SOURCE: America West Resources, Inc.

America West Resources, Inc.

May 16, 2011 08:30 ET

America West Resources Announces First Quarter 2011 Results

Posts 217% Increase in Revenue and Achieves Record Quarterly Coal Production; Reverses Total Stockholders' Deficit of $9.11 Million to Total Stockholders' Equity of $1.11 Million

SALT LAKE CITY, UT--(Marketwire - May 16, 2011) - America West Resources, Inc. (OTCBB: AWSR), a domestic compliant coal producer with mining operations in Central Utah, today announced its financial and operational results for the three month reporting period ended March 31, 2011.

Financial Highlights for the Three Months Ended March 31, 2011 Compared to the Three Months Ended March 31, 2010:

  • Revenues climbed 217% to $3.49 million, up from $1.10 million.
    • Quarterly coal production, from development, reached a record level in the first quarter of 2011, nearly doubling to 94,648 tons when compared to 47,903 tons produced for the three months ended March 31, 2010.
    • In January 2011, the Company took delivery of a new continuous miner and deployed it in a second section of the Horizon Mine in late February, which helped contribute to the increase in coal production and revenues.
  • Loss from operations decreased 56% to $1.43 million from $3.22 million.
  • Net loss increased to $6.53 million, or $0.19 loss per basic and diluted share, compared to a net loss of $4.97 million, or $0.23 loss per basic and diluted share. The rise in net loss was largely attributable to an approximate $2.5 million one-time non-cash charge to interest expense and an approximate $500,000 one-time, non-cash loss on extinguishment of debt for the three months ended March 31, 2011. These non-recurring charges were associated with the restructure of loans with shareholders, and the conversion of approximately $5 million of shareholder debt to equity.

The Company's balance sheet reflects total assets of $28.15 million as of March 31, 2011, up from $23.48 million at December 31, 2010, while total liabilities declined to $27.04 million from $32.58 million, respectively. As a result, the Company succeeded in reversing what was total stockholders' deficit of $9.11 million as of yearend 2010 to total stockholders' equity of $1.11 million as of the end of March 2011.

During March and April 2011, the Company raised $4.5 million through a private placement of its common stock through New York-based investment banking firm John Thomas Financial, and negotiated the conversion of approximately $5 million in debt to equity.

Commenting on the results, Dan Baker, Chief Executive Officer of America West Resources, noted, "The investments we have made over the past two and half years in mine development initiatives, mining equipment and an expanding workforce, are now beginning to pay off. With the deployment of the second continuous miner at Horizon late in the first quarter of this year, we achieved a record quarter in production for our Company. In addition, we hope to begin pulling pillars in certain developed areas of the mine this month, representing another major milestone for America West. When that occurs, daily coal production should notably increase to fuel record revenue growth over the next several quarters," concluded Baker.

For more detailed information relating to the Company's first quarter 2011 results, please refer to the financial statements included with this press release and the 10-Q that was filed with the U.S. Securities and Exchange Commission on Friday, March 13, 2011.

FINANCIAL CHARTS TO FOLLOW



America West Resources, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31,December 31,
20112010
Assets
Current assets:
Cash and cash equivalents$280,549$65,003
Restricted cash4,0104,010
Accounts receivable589,589466,871
Accounts receivable - related party84,416-
Inventory236,763136,037
Deferred financing costs1,122,635543,291
Prepaid expenses150,126115,115
Total current assets2,468,0881,330,327
Deposits305,137804,148
Property and equipment:
Property and equipment13,279,25911,150,980
Land and mineral properties21,963,99719,627,847
Less: accumulated depreciation and depletion(9,867,785)(9,439,156)
Net property and equipment25,375,47121,339,671
Total assets$28,148,696$23,474,146
Liabilities and Stockholders' Deficit
Current liabilities:
Bank overdraft$-$180,733
Accounts payable3,262,9243,077,428
Accounts payable - related party305,071521,506
Accrued expenses3,132,2284,567,572
Deferred revenue500,000500,000
Short-term debt - related party, net of unamortized discounts of $2,441 and $58,89758,6653,120,599
Current maturities of long-term debt, net of unamortized discount of $1,743,253 and $2,197,2519,567,53817,772,358
Current maturities of convertible debt-related party, net of unamortized discount of $30,381 and $070,888-
Current maturities of convertible debt, net of unamortized discount of $414,316 and $0966,737-
Capital lease obligation127,139
Derivative liabilities1,164,3271,594,370
Total current liabilities19,155,51731,334,566
Long-term debt693,6621,114,450
Convertible debt-related party, net of unamortized discount of $206,447 and $0481,711-
Convertible debt net of unamortized discount of $2,815,436 and $06,569,350-
Asset retirement obligation134,969134,969
Total liabilities27,035,20932,583,985
Stockholders' deficit:
Preferred stock, $0.0001 par value; 2,500,000 shares authorized; none issued and outstanding-
Common stock, $0.0001 par value; 300,000,000 shares authorized; 43,015,675 and 33,459,440 shares issued and outstanding, respectively4,3023,346
Additional paid-in capital46,746,00029,994,056
Accumulated deficit(45,636,815)(39,107,241)
Total stockholders' deficit1,113,487(9,109,839)
Total liabilities and stockholders' deficit$28,148,696$23,474,146


America West Resources, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
20112010
Coal sales$3,463,239$1,083,104
Machine repair services22,70517,817
Total revenue3,485,9441,100,921
Cost of revenue:
Coal production costs2,423,1741,271,348
Depreciation, depletion and accretion428,6291,040,136
Coal purchases-15,033
Machine repair costs2,599112,650
Total cost of revenue2,854,4022,439,167
Gross profit (loss)631,542(1,338,246)
Operating expenses:
General and administrative2,057,7021,883,249
Loss from operations(1,426,160)(3,221,495)
Other income (expenses):
Gain on derivative liabilities430,043-
Interest income154
Interest expense(4,967,101)(1,562,629)
Loss on extinguishment of debt and liabilities(566,357)(181,988)
Total other expenses(5,103,414)(1,744,563)
Net loss$(6,529,574)$(4,966,058)
Basic and Diluted Net Loss Per Share$(0.19)$(0.23)
Weighted Average Shares Outstanding
Basic and Diluted34,646,06321,801,246

About America West Resources, Inc.
Headquartered in Salt Lake City, Utah, America West Resources is an established domestic coal producer focused on the mining of compliant (low-sulfur) coal and its sale primarily to utility companies and industrial customers in the western U.S. The Company operates the Horizon Mine, which has recoverable, compliant, high BTU coal reserves. For more information, please visit www.AmericaCoal.com.

Forward-Looking Statements
This news release contains forward-looking statements. Please refer to the Company's Form 10-K and other filings with the United States Securities and Exchange Commission (the "SEC") for additional information regarding risks and uncertainties, including, but not limited to, the risk factors listed from time to time in such SEC reports. Copies of these filings are available through the SEC's electronic data gathering analysis and retrieval system (EDGAR) at www.sec.gov. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release which are not strictly historical statements, including, without limitation, statements regarding current or future mining output, ability to obtain necessary equipment, personnel and permits to mine coal, production capabilities, management's strategy, plans and objectives for future operations, plans and objectives for production, plans and objectives for present and future production, plans and objectives for regulatory approval, and anticipated results, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation, risks associated with coal production, mining in general and in our mines in particular, ability to achieve the coal output anticipated, ability to obtain permits, ability to hire and retain the necessary personnel, as well as other risks detailed in our filings with the SEC. We assume no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

Contact Information

  • FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
    ELITE FINANCIAL COMMUNICATIONS GROUP
    Dodi B. Handy
    President & CEO
    (Twitter: dodihandy)
    Or
    Kathy Addison
    COO
    (Twitter: kathyaddison)
    407-585-1080
    or via email at
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