F-15
9. We note that a number of your financing and loan agreements at Note 4
no longer carry
balances as of 12/31/21. Please expand your disclosure to indicate how
these debts were
settled.
Form 8-K filed August 15, 2022
Reconciliation of Adjusted EBITDA to Amounts Reported Under U.S. GAAP, page 8
10. We note you disclose Adjusted EBITDA as a non-GAAP financial
performance measure.
Expand your disclosure to explain how management uses this measure and
why you
believe it provides useful information to investors regarding your
performance pursuant to
Item 10(e)(1)(i)(C) and (D) of Regulation S-K.
Kirk P. Taylor
American Resources Corporation
August 31, 2022
Page 4
11. We note your reconciliation of the non-GAAP measure Adjusted EBITDA
includes an
adjustment for development costs which appear to be normal recurring
cash operating
expenses necessary to operate your business. Please tell us why you
believe
this adjustment is permitted under Item 10(e) of Regulation S-K and
your
considerations of Question 100.01 of the Compliance and Disclosure
Interpretations on
Non-GAAP Measures in forming your view.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Brian McAllister at (202) 551-3341 or Craig Arakawa,
Accounting
Branch Chief, at (202) 551-3650 if you have questions regarding comments on the
financial
statements and related matters. Please contact Ken Schuler, Mine Engineer, at
(202) 551-
3718 with any questions regarding the mining comments.
FirstName LastNameKirk P. Taylor Sincerely,
Comapany NameAmerican Resources Corporation
Division of
Corporation Finance
August 31, 2022 Page 4 Office of Energy &
Transportation
FirstName LastName