American Resources Corp: Form 10-K for the period ended Dec 31, 2025

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. 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 (AIC).

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. The Company also looks for opportunities to invest and operate new and innovate technologies within the mineral and infrastructure industry.

On December 25, 2025, it was determined that ARC was no longer the primary beneficiary of AIC and no longer was required to consolidate AIC’s financial reporting.

On December 26, 2025, it was determined that ReElement was no longer a variable interest entity and ARC had no ongoing requirement to consolidate ReElement’s financial reporting.

EMC continues to be fully consolidated and controlled by the Company.

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Competition

The global commodity industry for critical minerals, rare earth element and coal is intensely competitive. When evaluating areas of competition, the most important factors on which the Company competes are mineral quality, delivered costs to the customer and reliability of supply. Principal domestic competitors are MP Materials, Lithium Americas, Ramaco Resources, 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 financial statement Note 11 for detail on cases.

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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 7 direct employees. The Company is headquartered in Fishers, Indiana with four members of the Company’s executive team based at this location.

ARC’s principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038. We pay $9,178 per month in rent for the office space and the lease expires in June 2034. The rent is subject to escalation payments on an annual basis.

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Electrified Materials Corporation leases office space at 1845 Highway 15 South, Hazard, Kentucky 41701 from LRR with a current monthly rent payment of $263. The lease agreement expires in December 2028.

Electrified Materials Corporation leases outdoor storage space from LRR in Noblesville, Indiana at a monthly rent rate of $20,000. The lease expires in December 2028.

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 $20,559. The lease expires in December 2028 and is subject to escalating payments on an annual basis.

From time to time, we are subject to ordinary routine litigation incidental to our normal business operations.

Please see financial statement note 11 for detail on cases.

The management’s discussion, analysis of financial condition, and results of operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this annual report. Prior period amounts have been revised to reflect the correction of errors described in Note 13.

Overview.

Our primary source of revenue through 2025 has been the sale of metallurgical coal and coal used in pulverized coal injection (PCI), critical mineral process technology, purified elements and recycled metals; all of which are essential building blocks in the steel manufacturing process.

The overall outlook of critical minerals, recycled metals, metallurgical coal and rare earths is dependent on a variety of factors such as pricing, regulatory uncertainties and global economic conditions. Coal consumption and production in the U.S. have been driven in recent periods by several market dynamics and trends, such as the global economy, a strong U.S. dollar and accelerating production cuts.

Results of Operations.

Year Ended December 31, 2025 compared to Year Ended December 31, 2024.

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Revenues

The following table summarizes the changes in revenue generating operations:

Revenues for 2025 and 2024 were $0 and $34,070, respectively. The Company did not generate revenues during 2025 as it did not conduct metal recovery or sales activities during the period. The timing and extent of future revenues, if any, will depend on strategic, operational, and market factors, and there can be no assurance that revenue‑generating activities will resume in the near term.

Operating expenses

The following table summarizes the changes in operating expenses:

Total operating expenses decreased by $2.9 million to $11.3 million for the year ended December 31, 2025, compared to $14.3 million in 2024. The decrease was primarily driven by lower general and administrative expenses, professional fees, coal production and holdings costs, and development costs as the Company reduced legacy coal‑related activities and continued to rationalize its cost structure following the strategic shift in operations. The $1.8 million reduction in general and administrative expenses was principally attributable to lower stock‑based compensation and reduced related‑party expenses. Professional fees declined primarily due to decreased transaction‑related and advisory costs compared to the prior year. Development costs decreased as a result of lower contract labor and research and development activity. These decreases were partially offset by litigation expense incurred during 2025 and modest increases in production taxes and royalties.

Other income (expense)

The following table summarizes the changes in other income (expense):

Total other expense increased to $6.5 million for the year ended December 31, 2025, compared to $1.7 million in 2024. The increase was primarily driven by a $5.1 million loss recognized on the extinguishment of debt during 2025. In addition, net equity method losses declined year over year as losses from equity‑method investees decreased compared to the prior year. Interest income increased due to higher average cash balances and investment yields during 2025, while interest expense increased primarily as a result of additional financing obligations entered into during the year. Other income and expense fluctuated modestly and was not a significant contributor to the overall change year over year.

The loss on debt extinguishment and litigation expense recorded during 2025 were non‑recurring in nature and are not expected to be indicative of future results.

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Liquidity and Capital Resources.

Our primary sources of liquidity are derived from existing unrestricted cash, reimbursements from short-term investments and capital proceeds. We anticipate our Electrified Materials new business to achieve increasing revenues in 2026; however, we will continue to require cash flow from financing activities to support operations and the continued development of our new business models.

As of December 31, 2025, the Company had a cash balance of $31,701,916 unrestricted investments totaling $40,470,151 and a positive working capital balance of $73,054,345. The Company expects to fund its liquidity requirements over the next 12 months primarily through cash on hand and additional debt and equity financing transactions. Additionally, through short-term investments such as the fixed income fund. See further discussion around investments in Note 4. 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.

Cash Flows

Year Ended December 31, 2025 compared to Year Ended December 31, 2024

Net cash used in operating activities was $10.4 million for the year ended December 31, 2025, compared to net cash provided of $2.0 million for the year ended December 31, 2024. The increase in cash used during 2025 was primarily attributable to the Company’s net loss, increased operating expenses associated with development and corporate activities following the spin‑off, and changes in working capital, including increased prepaid expenses and inventories, partially offset by non‑cash charges such as stock‑based compensation, depreciation, and amortization. Operating cash flows in 2024 benefited from favorable working capital movements and lower overall operating costs during the period.

Net cash used in investing activities was $39.4 million for the year ended December 31, 2025, compared to net cash provided of $0.9 million for the year ended December 31, 2024. Cash used in investing activities during 2025 was primarily related to capital expenditures for property and equipment and changes in restricted investments associated with the Company’s project development activities. In contrast, investing activities in 2024 primarily reflected net proceeds from investments and lower levels of capital expenditures.

Net cash provided by financing activities was $81.3 million for the year ended December 31, 2025, compared to net cash used of $4.4 million for the year ended December 31, 2024. Financing activities during 2025 were primarily driven by proceeds from equity issuances, warrant exercises, and other financing arrangements, partially offset by repayments of financing obligations. Financing activities in 2024 primarily reflected repayments of debt and other financing obligations, with no comparable equity financings during the period.

Capital Resources

We had no material commitments for capital expenditures as of December 31, 2025.

Off-Balance Sheet Arrangements

As of December 31, 2025, we had no off-balance sheet arrangements.

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Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenues and expenses reported for the period then ended.

Impairment of Long-lived Assets. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These events and circumstances include, but are not limited to, a current expectation that a long-lived asset will be disposed of significantly before the end of its previously estimated useful life, a significant adverse change in the extent or manner in which we use a long-lived asset or a change in its physical condition.

Consolidation/Deconsolidation of Variable Interest Entities and Controlled Companies. We review potential consolidation and deconsolidation of variable interest entities and controlled companies both on a qualitative and quantitative basis at the end of the reporting period. If it is deemed that there are triggering events for a change in treatment the effects, including discontinued operations treatment, is assessed and recorded when the triggering event is deemed to have existed.

Fair Value of Investments. The Company reviews the stated value of its retained investments using the accepted applicable fair value framework. If there are changes in inputs the adjustments are run through the period in which the change occurred.

Stock Based Compensation. The Company records stock based compensation in accordance to the underlying documents to match the recognition of expense to the receipt of benefit. This includes an initial fair value assessment utilizing the Black Scholes Option Pricing Model and taking into account vesting schedules and any exercise or termination notices.

Income Tax Loss Carryforward and Allowance. The Company assesses its income tax loss carryforward and the level of appropriate loss allowance every quarter or when events warrant a revision.

Legal Contingencies and Accruals. The Company reviews its liabilities for potential losses associated with asserted or unasserted claims against the company.

When such events or changes in circumstances occur, a recoverability test is performed comparing projected undiscounted cash flows from the use and eventual disposition of an asset or asset group to its carrying amount. If the projected undiscounted cash flows are less than the carrying amount, an impairment is recorded for the excess of the carrying amount over the estimated fair value.

We make various assumptions, including assumptions regarding future cash flows in our assessments of long-lived assets for impairment. The assumptions about future cash flows and growth rates are based on the current and long-term business plans related to the long-lived assets.

The Company qualifies as a smaller reporting company, as defined by SEC Rule 229.10(f)(1) and is not required to provide the information required by this Item.

(a) Evaluation of Disclosure Controls and Procedures.

The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as of December 31, 2025.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Based on this evaluation, and because of the material weakness in internal control over financial reporting described below, management concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2025.

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(b) Management’s Annual Report on Internal Control over Financial Reporting.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a‑15(f). Internal control over financial reporting is a process designed under the supervision of the Company’s Principal Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

As of December 31, 2025, management, with the participation of the Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025 due to the existence of the following material weakness:

The Company has an insufficient number of personnel to adequately segregate accounting and financial reporting duties. This lack of segregation of duties results in limited independent review of financial reporting processes, which resulted in material error adjustments and period end accounting corrections, technical accounting treatment and disclosure adjustments and additional risk that errors or misstatements may not be prevented or detected on a timely basis.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Notwithstanding this material weakness, management believes the consolidated financial statements included in this Annual Report fairly present, in all material respects, the Company’s financial position, results of operations, and cash flows for the periods presented.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements or fraud. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that compliance with policies or procedures may deteriorate.

This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation pursuant to rules of the Securities and Exchange Commission that permit certain issuers to provide only management’s report.

(c) Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.