Shares of the American Resources Corporation (AREC) stock were rising in the pre-market trading session today on June 8, 2021, after facing a drop of 11.52% at the previous closing. The AREC stock price saw a push of 4.79% to reach $3.06 a share at the time of this writing. Let’s see the reason behind this bull.
What’s Happening?
There is no single reason behind the rising AREC stock price as a couple of announcements were made by AREC stock on June 7, 2021.American Resources signed the securities purchase agreement with institutional investors according to which AREC stock would issue and sell 8,600,000 shares of its common stock and 4,300,000 warrants in order to purchase 4,300,000 shares of AREC common stock. The warrants have an exercise price of $3.50 per share and are valid for the next five years from the issuance date. The gross proceeds are expected to be approximately $30.1 million from this offering.
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The second news announced by AREC stock on June 7, 2021, that American Resources Corporation has successfully achieved high purity of about 99.5% of the rare earth element (REE), Neodymiumfrom the waste magnets along with technology partner at Purdue University via the use of ligand assisted displacement (“LAD”) chromatography process and technology.
Financial Results:
- A significant decrease was observed in the revenue for the first quarter of 2021 as revenue dropped from $524,334 in the first quarter of 2020 to $10,646 in the first quarter of 2021.
- AREC stock spent $1.1 million in general and administrative expenses in the first three months of 2021 while these expenses were $842,925 in the same tenure of the previous year.
- The development cost for the AREC stock decreased to $1.8 million in the first quarter of 2021 as compared to $2.8 million in the same prior-year period.
- Interest expense of $491,113 was incurred by AREC stock in the recently reported quarter as compared to $500,640 interest expense in the first three months of 2020.
- $6.4 million, or $0.14 per share net income loss was reported by AREC stock in the first quarter of 2021 as compared to a net income loss of $3.4 million, or a loss of $0.12 per share in the same period of the prior year.
Wrap Up:
AREC stock is hot among investors so far after couple of announcements made by the American Resources Corporation. The management thinks that the purity obtained for Neodymium would be a game-changer for the manufacturing as well as commercialization of permanent magnets. In short, investors need to keep an eye on this stock.
