AREC 10-Q/A
American Resources Corp (AREC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______ to _______
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
(Address and Zip Code of principal executive offices)
Registrant’s telephone number, including area code: (
Indicate by check mark whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☐ | Smaller Reporting Company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Securities registered pursuant to Section 12(b) of the Act:
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As of October 17, 2025 the registrant had
EXPLANATORY NOTE
American Resources Corporation (the “Company”) filed its Quarterly Report on Form 10-Q for the period ended March 31, 2025 (the “Original Filing”) with the Securities and Exchange Commission (the “SEC”) on May 28, 2025. The Company filed Amendment No. 1 on Form 10-Q/A to its Quarterly Report on Form 10-Q for the period ended March 31, 2025, for the sole purpose of filing the required XBRL reporting. This Amendment No. 2 on Form 10-Q/A (this “Amendment”) is being filed to include additional information throughout that has been requested to be included pursuant to a SEC comment letter dated August 12, 2025, and correct errors and restate certain items presented in the Company’s March 31, 2025 Quarterly Report on Form 10-Q. Financial disclosures throughout this Form 10-Q have also been revised, if applicable, for the revisions to the accompanying consolidated financial statements.
The following items have been corrected and restated in the accompanying consolidated financial statements:
| · | Our depreciation expense calculations for the quarter ended September 30, 2024, included an error that resulted in the overstatement of depreciation and amortization of mining rights expense for the quarter ended September 30, 2024. The error also resulted in the overstatement of accumulated depreciation by $857,934 as of March 31, 2025 and December 31, 2024. |
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| · | Certain amounts previously classified as restricted cash on the consolidated balance sheets as of March 31, 2025, and December 31, 2024, should have been classified as restricted investments. Those reclassifications have been made in the accompanying consolidated balance sheets. |
AMERICAN RESOURCES CORPORATION
TABLE OF CONTENTS
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| Table of Contents |
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
AMERICAN RESOURCES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
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| December, |
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| 2025 |
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| 2024 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Restricted cash - current |
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Restricted investments - current |
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Short-term investments |
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Due from related party |
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Interest receivables |
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Receivables |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Non-current assets: |
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Restricted cash |
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Restricted investment |
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Property and equipment, net |
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Right-of-use assets, net |
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Right-of-use assets, net - related party |
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Finance – right-of-use asset, net – related party |
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Investment in other entities - Related Parties |
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Notes receivable, net |
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Total Assets |
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Liabilities and Deficit |
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Current liabilities: |
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Trade payables |
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Non-trade payables |
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Accounts payable - related party |
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Accrued expenses |
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Accrued litigation settlement |
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Accrued interest |
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Other current liabilities |
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Bond payable, current |
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Current portion of long term debt |
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Operating lease liabilities, current |
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Operating lease liabilities, current - related party |
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Finance lease - related party, current |
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Other financing obligations, current |
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Total current liabilities |
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Non-current liabilities: |
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Remediation liability |
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Bond payable, net |
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Convertible promissory note |
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Convertible promissory note - related party |
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Other financing obligations, net of current portion |
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Operating lease liabilities, non-current |
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Operating lease liabilities, non-current - related party |
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Finance lease - related party, non current |
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Total liabilities |
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Stockholders' deficit: |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders' deficit |
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Non-controlling interest |
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Total deficit |
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Total liabilities and stockholders' deficit |
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The accompanying footnotes are integral to the unaudited consolidated financial statements.
| 3 |
| Table of Contents |
AMERICAN RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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| FOR THE THREE MONTHS ENDED MARCH 31, |
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| 2024 |
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Revenue |
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Metal recovery and sales |
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Service fee revenue |
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Rare earth oxide revenue |
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Royalty income |
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Total revenue |
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Operating expenses (income) |
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Cost of coal sales and processing |
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Accretion |
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Depreciation |
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Amortization of mining rights |
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General and administrative |
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Professional fees |
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Litigation expense |
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Production taxes and royalties |
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Development |
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Gain on sale of equipment |
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Total operating expenses |
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Net loss from operations |
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Other income (expense) |
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Earnings from equity method investees |
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Other income and (expense) |
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Interest income |
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Interest expense |
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Total other income (expense) |
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Net loss |
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Less: Non-controlling interest |
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Net loss attributable to AREC shareholders |
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Net loss per share – basic and diluted |
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Weighted average shares outstanding – basic and diluted |
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The accompanying footnotes are integral to the unaudited consolidated financial statements.
| 4 |
| Table of Contents |
AMERICAN RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS of SHAREHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
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| Par Value Shares |
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| Paid-in Capital |
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| Total Deficit |
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Balance as of December 31, 2024 (As Restated) |
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Common stock issued to settle accounts payable and accrued expenses |
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Stock compensation – options |
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Net loss, as restated |
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Balance as of March 31, 2025 (As Restated) |
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Balance as of December 31, 2023 (As Restated) |
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Exercise of cashless warrants |
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Exercise of common stock options |
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Issuance of common shares for consulting services |
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Dividend-in-kind of Novustera, Inc. common stock to shareholders |
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Stock compensation - options |
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Net loss, as restated |
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Balance as of March 31, 2024 (As Restated) |
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| 5 |
| Table of Contents |
AMERICAN RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Cash Flows from Operating activities: |
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Net loss |
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Adjustments to reconcile net loss to net cash |
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Stock-based compensation expense |
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Depreciation expense |
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Amortization of mining rights |
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Accretion expense |
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Amortization of finance right-to-use assets - related party |
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Amortization of issuance costs and debt discount |
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Investment in other entities - Related Parties, net |
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Gain on sale of equipment |
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Issuance of common shares for services |
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Unrealized gain on short-term investments |
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Change in current assets and liabilities: |
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Interest receivable |
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Due from related party |
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Inventories |
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Prepaid expenses and other current assets |
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Trade and non-trade payable |
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Accounts payable related party |
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Accrued expenses |
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Accrued litigation settlement |
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Accrued interest |
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Accrued interest on finance lease liability - related party |
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Operating lease assets and liabilities, net |
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Operating lease assets and liabilities, net - related party |
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Cash used in operating activities |
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Cash Flows from Investing activities: |
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Purchase of property and equipment, net of capitalized interest income and (expense) |
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Restricted investments purchased |
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Proceeds from maturity of restricted investments |
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Proceeds from sale of equipment |
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Proceeds from short-term investments, net |
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Cash used in provided by investing activities |
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Cash Flows from Financing activities: |
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Proceeds from convertible promissory note |
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Proceeds received from other financing obligation |
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Proceeds from the exercise of stock option |
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Proceeds from tax exempt bonds, net |
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Repayments of other financing obligation |
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Cash provided by financing activities |
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Increase (decrease) in cash |
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Cash and cash equivalents, including restricted cash, beginning of period |
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Cash and cash equivalents, including restricted cash, end of period |
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SUPPLEMENTAL CASH FLOW INFORMATION |
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Common stock issued to settle accounts payable and accrued expenses |
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Acquisition of PPE through convertible promissory note - related party |
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Dividend-in-kind of Novustera, Inc. common stock to shareholders |
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The accompanying footnotes are integral to the unaudited consolidated financial statements
| 6 |
| Table of Contents |
AMERICAN RESOURCES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
American Resources Corporation’s (ARC or the Company) operations are comprised of ARC (Corporate or Parent) and three operating segments that we describe as American Infrastructure, ReElements and Electrified Materials. During this first quarter of 2025, the Company distributed out to its shareholders 90% ownership interest in American Infrastructure and 80% ownership interests in ReElements. As of March 31, 2025, the Company has determined that American Infrastructure and ReElements, (the “VIEs”) meet the criteria to continue to be consolidated in our financial statements as variable interest entities under ASC 810, Consolidation. The Company holds contractual and financial interests in each of these entities that provide it with the power to direct key activities and the right to receive benefits or the obligation to absorb losses that could be significant.
American Infrastructure (our coal mining operations) is comprised of subsidiaries that were formed or acquired between 2015 and 2020 with operations focused on the extraction, processing, transportation, and distribution of coal for a variety of industries, with a primary focus on metallurgical quality coal to the steel industry. Responsive to adverse market conditions and pricing pressures in the coal industry, during 2023 we suspended our coal production operations which significantly attributed to our decline in consolidated revenues from approximately $
Beginning in 2023, the focus of our business and capital allocation shifted towards the diversification of our revenue streams leading to the development of our ReElements and Electrified Materials segments which have been in the development (pre revenue) stages through 2024. Electrified Materials is focused on the aggregation, recovery and sale of recovered metal and steel. We established a new subsidiary, Electrified Materials Corporation (EMC, formerly known as American Metals) to operate this segment of our business. ReElements is focused on the purification and monetization of critical and rare earth element deposits and end of life magnets and batteries. American Rare Earth LLC was initially formed as a subsidiary to comprise the ReElements segment. In 2024, we changed the name of American Rare Earth LLC to ReElement Technologies LLC and recently converted the company from a limited liability corporation to a corporation.
Basis of Presentation and Consolidation:
The consolidated financial statements include the accounts of the Company, its consolidated subsidiaries and variable interest entities that include the following:
American Infrastructure:
American Infrastructure Corporation (AIC), Deane Mining, LLC (Deane), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy), Knott County Coal LLC (KCC), Wyoming County Coal (WCC), Perry County Resources LLC (PCR), Advanced Carbon Materials LLC (ACM), and T.R. Mining & Equipment Ltd. (TR Mining).
ReElements:
ReElement Technologies LLC (RLMT), ReElement Marion LLC (RLM), and Kentucky Lithium LLC (KYL).
Electrified Materials:
Electrified Materials Corporation (EMC).
| 7 |
| Table of Contents |
Corporate Office:
American Opportunity Venture II, LLC (AOV II).
All significant intercompany accounts and transactions have been eliminated in consolidation. Entities for which ownership is less than
Acquisition Transactions
Effective February 5, 2024,
On June 28, 2024, EMC entered into a Business Combination with AI Transportation Acquisition Corp. On November 27, 2024, EMC received notice of termination of the potential transaction and there are no ongoing discussions to effect a merger agreement.
Going Concern
The Company has evaluated whether there are any conditions and events considered in the aggregate, which raise substantial doubt about its ability to continue as a going concern within one year beyond the issuance date of these financial statements. Based on such evaluation and the Company’s current plans, which are subject to change, and the Company’s existing liquidity, there is substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date these financial statements were issued.
The accompanying financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.
The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. The Company will continue to seek to raise additional funding through debt or equity financing during the next twelve months from the date of issuance of these financial statements. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.
| 8 |
| Table of Contents |
A.RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS:
Current Restatement
Subsequent to filing of our original 2025 Form 10-Q on May 28, 2025, we became aware of a few matters requiring adjustments to the consolidated financial statements included therein. Those matters have been corrected in this Amendment No. 2 to the March 31, 2025 Form 10-Q and include the following:
| · | Depreciation and amortization of mining rights in the 2024 statement of operations were overstated by $ |
|
|
|
| · | Certain amounts previously classified as restricted cash on the consolidated balance sheets as of March 31, 2025 and December 31, 2024, should have been classified as restricted investments. Those reclassifications have been made in the accompanying consolidated balance sheets. |
Prior Restatement
The Company identified certain accounting errors in the Company’s consolidated financial statements as of and for the quarterly period ended March 31, 2024 included in the March 31, 2024 Form 10-Q filed with the SEC on May 20, 2024. The following describes the significant adjustments made to the consolidated financial statements as of and for the quarterly period ended March 31, 2024 included in the March 31, 2024 Form 10-Q filed with the SEC on May 20, 2024 that were corrected in the consolidated financial statements included in our original March 31, 2025 Form 10-Q filed with the SEC on May 28, 2025.
The following includes descriptions of the significant adjustments to the Company’s previously reported consolidated financial statements as of and for the quarterly period ended March 31, 2024.
1. Treasury bills and mutual fund reclassification
Treasury bills and mutual fund investments were incorrectly classified as cash and cash equivalents versus short-term investments on the balance sheets and the change in fair value of the investments was not recognized in the statement of operations. The adjustment corrects these matters.
2. Restricted investment reclassification
Cash balances in the WCC bond fund balances were classified as short-term investments on the balance sheets. The adjustment reclassifies the WCC bond fund balances to restricted cash.
3. Due from related party reclassification
A note receivable balance related to a working capital loan issued to American Acquisition Opportunity Inc was written off. However, the note was supported by Royalty Management Holding Corp., a related party, who has committed to issue shares of its stock if required to fulfill the obligation. The adjustment re-establishes the note receivable on the balance sheet and reverses the charge previously recognized in the statement of operations.
4. Accounts payable reclassification
A reclassification adjustment was made to properly present liabilities within the balance sheet. Certain liabilities were previously misclassified among trade payables, non-trade payables, and accounts payable – related party. This adjustment corrects the classification to reflect the nature of the underlying transactions more accurately.
| 9 |
| Table of Contents |
5. Failed leaseback adjustment
Certain fixed assets under the Maxus lease agreements were incorrectly recorded as a sale and lease-back arrangement, resulting in the removal of the assets from the balance sheet and recognition of a gain on sale. This adjustment reinstates the fixed assets and derecognizes the right of use assets and related finance lease liabilities previously recorded. Additionally, the previously recorded finance lease liabilities have been reclassified as Other Financing Obligations on the balance sheet.
6. Operating lease recognition adjustment
An operating lease was previously not recognized on the balance sheet and accounted for under ASC 842, Leases. The adjustment recognizes this operating lease under the provisions of ASC 842.
7. Equity investment accounting adjustment
There were accounting errors determined with respect to equity investments. Adjustments have been applied to the Company’s equity investment in Novusterra, which was initially recorded at a derived value rather than fair market value (FMV). Additionally, the equity investment in SPAC American Acquisition Opportunity Inc. (AAO) was incorrectly carried at its cost basis without reflecting changes in earnings. An adjustment was made to account for AAO on the equity method of accounting.
8. Advanced Magnet Lab, Inc. loan reclassification
A note receivable from Advanced Magnet Lab, Inc. was incorrectly classified as Investment in Other Entities - Related Party on the balance sheet. An adjustment was recognized to reclassify this item to notes receivable on the balance sheet.
9. Interest Expense Adjustment
An adjustment was recorded to correct previously understated interest expense resulting from an error in the Company’s debt rollforward calculation. The prior calculation did not accurately reflect the outstanding balances and timing of interest accruals related to certain borrowings. This restatement reflects a true-up of interest expense to properly account for interest incurred during the applicable periods. In addition, the Company identified an error in the calculation of its debt rollforward, which resulted in an understatement of accrued interest, current portion of long-term debt, convertible promissory notes – related party, and interest expense in prior periods. This adjustment corrects the interest expense to reflect the proper accrual based on outstanding debt balances. In addition, there was an adjustment to correct the amount of interest income earned on the WCC Bond.
| 10 |
| Table of Contents |
10. Accrued expenses and settlement adjustments
In connection with the 2024 audit and the re-audit of the 2023 financial statements, legal letter responses were requested and received from attorneys representing the Company with various litigation matters. Based on those responses, the Company concluded a loss was probable and reasonably estimated under Accounting Standards Codification 450. It was also concluded that the status of these litigation cases as of December 31, 2023 supported that a potential loss was probable at that date. Accordingly, adjustments were recognized to record the reserve for these potential litigation losses as of December 31, 2023.
11. Bond balance reclassification
Based on the review of the terms, provisions and covenants under the WCC Bond, it was determined that the Company was not in compliance with certain provisions with those matters dating back to December 31, 2023. The assessment was that these compliance issues could be deemed an event of default which then could lead to the acceleration of maturity. Accordingly, the outstanding balance was reclassified to a current liability on the balance sheet.
12. Non-controlling interest recognition adjustment
Non-controlling interests were previously not recognized for those subsidiaries that the Company does not wholly own. This adjustment records the non-controlling interest in minority ownership in various subsidiaries.
13. Prepaid deposit removal adjustment
Certain prepaid deposits were refunded to the Company. However, the deposit amount recognized in the balance sheet was not de-recognized upon the Company’s receipt of such funds. The adjustment de-recognizes the deposits from the balance sheet and reverses the income recognized in the statement of operations that had been recorded when the funds were returned to the Company.
14. Reclassification of operating expenses
An adjustment was made to correct the classification of certain operating expenses within the consolidated statements of operations. Previously, certain expenses were misclassified among general and administrative (G&A), development expense, professional fees, production taxes and royalties, and cost of coal sales and processing. This adjustment reclassifies these expenditures to the correct expense classification in the statement of operations.
* Represents revision for immaterial error correction
| 11 |
| Table of Contents |
The following tables summarize the effect of the restatement on each financial statement line item that was restated in the consolidated financial statements.
Balance Sheet as of March 31, 2024 |
| As Reported |
|
| Adjustment |
|
| As Restated |
|
| Reference |
| ||||
Cash and cash equivalents |
| $ |
|
| $ | ( | ) |
| $ |
|
|
| 1 |
| ||
Restricted cash - current |
|
|
|
|
|
|
|
|
|
|
| 11 |
| |||
Restricted investment - current |
|
|
|
|
|
|
|
|
|
|
| 2 |
| |||
Short-term investments |
|
|
|
|
|
|
|
|
|
|
| 1 |
| |||
Interest receivables |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Due from related party |
|
|
|
|
| 741,243 |
|
|
|
|
|
| 3 |
| ||
Inventories |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Prepaid expenses and other current assets |
|
|
|
|
| ( | ) |
|
|
|
|
| 13 |
| ||
Total current assets |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
|
|
| ( | ) |
|
|
|
|
| 11,2 |
| ||
Restricted investments |
|
|
|
|
|
|
|
|
|
|
| 2 |
| |||
Property and Equipment, net |
|
|
|
|
|
|
|
|
|
|
| 5 |
| |||
Right-of-use assets, net |
|
|
|
|
| ( | ) |
|
|
|
|
| 5 |
| ||
Right-of-use assets, net - related party |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Investment in other entities - Related Parties |
|
|
|
|
| ( | ) |
|
|
|
|
| 7 |
| ||
Notes Receivable, net |
|
|
|
|
|
|
|
|
|
|
| 8 |
| |||
Total assets |
| $ |
|
| $ | ( | ) |
| $ |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables |
| $ |
|
| $ | ( | ) |
| $ |
|
|
| 4 |
| ||
Non-trade payables |
|
|
|
|
| ( | ) |
|
|
|
|
| 4 |
| ||
Accounts Payable - Related Party |
|
|
|
|
|
|
|
|
|
|
| 4 |
| |||
Accrued expenses |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Accrued litigation settlement |
|
|
|
|
|
|
|
|
|
|
| 10 |
| |||
Accrued interest |
|
|
|
|
|
|
|
|
|
|
| 9 |
| |||
Other current liabilities |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Notes payable |
|
|
|
|
| ( | ) |
|
|
|
|
| 9 |
| ||
Bond payable, current |
|
|
|
|
|
|
|
|
|
|
| 13 |
| |||
Current portion of long term debt |
|
|
|
|
|
|
|
|
|
|
| 9 |
| |||
Operating lease liabilities, current |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Operating lease liabilities, current - related party |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Finance lease - related party, current |
|
|
|
|
| ( | ) |
|
|
|
|
| 5 |
| ||
Other financing obligations, current |
|
|
|
|
|
|
|
|
|
|
| 5 |
| |||
Total current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remediation liability |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Bond payable, net |
|
|
|
|
| ( | ) |
|
|
|
|
| 13 |
| ||
Convertible promissory note - related party |
|
|
|
|
|
|
|
|
|
|
| 9 |
| |||
Finance lease - related party, non current |
|
|
|
|
| ( | ) |
|
|
|
|
| 5 |
| ||
Other financing obligations, net of current portion |
|
|
|
|
|
|
|
|
|
|
| 5 |
| |||
Operating lease liabilities, non-current |
|
|
|
|
|
|
|
|
|
|
| 6 |
| |||
Operating lease liabilities, non-current - related party |
|
|
|
|
|
|
|
|
|
|
| 6 |
| |||
Total liabilities |
| $ |
|
| $ |
|
| $ |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Additional paid-in capital |
|
|
|
|
|
|
|
|
|
|
| 7 |
| |||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
Total stockholders' deficit |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
Non-controlling interest |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| 12 |
| |
Total deficit |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
Total liabilities and stockholders' deficit |
| $ |
|
| $ | ( | ) |
| $ |
|
|
|
|
| ||
Refer to the financial statements included herein which present the impact of the restatement of the Company’s previously reported consolidated balance sheet, the statement of operations, statement of cashflow, and the consolidated stockholders’ deficit as of and for the three months ended March 31, 2024.
| 12 |
| Table of Contents |
Statement of operations for the three months ended March 31, 2024 |
| As Reported |
|
| Adjustment |
|
| As Restated |
|
| Reference |
| ||||
Cost of coal sales and processing |
|
|
|
|
| ( | ) |
|
|
|
|
| 14 |
| ||
Accretion |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Depreciation |
|
|
|
|
|
|
|
|
|
|
| 5 |
| |||
Amortization of mining rights |
|
|
|
|
| ( | ) |
|
|
|
| * |
| |||
General and administrative |
|
|
|
|
|
|
|
|
|
|
| 14 |
| |||
Professional fees |
|
|
|
|
|
|
|
|
|
|
| 14 |
| |||
Litigation expense |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Production taxes and royalties |
|
|
|
|
| ( | ) |
|
|
|
|
| 14 |
| ||
Development |
|
|
|
|
| ( | ) |
|
|
|
|
| 14 |
| ||
Gain on sale of equipment |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| 5 |
| |
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from operations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from equity method investees |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| 7 |
| |
Other income and (expense) |
|
|
|
|
| ( | ) |
|
|
|
|
| 3 |
| ||
Interest income |
|
|
|
|
|
|
|
|
|
|
| 9 |
| |||
Interest expense |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| 9 |
|
Total other income (expenses) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
Non-controlling interest |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Net loss attributable to AREC shareholders |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
| 13 |
| Table of Contents |
|
| Common |
|
|
|
| (As reported) |
|
|
|
| (Restated) |
|
| (As reported) |
|
|
|
| (Restated) |
|
| (As reported) |
|
|
|
| (Restated) |
|
| (As reported) |
|
|
|
| (Restated) |
| |||||||||||||||||||
|
| Stock |
|
|
|
| Additional |
|
|
|
| Additional |
|
|
|
|
|
|
|
| Non- |
|
|
|
| Non- |
|
|
|
|
|
|
| |||||||||||||||||||||||
|
| Par Value Shares |
|
| Amount |
|
| Paid-in Capital |
|
| Adjustments |
|
| Paid-in Capital |
|
| Accumulated Deficit |
|
| Adjustments |
|
| Accumulated Deficit |
|
| controlling interest |
|
| Adjustments |
|
| controlling interest |
|
| Total Deficit |
|
| Adjustments |
|
| Total Deficit |
| ||||||||||||||
Balance as of December 31, 2023 |
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ | ( | ) |
|
| ( | ) |
| $ | ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
| $ |
|
|
| ( | ) |
|
| ( | ) | |||||||
Exercise of cashless warrants |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Exercise of common stock options |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||||||||
Issuance of common shares for consulting services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Dividend-in-kind of Novustera, Inc. common stock to shareholders |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
| ( | ) | ||||||
Stock compensation - options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||||
Balance as of March 31, 2024 |
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ | ( | ) |
|
| ( | ) |
| $ | ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
| $ | ( | ) |
|
| ( | ) |
|
| ( | ) | ||||||
| 14 |
| Table of Contents |
Statement of Cash flows for the three months ended March 31, 2024 |
| As Reported |
|
| Adjustment |
|
| As Restated |
|
| Reference |
| ||||
Cash Flows from Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
| |
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
| 7 |
| |||
Depreciation expense |
|
|
|
|
|
|
|
|
|
|
| 5 |
| |||
Amortization of mining rights |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Accretion expense |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Amortization of finance right-to-use assets - related party |
|
|
|
|
| ( | ) |
|
|
|
|
| 6 |
| ||
Accretion of right-to-use assets |
|
|
|
|
| ( | ) |
|
|
|
|
| 6 |
| ||
Amortization of issuance costs and debt discount |
|
|
|
|
| ( | ) |
|
|
|
| * |
| |||
Investment in other entities - Related Parties, net |
|
|
|
|
|
|
|
|
|
|
| 7 |
| |||
Gain on sale of equipment |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| 5 |
| |
Unrealized gain on short-term investments |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Inventories |
|
| ( | ) |
|
|
|
|
|
|
| * |
| |||
Prepaid expenses and other current assets |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| 13 |
| |
Trade and non-trade payable |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| 4 |
| |
Accounts payable related party |
|
| ( | ) |
|
|
|
|
|
|
|
| 4 |
| ||
Accrued expenses |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| 10 |
| |
Accrued litigation settlement |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Accrued interest |
|
| ( | ) |
|
|
|
|
|
|
|
| 9 |
| ||
Other current liabilities |
|
| ( | ) |
|
|
|
|
|
|
|
| 4 |
| ||
Issuance of common shares for services |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Operating lease assets and liabilities, net - related party |
|
| ( | ) |
|
|
|
|
|
|
| * |
| |||
Operating lease assets and liabilities, net |
|
|
|
|
| ( | ) |
|
| ( | ) |
| * |
| ||
Cash used in operating activities |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment, net of capitalized interest income and (expense) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| 5 |
|
Restricted investments purchased |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| 2 |
| |
Proceeds from sale of equipment |
|
|
|
|
| ( | ) |
|
|
|
|
| 5 |
| ||
Proceeds from short-term investments, net |
|
|
|
|
|
|
|
|
|
|
| 1 |
| |||
Cash (used in) provided by investing activities |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from tax exempt bonds, net |
|
|
|
|
|
|
|
|
|
|
| 11 |
| |||
Proceeds from the exercise of stock option |
|
|
|
|
| ( | ) |
|
|
|
| * |
| |||
Proceeds received from other financing obligation |
|
|
|
|
|
|
|
|
|
| * |
| ||||
Proceeds from convertible promissory note - related party |
|
|
|
|
|
|
|
|
|
|
| 9 |
| |||
Repayments of other financing obligation |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| 5 |
| |
Repayments of finance lease liabilities |
|
| ( | ) |
|
|
|
|
|
|
|
| 5 |
| ||
Repayments on notes payable |
|
| ( | ) |
|
|
|
|
|
|
| * |
| |||
Cash provided by financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| 15 |
| Table of Contents |
Use of Estimates:
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its assumptions on historical experiences and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In addition, management considers the basis and methodology used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation. Such estimates and assumptions could change in the future as more information becomes known which could impact the amounts reported and disclosed herein. Significant estimates include, carrying amounts of long-lived assets, valuation assumptions for share-based payments, evaluation of debt modification accounting, effective borrowing rate determinations, analysis of fair value transferred upon debt extinguishment, legal claims and contingencies, valuation and calculation of measurements of income tax assets and liabilities.
Cash, Cash Equivalents and Restricted cash: Cash and cash equivalents include bank demand deposits and money market funds that invest primarily in U.S. government securities.
Restricted cash and cash equivalents are held in trusts related to the Tax-Exempt Bonds and are restricted as to withdrawal as required by the agreement entered into by the Company.
The following table sets forth the total of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets.
|
| March 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
Cash and cash equivalents |
| $ |
|
| $ |
| ||
Restricted cash |
|
|
|
|
|
| ||
Total cash and restricted cash presented in the consolidated balance sheets |
| $ |
|
| $ |
| ||
Restricted Investments: Consist of U.S. government securities, corporate fixed income, and U.S. government securities that are held in trusts related to the Tax-Exempt Bonds and are restricted as to withdrawal as required by the agreement entered into by the Company. All investments are classified as trading securities as of March 31, 2025 and December 31, 2024. Trading securities are recorded initially at cost and are adjusted to fair value at each reporting period with unrealized gains and losses recorded in the current period earnings or loss, except for those amounts that are directly attributable to project funding activities, which are capitalized to construction in progress as part of the cost of the related asset.
Related Party Policies: In accordance with FASB ASC 850 related parties are defined as either an executive, director or nominee, greater than 10% beneficial owner, and or immediate family member and affiliated businesses of any of the proceedings.
Property and Equipment: Property and Equipment are recorded at cost. For equipment, depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally ranging from five to twenty years.
Construction in progress is related to the construction or development of leasehold improvements and equipment that have not yet been placed in service for our intended use. Construction in progress represents capital expenditures for direct costs of construction or acquisition and design fees incurred, and a proportional amount of bond interest income and expense for amounts capitalized directly related to the construction. Capitalization of these costs ceases and the construction in progress is transferred to the appropriate category of property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Construction in progress is not depreciated.
Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net undiscounted cash flows expected to be generated by the related assets. If these assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the assets.
There were no impairments recognized during the periods ended March 31, 2025 and 2024. Costs related to maintenance and repairs which do not prolong an asset’s useful life are expensed as incurred.
| 16 |
| Table of Contents |
Mine Development: Costs of developing new coal mines, including asset retirement obligation assets, are capitalized and amortized using the units-of-production method over estimated coal deposits or proven reserves. Costs incurred for the development and expansion of existing reserves are expensed as incurred.
Coal Production and Holdings Costs: Coal production and holdings costs for coal mined and processed include direct labor, materials and utilities. Activities related to metal recovery are inherent in both direct coal labor and overhead labor and do not require additional variable costs.
Asset Retirement Obligations (ARO) – Reclamation: At the time they are incurred, legal obligations associated with the retirement of long-lived assets are reflected at their estimated fair value, with a corresponding charge to mine development. Obligations are typically incurred when we commence development of underground and surface mines, and include reclamation of support facilities, refuse areas and slurry ponds or through acquisitions.
Obligations are reflected at the present value of their future cash flows. We reflect accretion of the obligations for the period from the date they incurred through the date they are extinguished. The asset retirement obligation assets are amortized based on expected reclamation outflows over estimated recoverable coal deposit lives.
We assess our ARO at events warrant to reflect revisions for permit changes, changes in our estimated reclamation costs and changes in the estimated timing of such costs. Management is currently in the process of assessing the ARO for the fiscal year and will include revisions if any during the first quarter of 2025.
The table below reflects the changes to our ARO:
|
| March 31, 2025 |
|
| March 31,2024 |
| ||
Beginning Balance |
| $ |
|
| $ |
| ||
Accretion |
|
|
|
|
|
| ||
Ending Balance |
| $ |
|
| $ |
| ||
Accretion expense amounted to $
Revenue Recognition: Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied; for all contracts this occurs when control of the promised goods have been transferred to our customers. For coal shipments to domestic and international customers via rail, control is transferred when the railcar is loaded. Our revenue is comprised of sales of mined coal, sales of recovered metals and service fees for processing coal.
All the activity is undertaken in eastern Kentucky, Western West Virginia, and Southern Indiana. Revenue from metal recovery and sales are recognized when conditions within the contract or sales agreement are met including transfer of title. Revenue from coal processing and loading are recognized when services have been performed according to the contract in place. Our coal sales generally include 10 to 30-day payment terms following the transfer of control of the goods to the customer. We typically do not include extended payment terms in our contracts with customers. Our contracts with customers typically provide for minimum specifications or qualities of the coal we deliver. Variances from these specifications or quantities are settled by means of price adjustments. Generally, these price adjustments are settled within 30 days of delivery and are insignificant.
| 17 |
| Table of Contents |
Income Taxes: We file a consolidated federal income tax return with our subsidiaries. The provision for income taxes is computed by applying statutory rates to income before taxes.
Income Taxes include U.S. federal and state income taxes currently payable and deferred income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period of enactment. Deferred income tax expense represents the change during the year in the deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized.
Management believes that the Company's income tax filing positions will be sustained on audit or any potential audit adjustments would be offset by the utilization of the Company’s unrecognized net operating loss carryforwards. Therefore, no reserve for uncertain income tax positions has been recorded. The Company's policy for recording interest and penalties, if any, associated with income tax examinations will be to record such items as a component of income taxes.
Fair Value: The Company follows the provisions of Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.
Note 3 presents the Company’s financial assets or liabilities measured at fair value as of March 31, 2025 and December 31, 2024. The carrying amounts of the Company’s cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value at March 31, 2025 and December 31, 2024 due to their short-term nature.
Leases: The Company reviews all arrangements for potential leases, and at inception, determines whether a lease is an operating or finance lease. Lease assets and liabilities, which generally represent the present value of future minimum lease payments over the term of the lease, are recognized as of the commencement date. Leases with an initial lease term of twelve months or less are classified as short-term leases and are not recognized in the balance sheets unless the lease contains a purchase option that is reasonably certain to be exercised.
Lease terms, discount rate, variable lease costs and future minimum lease payment determinations require the use of judgment and are based on the facts and circumstances related to the specific lease. Lease terms are generally based on their initial non-cancelable terms, unless there is a renewal option that is reasonably certain to be exercised. Various factors, including economic incentives, intent, past history and business needs are considered to determine if a renewal option is reasonably certain to be exercised. The implicit rate in a lease agreement is used when it can be determined to value the lease obligation. Otherwise, the Company’s incremental borrowing rate, which is based on information available as of the lease commencement date, including applicable lease terms and the current economic environment, is used to determine the value of the lease obligation.
Allowance For Doubtful Accounts: The Company recognizes an allowance for losses on trade and other accounts receivable in an amount equal to the estimated probable losses net of recoveries. The current expected credit loss model requires the recognition of lifetime expected credit losses at each reporting date, considering past events, current conditions, and reasonable forecasts. In assessing the credit quality of our portfolio, management utilizes a provision matrix that classifies trade receivables by customer type and age of receivable. Government and education sector receivables carry a low risk, while a higher risk is attributed to the remaining receivables as their aging progresses. For receivables with questionable collectability, a specific reserve is assigned. The estimated credit losses are a reflection of these factors, with the matrix applying percentages to the receivables based on their risk profile, adjusted for current and expected future conditions.
The allowance for note receivable was $
| 18 |
| Table of Contents |
Inventory: Inventory consists of mined coal and is stated at the lower of cost (first in, first out method) or net realizable value.
Stock-based Compensation: Stock-based compensation to employees is accounted for under ASC 718, Compensation-Stock Compensation. Stock-based compensation expense related to stock awards granted to an employee is recognized based on the grant-date estimated fair values of the awards using the Black Scholes option pricing model (“Black Scholes”). The value is recognized as expense ratably over the requisite service period, which is generally the vesting term of the award. We adjust the expense for actual forfeitures as they occur. Stock-based compensation expense is classified in the accompanying consolidated statements of operations based on the function to which the related services are provided.
Black-Scholes requires a number of assumptions, of which the most significant are expected volatility, expected option term (the time from the grant date until the options are exercised or expire) and risk-free rate. Expected volatility is determined using the historical volatility for the Company. The risk-free interest rate is based on the yield of US treasury government bonds with a remaining term equal to the expected life of the option. Expected dividend yield is zero because we have never paid cash dividends on common shares, and we do not expect to pay any cash dividends in the foreseeable future.
Earnings Per Share: The Company’s basic earnings per share (EPS) amounts have been computed based on the average number of shares of common stock outstanding for the period and include the effect of any participating securities as appropriate. Diluted EPS includes the effect of the Company’s outstanding stock options, restricted stock awards, restricted stock units and performance-based stock awards if the inclusion of these items is dilutive.
Segment Information: The Company’s operations include corporate and three operating segments. The Company’s Chief Executive Officer, as its chief operating decision maker (“CODM”), manages and allocates resources to the operations of the Company on a consolidated basis. The CODM assesses performance and allocates resources based on the Company’s consolidated statements of operations and key components and processes of the Company’s operations are managed centrally. Segment asset information is not used by the CODM to allocate resources. This enables our Chief Executive Officer to assess our overall level of available resources and determine how best to deploy these resources across projects to monitor and evaluate overall company performance, allocating resources, and establishing management compensation in line with our long-term company-wide strategic goals.
New Accounting Pronouncements: Management has determined that the impact of the following recent FASB pronouncements will not have a material impact on the financial statements.
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the statement of operations where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on the Company’s financial statement disclosures.
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07 - Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures, which enables investors to better understand an entity's overall performance and assess potential future cash flows through improved reportable segment disclosure requirements. The amendments enhance disclosures about significant segment expenses, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. ASU 2023-07 is effective for annual periods beginning after December 15, 2023. The Company adopted ASU No. 2023-07 on December 31, 2024. The adoption of the standard did not result in any significant disclosure changes in the Notes to the Consolidated Financial Statements.
No other new accounting pronouncements recently adopted or issued had or are expected to have a material impact on the consolidated financial statements.
NOTE 2 - PROPERTY AND EQUIPMENT
As of March 31, 2025 and December 31, 2024, property and equipment were comprised of the following:
|
| March 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
Surface |
| $ |
|
| $ |
| ||
Underground |
|
|
|
|
|
| ||
Processing/Loadout |
|
|
|
|
|
| ||
Coal Refuse Storage |
|
|
|
|
|
| ||
Building |
|
|
|
|
|
| ||
Land |
|
|
|
|
|
| ||
Acquired Mining Rights |
|
|
|
|
|
| ||
Rare Earth Processing |
|
|
|
|
|
| ||
Construction in Progress |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Less accumulated depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
Property and equipment, net |
|
|
|
|
|
| ||
| 19 |
| Table of Contents |
Depreciation expense amounted to $
The estimated useful lives are as follows:
Surface equipment |
|
|
| |
Underground Equipment |
|
|
| |
Processing and rail facilities |
|
|
| |
Acquired mining rights |
|
|
| |
Building |
|
|
| |
Acquired mining rights |
|
|
| |
Rare earth processing equipment |
|
|
|
NOTE 3 – INVESTMENTS IN TRADING SECURITIES
Investments (all level 1 fair value measurements) in trading securities consist of U.S. government and agency securities and fixed income funds that are by the Company or held in trusts related to the Company’s tax-exempt bonds. These investments held by a trust related to the Company’s tax-exempt bonds are classified as restricted investments on the accompanying balance sheets. All other securities are classified as short-term investments on the accompanying balance sheet. The short-term investment securities are classified as trading securities and, accordingly, the unrealized gains and losses are recorded in current period earnings or loss.
The Company’s investments in securities consisting of fixed income funds are as follows:
|
|
|
| Gross Unrealized |
|
| Allowance for |
|
| Fair |
| |||||||||
|
| Cost Basis |
|
| Gains |
|
| Losses |
|
| Credit Losses |
|
| Value |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
March 31, 2025 |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
December 31, 2024 |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
| ||||
The fair value of investments held as of March 31, 2025 consist of approximately $
The debt securities outstanding as of March 31, 2025 have a maturity date of May 31, 2038.
| 20 |
| Table of Contents |
NOTE 4 – RIGHT OF USE ASSETS AND LEASES
The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use assets (“ROU”), operating lease liabilities, and operating lease liabilities, non-current. Finance leases are included in right-of-use assets, finance lease liabilities, and finance lease liabilities, non-current. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As substantially all of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments. Incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets also include any prepaid lease payments made and initial direct costs incurred and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease, which is recognized when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
Operating leases:
ARC’s principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038. We pay $
ReElement leases office space at 1716 E Pleasant Street, Noblesville, Indiana 46060 with a current monthly rent payment of $
As of March 31, 2025, $
Operating leases – related party:
KCC, a subsidiary of AIC, rents office space from LRR at 11000 Highway 7 South, Kite, Kentucky 41828 with monthly rent of $
Electrified Materials Corporation leases office space at 1845 Highway 15 South, Hazard, Kentucky 41701 from LRR with a current monthly rent payment of $
Electrified Materials Corporation leases outdoor storage space from LRR in Noblesville, Indiana at a monthly rent rate of $
Electrified Materials Corporation leases commercial production, office and outdoor storage space at 3 from LRR at 611 South Adams Street, Marion, Indiana at a current monthly rate of $
The Company has not made any payments on the related party operating leases as of March 31, 2025, and has a balance of $
Finance lease – related party
ReElement leases approximately 316,000 square feet of commercial space from LRR, a related party, for its processing facility at 3301 South Adams Street, Marion, Indiana. The current monthly rent payment is $
The Company has not made any payments on the related party finance lease as of March 31, 2025, and has a balance of $
The components of lease expense included on the Company’s statements of operations, inclusive of the related party component were as follows:
| 21 |
| Table of Contents |
The components of lease expense included on the Company’s statements of operations, inclusive of the related party component were as follows:
|
|
|
|
| For the Three Months Ended |
| |||||
|
|
|
|
| March 31, |
| |||||
|
|
| Expense Classification |
| 2025 |
|
| 2024 |
| ||
Operating lease expense: |
|
|
|
|
|
|
|
|
| ||
Total Operating lease expense |
|
| General and administrative |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease expense: |
|
|
|
|
|
|
|
|
|
|
|
Amortization of ROU asset |
|
| General and administrative |
| $ |
|
| $ |
| ||
Interest on lease liabilities |
|
| Interest expense |
|
|
|
|
|
| ||
Total finance lease expense |
|
|
|
| $ |
|
| $ |
| ||
Other information related to leases is as follows:
|
| As of March 31, |
|
| As of December31, |
| ||
Operating leases: |
| 2025 |
|
| 2024 |
| ||
Weighted-average remaining lease term: |
|
|
|
|
|
| ||
Operating leases (in years) |
|
|
|
|
|
| ||
Weighted-average discount rate: |
|
|
|
|
|
|
|
|
Operating leases |
|
| % |
|
| % | ||
Finance lease: |
|
|
|
|
|
|
|
|
Finance lease (in years) |
|
|
|
|
|
| ||
Weighted-average discount rate: |
|
|
|
|
|
|
|
|
Finance lease |
|
| % |
|
| % | ||
| 22 |
| Table of Contents |
The future minimum lease payments required under leases as of March 31, 2025 were as follows:
|
| Operating |
|
| Finance |
|
|
|
| |||
Fiscal Year |
| Leases |
|
| Leases |
|
| Total |
| |||
2025 |
| $ |
|
| $ |
|
| $ |
| |||
2026 |
|
|
|
|
|
|
|
|
| |||
2027 |
|
|
|
|
|
|
|
|
| |||
2028 |
|
|
|
|
|
|
|
|
| |||
2029 |
|
|
|
|
|
|
|
|
| |||
Thereafter |
|
|
|
|
|
|
|
|
| |||
Discounted cash flows |
|
|
|
|
|
|
|
|
| |||
Less imputed interest |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Present value of lease liabilities |
| $ |
|
| $ |
|
| $ |
| |||
NOTE 5 - RELATED PARTY TRANSACTIONS
Effective January 1, 2022, the Company amended a Contract Services Agreement with Land Betterment Corp, an entity controlled by certain members of the Company’s management who are also directors and shareholders.
On June 11, 2020 the Company purchased $
On October 24, 2016, the Company sold certain mineral and land interests to a subsidiary of an entity, Land Resources & Royalties, LLC (“LRR”), owned by members of the Company’s management. LRR leases various parcels of land to AIC and engages in other activities creating miscellaneous income. The consideration for the transaction was a note in the amount of $
The Company was the sponsor of American Opportunity Ventures LLC (“AMAO”) a blank check company organized on January 20, 2021 and effectuated its business combination with Royalty Management Corporation (“RMCO”) on October 23, 2023 and at that point changed its name to Royalty Management Holding Corporation. The Company provided AMAO with money as needed for working capital needs. The advances from the Company are non-interest bearing and payable upon demand by the Company. No cash advances were made as of March 31, 2025 and December 31, 2024. As of March 31, 2025 and December 31, 2024, the Company had a balance of $
On January 13, 2023, ReElement Technologies Corporation (“RLMT”), a subsidiary of the Company, entered into a Line of Credit Agreement with LRR in the amount of $
As further described in Note 4, RLMT is the
On January 22, 2025 and March 4, 2025 the Company entered into an agreement to settle outstanding accounts payable to Land Betterment Corp. of $
On February 28, 2025, the Company entered into an agreement to settle outstanding accounts payable to LRR of $
| 23 |
| Table of Contents |
NOTE 6 - INVESTMENTS IN OTHER ENTITIES - RELATED PARTIES
The Company accounts for its investments and membership interest in other entities under the equity method of accounting if the Company has the ability to exercise significant influence, but not control, over the entity. Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable.
Royalty Management Co.
During January 2021, the company invested $
Novusterra, Inc.
On March 31, 2021, the Company entered into a Graphene Development Agreement with Novusterra, Inc (Novusterra), a related party, that provided a nonexclusive sublicense for fifty percent (
On August 30, 2022, we entered into a purchase agreement to sell the exclusive rights of the patent patents included in the Graphene Development Agreement for
It has been determined that Novusterra is a variable interest entity and that the Company is not the primary beneficiary. As such, the investment in Novusterra has been accounted for using the equity method of accounting.
Effective March 6, 2024, the Company issued a special dividend to all stockholders on record of
As of March 31, 2025 and December 31, 2024, the carrying value of the investment was $
FUB Mineral LLC
On October 1, 2021, the Company contributed $
Advanced Magnet Lab, Inc
On December 21, 2022 the Company issued a convertible promissory note to Advanced Magnet, Inc. (“AML”) for $
| 24 |
| Table of Contents |
NOTE 7 – DEBT
Current portion of long-term debt
On September 25, 2017, the Company entered into an equipment purchase agreement, which carries
On June 3, 2022, the Company entered into a promissory note agreement (“June 2022 Note”) with an unrelated party in the amount of $
On April 7, 2023, the Company entered into a promissory note agreement (“April 2023 Note”) with an unrelated party in the amount of $
|
|
|
| March 31, 2025 |
|
| December 31, 2024 |
| ||||||||||||||||||
|
| Maturity Date |
| Total Outstanding* |
|
| Principal |
|
| Interest |
|
| Total Outstanding* |
|
| Principal |
|
| Interest |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
September 2017 Note |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| |||||||
June 2022 Note |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
April 2023 Note |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
** - Total Outstanding = Principal + Interest as of March 31, 2025 and December 31, 2024
| 25 |
| Table of Contents |
Bonds payable, net
On May 31, 2023, the West Virginia Economic Development Authority (the “Issuer”) issued $
The Tax-Exempt Bonds bear interest of
The Tax Exempt Bonds are subject to redemption
The Company’s obligations under the Loan Agreement are (i) except as otherwise described below, secured by first priority liens on and security interests in substantially all of the Company’s and Subsidiary Guarantors’ real property and other assets, subject to certain customary exceptions and permitted liens, and in any event excluding accounts receivable and inventory; and (ii) jointly and severally guaranteed by the Subsidiary Guarantors, subject to customary exceptions.
The Loan Agreement contains certain affirmative covenants and representations, including but not limited to: (i) maintenance of a rating on the Tax Exempt Bonds; (ii) maintenance of proper books of records and accounts; (iii) agreement to add additional guarantors to guarantee the obligations under the Loan Agreement in certain circumstances; (iv) procurement of customary insurance; and (v) preservation of legal existence and certain rights, franchises, licenses and permits. The Loan Agreement also contains certain customary negative covenants, which, among other things, and subject to certain exceptions, include restrictions on (i) release of collateral securing the Company’s obligations under the Loan Agreement; (ii) mergers and consolidations and disposition of assets, and (iii) restrictions on actions that may jeopardize the tax-exempt status of the Tax-Exempt Bonds.
The Loan Agreement contains customary events of default, subject to customary thresholds and exceptions, including, among other things: (i) nonpayment of principal, purchase price, interest and other fees (subject to certain cure periods); (ii) bankruptcy or insolvency proceedings relating to us; (iii) material inaccuracy of a representation or warranty at the time made; and (v) cross defaults to the Indenture of Trust, the guaranty related to the Tax Exempt Bonds or any related security documents.
As of March 31, 2025 and December 31, 2024, the Company was not in compliance with certain provisions of the bond agreement. The failure to comply with these provisions constituted an event of default under the terms of the bond agreement. Accordingly, the bonds have been classified as a current liability on the balance sheets.
On March 28, 2024, the Company, closed a Bond Purchase Agreement (“Purchase Agreement”) with Hilltop Securities Inc. (the “Underwriter”), Knott County, Kentucky (the “Issuer”), a county and political subdivision organized and existing under the laws of the Commonwealth of Kentucky (the “Commonwealth”), whereby the Underwriter agrees to purchase from the Issuer, and the Issuer agrees to sell and deliver to the Underwriter, all (but not less than all) of the Knott County, Kentucky Industrial Building Revenue Bonds (Solid Waste Project), Series 2024 (the “Bonds”), at the purchase price of $
The Tax-Exempt Bonds bear interest of
| 26 |
| Table of Contents |
The Company accounts for investment income and interest expenses related to the tax-exempt bonds that are restricted for payment of project costs by capitalizing the net amount each period related to qualifying expenditures to construction in progress per ASC 835-20-30-11.
The outstanding net balance on the bonds was $
|
| March 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
Tax Exempt Bonds ($45 million face value) |
| $ |
|
| $ |
| ||
Tax Exempt Bonds ($150 million face value) |
|
|
|
|
|
| ||
Debt issuance costs and debt discount |
|
| ( | ) |
|
| ( | ) |
Bonds payable |
|
|
|
|
|
| ||
Less: current portion |
|
|
|
|
|
| ||
Bonds payable, net |
| $ |
|
| $ |
| ||
Convertible Promissory Notes
From October 2024 to March 2025, ReElement issued eleven convertible promissory notes (the “Notes B-K”) to unaffiliated investors with an aggregate principal amount of $
As of March 31, 2025 and December 31, 2024, Note B-K had an outstanding principal balance of $
The following tables reflects a summary of the outstanding principal and accrued interest by each lender and their respective maturity date as of March 31, 2025 and December 31, 2024:
|
|
| March 31, 2025 |
|
| December 31, 2024 |
| |||||||||||||||||||
|
| Maturity Date |
| Total Outstanding* |
|
| Principal |
|
| Interest |
|
| Total Outstanding* |
|
| Principal |
|
| Interest |
| ||||||
Note B |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note C |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note D |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note E |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note F |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note G |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note H |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note H |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note J |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Note K |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
** - Total Outstanding = Principal + Interest as of March 31, 2025 and December 31, 2024
Convertible Promissory Notes – Related party
In 2023, ReElement Technologies LLC (“ReElement”) entered into multiple Convertible Promissory Note agreements (“Note A”) with Land Resources & Royalties LLC (“LRR”) in the aggregate principal amount of $
In 2024, ReElement entered into additional Convertible Promissory Notes with LRR (“Note A”) in the aggregate amount of $
The Convertible Promissory Notes carry an annual interest rate of
The Promissory Note’s principal amount, along with any accrued interest, is due in full upon the Note’s maturity date or in the event of default.
The Convertible Promissory Notes entered into with LRR are subject to a conversion feature. If ReElements completes a round or series of a capital raise in the aggregate amount of a minimum of $
As of March 31, 2025 and December 31, 2024, Note A had an outstanding principal balance of $
| 27 |
| Table of Contents |
The following tables reflects a summary of the outstanding principal and accrued interest by each lender and their respective maturity date as of March 31, 2025 and December 31, 2024:
|
|
|
|
| March 31, 2025 |
|
| December 31, 2024 |
| |||||||||||||||||||||
Loan Holder |
| Loan Number |
|
| Maturity Date |
| Total Outstanding* |
|
| Principal |
|
| Interest |
|
| Total Outstanding* |
|
| Principal |
|
| Interest |
| |||||||
Land Resources & Royalties LLC |
| RET001 |
| Note A |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||
Land Resources & Royalties LLC |
| RET002 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET003 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET004 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET005 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET006 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET007 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET008 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET009 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Land Resources & Royalties LLC |
| RET010 |
| Note A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
** - Total Outstanding = Principal + Interest as of March 31, 2025 and December 31, 2024
| 28 |
| Table of Contents |
NOTE 8 – STOCKHOLDERS’ EQUITY
Common Stock Option Transactions
A 2016 Stock Incentive Plan (2016 Plan) was approved by the Board during January 2016. The Company may grant up to
A new 2018 Stock Option Plan (2018 Plan) was approved by the Board on July 1, 2018 and amended on July 16, 2020. The Company may grant up to
Total stock-based compensation expense for grants to officers, employees and consultants was $
During the quarter ended March 31, 2025, the Company settled accounts payables and accrued expenses totaling $
As of March 31, 2025, the company has $
|
|
|
|
| Weighted |
|
| Weighted Average |
|
| Aggregate |
| ||||
|
| Number of Options |
|
| Average Exercise Price |
|
| Contractual Life in Years |
|
| Intrinsic Value |
| ||||
Outstanding - December 31, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Granted |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Outstanding - March 31, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Exercisable (Vested) - March 31, 2024 |
|
|
|
| $ |
|
|
|
|
|
|
|
| |||
|
|
|
| Weighted |
|
| Weighted Average |
|
| Aggregate |
| |||||
|
| Number of Options |
|
| Average Exercise Price |
|
| Contractual Life in Years |
|
| Intrinsic Value |
| ||||
Outstanding - December 31, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Forfeited or Expired |
|
| ( | ) |
| $ |
|
|
| - |
|
| $ |
| ||
Exercised |
|
| ( | ) |
| $ |
|
|
| - |
|
| $ |
| ||
Outstanding - March 31, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Exercisable (Vested) - March 31, 2025 |
|
|
|
| $ |
|
|
|
|
|
|
|
| |||
| 29 |
| Table of Contents |
NOTE 9 – CONTINGENCIES AND COMMITMENTS
In the course of normal operations, the Company is involved in various claims and litigation matters that management intends to defend. The range of loss, if any, from all potential claims cannot be reasonably estimated. However, management believes the ultimate resolution of matters not disclosed below will not have a material adverse impact on the Company’s business or financial position.
American Infrastructure Legal Proceedings
The Kentucky Energy Cabinet, the Kentucky Department for Natural Resources and the Kentucky Division of Mine Reclamation and Enforcement have assessed claims totaling $
In November of 2023 a court entered into an order granting summary judgment against AIC in connection with a lease dispute in which the plaintiff alleges that the defendants failed to diligently mine coal in accordance with the terms of the lease and did not pay minimum royalties owed under the agreement. A final judgment was entered into during 2024 against the defendant, who is currently appealing the decision and pursuing post-judgment collection efforts. The case is being appealed and $
In 2023, Dean was given a judgement due to a lease dispute, in which the plaintiff alleges trespass, conversion, and civil conspiracy against the defendants. A judgment has been entered against Dean, and management is currently appealing the decision. Management has accrued $
The Company also has a number of unpaid legal judgments for amounts that plaintiffs claim are due for services or goods provided to the Company that are accrued and total approximately $
NOTE 10 – SEGMENT INFORMATION
In its operation of the business, management, including our chief operating decision maker, who is also our CEO, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with GAAP.
For all of the segments, the CODM uses segment operating income (loss) in the annual budgeting and forecasting process. The CODM considers budget-to-actual variances on a monthly basis for both profit measures when making decisions about allocating capital and personnel to the segments. The CODM also uses segment operating income to assess the performance for each segment by comparing the results and return on assets of each segment with one another.
During the periods presented, we reported our financial performance based on the following segments: Corporate, American Infrastructure (AIC), ReElements (RLMT) and Electrified Materials Corporation (EMC).
Our reportable segments are described below.
Corporate - Costs are incurred at a corporate level and allocated to our segments. These allocated costs generally include corporate overhead and administrative support costs incurred as a part of a corporate program. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated and is generally based on relative gross margin or relative headcount.
| 30 |
| Table of Contents |
AIC - Operations primarily focused on the extraction, processing, transportation, and distribution of coal for a variety of industries, with a primary focus on metallurgical quality coal to the steel industry.
RLMT - provider of final-stage, separated and purified rare earth and critical elements to the electrification industry supply chain. Our products, separated and purified rare earth and critical elements, are used to manufacture permanent magnets and battery materials for high efficiency electric motors and lithium-ion batteries.
EMC - Aggregator and processor of used metals for recycling into new steel-based products for the recovery and sale of recovered metal and steel. From inception to date the majority of company activities and revenue have been focused on the aggregation and sales of scrap steel materials. The company has yet to commence meaningful operations in battery, magnet and advanced materials recycling.
The accounting policies of our reportable segments are the same as those described in the “Summary of Significant Accounting Policies” for the Company.
Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized, and costs incurred by one segment may benefit other segments. Revenue from contracts with customers is recognized in the segment to which the underlying products or services relate. The Company does not allocate revenue among segments; rather, revenue is recorded directly in the segment that is responsible for fulfilling the related performance obligations. Accordingly, revenue is recognized where it is earned based on the nature of the products or services provided by each segment and in accordance with the terms of the customer contracts. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit and are generally allocated based on relative gross margin.
The table below presents information about reported segments for the three months ending:
March 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
($ in thousands) |
| Corporate |
|
| AIC |
|
| RLMT |
|
| EMC |
|
| Consolidated |
| |||||
Revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Gross margin |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Operating income (loss) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
($ in thousands) |
| Corporate |
|
| AIC |
|
| RLMT |
|
| EMC |
|
| Consolidated |
| |||||
Revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Gross margin |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Operating income (loss) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| 31 |
| Table of Contents |
A reconciliation of total segment revenues to total consolidated revenues and of total segment gross margin and segment operating income (loss) to total consolidated income (loss) before income taxes, for the three months ended March 31, 2025 and 2024, is as follows:
|
| For the Three Months Ended March 31, 2025 |
| |||||||||||||||||
|
| Corporate |
|
| AIC |
|
| RLMT |
|
| EMC |
|
| Consolidated |
| |||||
Total revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Cost of revenues |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Gross Margin |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||
Depreciation |
|
|
|
|
| (512,332 | ) |
|
|
|
|
|
|
|
| ( | ) | |||
Amortization of mining rights |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||
General and administrative |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Professional fees |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Litigation expense |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
| (59,178 | ) | |||
Production taxes and royalties |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
Development |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Gain on sale of equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment operating loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items to net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (1,672,606 | ) |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | ( | ) |
| 32 |
| Table of Contents |
|
| For the Three Months Ended March 31, 2024 |
| |||||||||||||||||
|
| Corporate |
|
| AIC |
|
| RLMT |
|
| EMC |
|
| Consolidated |
| |||||
Total revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Cost of revenues |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Gross Margin |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Operating expenses (income) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||
Depreciation |
|
|
|
|
|
|
|
| (550,640 | ) |
|
|
|
|
| (550,640 | ) | |||
Amortization of mining rights |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
General and administrative |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Professional fees |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Litigation expense |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
| ( | ) | |||
Production taxes and royalties |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Development |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Gain on sale of equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment operating loss |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items to net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (290,938 | ) |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | ( | ) |
Long-lived assets, classified by the segment were as follows:
|
| March 31, |
|
| December 31, |
| ||
($ in thousands) |
| 2025 |
|
| 2024 |
| ||
Corporate |
| $ |
|
| $ |
| ||
American Carbon |
|
|
|
|
|
| ||
ReElements |
|
|
|
|
|
| ||
American Metals |
|
|
|
|
|
| ||
Consolidated |
| $ |
|
| $ |
| ||
| 33 |
| Table of Contents |
NOTE 11 - SUBSEQUENT EVENTS
Bond Refinancing
On April 1, 2025, Kentucky Lithium LLC closed a remarketing of the outstanding $
Equipment Financing and Lease Transactions
On April 1, 2025, ReElement Technologies entered into an equipment financing transaction for rare earth and critical element processing equipment. The net benefit to the company was $
On May 1, 2025, American Resources entered into a refinancing arrangement with existing equipment financing obligations. The net benefit to the company was $
Debt and Financing Activities
On April 18, 2025, $
During April 2025, $
In September 2025, ReElement Technologies entered into a commitment for an equipment leasing facility with Maxus Capital Group, LLC, providing up to $
Equity Transactions
During the quarter ended June 30, 2025, the Company issued
On October 13, 2025, the Company entered into securities purchase agreements with certain investors for the private placement of On October 15, 2025, the Company entered into securities purchase agreements with certain investors pursuant to which it agreed to issue and sell, in a private placement offering, an aggregate of |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Form 10-Q/A and other reports filed by Registrant from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, Registrant’s management as well as estimates and assumptions made by Registrant’s management. When used in the filings the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions as they relate to Registrant or Registrant’s management identify forward looking statements. Such statements reflect the current view of Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors relating to Registrant’s industry, Registrant’s operations and results of operations and any businesses that may be acquired by Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in the forward-looking statements are reasonable, Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results.
Overview
When we formed our company, our focus was to (i) construct and/or purchase and manage a chain of combined gasoline, diesel and natural gas (NG) fueling and service stations (initially, in the Miami, FL area); (ii) construct conversion factories to convert NG to liquefied natural gas (LNG) and compressed natural gas (CNG); and (iii) construct conversion factories to retrofit vehicles currently using gasoline or diesel fuel to also run on NG in the United States and also to build a convenience store to serve our customers in each of our locations.
On January 5, 2017, American Resources Corporation (ARC) executed a Share Exchange Agreement between the Company and Quest Energy Inc. (“Quest Energy”), a private company incorporated in the State of Indiana on May 2015 with offices at 12115 Visionary Way, Fishers, IN 46038, and due to the fulfillment of various conditions precedent to closing of the transaction, the control of the Company was transferred to the Quest Energy shareholders on February 7, 2017. This transaction resulted in Quest Energy becoming a wholly-owned subsidiary of ARC. Through Quest Energy, ARC was able to acquire coal mining and coal processing operations, substantially all located in eastern Kentucky and western West Virginia. On November 25, 2020, Quest Energy changed its name to American Carbon Corp. On December 27, 2024, American Carbon changed its name to American Infrastructure Corporation (American Infrastructure Corporation).
American Infrastructure Corporation currently has six coal mining and processing operating subsidiaries: McCoy Elkhorn Coal LLC (doing business as McCoy Elkhorn Coal Company) (McCoy Elkhorn), Knott County Coal LLC (Knott County Coal), Deane Mining, LLC (Deane Mining), Wyoming County Coal LLC (Wyoming County), Perry County Resources (Perry County) located in eastern Kentucky and western West Virginia within the Central Appalachian coal basin, and ERC Mining Indiana Corporation (ERC) located in southwest Indiana within the Illinois coal basin. The coal deposits under control by the Company are generally comprise of metallurgical coal (used for steel making), pulverized coal injections (used in the steel making process) and high-BTU, low sulfur, low moisture bituminous coal used for a variety of uses within several industries, including industrial customers and specialty products.
Efforts to diversify revenue streams have led to the establishment of additional subsidiaries; Electrified Materials Corporation (EMC) which is focused on the aggregation, recovery and sale of recovered metal and steel and American Rare Earth LLC (ARE) which is focused on the purification and monetization of critical and rare earth element deposits and end of life magnets and batteries. During 2024, American Rare Earth LLC changed its name to ReElement Technologies LLC (ReElement). During 2024, ReElement filed and changed from a limited liability company to a corporation. During 2025, the Company gave up majority stake in American Infrastructure, ReElements, and Electrified Materials. The Company maintained contractual and financial interests in each of these entities that provide it with the power to direct key activities and accordingly these entities continue to be consolidated as variable interest entities.
We have not classified, and as a result, do not have any “proven” or “probable” reserves as defined in United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, our company and its business activities are deemed to be in the exploration stage until mineral reserves are defined on our properties.
Since mid-2019, we have not mined or sold coal which is sold into the thermal coal markets. Due to adverse market conditions all mining operations are currently idled. Should mining operations commence, all production and future investment will be for the mining of metallurgical coal. The following table is presented for historical purposes.
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McCoy Elkhorn Coal LLC
General:
Located primarily within Pike County, Kentucky, McCoy Elkhorn is currently comprised of three mines in “idle” status (Mine #15 and the Carnegie 1 and Carnegie 2 Mines), two coal preparation facilities (Bevins #1 and Bevins #2), and other mines and permits in various stages of development or reclamation. The address for the Bevins #1 and #2 preparation facilities is 2069 Highway 194 E Meta, KY 41501.
When operating, McCoy Elkhorn has historically sold its coal to a variety of customers, both domestically and internationally, primarily to the steel making industry as a high-vol “B” coal or blended coal. Due to adverse market conditions, Mine #15 was in idle status during 2023 and 2024 and the mining operations at Carnegie 1 and 2 were idled during 2023.
Mines:
Mine #15 is an underground mine in the Millard (also known as Glamorgan) coal seam and located near Meta, Kentucky. When operating, coal is mined via room-and-pillar mining methods using continuous miners and belted directly from the stockpile to McCoy Elkhorn’s coal preparation facility. Mine #15 has the estimated capacity to produce up to approximately 40,000 tons per month of coal. The mineral available is leased from various 3rd party mineral holders. Coal mined from the lease requires a payment of greater of $2.50 per ton or 5% of gross sales price.
Within the McCoy Elkhorn subsidiary, Carnegie 1 is deemed material under Items 1304 of Regulation S-K. The Carnegie 1 is an underground mine in the Alma and Upper Alma coal seams and located near Kimper, Kentucky. When operating, coal is mined via room-and-pillar mining methods utilizing a continuous miner with the estimated capacity to produce up to approximately 10,000 tons per month of coal. The coal is stockpiled on-site and trucked approximately 7 miles to McCoy Elkhorn’s preparation facilities. In 2023, Carnegie 1 produced approximately 41,400 tons and sold at an average of $122 per ton. The mineral mined is leased from a 3rd party professional mineral company with lease payments based on the greater of $1.75 per ton or 6% of gross sales price.
Carnegie 2 is also an underground mine in the Alma and Upper Alma coal seams and located near Kimper, Kentucky. When operating, coal is mined via room-and-pillar mining methods utilizing a continuous miner with the estimated capacity to produce up to approximately 10,000 tons per month of coal. The coal is stockpiled on-site and trucked approximately 7 miles to McCoy Elkhorn’s preparation facilities. In 2023, the Carnegie 2 Mine produced approximately 13,000 tons and sold at an average of $157 per ton. The mineral being mined is leased from a 3rd party professional mineral company with lease payments based on the greater of $1.75 per ton or 6% of gross sales price.
Processing & Transportation:
The Bevins #1 Preparation Plant is an 800 ton-per hour coal preparation facility located near Meta, Kentucky, across the road from Mine #15. Bevins #1 has raw coal stockpile storage of approximately 25,000 tons and clean coal stockpile storage of 100,000 tons of coal. The Bevins #1 facility has a fine coal circuit and a stoker circuit that allows for enhance coal recovery and various coal sizing options depending on the needs of the customer.
The Bevins #2 Preparation Plant is on the same permit site as Bevins #1 and is a 500 ton-per-hour processing facility with fine coal recovery and a stoker circuit for coal sizing options. Bevins #2 has raw coal stockpile storage of 25,000 tons of coal and a clean coal stockpile storage of 45,000 tons of coal.
Both Bevins #1 and Bevins #2 have a batch-weight loadout and rail spur for loading coal into trains for rail shipments. The spur has storage for 110 rail cars and is serviced by CSX Transportation and is located on CSX’s Big Sandy, Coal Run Subdivision. Both Bevins #1 and Bevins #2 have coarse refuse and slurry impoundments called Big Groundhog and Lick Branch. While the Big Groundhog impoundment is nearing the end of its useful life, the Lick Branch impoundment has significant operating life and will be able to provide for coarse refuse and slurry storage for the foreseeable future at Bevins #1 and Bevins #2. Coarse refuse from Bevins #1 and Bevins #2 is belted to the impoundments. Both Bevins #1 and Bevins #2 are facilities owned by McCoy Elkhorn, subject to certain restrictions present in the agreement between McCoy Elkhorn and the surface land owner.
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Although currently idle, Bevins #1 and Bevins #2, as well as the rail loadout no work is required beyond routine maintenance to recommence operations. The 2017 purchase price allocated to the McCoy Elkhorn properties was approximately $95,000.
Due to the processing storage capacity at Bevins #1 and Bevins #2 Preparation Plants, McCoy Elkhorn has the capacity to process, store, and load coal for other regional coal producers for agreed to fees.
Additional Permits:
In addition to the above mines, McCoy Elkhorn holds 11 additional coal mining permits that are idled operations or in various stages of reclamation. For the idled coal mining operations, McCoy Elkhorn will determine which coal mines to bring back into production, if any, as the coal market changes, and there are currently no other idled mines within McCoy Elkhorn that are slated to go into production in the foreseeable future. Any idled mines that are brought into production would require significant upfront capital investment, and there is no assurance of the feasibility of any such new operations.
Knott County Coal LLC
General:
Located primarily within Knott County, Kentucky (but with additional idled permits in Leslie County, Perry County, and Breathitt County, Kentucky), Knott County Coal is comprised of one idled mine (the Wayland Surface Mine) and 22 idled mining permits (or permits in reclamation), including the permits associated with the idled Supreme Energy Preparation Plant. The idled mining permits are either in various stages of planning, idle status or reclamation. The idled mines at are primarily underground mines that utilize room-and-pillar mining. Approximate coal deposits owned and leased are 0 tons and 3,207,000 tons, respectively. The current leases contain production royalty payments based on the greater of $1.50 per clean ton or 6% of gross sales price.
Mines:
The Wayland Surface Mine is a surface waste-rock reprocessing mine in a variety of coal seams (primarily the Upper Elkhorn 1 coal seam) located near Wayland, Kentucky. When operating, coal is mined via area mining through the reprocessing of previously processed coal, and the coal is trucked approximately 22 miles to the Mill Creek Preparation Plant at Deane Mining, where it is processed and sold. The mine has an estimated capacity to produce up to approximately 15,000 tons per month of coal and started production in mid-2018 with nominal coal extracted and sold as thermal coal. Since 2022, mining operations have been idle due to the company's focus on the metallurgical and industrial markets and adverse market conditions.
Other potential customers of Knott County Coal include industrial customers, specialty customers and utilities for electricity generation, although no definitive sales have been identified yet.
Processing & Transportation:
The idled Supreme Energy Preparation Plant is a 400 ton-per-hour coal preparation facility with a fine coal circuit located in Kite, Kentucky. The Bates Branch rail loadout associated with the Supreme Energy Preparation Plant is a batch-weigh rail loadout with 220 rail car storage capacity and serviced by CSX Transportation in their Big Sandy rate district. When operating, coarse refuse is trucked to the Kings Branch impoundment, which is approximately one mile from the Supreme Energy facility, and slurry is piped from the Supreme Energy facility to the Kings Branch impoundment.
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The Supreme Energy Preparation Plant is owned by Knott County Coal, subject to certain restrictions present in the agreement between Knott County Coal and the surface landowner, Land Resources & Royalties LLC. During 2024 components of the Supreme Energy Preparation Plant have been transferred as part of the WCC development.
The Company acquired the Supreme Energy Preparation Plants as an idled facility, and since acquisition, no work has been performed at the facility other than minor maintenance. Both the Supreme Energy Preparation Plant and the rail loadout are idled and would require an undetermined amount of work and capital to bring them into operation. The purchase price allocated of the Knott County Coal property was approximately $286,000.
Additional Permits:
In addition to the above mines, Knott County Coal holds 20 additional coal mining permits, idled or in various stages of reclamation. Any idled mines that are brought into production would require significant upfront capital investment and there is no assurance of the feasibility of any such new operations.
Deane Mining LLC
General:
Located within Letcher County and Knott County, Kentucky, Deane Mining is comprised of one idled underground coal mine (the Access Energy Mine), one idled surface mine (Razorblade Surface) and one idled coal preparation facility called Mill Creek Preparation Plant, along with 12 additional idled mining permits (or permits in reclamation). The idled mining permits are either in various stages of development, reclamation or being maintained as idled, pending any changes to the coal market that may warrant re-starting production. The coal controlled at Deane Mining (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Items 1300 through 1305 of Regulation S-K.
Mines:
Access Energy is an underground mine in the Elkhorn 3 coal seam and located in Deane, Kentucky. Access Energy is mined via room-and-pillar mining methods using continuous miners, and the coal is belted directly from the mine to the raw coal stockpile at the Mill Creek Preparation Plant across the road from Access Energy. Access Energy is currently a “company run” mine, whereby the Company manages the workforce at the mine and pays all expenses of the mine. During 2019, the permit related to the Access Energy mine was idled and is not expected to produce again under the Company’s control due to the continued focused on the metallurgical and industrial markets.
Razorblade Surface is a surface mine targeting the Hazard 4 and Hazard 4 Rider coal seams and located in Deane, Kentucky. Deane Mining commenced mining activity at Razorblade Surface during the spring of 2018. Coal produced from Razorblade Surface is trucked approximately one mile to the Mill Creek Preparation Plant. Razorblade Surface is currently run as a contractor model for which the contractor is paid a fixed per-ton fee for the coal produced. During 2019, the permit related to the Access Energy mine was idled and is not expected to produce again under the Company’s control due to the continued focused on the metallurgical and industrial markets.
Processing & Transportation:
The Mill Creek Preparation Plant is an 800 ton-per-hour coal preparation facility located in Deane, Kentucky. The associated Rapid Loader rail loadout is a batch-weight rail loadout with 110 car storage capacity and services by CSX Transportation in their Big Sandy and Elkhorn rate districts. The Mill Creek Preparation Plant is owned by Deane Mining, subject to certain restrictions present in the agreement between Deane Mining and the surface landowner, Land Resources & Royalties LLC. We are currently utilizing less than 10% of the available processing capacity of the Mill Creek Preparation Plant.
Both the Mill Creek Preparation Plant and the rail loadout are operational, and any work required on any of the plant or loadouts would be routine maintenance. The allocated cost of the property at Deane Mining paid by the Company is $1,569,641.
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Additional Permits:
In addition to the above mines and preparation facility, Deane Mining holds 12 additional coal mining permits that are in development, idled or in various stages of reclamation. Any idled mines that are brought into production would require significant upfront capital investment and there is no assurance of the feasibility of any such new operations.
Wyoming County Coal LLC
General:
Located within Wyoming County, West Virginia, Wyoming County Coal (WCC) is comprised of two idled underground mining permits and the three permits associated with the idled Pioneer Preparation Plant, the Hatcher rail loadout, and Simmons Fork Refuse Impoundment. The two idled mining permits are undisturbed underground mines that are anticipated to utilize room-and-pillar mining. Approximate coal deposits owned and leased are 5,668,00 tons and 0 tons, respectively.
Mines:
The mining permits held by Wyoming County Coal are in various stages of planning with no mines currently in production.
Potential customers of Wyoming County Coal would include steel mills in the United States or international marketplace although no definitive sales have been identified yet.
Processing & Transportation:
The idled Pioneer Preparation Plant is a 350 ton-per-hour coal preparation facility located near Oceana, West Virginia. The Hatcher rail loadout associated with the Pioneer Preparation Plant is a rail loadout serviced by Norfolk Southern Corporation. The refuse from the preparation facility is trucked to the Simmons Fork Refuse Impoundment, which is approximately 1.0 mile from the Pioneer Preparation facility. The preparation plant utilizes a belt press technology which eliminates the need for pumping slurry into a slurry pond for storage within an impoundment.
In June 2023, WCC closed on an Industrial Development Bond in the amount of $45,000,000 for the purpose of financing the development of the permits and infrastructure. As of December 31, 2024 and 2023, approximately $32,500,000 and $9,500,000 of the $36,500,000 initial project fund have been expended, respectively. Due to a delay in government approvals and the expansion of rare earth concentrations it is undeterminable as to when meaningful operations will commence and the additional capital expenditures required.
In connection with the Industrial Development Bond financing, the Company is in the process of upgrading and redeveloping the preparation facility to a modern 350 ton per hour preparation facility and upgrading the rail load out facility to a modern batch weight load out system.
The Company acquired the Pioneer Preparation Plant as an idled facility. The purchase price allocated to the Wyoming County Coal property was approximately $22,300,000 of which approximately $22,100,000 was settled with shares of the Company’s Class A Common stock. The remaining portion was satisfied in the form of a convertible note which was converted to Company common stock in December 2020.
Permits:
Wyoming County Coal holds two coal mining permits that are in the development phase including faceup and infrastructure work and three permits associated with the idled Pioneer Preparation Plant, the Hatcher rail loadout, and Simmons Fork Refuse Impoundment.
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Perry County Resources LLC
General:
Located primarily within Perry County, Kentucky, Perry County Resources LLC is comprised of one idled underground mine (the E4-2 mine) and one idled coal processing facility called the Davidson Branch Preparation Plant, along with two additional idled underground mining permits. The E4-2 mine and Davidson Branch Preparation Plan are located at 1845 KY-15 Hazard, KY 41701.
The two idled mining permits are for underground mines and have been actively mined in the past and being maintained as idled, pending any changes to the coal market that may warrant re-starting production. Approximate coal deposits owned and leased are 0 tons and 58,100,000 tons. The current leases contain minimum annual payments of $12,000 and production royalty payments ranging from 6% to 7% of gross sales price.
Mines:
Within the Perry County subsidiary, E4-2 mine is deemed material under Items 1304 of Regulation S-K. The E4-2 mine is an underground mine in the Elkhorn 4 (aka the Amburgy) coal seam located near the town of Hazard, Kentucky. When operating, coal is mined via room-and-pillar mining methods using both continuous miners and continuous haulage systems, and the coal is belted directly from the mine to the raw coal stockpile at the Davidson Branch Preparation Plant less than a mile away. The E4-2 mine has the estimated capacity to produce up to approximately 80,000 tons per month of coal. The mineral available is partially owned by the Company and partially leased from various mineral holders. The lease terms are the greater of $1.50 per ton or 6% of gross sales price.
In 2022, the E4-2 mine produced approximately 106,000 tons and sold the coal at an average price of $153 per ton. During the period of ownership by the Company, 100% of the coal sold was sold as industrial stoker and PCI. Since the end of 2022, the mine has been idle due to adverse market conditions.
Processing and Transportation:
The Davidson Branch Preparation Plant is a 1,300 ton-per-hour coal preparation facility located near Hazard, Kentucky. The associated “Bluegrass 4” rail loadout is a batch-weight rail loadout with 135 car storage capacity and services by CSX Transportation in their Hazard/Elkhorn rate district. The Davidson Branch Preparation Plant is owned by Perry County Resources. With mining operations currently idle, the preparation plan is not currently operating.
Both the Davidson Branch Preparation Plant and the rail loadout have been maintained should operations commence in a future period. The purchase price allocated to Perry County Resources property was approximately $1,551,000.
Additional Permits:
In addition to the above mine, preparation facility, and related permits, Perry County Resources had four additional coal mining permits that are idled or in development stage. Any idled mines that are brought into production would require significant upfront capital investment and there is no assurance of the feasibility of any such new operations. Three of the idled permits were sold to an unrelated entity on March 4, 2020 for $700,000 cash and $300,000 of value for equipment.
The transfer of any new permits to the Company is subject to regulatory approval. This approval is subject to the review of both unabated or uncorrected violations that are listed on the Applicator Violator List. The Company, to include several of its subsidiaries, does have unabated and/or uncorrected violations that are listed on the Applicator Violator List. Should the state regulators believe that the Company is not in the process of abating or correcting the currently outstanding issues associated with their currently held permits they may choose not to issue the Company any new permits until such issues are properly rectified.
ERC Mining Indiana Corporation (the Gold Star Mine)
General:
Located primarily within Greene and Sullivan Counties, Indiana, ERC Mining Indiana Corporation (“ERC”) is currently comprised of one idled underground mine (the Gold Star Mine), one idled coal preparation plant and rail loadout. ERC sold its coal in the past as thermal coal to utilities. The Company does not plan to mine the property and purchased it for monetization of infrastructure assets and to reclaim the property which has been ongoing through 2024. The Company is facilitating the full reclamation and remediation of the former mine site.
Approximate coal deposits owned and leased are 0 tons and 4,383,298 tons, respectively. All of the deposits are in reclamation.
Mines:
The Gold Star Mine is an underground mine in the Indiana IV (aka the Survant) coal seam located near the town of Jasonville, Indiana. Currently idled, the Gold Star Mine has been mined in the past via room-and-pillar mining methods using continuous miners, and the coal is belted directly from the mine to the raw coal stockpile at the preparation plant less than a mile away.
Processing and Transportation:
The idled preparation plant is a 165 ton-per-hour coal preparation facility located near the underground mine portal. The rail loadout associated with the preparation plant is a rail loadout serviced by the Indiana Rail Road. The preparation plant has a coarse refuse and slurry impoundment. There was no purchase price allocated to the Gold Star property.
Permits:
ERC holds one permit that covers the Gold Star Mine, processing plant, rail loadout, and related infrastructure which are in reclamation status.
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Mineral and Surface Leases
Coal mining and processing involves the extraction of coal (mineral) and the use of surface property incidental to such extraction and processing. All of the mineral and surface related to the Company’s coal mining operations is leased from various mineral and surface owners (the “Leases”). The Company’s operating subsidiaries, collectively, are parties to approximately 200 various Leases and other agreements required for the Company’s coal mining and processing operations. The Leases are with a variety of Lessors, from individuals to professional land management firms such as the Roadrunner Land Company. In some instances, the Company has leases with Land Resources & Royalties LLC (LRR), a professional leasing firm that is an entity wholly owned by Wabash Enterprises Inc, an entity owned by members of Quest Energy Inc.’s management.
Coal Sales
ARC sells its coal to domestic and international customers, some which blend ARC’s coal at east coast ports with other qualities of coal for export. The Company may, at times, purchase coal from other regional producers to sell on its contracts.
Competition
The coal industry is intensely competitive. The most important factors on which the Company competes are coal quality, delivered costs to the customer and reliability of supply. Our principal domestic competitors will include Corsa Coal Corporation, Ramaco Resources, Blackhawk Mining, Coronado Coal, Arch Resources, Contura Energy, and Warrior Met Coal. Many of these coal producers may have greater financial resources and larger coal deposit bases than we do. We also compete in international markets directly with domestic companies and with companies that produce coal from one or more foreign countries, such as China, Australia, Colombia, Indonesia and South Africa.
Legal Proceedings
From time to time, we are subject to ordinary routine litigation incidental to our normal business operations.
Please see the financial statement’s contingencies footnote.
Environmental, Governmental, and Other Regulatory Matters
Our operations are subject to federal, state, and local laws and regulations, such as those relating to matters such as permitting and licensing, employee health and safety, reclamation and restoration of mining properties, water discharges, air emissions, plant and wildlife protection, the storage, treatment and disposal of wastes, remediation of contaminants, surface subsidence from underground mining and the effects of mining on surface water and groundwater conditions. In addition, we may become subject to additional costs for benefits for current and retired coal miners. These environmental laws and regulations include, but are not limited to, the Surface Mining Control and Reclamation Act of 1977 (SMCRA) with respect to coal mining activities and ancillary activities; the Clean Air Act (CAA) with respect to air emissions; the Clean Water Act (CWA) with respect to water discharges and the permitting of key operational infrastructure such as impoundments; Resource Conservation and Recovery RCRA with respect to solid and hazardous waste management and disposal, as well as the regulation of underground storage tanks; the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) with respect to releases, threatened releases and remediation of hazardous substances; the Endangered Species Act of 1973 (ESA) with respect to threatened and endangered species; and the National Environmental Policy Act of 1969 (NEPA) with respect to the evaluation of environmental impacts related to any federally issued permit or license. Many of these federal laws have state and local counterparts which also impose requirements and potential liability on our operations.
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Compliance with these laws and regulations may be costly and time-consuming and may delay commencement, continuation or expansion of exploration or production at our facilities. They may also depress demand for our products by imposing more stringent requirements and limits on our customers’ operations. Moreover, these laws are constantly evolving and are becoming increasingly complex and stringent over time. These laws and regulations, particularly new legislative or administrative proposals, or judicial interpretations of existing laws and regulations related to the protection of the environment could result in substantially increased capital, operating and compliance costs. Individually and collectively, these developments could have a material adverse effect on our operations directly and/or indirectly, through our customers’ inability to use our products.
Certain implementing regulations for these environmental laws are undergoing revision or have not yet been promulgated. As a result, we cannot always determine the ultimate impact of complying with existing laws and regulations.
Due in part to these extensive and comprehensive regulatory requirements and ever-changing interpretations of these requirements, violations of these laws can occur from time to time in our industry and also in our operations. Expenditures relating to environmental compliance are a major cost consideration for our operations and safety and compliance is a significant factor in mine design, both to meet regulatory requirements and to minimize long-term environmental liabilities. To the extent that these expenditures, as with all costs, are not ultimately reflected in the prices of our products and services, operating results will be reduced.
In addition, our customers are subject to extensive regulation regarding the environmental impacts associated with the combustion or other use of coal, which may affect demand for our coal. Changes in applicable laws or the adoption of new laws relating to energy production, greenhouse gas emissions and other emissions from use of coal products may cause coal to become a less attractive source of energy, which may adversely affect our mining operations, the cost structure and, the demand for coal.
We believe that our competitors with operations in the United States are confronted by substantially similar conditions. However, foreign producers and operators may not be subject to similar requirements and may not be required to undertake equivalent costs in or be subject to similar limitations on their operations. As a result, the costs and operating restrictions necessary for compliance with United States environmental laws and regulations may have an adverse effect on our competitive position with regard to those foreign competitors. The specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, applicable legislation and its production methods.
Employees
ARC and its operating subsidiaries, employ a combination of company employees and contract labor. The Company is continually evaluating the use of company employees and contract labor to determine the optimal mix of each, given the needs of the Company.
The Company currently has approximately 23 direct employees. The Company is headquartered in Fishers, Indiana with four members of the Company’s executive team based at this location.
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Results of Operations
The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:
|
| For the Three Months Ended |
| |||||||||
|
| March 31, |
| |||||||||
|
| 2025 |
|
| 2024 |
|
| Change |
| |||
Revenue |
|
|
|
|
|
|
|
|
| |||
Coal sales |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Metal recovery and sales |
|
| 1,050 |
|
|
| 29,352 |
|
|
| (28,302 | ) |
Service fee revenue |
|
| 30,305 |
|
|
| - |
|
|
| 30,305 |
|
RareEarth oxide revenue |
|
| 572 |
|
|
| - |
|
|
| 572 |
|
Royalty income |
|
| - |
|
|
| 64,667 |
|
|
| (64,667 | ) |
Total revenue |
|
| 31,927 |
|
|
| 94,019 |
|
|
| (62,092 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (income) |
|
|
|
|
|
|
|
|
|
|
|
|
Coal production and holdings costs |
|
| 181,995 |
|
|
| 976,452 |
|
|
| (794,457 | ) |
Accretion |
|
| 248,291 |
|
|
| 249,016 |
|
|
| (725 | ) |
Depreciation |
|
| 512,332 |
|
|
| 550,640 |
|
|
| (38,308 | ) |
Amortization of mining rights |
|
| 303,918 |
|
|
| 307,294 |
|
|
| (3,376 | ) |
General and administrative |
|
| 3,207,512 |
|
|
| 3,722,671 |
|
|
| (515,159 | ) |
Professional fees |
|
| 172,326 |
|
|
| 946,352 |
|
|
| (774,026 | ) |
Litigation expense |
|
| 59,178 |
|
|
| 59,836 |
|
|
| (658 | ) |
Production taxes and royalties |
|
| 4,305 |
|
|
| 9,555 |
|
|
| (5,250 | ) |
Development |
|
| 325,503 |
|
|
| 402,388 |
|
|
| (76,885 | ) |
Gain on sale of equipment |
|
| - |
|
|
| (400,000 | ) |
|
| 400,000 |
|
Total operating expenses |
|
| 5,015,360 |
|
|
| 6,824,204 |
|
|
| (1,808,844 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from operations |
|
| (4,983,433 | ) |
|
| (6,730,185 | ) |
|
| 1,746,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from equity method investees |
|
| (10,866 | ) |
|
| (214,975 | ) |
|
| 204,109 |
|
Other income and (expense) |
|
| 86,583 |
|
|
| 96,913 |
|
|
| (10,330 | ) |
Interest income |
|
| 4,173 |
|
|
| 489,803 |
|
|
| (485,630 | ) |
Interest expense |
|
| (1,752,496 | ) |
|
| (662,679 | ) |
|
| (1,089,817 | ) |
Total other income (expenses) |
|
| (1,672,606 | ) |
|
| (290,938 | ) |
|
| (1,381,668 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| (6,656,039 | ) |
|
| (7,021,123 | ) |
|
| 365,084 |
|
Less: Non-controlling interest |
|
| 3,276 |
|
|
| 79,760 |
|
|
| (76,484 | ) |
Net loss attributable to AREC shareholders |
| $ | (6,652,763 | ) |
| $ | (6,941,363 | ) |
| $ | 288,600 |
|
Revenue decreased by $62,092 for the three months ended March 31, 2025 compared to 2024. The primary driver of the decrease was a reduction of $64,667 in royalty income for the three months ended March 31, 2025 as compared to 2024.
| 43 |
| Table of Contents |
The following table summarizes the period over period changes in operating expenses (income) for the three months ended March 31, 2025 and 2024:
|
| For the Three Months Ended |
| |||||||||
|
| March 31, |
| |||||||||
|
| 2025 |
|
| 2024 |
|
| Change |
| |||
Operating expenses (income) |
|
|
|
|
|
|
|
|
| |||
Coal production and holdings costs |
| $ | 181,995 |
|
| $ | 976,452 |
|
|
| (794,457 | ) |
Accretion |
|
| 248,291 |
|
|
| 249,016 |
|
|
| (725 | ) |
Depreciation |
|
| 512,332 |
|
|
| 550,640 |
|
|
| (38,308 | ) |
Amortization of mining rights |
|
| 303,918 |
|
|
| 307,294 |
|
|
| (3,376 | ) |
General and administrative |
|
| 3,207,512 |
|
|
| 3,722,671 |
|
|
| (515,159 | ) |
Professional fees |
|
| 172,326 |
|
|
| 946,352 |
|
|
| (774,026 | ) |
Litigation expense |
|
| 59,178 |
|
|
| 59,836 |
|
|
| (658 | ) |
Production taxes and royalties |
|
| 4,305 |
|
|
| 9,555 |
|
|
| (5,250 | ) |
Development |
|
| 325,503 |
|
|
| 402,388 |
|
|
| (76,885 | ) |
Gain on sale of equipment |
|
| - |
|
|
| (400,000 | ) |
|
| 400,000 |
|
Total operating expenses |
| $ | 5,015,360 |
|
| $ | 6,824,204 |
|
|
| (1,808,844 | ) |
Total operating expenses decreased by $1,808,844 for the three months ending March 31, 2025 as compared to 2024. This decrease was primarily driven by lower coal production related costs due to idled mining operations, lower holding costs of $794,457 due to concentrated efforts to lower payroll costs, and professional fees of $774,460 due to the decrease in legal fees.
The following table summarizes the period over period changes in other income (expense) for the three months ended March 31, 2025 and 2024:
|
| For the Three Months Ended |
| |||||||||
|
| March 31, |
| |||||||||
|
| 2025 |
|
| 2024 |
|
| Change |
| |||
Other income (expense) |
|
|
|
|
|
|
|
|
| |||
Earnings from equity method investees |
| $ | (10,866 | ) |
| $ | (214,975 | ) |
|
| 204,109 |
|
Other income and (expense) |
|
| 86,583 |
|
|
| 96,913 |
|
|
| (10,330 | ) |
Interest income |
|
| 4,173 |
|
|
| 489,803 |
|
|
| (485,630 | ) |
Interest expense |
|
| (1,752,496 | ) |
|
| (662,679 | ) |
|
| (1,089,817 | ) |
Total other income (expenses) |
| $ | (1,672,606 | ) |
| $ | (290,938 | ) |
|
| (1,381,668 | ) |
The increase in other income (expense) increased by $1,381,668, compared to the three months ended March 31, 2024. The increase is primarily attributable to the net decrease in interest income of $485,630 and the increase in interest expense of $1,089,817due to the Company receiving additional proceeds from convertible notes and bond fund income driven by the WCC bonds.
| 44 |
| Table of Contents |
Liquidity and Capital Resources
Our primary sources of liquidity are derived from existing unrestricted cash, reimbursements from bond funds and other debt and capital proceeds. With the suspension of our coal production activities beginning in 2023 and the development stage of our new ReElement and Electrified Materials businesses through 2024, our sources of revenue in 2024 were limited. We anticipate our ReElement and Electrified Materials new businesses to achieve increasing revenues in 2025; however, we will continue to require cash flows from financing activities to support operations and the continued development of our new business models.
As of March 31, 2025, the company has a cash balance of $24,623 and a working deficit of $77,339,153. We expect to fund our liquidity requirements over the next 12 months primarily with cash on hand and additional debt and equity financing transactions. If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may be required to rationalize our expenditures or slow down efforts to further develop our new business models. We do not have any credit lines currently available to fund our liquidity requirements. Maintaining future liquidity is subject to significant uncertainties primarily related to the generation of revenues from our new business models at levels that surpass breakeven and the ability to obtain additional debt and equity financing.
Cash Flows
Three Months Ended March 31, 2025 and 2024
|
| Three months ended March 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Consolidated statement of cash flow data: |
|
|
|
|
|
| ||
Cash used in operating activities |
| $ | (1,434,850 | ) |
| $ | (4,750,471 | ) |
Cash used in investing activities |
|
| (151,647,764 | ) |
|
| (143,804,697 | ) |
Cash provided by financing activities |
|
| 76,799 |
|
|
| 148,233,077 |
|
Net change in cash and restricted cash |
| $ | (150,289,713 | ) |
| $ | (322,091 | ) |
The $3,315,621decrease in cash used for operating activities was primarily due to a $365,084 decrease in net loss and a $3,200,491increase in changes in working capital offset by an decrease of $249,955 in non-cash charges.
Cash used in investing activities for the three months ended March 31, 2025 was $151,647,764 compared to $143,804,697 for the three months ended March 31, 2024. The change was primarily due an increase in purchase of property and equipment, net of $1,040,924, restricted investments sold of $151,205,321 and increase from proceeds from short-term investments of $479,458 offset by decrease in restricted investments purchased of $143,126,757 and decrease in sale of equipment of $400,000.
Cash provided by financing activities for the three months ended 2025 was $76,799 compared to $148,233,077 for the three months ended 2024. The change was due to proceeds from tax exempt bonds, net of $149,719,203 that was received in March 31, 2024 and no bonds issued in 2025, repayment of other financing obligation of $1,373,201, offset by proceeds from convertible promissory note of $1,450,000.
| 45 |
| Table of Contents |
Capital Resources
We had no material commitments for capital expenditures as of March 31, 2025.
Off Balance Sheet Arrangements
As of March 31, 2025, we had no off-balance sheet arrangements.
Critical Accounting Policies
The preparation of financial statements requires management to utilize estimates and make judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The estimates are evaluated by management on an ongoing basis, and the results of these evaluations form a basis for making decisions about the carrying value of assets and liabilities that are not readily apparent from other sources. Although actual results may differ from these estimates under different assumptions or conditions, management believes that the estimates used in the preparation of our financial statements are reasonable. The critical accounting policies affecting our financial reporting are summarized in Note 1 to the financial statements included elsewhere in this report.
Recent Accounting Pronouncements
None.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Because we are a smaller reporting company, we are not required to include any disclosure under this item.
| 46 |
| Table of Contents |
Item 4. Controls and Procedures
(a) Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
With respect to the period ending March 31, 2025, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.
Based upon our evaluation regarding the period ending March 31, 2025, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s insufficient number of staff performing accounting and reporting functions and lack of timely reconciliations. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.
The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
(b) Changes in Internal Controls.
There have been no changes in the Company’s internal control over financial reporting during the period ended March 31, 2025 that have materially affected the Company’s internal controls over financial reporting.
| 47 |
| Table of Contents |
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are subject to ordinary routine litigation incidental to our normal business operations.
Please see financial statement note 6 for detail on cases.
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Quarterly Report.
Item 5. Other Information
None.
| 48 |
| Table of Contents |
Item 6. Exhibits
The following exhibits are filed herewith except as otherwise noted:
Exhibit Number |
| Description |
| Location Reference |
| ||||
| Articles of Incorporation of Natural Gas Fueling and Conversion Inc. |
| Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on November 27, 2013. | |
| Amended and Restated Articles of Incorporation of NGFC Equities Inc. |
| Incorporated herein by reference to Exhibit 3.1 to the Company’s 8k filed on February 25, 2015. | |
| Articles of Amendment to Articles of Incorporation of NGFC Equities, Inc. |
| Incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K on February 21, 2017. | |
|
| Incorporated herein by reference to Exhibit 3.4 to the Company’s Form 10-Q, filed with the SEC on February 20, 2018. | ||
|
| Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, filed with the SEC on November 27, 2013. | ||
|
| Incorporated herein by reference to Exhibit 3.2 to the Company’s 8k filed on February 25, 2015. | ||
|
| Filed as Exhibit 99.1 to the Company’s 8k filed on November 13, 2018, incorporated herein by reference. | ||
| Bylaws of American Resources Corporation, as amended and restated |
| Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on November 13, 2018. | |
|
| Incorporated herein by reference to Exhibit 4.1 to the Company’s 8k filed on October 11, 2017. | ||
|
| Incorporated herein by reference to Exhibit 4.2 to the Company’s 8k filed on October 11, 2017. | ||
|
| Incorporated herein by reference to Exhibit 4.3 to the Company’s 8k filed on October 11, 2017. | ||
|
| Incorporated herein by reference to Exhibit 4.4 to the Company’s 8k filed on October 11, 2017. | ||
|
| Incorporated herein by reference to Exhibit 4.5 to the Company’s 8k filed on October 11, 2017. | ||
|
| Incorporated herein by reference to Exhibit 4.6 to the Company’s 8k filed on October 11, 2017. | ||
|
| Incorporated herein by reference to Exhibit 4.7 to the Company’s 8k filed on October 11, 2017. | ||
|
| Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on January 3, 2019. | ||
| Promissory Note for up to $6,500,000 dated December 31, 2018 |
| Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on January 3, 2019. | |
|
| Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on May 15, 2018. | ||
|
| Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on May 15, 2018. | ||
|
| Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on May 15, 2018. | ||
|
| Incorporated herein by reference to Exhibit 99.4 to the Company’s 8k filed on May 15, 2018. | ||
|
| Incorporated herein by reference to Exhibit 99.5 to the Company’s 8k filed on May 15, 2018. | ||
| Sublease Agreement Between Colonial Coal Company, Inc. and McCoy Elkhorn Coal LLC |
| Incorporated herein by reference to Exhibit 99.1 to the Company’s 8k filed on May 1, 2018 | |
|
| Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on May 1, 2018 | ||
| Consolidated and Restated Loan and Security Agreement dated October 4, 2017 |
| Incorporated herein by reference to Exhibit 10.1 to the Company’s 8k filed on October 11, 2017 | |
| Asset Purchase Agreement between Wyoming County Coal LLC and Thomas Shelton dated November 7, 2018 |
| Incorporated herein by reference to Exhibit 10.9 to the Company’s registration statement filed on December 11, 2018. |
| 49 |
| Table of Contents |
Incorporated herein by reference to Exhibit 10.10 to the Company’s registration statement filed on December 11, 2018. | ||||
Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on January 3, 2019. | ||||
Incorporated herein by reference to Exhibit 99.4 to the Company’s 8k filed on January 3, 2019. | ||||
Incorporated herein by reference to Exhibit 10.13 to the Company’s registration statement filed on February 6, 2019. | ||||
Incorporated herein by reference to Exhibit 10.14 to the Company’s registration statement filed on February 6, 2019. | ||||
Incorporated herein by reference to Exhibit 10.15 to the Company’s registration statement filed on February 6, 2019. | ||||
Incorporated herein by reference to Exhibit 10.16 to the Company’s registration statement filed on February 6, 2019. | ||||
Incorporated herein by reference to Exhibit 10.17 to the Company’s registration statement filed on February 6, 2019. | ||||
Incorporated herein by reference to Exhibit 10.18 to the Company’s registration statement filed on February 14, 2019. | ||||
Share Exchange Agreement to replace Merger Agreement with Colonial Coal | Incorporated herein by reference to Exhibit 10.19 to the Company’s registration statement filed on February 14, 2019. | |||
Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on November 13, 2018. | ||||
Incorporated herein by reference to Exhibit 99.3 to the Company’s 8k filed on November 13, 2018. | ||||
Filed Herewith | ||||
Filed Herewith | ||||
Filed Herewith | ||||
Filed Herewith | ||||
Filed Herewith | ||||
Filed Herewith |
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| 50 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMERICAN RESOURCES CORPORATION | ||
| |||
Date: October 24, 2025 | By: | /s/ Mark C. Jensen | |
| Name: | Mark C. Jensen | |
| Title: | CEO, Chairman of the Board | |
| Principal Executive Officer | ||
| 51 |