American Resources Corporation (NASDAQ:AREC) Q3 2023 Earnings Call Transcript

American Resources Corporation (NASDAQ:AREC) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Good day, everyone, and welcome to today’s American Resources Corporation Third Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call may be recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mark LaVerghetta. Please go ahead, sir.

Mark LaVerghetta: Thank you, and good afternoon, everyone. On behalf of American Resources Corp, I would like to welcome everyone to our third quarter of 2023 conference call and business update. We do always welcome this opportunity to provide an update on our businesses and discuss our accomplishments we have made over the past several months and how we are uniquely positioned within the markets that we serve for our American Carbon, American Metals, and ReElement Technologies. Also on the call today is Mark Jensen, American Resources Chairman and CEO; Kirk Taylor, our Chief Financial Officer; and Tom Sauve, our President. So Mark and Kirk and I will provide some prepared remarks, then we will get into the question-and-answer part of the call.

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Before we kick it off, I would like to remind everyone of our normal cautionary statement. Certain statements discussed on today’s call constitute forward-looking statements within the meaning of the Private Security 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, for anyone wanting to ask questions today, I believe you will need to dial in by phone to get into the queue. And we are going to begin today with a few comments from Kirk Taylor, our Chief Financial Officer. Kirk.

Kirk Taylor: Thank you, Mark, and thank you, everyone, for taking a few moments out of your afternoon. Over the past several months, we have continued our execution on solidifying our strategic positioning within our addressable markets, which we believe positions our company for attractive long-term value creation. In doing so and in conjunction with the direction of our strategic committee, we have embarked on several initiatives to unbundle our unique platform of assets to better unlock value for our shareholders and position each entity as a standalone company. We will go into some detail on several of these initiatives throughout this call. First, I will start with the update on ReElement technologies. As we have previously discussed, our intention is to separate our wholly-owned ReElement Technology division into a standalone public company, given the strategic positioning and groundbreaking innovation as a world-leading refining technology platform using our patented chromatography technology to refine critical minerals as well as rare earth elements.

We believe ReElement is a very unique entity and provides investors with a tremendous value proposition. This past January, we filed our initial Form-10 registration statement with the SEC to begin that process. We have addressed all the comments and questions from the SEC regarding the spin-off at separation and feel that we are in a good position to continue to update our filings, as it relates to quarterly updates and periodic news flow. All of our filings related to this can be found at sec.gov under ReElement Technologies. We also converted ReElement Technologies, LLC to Indiana Corporation to further advance the separation process. We recently announced a bond offering approval in an amount up to $150 million to finance our dedicated lithium refining facility in Knott County, Kentucky.

We are tremendously excited to work with the local county and the workforce there to develop a unique platform as a domestic refiner of lithium, battery grade lithium. We also recently closed on our previously announced nearly $45 million tax increment financing bond for our Marion Refining facility. Again, we tremendously look forward to working with local community, workforce and government to enhance both of these projects. We continue to discuss many strategic relationships, both in commercial and financial arrangements with domestic and worldwide partners on ReElement. Every day is exciting and every day we are progressing. Next, I will touch on our spec. So as previously discussed, American Resources sponsored AMAO, American Acquisition Opportunity, Inc.

We are extremely proud of our team with the execution of the recent closing of the merger between our sponsors back American Acquisition Opportunity and its target RoyaltyMajor Corporation. American Acquisition Opportunity, Inc., has been renamed Royalty Major Holding Corporation and now trades on NASDAQ under RMCO and its warrants RMCOW. When we had IPO’ed AMAO as its main sponsor, we sought out to merge with a dynamic cash flowing company that did not require a complicated or highly diluted financing as part of this D SPAC process. We wanted to make sure it was a clean platform to thrive as a public company. After assessing a number of potential targets with several required complex structures, we paved the path forward to bring Royalty Major Corporation to the public markets through the D SPAC merger with AMAO.

As a reminder, RMCO is a next generation royalty company, focused on expanding its current cashflow and revenue streams by identifying undervalued assets within sectors, including natural resources, land, sustainable development, controlled environment, agriculture, and intellectual property, while constructively supporting the communities in which those businesses operated. Following the closing of this transaction, American Resources remained the shareholder approximately 3.25 million shares and warrants a fully diluted basis. The underlying registration of these shares was filed yesterday, and I would direct anyone wanting to learn more information to go to sec.gov. Search under RMCO, you will find all the relevant filings. And again, to reiterate, as of last week, the combined company trades under RMCO on NASDAQ as Royalty Management Corporation, a royalty management holding corporation.

Now we will dive into our quarterly summary. Over the third quarter of 2023, we again showcase our operational flexibility, operating cash flow positively and generating approximately 3.5 million in net income, while continuing to position our unique set of assets while executing on our value creating initiatives. The only new debt that we took on over the past two quarters was associated with the issuance of the tax exempt industrial development bond for the development of our Wyoming County, West Virginia buying complex, as well as mine development financing from one of our key customers to develop the Carnegie 1 and Carnegie 2 expansion. As of today, November 14, 2023, our current shares outstanding is just over 78.2 million Class A common shares.

Cash on hand as of the end of third quarter was approximately $44.7 million. Lastly, and it is probably worth reiterating, all of our excess cash above FTIC limits are held at a top two U.S. based bank. Our unique platform of assets is in great position to deliver what we believe is attractive returns and value to our shareholders, including our mining assets, our ReElement Technologies division, as well as our American Metals division, which we are in the process of strategically positioning within the electrified economy. I would like to now turn the call over to Mark LaVerghetta for some additional comments. Mark.

Mark LaVerghetta: Thanks, Kirk. As we frequently state, our ReElement Technologies division represents an incredibly exciting and very strategic opportunity for us. We have never been involved with an entity that in our opinion has as much upside than ReElement. As we continue to strategically position ourselves in the global supply chain for critical minerals, I think it is important to reiterate and emphasize our position within that market. ReElement is an innovative and advanced refining platform for critical minerals. While we believe we are a high value component within the recycling value chain, we are not solely a recycling platform. As highlighted by our recent announcement of producing battery grade lithium carbonate from spodumene bearing ores.

Our ability to produce high-purity lithium products and rare earth oxide from natural feedstocks showcases our platform’s flexibilities and differentiates us. However, we do believe our position in the recycling market and sustainable supplier of critical minerals is highly important as we move towards a highly mineral-dependent electrified economy. That being said, and again in our opinion, recycling platforms alone are going to have a hard time, bridging the gaps to an end-of-life and manufacturing volumes materialize to levels that can support their CapEx and OpEx fundamentals. Additionally, when we started ReElement, our mission was always focused on how to most efficiently and effectively deploy critical mineral refining capacity Outside of China.

It has always been our belief that attempting to deploy legacy Chinese refining technology in the United States or Europe or much of the industrialized world for that matter would pose a real challenge. Those type of facilities are extremely expensive to build and operate, due to the harsh chemicals, the waste output and maintenance at large scale. Even though it is still early in energy transition, I believe we are starting to see those challenges manifest as projects utilizing solvent extraction or HydroMet are getting delayed or canceled. Of note, we are now referring to our Noblesville, Indiana facility as our commercial qualification plan, rather than a pilot facility, to give a more accurate description of what we actually do there, especially given the variety of feedstocks that we frequently receive, test, validate and design for in large scale.

Our innovative and advanced refining methods using chromatography, displaces the toxic conventional methods which are used in China and we believe is an important linchpin in making the United States competitive within the electrified economy. Just to recap some of our commercial qualification milestones, meaning the production of certain ultra pure elements and compounds at commercial scale within our Noblesville plant and validated by third-party labs. These are, we produce greater than 99.5% pure rare earth elements such as neodinium, presiodinum, and dispersium from end of life waste magnets, greater than 99.9% pure lithium from end of life NMC lithium ion battery chemistries. 99.9978 pure lithium carbonate, produced from LFP battery manufacturing waste and 99.96 pure lithium carbonate from spojemine bearing pegmatite ores.

And as we frequently, we are frequently sending material out to our third-party labs to verify our own results. We recently again verified neodinium oxide at a 99.57% purity with presiodinum being the most predominant contaminant, where our NDPR mixed oxide was produced at a 99.96 purity, where magnet manufacturers actually prefer a mixed NDPR oxide. Another meaningful attribute and differentiator of our technology is its ability to modulate scale within a smaller footprint, allowing us to grow more congruently with available feed stocks and as market demand grows, meaning we do not have to make huge CapEx bets and wait for feed stocks to materialize. We design for the specific feed stock, we spend less and build accordingly to the market. While our intrinsic operating parameters do not change as we scale up.

The world has never really needed innovative innovation and critical mineral refining until now or maybe we just became complacent with China’s dominance of the overall market. But that is obviously changing and that there is the value proposition of ReElement. The world needs advancements in refining these raw materials that power our modern day technology and we believe we provide the most efficient solution while also being in the lead position to do so. Lastly and to add to Kurt’s comment on the strategic spinoff of ReElement, I have frequently stated that this is not an exercise of speed, but rather an exercise of value creation. There is strategic value in communicating our plan to separate certain assets from the holding company as well as our desire to be transparent with our investor base.

While certain things are within our control, others are not. However, I would refer to the closing of the Wyoming County coal tax exempt bond issuance, the closing of the merger between American Acquisition Opportunity and Royalty Management Corporation, and the recent procurement of our Marion facility and incentive package, which Mark will elaborate on here soon as recent executional successes. We truly believe ReElement has the opportunity to create substantial value for our shareholders and the decision we, the decisions we make, and the time associated around the entire process, while sometimes outside of our control are based on maximizing that value the best that we can. I would like to now turn the call over to Mark Jensen for some additional comments.

Mark Jensen: Thanks Mark, and thanks everyone for joining. It is been an exciting quarter for us, in terms of a number of avenues, but more importantly, our team has been extremely active this quarter on positioning and the execution at all of our divisions. Our business model within these divisions was set out to displace and disrupt legacy industries through technology efforts, streamlining of the businesses, and we are exceeding on or succeeding on all fronts. We truly sit at a very interesting position within our ability to bring cost competitive refining of critical minerals to the domestic and global market in the most environmentally safe and sustainable methods ever developed. At no point in our history has our business been better positioned to serve the markets we operate in and capitalize on the broad asset base that we built, the talent that we possess within our team and our ability to produce, process and refine raw materials that are in very high demand across the entire platform.

We are extremely excited about the opportunities for all of our entities, as we continue to execute upon our strategic plan to unbundle these assets, extract value for our shareholders and better position the asset bases within each of their divisions for growth as well as capital allocation and with developing teams under each of the separate operating companies. Let me touch briefly on the monetization of our Carbon platform. As we have reiterated, we remain highly focused on monetizing our substantial platform of carbon assets, either through operations, leases or divestitures. As we have previously communicated, we have successfully closed on our $45 million tax exempt industrial bond offering through the West Virginia Economic Development Authority, which will fund the expansion technological improvements to the existing metallurgical carbon processing facility at our Wyoming County Complex.

We have commenced our development work there and recently put out our first development production of mid-vol carbon on the ground as we began facing up the first deep mine. Subsequent to the closing, we have seen an increased interest in our carbon assets from several parties. These include, an unsolicited bid for all of the assets associated with American Carbon for the implied enterprise value of approximately $260 million. This offer was not accepted by our Board of Directors due to the duration and structure of the consideration payments. We have also received and entered into a non-binding LOI from a non-affiliated strategic party to purchase McCoy Elkhorn, Perry County and Wyoming County complexes for a total consideration of approximately $280 million or $3.58 per share.

We have signed that LOI and are working with that party on that process. We are seeing a round of consolidation taking place within the global steel industry, including the supply constrained carbon market. Our platform of carbon assets is unique, given the significant mining infrastructure we own, the quality of the carbon we produce and have those two, the restructuring efforts and investments we have made over the past several years to right size and streamline the operations. Those streamlining efforts, let me touch base on that quickly, which I think is important. We acquired eight companies, five of them through 363 bankruptcy sales over a period since 2015. During that process, we have reclaimed almost $28 million of environmental liability and received bond releases on it.

Those bonds cost money each year. And by reducing that liability, we are also making our business more profitable from these legacy operations that we acquired, bettering the assets and streamlining the team to be focused on production at low cost. And that is what we build today and that is what we possess in our ramping up. We believe our platform is very attractive for the current market as steel producers are looking to secure long-term supply chains of quality met carbon, not only domestically but also internationally. And within the supply constrained environment, there is going to be significant opportunity over the next few years, and into the future to be a low cost producer of met carbon. Furthermore, our operational team has made huge strides over the last few quarters to further reduce the cost structure and position these operations as one of the last low cost, long life operations within the industry.

Given the progress, the company’s target is to restart these select operations over the next 45-days and we are progressing towards that in past quarter. As we work through the sale process as well. We continue to work through these processes along with the other possible consolidation plays that are taking place in the overall global steel industry. As stated earlier, we have received interest from multiple parties and continue to receive interest from multiple parties and additional parties across the landscape for our different operations, which provide us several options to explore and we will pursue those that best benefit our shareholders and workers alike. Given our team’s efforts and positioning to date, we choose and if we choose not to sell the carbon assets to the OI which we signed or any of the other interested parties, we are well positioned to still separate the companies to create pure play opportunities.

With that we previously filed our initial form 10 registration statement with the SEC to spin off our wholly owned American Carbon division into a standalone public company. Let me touch base on that briefly. The reason we did that was we can’t control every aspect and or timing of any other party. What we have we can control is the ability to put forth effort to position the assets and prepare for anything that comes at us. And as such, we filed that the Form 10 and we are pursuing and working with the party to sell the assets. But should that not close, we are well positioned to still monetize the assets for our investors, create a royalty stream back to American Resources, dividend out those shares to our underlying investors, and position the company for growth as a standalone operating entity.

We did this in conjunction with the recommendation of our strategic committee and approved by our Board of Directors on spinning off American Carbon into its own public platform, which better enables the business for growth, capital allocation and motivation of the operating team in itself. As stated, also, additionally, the spinoff is structure did that American Resource Corporation could receive up to over 300 million in the form of royalty payments from American Carbon over time based on production and capital raises. Under a spinoff scenario, our shareholders would receive a pro rata distribution of the American Carbon shares, should we go that route. Furthermore, we have also secured a $20 million factoring facility for American Carbon to support its normal course of business and to grow the business and upon any spinoff of American Carbon.

We have a $100 million dollars equity financing facility in place under American Carbon Pubco as an additional option for future growth, which would go alongside of our 45 million tax and bond for Wyoming County, which cumulatively represents approximately 165 million meta fees of financing capacity for a standalone American Carbon asset. Over the third quarter, we were able to monetize some carbon assets and inventories as the Global Met carbon market stabilized following a brief period of logistics and bottleneck supply challenges that took place in the global supply chain. As previously stated, we are currently in the process of planning a restart of our Carnegie mines. And pick up where we left off earlier in the year where we have realized some of our best fundamental production levels.

Furthermore, during this period of downtime, we have also continued to advance forward at the operations to further drive operational efficiencies and have made huge stride by our team there at very low CapEx levels by expanding and positioning those mines to be high producers at low cost. We continue to develop our Wyoming County complex to begin operations next year and are on track and progressing nicely at that operation and execute upon the vision of the American Carbon team and also the vision of our strategic committee to unbundle the assets, the certain assets as we disclosed. Let me touch briefly further on ReElement Technologies. To add to the comments that Mark made earlier regarding ReElement, the opportunities we have in front of us are extremely exciting.

Our ability and the way that we efficiently deploy critical mineral refining is indeed unique. Our strategic plan to scale our platform is multifaceted. One, we will operate our existing facilities and current facilities we have announced. We currently have two planned announcements of two additional planned facilities that we publicly announced, one, in Marion, Indiana and two, Knott County, Kentucky. Our Marion, Indiana campus which I was at today is coming along phenomenally well. This is a 42 acre campus with approximately 425,000 square feet of existing structure which will be mainly focused on the recycling and refining of Critical Minerals. Our initial design will support an annual production capacity of 5,000 metric tons of battery-grade lithium carbonate and 1,000 metric tons of magnet-grade rare earth oxides.

We have also closed on our tax incentive package with the support of Marion of approximately $45 million from the City of Marion to support the Brownfield development of the facility, as well as the equipment expansion and operational expansion of the facility. And we are working on other government supported programs under Bipartisan Infrastructure Law and IRA as well as other capital sources to support that growth at the project level. Kentucky Lithium, Kentucky Lithium project highlights another unique attribute of ours and how we are well-positioned to deploy our leading critical mineral refining technology. Our vast ownership of mining assets in Eastern Appalachian Corridor provides us with the needed infrastructure to bring meaningful lithium refining to North America.

Furthermore, I would like to point out, we are tapping into a skill set in a workforce that has hundreds of years of commodity processing experience. They understand the importance of cost. They also understand the importance of quality. We are also tapping into existing infrastructure that we have at our Knott County complex, which we did not include in the sale of the assets under the previous LOI for this reason. This provides us the ability to move fast and at low cost to build our lithium refinery there, utilizing the existing infrastructure and the existing location to lower the CapEx and further to tap into the existing infrastructure that we have already present that we are not going to be waiting on from power stacking tubes, conveyors, et cetera.

As a point of reference, the United States today produces approximately 17,000 metric tons of battery-grade lithium carbonator hydroxide. This facility is being designed to produce approximately 15,000 metric tons of battery-grade lithium carbonator hydroxide, giving the United States the ability to double its capacity utilizing our state-of-the-art technology and utilizing a workforce that is more than up to this challenge. The facility is on controlled land, logistics infrastructure is on place, rail is on place, landfill is in place and the workforce is in place. This is an exciting opportunity not only for us, but also to showcase and provide opportunities to a workforce that has been displaced by the energy transition marketplace. As stated, we have recently announced the preliminary approval of the Knott County Fiscal Court for the issuances of up to $150 million of taxes and revenue bonds to support the growth of that complex, similar to the Wyoming County bond we closed.

I have also had the opportunity to speak at a taxes and bond conference and I will say that the Port for industrial revenue bonds such as these is very strong upon the investment community especially, the way that we are building this facility, the workforce that we are bringing, and the use of this facility in itself. Both our Marion and Kentucky lithium facilities will be able to modularly and efficiently add refining capacity to respond to feedstock availability as well as market demand. And I will say from a feedstock availability based on our trips to Africa as well as to Canada is abundant. There is quite a bit of lithium ores, lithium bearing ores within the marketplace that need a place to refine other than China, that are looking for a place to refine other than China.

We have also recently been expanding our operations and looking at opportunities in discussions on several opportunities in Germany as well as throughout the EU marketplace, and are having those discussions with partners as we speak with our team over in Germany as during this call at the moment. Japan is another market which we have been working on. We have been working on the Japanese market for a long time. We have entered into a joint venture partnership within the Japanese market. We will showcase ReElement Technology in Japan, one of the most highest tech areas of the world, and showcase how it can not only refine critical minerals, but do it at a cost structure that is competitive, if not better than what is done in China today. This partnership has also already begun realizing service revenues to ReElement sourcing of lithium ores.

As I mentioned, our team has been to Canada, we have also been to Africa. I have been to Africa myself three times over the last six-months, and the opportunities there not only for sourcing ores but also showcasing our technology is abundant, it is an amazing opportunity to create job opportunities within the local environment, to displace China’s dominance throughout the region and to do it in a way that is favorable to the local community. Our relationships in West Africa, South Africa, as well as East Africa are substantial and very and moving very, very quickly and we are excited about the opportunity to import high value technology to Africa, create jobs for the population, one of the fastest growing population bases in the world, while also helping them drive manufacturing and solving the supply chain for the United States.

We believe these opportunities to provide low cost, environmentally safe, lithium refining around the world in a collaborative manner to meet the needs of the energy storage market are abundant and will continue to grow. Being able to build our modular facilities in these local environments to source the critical minerals in a low cost format, while also showcasing one of the lowest carbon footprints from a refining capacity facilities in the world. We have had early successes in developing partnerships such as the one we have established with our magnet and battery partners that we have already announced, and we continue to have good success with several other pilot programs where we are fostering collaborative opportunities within the automotive, wind energy, consumer power tools, and broader energy storage and recycling markets.

We are excited and confident about the developing these pilot programs into long-term partnerships and communicating them in the near term with our investor base. I would like to recognize our ReElement team for the groundbreaking successes that we have achieved and the time, quick timeframe we have achieved it and we do believe the time is of the essence. We also believe that we put together the best team to continue to drive the revolutionary refining technology and continue to add great talent to our team with the recent additions of Ben Weisman as President and Shane Tragathonas Vice President of International Strategy. Our goal is to build real element into a multi-billion dollar business and do so based on performance. We believe we have the right team in place and the line of sight to accomplish this mission.

As we continue to execute upon our strategic plan, American Resources is focused on the highest value opportunities and we will look to expand its asset base within the natural resources industry, utilizing cash generated from asset sales and royalties to acquire interest in high value, critical and rare earth mining assets that can feed into ReElement Technologies to be refined in a cost-effective environmentally sustainable method. We are in active discussions on multiple opportunities in this front where we can leverage the ReElement Technology, take an ownership stake in these mines such as lithium bearing mines in Africa, as well as other parts of the world that we can also showcase and help to provide guidance on how to operate these mines safely and effectively and efficiently.

We are excited about that opportunity and we believe in the future from American Resources, as a holding company, we will be able to benefit greatly from these additional expansions we are evaluating. In closing, we remain very confident in the positioning of all of our assets and the long-term value they provide to our shareholders. We remain hyper-focused on unlocking that We have ample liquidity and do not foresee us needing to issue equity at the AREC level to raise cash, especially with some of the sources of non-dilutive capital we have available to us and recently announced project financing that we have available to us at the ReElement level. Just to reiterate, as the largest shareholder of American Resources and one of our largest shareholders of American Resources, our management team is committed to maximizing the value of all of our businesses and believe our continued execution and the unbundling of assets will help us to achieve this.

With that, I would like to turn the call back over to the moderator for some Q&A.

Operator: [Operator Instructions] And we will take our first question from Heiko Ihle with H.C. Wainwright. Your line is open.

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Q&A Session

Heiko Ihle: Thanks for taking my questions. Excuse me. You filed that Form-10 registration statement for the spinoff of American Carbon. And I guess that is obviously only if the sale options don’t materialize. Is there internal drop debt date by when you expect to make this decision whether it gets sold externally or what exactly happens? And I’m pretty sure the answer is, it doesn’t matter. But to be clear, just because you filed this form doesn’t force you to do anything, correct?

Mark LaVerghetta: That is correct. So we are not forced to do anything. We filed it. We obviously can’t control what any buyer does or does do, especially with the consolidation taking place within the steel industry today. Our goal is to monetize the assets. Now, we are running and thankful for our team, it is a dual process that takes time and effort, but we are running that dual process. Even if we spin off American Carbon in the Form 10, that does not mean we may not still monetize it. If the value is above the current market value, then we will monetize it. We are getting, I mean, American Resources, we believe today is well below the fundamental value of the business and we have seen interest for the company as a whole obviously which we are not willing to do, above the current market value.

But the American Carbon asset in itself, we are working and the buyer is in active dialogue and it is going very well. I mean and we are going to showcase the cost structure of these mines very quickly, which is getting very exciting. And not only the current buyer that we signed the LOI with, but we have had multiple other parties come in with very interesting structures as well beyond that. But depending on how long they take that doesn’t mean we may not still pursue with the Form 10 and spin it off and then still move forward with the sale the assets if the market value is below what the buyer is willing to pay. But it does not – filing the Form 10 does not force us to spin it off. But we are going to move as quickly as we possibly can, pursuing all alternatives to position the assets to unlock that value and that may be spinning the company off in a Form 10 and then selling it thereafter.

Heiko Ihle: Fair enough. And then just a completely different one, can you break down the $45 million in local incentives that you got? How much of that is cash? How much is tax savings? How much is, I don’t know, discounts on land? Can you just break down the $45 million please?

Mark LaVerghetta: Yes, I will do my best at it. And I, just, it is a little bit of a complicated structure, but it is a tiff that can be monetized as we build the property out and or borrowed against. So it is a bond that can be issued, or borrowed against as we continue to build out the facility and allocate capital. There is almost like a reimbursement of the cash, is the best way to describe it. So it is, it provides, it is a great structure for us to enable us to have non-dilutive capital available to us and as we spend the capital, get it reimbursed.

Operator: Our next question comes from [Mark Stone] (Ph). Your line is open.

Unidentified Analyst: Can you please clarify the relation between all the potential assets, sales and spinoffs? For instance, if American Carbon is sold and or spun off, and would you still go ahead with ReElement spinoff? What would that leave American Resources with? Would that be American Metals plus the shares owned of Royalty Management Company? Can you please clarify that?

Mark LaVerghetta: Yes, that is good question. So our goal is to separate the divisions off into their own operations, own teams, that are able to drive in a direction and as a pure play opportunity. So American Carbon, that is correct. We, if we spin it off or sell it, obviously that would be its own independent entity, a will, regardless of how the structure, it will pay royalty back to American Resources for the American Resources shareholders. In either one of those instances as well as cash consideration. ReElement absolute plan is to still spin it off into its own separate company, to provide a very clean structure, spinning ReElement off, I mean ReElement we believe is an absolute game changer for the market. It is being recognized throughout the world for what it can do and our partnerships that we are developing and customers that we are developing on that front, we will be able to showcase here very shortly.

Also the fact that we do intend to apply for infrastructure bill, grants and stuff of that nature, having it associated to a coal business, it makes that challenging. So having any of the legacy coal related aspects in this filing, we would prefer not. So we will spin that off into its own entity. Post a spinoff of both of those assets. American Resources is set up as an opportunity to further expand its footprint within the critical mineral space. We are in negotiations as we currently speak and making significant progress on acquiring an interest in lithium mines. I have been traveling throughout the world in multiple countries within Africa that we have very good relationships with the strategic parties that have concessions there that we may take an interest in, which will then be processed at ReElement.

So the goal for American Resources is expansion, is expansion within that sector, focusing on taking strategic interest in operations that could then feed into the ReElement entity for further refining, controlling the supply, de-risking it for both entities involved. But and then obviously yes, it will still own American Metals as well as the interest in Royalty Management Corporation, Royalty Management Holding Corporation.

Unidentified Analyst: So if those mines were acquired, would that be a ReElement processed the material from the mines? Would that mean that ReElement was doing more than just recycling processing but actually processing initial mining extracts?

Mark LaVerghetta: Oh yes. ReElement’s doing that today. We were processing lithium spot mean as we speak. That is what, I mean my three trips to Africa over the last six months were to work with not only the lithium opportunities, but also rare thors, which is a new opportunity for us, which we will further go into in the next few months. But the lithium bearing ores and/or other critical mineral ores are substantial opportunity for the ReElement technology. We can build facilities at a much, much lower cost than the legacy methods of doing of refining materials that China uses. We can co locate them at the operations within the sites such as in Africa, and build the facilities there so we are not trucking rock or shipping rock halfway across the world.

And we can scale our, design our facility to match the CapEx with the feedstock available. One of our competitors just announced that, they are evaluating the sale of their business. They were trying to build a refinery that was about five times the size of the current market availability. That is a recipe for failure. We instead design our facility, based on the current feedstock available and then we can modularly scale them up over time. We are matching CapEx with feedstock as well as OpEx with feedstock. So that there is no – from a cost structure perspective, we are able to very, very efficiently expand our business. But that gives us the ability to go to the ores as well as the recycled market and expand our footprint globally to benefit from the technology in itself.

Sorry for long answer.

Mark Stone: Yes. Okay. So a separate question. Can you please tell us the plans and timelines for getting to non-trivial revenue generation from rare earth oxide separation?

Mark LaVerghetta: If I gave you guys time frames, you would all yell at me. We do our best to achieve them, but some things are outside of our control. I will do my best though. So our Marion facility is where – our customer qualification plan can significantly expand our production and we are doing that as we speak. We have been qualified at a number of different customers currently, and are further progressing with those customers. We have off takes on the rare earth side. We have off on the battery side, getting the meaningful revenue will be in 2024. Now that being said, we are generating service revenue as we speak right now through our Japanese partnership. More to come on that in the next couple of days. But the ability to further scale the business and the unique thing is our cost structure is extremely low.

We are strategic in the team members that we are hiring, to keep our costs low until we get to that meaningful revenue generation, which is coming. It is coming quickly. I don’t want to give you an exact date because if I miss by a little bit, I will get slapped for it.

Operator: Our next question comes from Steve Segal with KBB Asset Management. Your line is open.

Steve Segal: I was reading today about the life cycle news, and I hadn’t really known that much about the company, but I read more about it and I see they had multiple shredding facilities and they mothballed, I guess, their HydroMet facility and it seems like chromatography is a much better solution than what they were trying to do. So is there any interest on ReElement in like, you know, talking with them about some of their assets or collaborating at all?

Mark LaVerghetta: I mean, we will look at the assets and we will reach out to their adviser that they hired with regards to the shredding operations, not with regards to the refining capacity they were trying to build, that announcement.

Steve Segal: You have a better solution, right?

Mark LaVerghetta: Yes. It showcases that legacy ways of refining commodities does not work. It works in China because they already built it and they don’t care. I mean, they are in inner Mongolia, labor and environmental standards there are very low. That technology does not work in the United States. It does not work in Africa, it doesn’t work in Europe. And you are going to see more of that, in my opinion, in the United States where people are going to mothball solvent extraction facilities because it is not, it is not cost effective and it is extremely expensive to build. More importantly, it is extremely expensive to operate over time. You can maybe get it up and running, but you will not run it for over 10-years without having significant maintenance CapEx. You are dealing with really harsh emulsion of chemicals.

Chromatography is a game changer in the space. One, because we can design it based on the scale of available material. And so that gives us the opportunity to build anywhere throughout the world and do it quickly. And we are going to showcase that here very shortly to our shareholders and through the relationships that we are building to date. Would we have interest in their shredding operations? Yes, we would. I mean, through the American Metals business line, we would be interested in acquiring that. But more importantly, instead of hub and spoke, we will put a chromatography facility in each one of their shredding operations and show the world how to do it the right way. Do it in a way that that is cost effective. Costs matter, the automotive industry, and especially in the EV chain, are losing money right now.

They need to focus on controlling their costs. They are building great business models for the long-term, but they got to refine the cost structure. We can do that. We can provide cost effective solutions that go head to head against China and displace them in markets that they are already trying to operate in, especially within Africa.

Operator: Our next question comes from Keith Goodman with Maxim Group. Your line is open.

Keith Goodman: Hey guys, quick question going back to Africa and Japan and Germany and other places that you said you are working with. First of all, does any work that you may do there, get you to qualify for the inflation reduction? And two, it sounded like you are saying that you are going to take equity ownership or maybe some type of economic ownership of some of the mines there. Does that mean you would pay for something like that or would you bringing the technology over there get a low cost way of owning the, you know, a partnership?

Mark LaVerghetta: I will touch on the first one first. So, obviously on the importing of ores to our Kentucky Lithium site, yes. We have received preliminary approval to advance to the next stage under IRA compliance. Most people don’t think it is an application based process, but it is, and we are working with the DOE on that. We have gotten through the first phase of that process which opens us up to go to the second phase, which we are super excited about. Steven Frankowski and our team did an absolutely amazing job with that. And so we, yes, we do believe that given the high value aspect of refining in country, we will enable it to qualify. Now, we also are working with the government on operations that we would build within Africa, because our model is to go to Africa, to build within the local environment with partners, being project financed over within Africa with local sources as well, and local partners, so that ultimately we are sharing in the risk and we are aligning the interest of the parties there.

So I mean, IRA compliance is a big deal, especially in the automotive. But now we also focus a lot on the LFP market, which is a lot of energy storage, which represents over 70% of the battery market today. We are the only company that we know of in the U.S. that can refine LFP batteries at scale, cost effectively and make money doing it, let alone obviously the ore business we are doing. But yes, we do believe based on that, we will qualify. We are working with them on the applicant operations. If we bring it back here to our cathodic active material partners, would that qualify for IRA? We are working with the government on that. We are uncertain on that aspect. But not necessarily needed for all applications, not needed for energy storage in some of those markets that are already building out substantial amount of batteries, and it gives us the ability to scale quickly.

The one project in Africa I just came back from in West Africa could represent first year of operations, which will take time to build and everything to that extent could be well over $350 million in revenue to us as a business and the ability to significantly scale it beyond that, that is one project out of many that we are working on in that market. And I apologize. What was your second question?

Keith Goodman: Would you have to pay for the ownership of those assets?

Mark LaVerghetta: So I’m not going to give you all my negotiating strategy away. But, we will leverage our partnership with ReElement, which will enable American Resources to get a very attractive opportunity to take an equity ownership in these mines. Now, why is that important? One, you read a lot of negativity about mines in Africa and I have been to a bunch of them recently. They are not all being run-in an unethical way. There is actually a substantial amount of mechanization. There is a substantial amount of ethical mining and/or small scale mining that is done ethically. But as we expand ReElement, we want to also make sure that, we are protecting the interest of ReElement and making sure that where our sources are also doing it right, not only from an ethical perspective but also being done from a safety perspective and from a productivity perspective so we can get as much feedstock as we can so we can grow our business as fast as we can.

I’m proud to say American Resources under our Mining Department Division, we won the Sentinel Safety Award once and we have been nominated twice, which is the highest safety award you can get within the Federal Government of the United States. We are going to bring those same aspects to the international locations that we are partnering with. Now, will we pay something for them? Possibly, yes. We will invest into them. I feel like given the time of what we are doing and the work and we are doing in place and bringing equipment over there and stuff to that nature will be methods of gaining interest in these mines. Now, we won’t run the mines. Our goal is not to operate mines within Africa, but it is to take an influential position within the mines to protect our interests and protect our future supply chains.

Keith Goodman: So all of the above…

Mark LaVerghetta: Yes, the quick answer is all of the above. There will be some cash consideration. There will be in kind of. There will be refining capacity we are bringing to the table and stuff of that nature.

Keith Goodman: Okay. And I have been reading recently some coal miners here or companies that own some coal assets here are claiming rare earth critical element on some of these properties, which leads to the question, do your coal mine, coal asset properties have rare earth critical elements on it? And isn’t there some value to your property with that as well?

Mark LaVerghetta: Santa Claus just came to the coal market. Every coal business is worth billions of dollars now, basically is what they are saying. Nothing against, they are great guys. I know them. They have done a good job on the mining side, on the coal side. Every coal property has essentially, not every, a lot of coal properties have that same characteristic. It is nothing new. Cool that, rare earth elements, lithium for that matter is in your backyard in a parts per million basis. Now, if that property is worth $37 billion, that is phenomenal that every coal business in the country is now worth a lot more money because most coal companies have – present on the overburden, underburden including ours which we own. We are one of the largest mining companies in Eastern Kentucky from an infrastructure perspective.

And we have sampled, we worked with Penn State three years ago to do an extensive study on all of our rare earth reserves and lithium reserves at our properties. And we had, most of the properties we sampled were actually higher grades than what they reported. And so yes, we have those exact same things. Now, my opinion is, it is very, very challenging to focus exclusively on mining rare earth elements from unconventional sources. Now, so as a mining operation, you are not going to go somebody, they are not going to go mine that operation just to extract the rare earth elements. They will never make money doing it. Our opinion is you can use byproduct economics and you can actually make money. We are going to showcase that in West Virginia, using byproduct economics extract a valuable resource, which is your met carbon.

The output of that ionic clay is your waste, your overburdened under burden using our technologies that we have within ReElement to extract out those metals, produce a concentrate, and then feed them into ReElement to refine. Now, if they go through all those steps and they can do it profitably, then we would happily accept it at ReElement to refine it because they don’t have that technology, nor does anybody else, we do. So we hope they do, we hope they progress with that. But I think it is challenging as a standalone. Maybe they have byproducts that they are focusing on there and that’d be great. But everybody, all the coal companies, if you test their eye on a clays within the coal seeds, they probably have some components of rare earth in them and or lithium in them, which we have done, which we do have.

But you got to, you got to figure out how a way to make money doing it, and that is the most important thing, and do it in a cost structure that your customers can pay for it.

Keith Goodman: Got you. Got you. And then lastly, I guess going back to lifecycle for a second, if they are shutting down the construction of the second part, which I guess is the processing part, they must have had relationships with some companies who I guess were under the assumption that they were going to be getting some of these rare critical elements that are processed as a from lifecycle. I imagine that would be a logical potential customer for you.

Mark LaVerghetta: Yes. I mean, we believe, so. We talk about refining, ReElement is a refining company. When you talk about recycling, those are shredding companies. Most of the people that you hear about in the United States that they say are the biggest battery recyclers, they are shredders. They shred material, they produce black mass and they sell it to China. That is what is done today in the United States, by the way. That is going to change here shortly, in my opinion. And I think Congress is going to open up to that and start saying, why are we shipping all this black mass and shredded batteries back to China? That is got to stop. And it slowly is, and we are seeing quite a bit of black mass come through our facilities now from these recycling companies that are testing that we are able to test with and develop partnerships with.

And we are excited about that. And we are excited about what the recyclers are doing. They are doing a lot of aggregation and they are doing a lot of shredding of batteries. And now we can refine that for them. What Lifecycle was trying to do is create a hub and spoke model. They were trying to create these battery shredding operations throughout the country, and then they were going to build one hub up in Rochester to process it. Well it is proof is in the pudding. Solvent extraction doesn’t work in the United States. It is too costly to build and it doesn’t make money. And you can’t match your CapEx with your feedstock availability and or scale it over time once you build it is what it is. Our technology at Real Element is highly modular and highly scalable.

And yes, we are super excited about working with all of the recycling companies throughout the United States and throughout the world to help fulfill that supply chain gap that everybody’s missing. Everybody’s missing the ability to refine lithium, to refine critical minerals, to refine, rare earth elements outside of China. And we can do that today and we can scale that rapidly today. And because of that, we are getting a huge amount of interest from these parties to work with them. Now would we be interested in the life cycle assets, and will we be involved in that process? For sure. Under American Metals line, which is where we would shred the batteries at, and we have developed that model to do so. But, ReElement is that missing gap.

It is replacing that solvent which can’t be done in the United States. And our facilities are operating, proven can operate under environmental standards and proven we can scale it rapidly, not only domestically but also internationally.

Keith Goodman: Okay. Appreciate it. I really appreciate it. I think a good job of explaining it. Thanks a lot.

Operator: We will take our next question from Mike Niehuser with Roth MKM. Your line is open.

Mike Niehuser: Just real quick, I know we are running late here. But I noticed that it said that you would commenced development at your Wyoming County and that you are realizing the first development. I take that as you are almost in the early throes of production and you are going to be commissioning them for the next couple quarters now? Is that close?

Mark LaVerghetta: So we started the initial development of the face ups. And in that, the nice thing about deep mine face ups is you actually will produce coal in that process, and be able to monetize it. And so we are working on the Eagle team as we speak right now to develop that, with the goal of over the next few quarters to commence production there. In the meantime, we will be able to generate revenues from the facility as we are expanding it, as we are developing it. So it is an exciting development. The quality there is mid-vol met coal, highest quality you can produce in the country. And the beauty of it is they are – Greenfield operations so that the cost structure we are going to be significantly lower than our competition.

Mike Niehuser: Are you stockpiling there now or are you actually putting it through a facility?

Mark LaVerghetta: It varies. I mean, it is very small right now. What we got on the ground, but over the next 30 days, we will probably truck some of it out and monetize it. I got to check on our mine licenses for those specific, to be able to do so. But right now, it will be stockpiled for the next, over the period of time, but then hopefully monetizing it, we will hopefully generate, some decent revenue, by the end of the year.

Mike Niehuser: Yes. And with Carnegie 1 and 2, you did have some production on your income statement this year or this quarter, where did that production come from? I thought it would come from one of the Carnegie. But, what is producing, I guess, right now to bring that number out and what are the status of Carnegie 1 and 2 again, please?

Mark LaVerghetta: So we have been doing some development at the Carnegie as well. And so in that process, cutting overcast and developing it for additional sections so that when we start off, we are not just producing from one section, we are producing from multiple sections, which means we are optimizing that cost within that process, generating some revenue out of it, during the development phase of it as well. And some of our other idle operations, we generated revenue from as well. But the Carnegie 1, we are tracking really well at Carnegie 1 for the development. When we restart it, we will restart with multiple sections running, which is really important. You are covering your fixed overhead with one section, when you add that second section, you are adding about 15% more workforce, but you are doubling your production, which means your cost structure goes way down.

These mines are very new mines. We have pretty much developed them from the onset. And so they are set up in a way, and we have been working over the last 60 to 90 days with our team there to further optimize the mine. So when we light the fire here very shortly in the next couple of weeks, they will be set up to run at very, very low cost and be we think they will be very, very profitable mines for us.

Mike Niehuser: You could almost look at the revenues then in the quarter as you know, what you received similar to Wyoming County in terms of development, commissioning, optimizing, neither one or at full tilt, but should be a much stronger first half of next year for both of them, I imagine.

Mark LaVerghetta: Yes, I mean, going into the 2024 year, we are going to be, one we will be hopefully progressing very significantly, if not already making substantial progress on the monetization of the mines, which generates significant cash for American Resources as well as, or spinning them off, but also we will be producing, the goal would be to have both Carnegie 1 and Carnegie 2 both running at multiple sections before the end of the year. So going into 2024, hit the ground running in a way that will be very nicely profitable. And you will starting to see that the coal market got kind of whipsawed about four months ago. And we take the approach that we react quickly. You don’t know what things are going to do, but what we do know is we have one of the lowest cost structures from a corporate overhead perspective, compared to our peers.

And we have operational flexibility to do that. Now, with that, we, we made some decisions there to do what we did, and now we are in a position where we think the coal markets are stabilizing. The China, Australia rebalance has taken place and now that the world markets are kind of stabilized in that regard, you are starting to see supply continue to go down, and demand has been increasing. So we think it is coal prices are good right now and we think they are going to get better over the next three to four months.

Mike Niehuser: Yes. Well, it looks like you are holding some good cards there in your hand to plan how you want. Just real quick, please. When you looking at Africa and I like the way you categorize that. Is it primarily lithium or are you looking at other ores? Is it, so is it limited to lithium?

Mark LaVerghetta: So right now, predominantly lithium, based on some new developments, we are also working on some rare earth ores over there that are really, really attractive. We have been testing, getting some of those sent in over the last couple weeks because of some recent developments of our technology licenses. We are sampling from some cobalt mines that we know of that are run by companies that we feel very secure with. And then further that, I mean we have a partnership actually our SPAC RMC has an investment in a company called Ferox. It has a significant amount of vanadium. There is energy storage is predominantly either LFP or vanadium redux batteries. And so we think vanadium is actually going to have a bit of a movement going forward.

So we are looking at doing some testing and development around the vanadium as well from ReElement’s perspective. Haven’t done it yet, but we are working on that. So it is predominantly lithium to date, but the ability to utilize our technology for other applications. We are doing some really exciting stuff within the facilities as we speak for other applications like illumina and some other products that need high value refining that we may insert ourselves as a component of that refining process. The ReElement’s I mean run by Chief Operating Officer Jeff Peterson, who’s phenomenal, Ben Wrightman, they are doing some amazing things there in terms of positioning the assets to be deployed into multiple avenues, multiple revenue streams over the next few years.

Mike Niehuser: Well, that was a good question. I asked, just real quick about Marion. Should we be looking at ReElement with Marion as being primarily rare earths not lithium, and then looking at your Noblesville facility as kind of, did you say a pilot plant or a customer qualification lab, so to speak? Is that the right way to look at those three facilities?

Mark LaVerghetta: Yes. So Marion, yes, look at Marion and both. So Marion will be processing black mass end of life batteries for lithium. And then for LFP batteries specifically is a huge market for us in 60% to 70% of the battery market, and we can extract lithium out of LFP batteries very, very economically. We are super excited about that. We will be doing that in Marion as well as NMC, extracting out the lithium and then further processing the nickel cobalt within the NMC batteries very, very cost effectively. And then the rare earth ores. We are working with one automotive company, one of the larger OEMs on recycling their non-spec rotors and materials there as well as power tool markets. We are seeing a bunch of rare elements come in from different feedstocks, that is wind energy, wind turbines, but that will be Marion.

What our Noblesville facility, once we commence production at Marion, which is our current customer qualification plan, we will still produce out of there, but we will also do optimization and development. It will turn into, a think tank lab development beyond the revenue that it will be generating to further co-develop different applications to further drive and optimize our process. We will never stop. I mean Bob Gallien, who is on our Board of ReElement, he was the number two at CATL, build it from $100 in revenue to $185 billion with Robin Zhang, to the largest battery company in the world today. And he told me from day one, you need to always spend on R&D. If you don’t, you will be left behind. And that man knows what he is talking about.

We will do that same thing. And Noblesville will be a great facility for us to do that beyond the revenue it will generate. And then obviously, Kentucky lithium will be processing lithium ores from Africa, Canada and some other locations. But in Knott county, yes. Marion will be both. Knott Count predominantly lithium and then Noblesville will be all of the above but also resin development, technology development as well to further optimize our cost structures.

Mike Niehuser: And then you are also looking to co-locate opportunities where possible, as you mentioned. Why would you not co-locate with your lithium, closer to your lithium mine, if there is as you kind of look at things unfold?

Mark LaVerghetta: We will. I mean I have been in Africa three times in the last six months and heading back probably in another month to further progress the deal we are working on there. We will build refining capacity over there. Now having the Kentucky lithium side up and running, we will always export certain amount of product back to the United States that provides us redundancy for our customer base. And customers, especially when you are dealing with the customers we are dealing with they want to derisk it any way you possibly can. And being able to feed their supply chain from multiple angles, multiple locations is paramount. And there is a lot of locations in Africa today that are producing lithium spodumene and/or other lithium-bearing ores that we can’t build in each one of them today, now down the road, we can.

But there is a select site. We have got three sites in Africa that we are looking at building refining capacity at, working with our local partners on the financing aspect of it, the structure of it, site location, all that good stuff, so we can build local refining. Now also having that redundancy back in the United States is a de-risking mechanism for our customers.

Mike Niehuser: Are you thinking about recycling catalytic inverters?

Mark LaVerghetta: Not looking at catalytic converters as currently. But I will say in our Marion facility which is really, really nicely, we will further build out the lab there too. We will down the road work on other applications. Like I said, alumina, some high nickel content applications, germanium, gallium, looking at the ability to utilize our technology for refining all other materials as well. Catalytic inverters probably not as much. Not a market. I don’t know. I mean, I don’t want to say no to anything, but our lab and our team that we are building there could look at a number of different applications. Catalytic inverters, how they are sourced is on sometimes a little bit negative.

Mike Niehuser: Well, just a comment. I really like what you said about the ionic clays, for lithium and rare earth, since that is kind of where you got into this whole ReElement business to begin with. But if somebody just listened to this call for the first time, they would think that you are trying to planning on supplanting the entire refinery industry. And then they would kind of walk away probably incredulous having not seen your success firsthand. But that is kind of the direction you are going, isn’t it? To be just real opportunistic, to exploit every opportunity you can anywhere along the supply chain from beginning to end.

Mark LaVerghetta: 10-years from now, ReElement will display solvent extraction in the world. Now the legacy facilities will be running, but nobody will build a new one. Our technology is superior. It is lower cost, it is more environmentally sensitive and it is highly scalable. I’m highly confident of that. Now, we continue to prove it. And to your point, yes, we got into this space by, we developed ReElement by just trying to treat environmental liability. That is why we developed the business plan over nine years ago, when we bought the mines, we were treating water with it. That is why we developed the electrolysis technology with Dr. Bodi. That is how I met Dr. Wang cause we were looking for once we could concentrate it, we were looking for a way to refine it.

We have been building this for a long time. We have also been processing commodities for 20-years. Lithium, rare earth elements, all this stuff. They are commodities. People think it is really sexy and exciting and you can jump into it and it is just, you can print money if you just build something that is not the case. You still have to have a cost structure that makes sense and you still have to be able to do it in a way that is one commensurate with product quality your customers actually want. That is what ReElement does. But we are also building that on the backbone of a team that is been processing commodities for a really long time and understand how to survive those markets. And we have done it. We are hell, 95% of the coal business around us went bankrupt during the eight years when we were growing our business.

And we are now one of the largest, longest standing coal mining operations in eastern Kentucky today because we never went bankrupt cause, we have built our business model to survive and thrive.

Mike Niehuser: The Knott site came in handy too.

Mark LaVerghetta: Well. Oh, it is awesome, right? I mean, yes. And the people. There are phenomenal.

Mike Niehuser: Well, thanks for taking all my questions and appreciate it very much and congratulations on all the things you have done, especially with the non-dilutive financings is really quite, quite hard to take all in. Thank you.

Mark LaVerghetta: Well, a hundred percent. I appreciate it. And non-dilutive financings are key. We are all shareholders. I mean, that is what motivates us when we wake up in the morning, making sure we are protecting the dilution within the company and also positioning it to grow so it is not sitting on our hands just hoping financing comes in. It is making moves to bring in innovative capital. Kirk Taylor, our CFO’s done an absolutely phenomenal job at that. I mean, the guys – he is super smart on how to make sure we protect the shareholders through capital allocation. Thanks for your questions.

Operator: We appear to have no further questions at this time. I would like to turn the program back to the speakers for any additional or closing remarks.

Mark Jensen: Excellent. Well, I have kept you guys on here for quite a while. One, I want to thank you all for joining. We know you have better, other things to do and taking a few minutes out of your day to listen to us speak, we appreciate that. We couldn’t be more excited and thankful for the position we are in, the team that we built and the opportunities we have in front of us. The next few months, next few weeks, next few days are going to be quite exciting for us. Please stay tuned to what we accomplished as a business. It is going to take a lot of groundwork, and we are prepared to do that to take this business to the next level. And eventually, our marketplace will respond to that, as one of the management of some of the largest shareholders in this company, obviously, we care about market value.

We care about it over the long-term. And we know that fundamental business development and expansion will eventually drive market value. But I thank you all for your time. Excited about the future and look forward to speaking to you again here in the near-term.

Operator: This does conclude today’s program. Thank you for your participation and you may disconnect at any time.