American Resources Corporation

Greetings. Welcome to the American Resources Corporation's fourth quarter 2022 conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll now turn the conference over to Mark LaVarghetta, Vice President, Corporate Finance and Communications. Mark, you may begin.

Thanks, Rob. Good afternoon. On behalf of American Resources Corporation, I'd like to welcome everyone to our fourth quarter and full year 2022 conference call and business update. We always welcome this opportunity to provide an update on our business and discuss our accomplishments since our last update, and also discuss how we uniquely position within the markets we serve for our American Carbon, American Metals, and our Re-Element Technologies Division. Also on the call today is Mark Jensen, American Resources Chairman and CEO, Kirk Taylor, our Chief Financial Officer, and Tom Salve, our President. Before we kick it off, I'd like to remind everyone of our normal cautionary statement. Certain statements discussed in today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from the results discussed in the forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors, uncertainties, and other cautionary statements which are laid out in our press releases and SEC filings. We also do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Lastly, we will be holding a question and answer session today following our prepared remarks, and for anyone Wanting to ask a question, you'll need to dial in by phone to get into the queue. We're going to begin today with a few comments from our Chief Financial Officer, Kirk Taylor.

Thank you, Mark. And thank you everyone for your interest and your time this afternoon. The fourth quarter of 2022 and the beginning of 2023 have continued to showcase our focus and execution that positions our company for long-term value creation. When looking at our recent execution, it is important to take a step back and highlight some of our accomplishments on all fronts. From a corporate standpoint, during 2022, our board established a special committee to evaluate strategic opportunities to best unlock value of the company. And out of that committee, we had announced a share repurchase program, which our team began to execute upon a repurchased $86,450 shares as of December 31st, 2022. Additionally, we purchased back 7.5% outstanding interest of our re-element technologies division, making it, again, a wholly owned subsidiary of American Resources. We believe this will contribute meaningful value to our shareholders, and we subsequently announced our plan to spin off re-element into its own public company. In conjunction with reELEMNT's planned spinoff, we filed a Form 10 information statement with the SEC this past January for 2023. I would refer you or anyone interested in reading more about that to go to SEC.gov and search under reELEMNT. We've also sold the exclusive rights of our carbon nanostructure and graphene patents to Novastera, showcasing our focus and ability to monetize value of our broad asset base. Lastly, during January of 2023, our last and largest convertible debt holder converted all of its debt into common stock, which reduced our debt by over $9 million and further strengthens our balance sheet and exemplifies strong confidence in our business planning and execution, as well as believing in our value as a company. While we will dive into our business pillars in more detail throughout this call, it is worth noting a couple achievements that we've gone through during 2022. For re-element technologies, we've achieved groundbreaking success in commercializing our revolutionary critical mineral refining technologies by producing greater than 99.5% pure rare earth elements and critical battery elements in a commercial scale. We're the first to accomplish this domestically. Our rapid execution in advancing re-element technologies is a worldwide leader and critical mineral refining is worth reflecting upon. In October of 2020, we unveiled our critical and rare earth element division for the first time. November 2021, we successfully permitted our first refining, commercial scale refining facility, which took under two months of permitting process. This is a clear and unique differentiator of our leading technology and how environmentally safe it is. In April of 2022, we announced the advancement of our intellectual property with a filing of multimodal chromatography patent for critical mineral separation and purification. In August of 2022, we announced our commercial scale success in rare earth element refining, separation, and purification from recycled material. And then just in January of 2023, we announced again our commercial scale success in lithium refining, from recycled battery material. We believe we have uniquely positioned Re-Element as it plans to be a standalone public company. Over this brief timeline, we have also secured an initial independent working capital facility at the Re-Element level. We've added key talent to bolster our best-in-class team and entered into our first long-term collaborative partnerships to help secure our domestic supply chain for critical minerals including sales MOUs with the only two domestic magnet manufacturing companies in existence. 2022 marked a record year for us. We realized nearly $40 million of revenue, which increased more than 400% over 2021. This again showcases our valuable carbon assets as we opportunistically acquire and restructure them. While mining is not completely linear, our carbon platform is uniquely positioned to be a meaningful contributor to much-needed supply growth of metallurgical and specialty carbon products from our region where a lot of mines are becoming exhausted and closing down. We remain focused on monetizing our platform with assets for our shareholders. We will also discuss the options and actions we are taking with our controls to do just that. Our unique platform of assets is in a great position to deliver what we believe is an attractive return and value to our shareholders, including our mining assets, our re-element technologies division, as well as our American metals division, which we are in the process of strategically positioning within the electrification economy. Over the past year, we've been able to eliminate approximately $12 million of debt and payables and invested approximately $28 million of expense development costs position both our American Carbon and Realment Technologies platforms for strong growth in high demand markets. As of December 31st, 2022, our traditional debt balance totaled approximately $1.9 million in total, of which $300,000 is equipment financing and $1.6 million in the form of mine development loan from one of our top customers. As of December 31st, 2022, our convertible note balance totaled approximately $9.7 million. As mentioned previously, on January 31st, 2023, the entire convertible note was converted into common equity, which is reflected in the current shares outstanding of just over 78.2 Class A common shares. Cash on hand at the end of 2022 is approximately $8.9 million. And lastly, as part of our ongoing risk management process, all of our excess cash above FDIC limits are held in a top two U.S. domiciled bank. I'd now like to turn our call over to Mark LaBregada for some additional comments on our re-element technologies division. Mark?