What changed in this filing

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Item 9A. Controls and Procedures

2025-06-02 compared with 2023-02-10 · 1138 added, 1106 removed, 595 unchanged (79% of the section changed)

33 unchanged sentences

Chief Operating Officer

Michael Layman

Independent Director

Gerardine Botte, PH.D.

Director - Former

Director- Former

Independent Director

Jensen (age 45) – Chief Executive Officer

49 unchanged sentences

He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Michael Layman – Director

Layman is a well-established financial industry executive with a track record for driving value and growth for both private and publicly traded companies.

Layman currently serves as General Partner/CEO of Emerald Shoals Targeted Opportunities Fund LP, a hybrid growth fund backed by a network of ultra-high net worth individuals seeking novel opportunities to invest in high-growth catalyst driven companies.

Layman also is the chairman & managing director of LF Athens Capital, a Delaware series LLC that seeks to provide attractive investment opportunities in private and small cap public companies.

Laymen also serves on the board of directors of Land Betterment Corp and Clarametyx Biosciences Inc.

Prior to his current role at Emerald Shoals and LF Athens, Mr.

Layman served at a large top-four brokerage house where he was co-owner of a private wealth management group where he was responsible for identifying attractive and undervalued investment opportunities.

Additionally, he also aided in the development and implementation of various investment strategies based on differing types of needs from conservative to aggressive growth.

Additionally, Mr.

Layman previously worked for a private equity fund in New York where he established a strong network of relationships with research analysts and investment bankers at a number of Wall Street firms.

Layman obtained his Bachelor of Arts degree in business from Otterbein University.

The Board nominated Mr.

Layman to serve as a director because of his leadership in the finance industry and assisting companies with capital raising.

Josh Hawes – Director

Josh Hawes is an Independent Board Director at American Resources Corporation (AREC).

He brings over 15+ years of leadership experience, specializing in commodities, buy-side/sell-side investments, and advanced technologies, to assist AREC with its capital markets plan and corporate strategy.

He has a vast knowledge of capital markets integration with strategic vision and vertical integration.

Josh is currently the chair of the Audit and Compensation committees for AREC.

His prior experience includes chief strategy officer of USA Rare Earth, CEO of Delta1x and Hawking Alpha.

Hawes holds licenses spanning commodities, investment banking, public, and private securities, including Series 3, 63, 65, 7, 79, 82, and SIE.

As well, Josh holds several professional designations, such as Wharton Business School’s Corporate Governance program certificate, “Maximizing Your Effectiveness in the Boardroom,” and University of Cambridge Judge Business School, “Circular Economy and Sustainability Strategies.” He is also holder of the Chartered Market Technician, Certified Hedge Fund Professional, and Qualified Family Office Professional A Wireless Software Engineering graduate from Auburn University.

The Board nominated Josh to serve as a director because of his experience and relationships in the critical minerals sector, banking sector and his experience in growth businesses.

He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

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He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Stephenson – Director (Former)

Randal serves as Director of American Resources Corporation.

He is an investment banking, strategy and corporate finance professional with over 25 years of experience in mergers, acquisitions, sale of companies, private capital placements, strategic planning and corporate development.

Randal has Wall Street Bulge Bracket investment banking experience, and previously was the Global Head of Mergers & Acquisitions for CIT Group, the Head of Exclusive Sales & Divestitures M&A for Jefferies & Company, and the Global Head of Energy & Mining Investment Banking for Duff & Phelps Securities.

Randal co-founded a FINRA broker-dealer and is a leading U.S.

expert witness in large dollar, complex commercial litigation involving M&A and corporate finance issues.

Randal graduated with a Bachelor of Arts degree from the University of Michigan, Ann Arbor and has a Master of Business Administration degree from Harvard University and his Juris Doctorate (with honors) from Boston College Law School.

He is an attorney admitted to practice in New York, and holds the Series 7, 79, 63 and 24 securities licenses.

The Board nominated Randal to serve as a director because of his leadership experience and leadership in the finance industry and assisting companies with mergers and acquisitions and capital raising.

Effective November 23, 2020, Mr.

Stephenson resigned from the board and took a position on the Company’s advisory committee.

He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Ian Sadler - Director (Former)

Ian serves as Director of American Resources Corporation.

He brings decades of direct leadership and experience in the steel industry and has demonstrated expertise in successfully leading rapidly-growing companies, optimizing operational efficiencies and performance enhancements.

He has experience in due diligence, joint ventures and mergers and acquisitions with a history of successfully assimilating acquired businesses into value creating enterprises.

Prior to retirement, Ian was the President and CEO of Miller Centrifugal Casting International in Cecil, PA.

He has a history of leadership with the Pennsylvania Foundry Group, Shenango LLC, Johnstown Corporation, Blaw-Knox Corp., and National Roll Company.

He received his Bachelor’s Degree, with First Class Honors, and Master’s Degree in Metallurgy from Cambridge University and was a prior President of the American Institute of Mining, Metallurgical and Petroleum Engineers (AIME) and previously served as President of the Iron and Steel Society.

The Board nominated Ian to serve as a director because of his executive management experience and experience with growing companies in an efficient and cost-effective manner.

Effective February 24, 2020, Mr.

Sadler resigned from the board for retirement.

He has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

None of the directors have been involved in any legal proceedings that would require a disclosure under Item 401 of Regulation SK.

13 unchanged sentences

Jensen, our Chief Executive Officer, Thomas M.

Sauve, our President, Michael Layman, Gerardine Botte, PHD, and Courtenay O.

Sauve, our President, Josh Hawes, Gerardine Botte, PHD, and Courtenay O.

Taplin, of which Ms.

Botte and Messrs Layman and Taplin are considered independent in accordance under the requirements of the NASDAQ, NYSE and SEC.

Botte and Messrs Hawes and Taplin are considered independent in accordance under the requirements of the NASDAQ, NYSE and SEC.

Limitation of Director Liability;

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Committees of the Board of Directors

Currently, our board of directors has three committees:

an Audit Committee, a Compensation Committee, and a Safety and Environmental Committee.

Currently, our board of directors has four committees:

an Audit Committee, a Compensation Committee, a Nomination Committee, and a Safety and Environmental Committee.

The Audit Committee and Compensation Committee are both comprised of the three independent directors of the Company.

The Safety and Environmental Committee is comprised of Thomas M.

The Safety and Environmental Committee and Nomination Committee are both comprised of Thomas M.

Sauve and Mark C.

2 unchanged sentences

As required by the rules of the SEC, the audit committee consists solely of independent directors, who are Ms.

Botte and Messrs Layman, and Taplin.

Botte and Messrs Hawes, and Taplin.

SEC rules also require that a public company disclose whether its audit committee has an “audit committee financial expert” as a member.

8 unchanged sentences

The purpose of this committee shall be to (i) assist the board of directors in the oversight of the Company’s executive officer and director compensation programs, (ii) discharge the board of director’s duties relating to administration of the Company’s incentive compensation and any other stock- based plans, and (iii) act on specific matters within its delegated authority, as determined by the board of directors from time to time.

Nomination Committee

The board of directors formed the Nomination Committee, which is comprised of Mr.

Sauve and Mr.

The purpose of this committee shall be to (i) assist the board of directors in cultivating valuable board of director nominees and (ii) navigating the onboarding for selected directors.

Safety and Environmental Committee

16 unchanged sentences

_____________

During 2017 salary in the amount of $32,000 was accrued and unpaid during 2017 and 2018.

During 2019, $15,550 was repaid leaving an unpaid balance of $16,450.

On January 2, 2018, the Company entered into an employment agreement with Mr.

Jensen, at an annual salary rate of $156,000 which expired on December 31, 2019.

On October 1, 2020, the Company entered into an employment agreement with Mr.

On October 1, 2020, the Company entered into an employment agreement, beginning January 1, 2021 and expiring on December 31, 2021, with Mr.

Jensen increasing base pay to $250,000 and carrying certain performance bonuses which would be awarded by the board of directors.

1 unchanged sentence

25,000 Options issued on January 28, 2021 and 450,000 Options were issued on December 13, 2021.

$643,500 represents Black-Scholes Option Pricing Model.

On November 23, 2021, the Company entered into an employment agreement, beginning January 1, 2024 and expiring on December 31, 2024, with Mr.

Jensen increasing base pay to $375,000 any carrying certain performance bonuses which would be awarded by the board of directors and stock options totaling 150,000.

The Company issued 800,000 and 300,000 stock options in 2023 and 2024, respectively.

The value in the option awards represents Black-Scholes Option Pricing Model fair market value.

No bonus was awarded during 2023 and 2024.

During 2020, other compensation totaling $24,187 included $16,450 of retroactive pay.

During 2017 salary in the amount of $32,000 was accrued and unpaid during 2017 and 2018.

During 2019, $12,672 was repaid leaving an unpaid balance of $19,328.

On January 2, 2018, the Company entered into an employment agreement with Mr.

Sauve, at an annual salary rate of $156,000, which expired on December 31, 2019.

On October 1, 2020, the Company entered into an employment agreement with Mr.

Sauve increasing base pay to $200,000 and carrying certain performance bonuses which would be awarded by the board of directors.49,342 options were issued under the new contract and vest immediately.

Sauve increasing base pay to $200,000 and carrying certain performance bonuses which would be awarded by the board of directors.

49,342 options were issued under the new contract and vest immediately.

25,000 Options issued on January 28, 2021 and 275,000 Options were issued on December 13, 2021.

$365,750 represents Black-Scholes Option Pricing Model.

On November 23, 2021, the Company entered into an employment agreement, beginning January 1, 2024 and expiring on December 31, 2024, with Mr.

Sauve increasing base pay to $300,000 any carrying certain performance bonuses which would be awarded by the board of directors and stock options totaling 100,000.

The Company issued 625,000 and 225,000 stock options in 2023 and 2024, respectively.

The value in the option awards represents Black-Scholes Option Pricing Model fair market value.

No bonus was awarded during 2023 and 2024.

During 2021, other compensation included $2,865 health insurance reimbursement.

During 2020, other compensation totaling $29,197 included $3,051 health insurance reimbursement and $19,328 of retroactive pay.

During 2017 salary in the amount of $21,487 was accrued and unpaid during 2017 and 2018.

During 2019, $13,109 was repaid leaving an unpaid balance of $8,378.

On January 2, 2018, the Company entered into an employment agreement with Mr.

Taylor, at an annual rate of $156,000, which expired on December 31, 2019.

During 2024 and 2023, other compensation totaling $8,417 and $8,074 included health insurance reimbursement.

On October 1, 2020, the Company entered into an employment agreement with Mr.

2 unchanged sentences

25,000 Options issued on January 28, 2021 and 100,000 Options were issued on December 13, 2021.

$143,000 represents Black-Scholes Option Pricing Model.

On November 23, 2021, the Company entered into an employment agreement, beginning January 1, 2024, and expiring on December 31, 2024, with Mr.

Taylor increasing base pay to $300,000 any carrying certain performance bonuses which would be awarded by the board of directors and stock options totaling 100,000.

The Company issued 450,000 and 0 stock options in 2023 and 2024, respectively.

The value in the option awards represents Black-Scholes Option Pricing Model fair market value.

No bonus was awarded during 2024 and 2023.

During 2021, other compensation totaling included $4,973 health insurance reimbursement.

During 2020, other compensation totaling $25,836 included $13,639.60 health insurance reimbursement and $8,378 of retroactive pay.

During 2024 and 2023, other compensation totaling $26,363 and $25,298 included health insurance reimbursement.

There is no employment agreement in place for Mr.

Thompson was awarded 75,000 options as part of the company’s 2018 stock option plan.

The options to Mr.

Thompson vest equally over the course of three years, and as of December 31, 2019, one third of the options have vested.

Thompson was awarded 500,000 options which vest over 7 years200,000 Options were issued on December 13, 2021.

$266,000 represents Black-Scholes Option Pricing Model.

0 Options were issued during 2024.

The value in the option awards represents Black-Scholes Option Pricing Model.

During 2024 and 2023, other compensation totaling $26,699 and $0 included health insurance reimbursement.

Director Compensation

4 unchanged sentences

All Other Compensation

Stephenson (Former) (3)

Ian Sadler (Former) (4)

Michael Layman (4)

Gerardine Botte (5)

For services rendered on the board of directors, Mr.

Jensen was issued 25,000 options which vest immediately on October 1, 2020.

The Option Award to Directors in Column (d) of $41,000 represents the amortized book value of warrants priced using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder.

During 2021, 300,000 of options were issued to Mr.

Jensen for his service on the board and as serving as chairman.

The value of the options have been included in the officer compensation table.

For services rendered on the board of directors, Mr.

Sauve was issued 25,000 options which vest immediately on October 1, 2020.

During 2021, 150,000 of options were issued to Mr.

Sauve for his service on the board.

The value of the options have been included in the officer compensation table.

Stephenson was appointed as a director on November 15, 2018.

Stephenson was awarded 15,000 options for services rendered as a director.

The options to Mr.

Stephenson vest equally over the course of three years.

Stephenson was awarded 25,000 options which vest immediately.

The Option Award to Directors in Column (d) of $161,450 represents the amortized book value of warrants priced using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder.

Other Compensation includes $0 and 13,640 of health insurance premiums paid by the Company for 2021 and 2020, respectively.

Sadler was appointed as a director on November 15, 2018.

Sadler was awarded 15,000 options for services rendered as a director.

The options to Mr.

Sadler vest equally over the course of three years.

The Option Award to Directors in Column (d) of $120,450 represents the amortized book value of warrants priced valued using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder.

Josh Hawes (6)

The value of the Option Award to Directors in Column (d) represents the fair market value of the stock options awarded using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the stock options to the option holder.

During 2024 and 2023, 800,000 and 300,000 of options were issued to Mr.

Jensen, respectively.

During 2024 and 2023, 625,000 and 225,000 of options were issued to Mr.

Sauve, respectively.

Taplin was appointed as a director on November 15, 2018.

Taplin was awarded 15,000 options for services rendered as a director.

The options to Mr.

Taplin vest equally over the course of three years.

Taplin was awarded 25,000 options which vest immediately.

During 2021, 150,000 options were issued to Mr.

Taplin for his service on the board.

During 2024 and 2023, 150,000 and 150,000 options were issued to Mr.

Taplin for his service on the board, respectively.

Layman was appointed as a director on July 16, 2020.

Layman was awarded 75,000 options for services rendered as a director.

The options to Mr.

Layman immediately.

The Option Award to Directors in Column (d) of $93,500 represents the amortized book value of warrants valued using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the warrants to the warrant holder.

During 2021, 250,000 options were issued to Mr.

Layman for his service on the board and as chairs of the Audit Committee and Compensation Committee.

During 2024 and 2023, 0 and 750,000 options were issued to Mr.

Layman, respectively.

Botte was appointed as a director on November 23, 2020.

Botte was awarded 25,000 options for her services on the board.

The options vest immediately.

During 2021, 200,000 options were issued to Dr.

The value of the Option Award to Directors in Column (d) represents the fair market value of the stock options using the Black-Scholes Option Pricing Model, and does not represent the actual cash value of the stock options to the option holder.

During 2024 and 2023, 150,000 options were issued to Dr.

Botte for her service on the board.

Hawes was appointed as a director on August 16, 2023.

During 2024, 250,000 options were issued to Mr.

Hawes for his service on the board and chair of the audit and compensation committees.

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.

3 unchanged sentences

The payment of such bonus and/or incentive stock options shall be in the sole discretion of the Company’s Board of Directors.

The in-place contracts we effective beginning January 1, 2022 and expires December 31, 2022.

The in-place contracts we effective beginning January 1, 2024 and expired December 31, 2024 with one year automatic extensions effective through December 31, 2024.

Outstanding Equity Awards

7 unchanged sentences

Those options vest over 9 years.

June 28, 2022 to purchase up to 300,000 shares of our Company at $1.52 per share.

Those options vest over 5 years.

July 27, 2022 to purchase up to 100,000 shares of our Company at $1.94 per share.

Those options vest over 2 years.

January 1, 2023 to purchase 150,000 shares of our Company at $1.32 per share.

Those options vest over 4.25 years.

April 19, 2023 to purchase 350,000 shares of our Company at $1.29 per share.

Those options vest over 5 years.

July 18, 2023 to purchase 300,000 shares of our Company at $1.95 per share.

Those options vest over 5.25 years.

February 8, 2024 to purchase 50,001 shares of our Company at $1.29 per share.

Those options vest over 1 years.

February 8, 2024 to purchase 249,999 shares of our Company at $1.29 per share.

Those options vest over 5.25 years.

November 23, 2020 to purchase up to 70,732 shares of our Company at $1.64 per share.

4 unchanged sentences

Those options vest over 7 years.

June 28, 2022 to purchase up to 175,000 shares of our Company at $1.52 per share.

Those options vest over 3 years.

July 27, 2022 to purchase up to 100,000 shares of our Company at $1.94 per share.

Those options vest over 2 years.

January 1, 2023 to purchase 100,000 shares of our Company at $1.32 per share.

Those options vest over 4.25 years.

April 19, 2023 to purchase 350,000 shares of our Company at $1.29 per share.

Those options vest over 5 years.

July 18, 2023 to purchase 175,000 shares of our Company at $1.95 per share.

Those options vest over 4.75 years.

February 8, 2024 to purchase 175,000 shares of our Company at $1.29 per share.

Those options vest over 4.75 years.

August 29, 2024 to purchase 50,000 shares of our Company at $0.54 per share.

Those options vest over 3 years.

- Chief Financial Officer:

5 unchanged sentences

Those options vest over 7 years.

July 27, 2022 to purchase up to 100,000 shares of our Company at $1.94 per share.

Those options vest over 2 years.

January 1, 2023 to purchase 100,000 shares of our Company at $1.32 per share.

Those options vest over 4.25 years.

April 19, 2023 to purchase 350,000 shares of our Company at $1.29 per share.

Those options vest over 5 years.

- Chief Operating Officer, who was issued options under our Employee Incentive Stock Option Plan on

June 18, 2020 to purchase up to 500,000 shares of our Company at $1.13 per share

June 5, 2019 to purchase up to 75,000 shares of our Company at $2.63 per share

September 12, 2018 to purchase up to 136,830 shares of our Company at $1.00 per share.

Those options vest equally over the course of three years.

June 5, 2019 to purchase up to 75,000 shares of our Company at $2.63 per share

June 18, 2020 to purchase up to 500,000 shares of our Company at $1.13 per share

December 13, 2021 to purchase up to 200,000 shares of our Company at $1.74 per share.

14 unchanged sentences

Golden Properties, Ltd.

White River Ventures LLC (2) (4)

Midwest General Investment Company LLC (2) (5)

A person is deemed to be the beneficial owner of securities that can be acquired by such a person within 60 days upon exercise of options, warrants or convertible securities.

Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such a person (but not those held by any other person) and are exercisable within 60 days from that date have been exercised;

Based on 61,741,391 shares of Common Stock deemed to be outstanding as if one or more warrants were exercised up to the maximum amount of 9.99% (or 6,167,965 shares) of the issued and outstanding number of shares at December 31, 2021.

Based on 78,017,047 shares of Common Stock deemed to be outstanding as of December 31, 2024.

This percentage has been rounded for convenience;

6 unchanged sentences

is presently deemed the beneficial owner of 9,102,246 shares of our Common Stock pursuant to Securities and Exchange Commission Rule 13d-3, promulgated under the Securities Exchange Act of 1934.

The full number of shares that Golden Properties’ beneficially owns (including all shares underlying all the warrants owned by Golden Properties and excluding those Class A Common shares owned by Alexander Lau and TAU Holdings as stated above) is 5,968,592 shares.

Represents shares gifted in an exempt transaction under Rule 16b-5 by Mark Jensen for no consideration to White River Ventures LLC, which is wholly owned by a family trust of which certain members of the Jensen family are beneficiaries.

Thomas Sauve serves as sole manager of this entity.

Represents shares gifted in an exempt transaction under Rule 16b-5 by Thomas Sauve for no consideration to Midwest General Investment Company LLC, which is wholly owned by a family trust of which certain members of the Sauve family.

Mark Jensen serves as sole manager of this entity.

Series A Preferred

12 unchanged sentences

These percentages have been rounded for convenience;

Jensen beneficially owns 92,264 shares of our Class A Common Stock through his equity ownership in T Squared Capital LLC, which shares are included in the table above.

Sauve beneficially owns 61,509 shares of our Class A Common Stock through his equity ownership in T Squared Capital LLC, which shares are included in the table above.

Jensen beneficially owns 89,981 shares of our Class A Common Stock through his equity ownership in Westside Advisors LLC,.

Sauve beneficially owns 59,988 shares of our Class A Common Stock through his equity ownership in T Squared Capital LLC and Westside Advisors LLC.

Certain Relationships and Related Transactions, and Director Independence.

Transactions with Related Persons, Promoters and Certain Control Persons.

During 2015, equipment purchasing was paid by an affiliate resulting in a note payable.

The balance of the note was $74,000 as of December 31, 2021 and 2020 respectively.

On April 30, 2017, the Company purchased $250,000 of secured debt that had been owed to that party, by an operating subsidiary of a related party.

As a result of the transaction, the Company is now the creditor on the notes.

The first note in the amount of $150,000 is dated March 13, 2013, carries an interest rate of 12% and was due on September 13, 2015.

The second note in the amount of $100,000 is dated July 17, 2013, carries an interest rate of 12% and was due January 17, 2016.

Both notes are in default and have been fully impaired due to collectability uncertainty as of December 31, 2021 and 2020, respectively.

The Company, through its subsidiaries, leases property and mineral from a related entity, LRR.

During the year ended December 31, 2021 and 2020, the Company incurred royalty expense in the amount of $232,208 and $330,060.29 to a related entity formally consolidated as a variable interest entity.

As of December 31, 2021, and 2020, the Company owed the related entity a total of $679,146 and $737,981 for unpaid royalties and advances, respectively.

From inception, October 24, 2016, through June 30, 2018, the accounts of LRR were consolidated with the company as a variable interest entity.

Due to its ongoing review, on July 1, 2018 management determined that LRR no longer met the requirements of consolidation and the accounts were deconsolidated.

On October 13, 2020, the company paid $110,828.89 to settle past sales commission invoices.

The sales broker is 50% owned by one of our directors.

On June 30, 2020 and on October 20, 2020, an investment fund controlled by one of our directors made investments in the Company’s convertible debt offering for a total of $1,250,000 as of December 31, 2021.

On November 23, 2020, American Rare Earth, entered into an operating agreement with one of our directors to form Advanced Carbon Materials, LLC ACM.

The agreement calls for the company to fund the ACM in the amount of $4,000 monthly for the purpose of procuring licenses to further advance the technologies in advanced carbon uses.

As of December 31, 2021, no transaction between the companies had been made.

On February 13, 2020, the Company entered into 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.

The contract terms state that service costs are passed through to the Company with a 10% mark-up and a 50% share of cost savings.

The agreement covers services across all of the Company’s properties.

During 2020, the amount incurred under the agreement amounted to $1,547,671 and the amount paid amounted to $1,547,671.

As of December 31, 2021, the amount due under the agreement amounted to $355,899.

On June 11, 2020 the Company purchased $1,494,570 of secured debt including accrued interest that had been owed to that party, by an operating subsidiary of a related party.

As a result of the transaction, the Company is now the creditor on the four notes.

The first note in the amount of $75,000 is dated June 28, 2013, carries an interest rate of 12% and was due on June 28, 2015.

The second note in the amount of $150,000 is dated June 28, 2013, carries an interest rate of 12% and was due June 28, 2015.

The third note in the amount of $199,500 is dated March 18, 2014, carries an interest rate of 4% and was due on March 18, 2016.

The fourth note in the amount of $465,500 is dated March 18, 2014, carries an interest rate of 4% and was due on March 18, 2016.

The notes are in default and have been fully impaired due to collectability uncertainty.

On January 1, 2021, the Company purchased $250,000 of secured debt including accrued interest that has been owed to that party, by an operating subsidiary of a related party.

As a result of the transaction, the Company is now the creditor on the note.

The note is in default and has been fully impaired due to collectability uncertainty.

Royalty Management Co.

During January 2021, the company invested $2,250,000 for 50% ownership and became the managing member of American Opportunity Venture, LLC.

(AOV) It has been determined that AOV is a variable interest entity and that the Company is the primary beneficiary, therefore AOV has been consolidated into the Company’s financial statement.

As such, AOV’s sole investment in Royalty Management Co (RMCO) will be accounted for using the equity method of accounting.

The sole investment was initially in American Acquisition Opportunity Inc (AMAO) a SPAC that closed its reverse merger with RMCO effective October 31, 2023.

The Company recognizes the earnings or losses on a three-month lag to ensure consistency and timely filling of the Company’s financial statements.

As of December 31, 2023 and 2024 the Company held 3,076,500 shares of Class A common stock in RMCO.

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 (50%) of the operating profits from Novustera’s Graphene manufacturing and marketing business activity.

As part of the agreement, Novusterra’s Chairman of the Board of Directors at the time was replaced by the Company’s Mark Jensen, Chief Executive Officer and Chairman of the Board of Directors.

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 4,000,000 common shares of Novusterra with a fair market value of $1,784,000 in stock of Novusterra.

As part of the sale of the exclusive rights to the patents, Andrew Weeraratne resigned as director and CEO of Novusterra and Gregory Jensen, the Company’s general counsel, joined Novusterra as CEO and Director and Mark Jensen resigned as Chairman of the Board of Directors.

Pursuant to the purchase agreement, Novusterra is no longer obligated to pay the Company fifty percent (50%) of the operating profits from their Graphene manufacturing and marketing business.

However, Novusterra is still obligated to pay the Company ten percent (10%) of all revenue from the exclusive sublicense with Kenai Defense Company, LLC and for the Department of Defense under the contract that was transferred from the Company to Novusterra.

Any subsequent contracts entered into by Novusterra with Kenai Defense Company, LLC and for the Department of Defense will have no future revenue allocations to the Company.

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 91% of the Company’s ownership in Novusterra, Inc.

resulting in the Company to receive 9% of future cash flows and holding 1,417,500 common shares of Novusterra, Inc.

Due to the Company new ownership in Novusterra, Inc.

the investment is accounted for using the cost method of accounting.

As of December 31, 2024 and 2023, the carrying value of the investment was $0 and $1,598,480, respectively.

FUB Mineral LLC

On October 1, 2021, the Company contributed $250,000 for 23% ownership of FUB Mineral LLC (FUB).

Simultaneously the Company issued a promissory note FUB for $350,000, this note was fully repaid as of April 15, 2022.

On February 2, 2022, the Company issued a new promissory note for $535,000 to FUB with an interest rate of 10% and maturity date of February 1, 2023, which has been extended by the Company through the end of August 2024.

As of December 31, 2024 and 2023, the Company had a note receivable balance of $0 and $99,022, respectively.

The Company recorded an allowance for the full remaining balance of the note receivable as it was doubtful to receive payment as of December 31, 2024.

Advanced Magnet Lab, Inc

On December 21, 2022 the Company issued a convertible promissory note to Advanced Magnet, Inc.

(“AML”) for $280,000 with 10% interest rate that compounds monthly.

The Company’s Chief Executive Officer is the director of AML.

The convertible promissory note may be prepaid at any time.

The Company has the option to convert the principal amounts of the convertible promissory note at a share price of $1.50 per share.

The Company has not recorded any interest income related to this note due to the income deemed not probable and has held the investment at cost, which the Company expects to receive common stock upon conversion for the value of the principal balance.

As of December 31, 2024 and 2023, the Company had a note receivable balance of $280,000.

Director Independence.

1 unchanged sentence

Botte and Messrs.

Layman, Taplin, Stephenson (retired), and Sadler (retired) are independent are independent within the meaning of the listing standards for general independence of the NASDAQ Capital Market.

Hawes, Taplin are independent are independent within the meaning of the listing standards for general independence of the NASDAQ Capital Market.

Under the listing standards, the Audit Committee is required to be composed solely of independent directors.

3 unchanged sentences

Principal Accounting Fees and Services.

Borgers CPA, PC (PCAOB ID:

5041 ), services as the Company’s independent registered public accounting firm.

The following is a summary of fees paid or to be paid to Malone Bailey LLP, and B.F.

On May 10, 2024, the Audit Committee approved the appointment of GBQ Partners LLC (“GBQ”) as the Company’s new independent public accounting firm, effective immediately.

During the Company’s two most recent fiscal years, and any subsequent interim period prior to engaging GBQ, neither the Company, nor anyone on its behalf, consulted GBQ regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Company, and no written report or oral advice was provided to the Company by GBQ that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue;

or (ii) any matter that was the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).

The following is a summary of fees paid or to be paid to GBQ Partners LLC and B.F.

Borgers CPA, PC, for services rendered for the years ended December 31, 2024 and 2024.

Audit fees - GBQ Partners LLC

Audit related fees - GBQ Partners LLC

Audit fees – BF Borgers, PC

Audit related fees – BF Borgers, PC

Audit related fees – Malone Bailey LLP

All other fees

8 unchanged sentences

As a result, the audit committee did not preapprove all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors.

Since the formation of our audit committee, and on a goingforward basis, the audit committee has and will preapprove all auditing services and permitted nonaudit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for nonaudit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

Since the formation of our audit committee, and on a going forward basis, the audit committee has and will preapprove all auditing services and permitted nonaudit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for nonaudit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

Exhibits, Financial Statement Schedule.

36 unchanged sentences

Incorporated herein by reference to Exhibit 99.2 to the Company’s 8k filed on January 3, 2019.

Share and Warrant Purchase Agreement

Incorporated herein by refence to Prospectus filed August 23, 2019

Share and Warrant Purchase Agreement

Incorporated herein by refence to Prospectus filed October 9, 2020

Share and Warrant Purchase Agreement

Incorporated herein by refence to Prospectus filed June 8, 2021

Secured Promissory Note

52 unchanged sentences

Filed Herewith.

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Compensation Clawback Policy

Filed Herewith

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Pursuant to the requirements of Section 13 or 15(d) 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.

1 unchanged sentence

Principal Executive Officer,

March 30, 2022

Chief Executive Officer, Chairman of the Board of Directors

1 unchanged sentence

Principal Executive Officer,

March 30, 2022

Chief Executive Officer, Chairman of the Board of Directors

Principal Financial Officer, Chief Financial Officer

March 30, 2022

/s/ Thomas M.

Director, President

March 30, 2022

/s/ Michael Layman

March 30, 2022

Michael Layman

/s/ Josh Hawes

/s/ Gerardine Botte

March 30, 2022

Gerardine Botte, PHD

/s/ Courtenay O.

March 30, 2022

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants

12 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of American Resources Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of American Resources Corporation as of December 31, 2021 and 2020, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Shareholders and Board of Directors

American Resources Corporation

Fishers, Indiana

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of American Resources Corporation (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended , in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

1 unchanged sentence

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/S/ BF Borgers CPA PC

/s/ GBQ Partners LLC

GBQ Partners LLC (PCAOB ID # 1808 )

Columbus, Ohio

We have served as the Company's auditor since 2024.

March 30, 2022

AMERICAN RESOURCES CORPORATION

1 unchanged sentence

Current assets:

Prepaid fees and deposits

Receivables - other

Advances to related party

Cash and cash equivalents

Restricted cash - current

Restricted investment

Short-term investments

Due from related party

Interest receivables

Prepaid expenses and other current assets

Total current assets

Cash - restricted

Non-current assets:

Restricted cash

Property and Equipment, net

Long-term right of use assets, net

Investment in llc- related party

Notes receivables

LIABILITIES AND STOCKHOLDERS' DEFICIT

Right-of-use assets, net

Right-of-use assets, net - related party

Finance – right-of-use asset, net – related party

Investment in other entities - related parties

Notes receivable, net

$ 205,013,999

Liabilities and Deficit

Current liabilities:

2 unchanged sentences

Accounts payable - related party

Accrued expenses

Accrued litigation settlements

Accrued interest

Due to affiliate

Other current liabilities

Bond payable, current

Current portion of long-term debt

Current portion of convertible debt (net of unamortized discount of $ 18,106 and $ 827,573 )

Current portion of lease liabilities, net

Operating lease liabilities, current

Operating lease liabilities, current - related party

Finance lease - related party, current

Other financing obligations, current

Total current liabilities

Notes payable (net of issuance costs of $ 0 and $ 405,667 )

Convertible note payables (net of unamortized discount of $ 22,549 and $ 0 )

Non-current liabilities:

Remediation liability

Lease liabilities, net

Bond payable, net

Convertible promissory note - related party

Other financing obligations, net of current portion

Operating lease liabilities, non-current

Operating lease liabilities, non-current - related party

Finance lease - related party, non-current

Total liabilities

Commitments and contingencies (Note 10)

Stockholders' deficit:

Common stock:

$ 0.0001 par value;

230,000,000 shares authorized, 65,084,992 and 42,972,762 shares issued and outstanding

Common stock, $ 0.0001 par value;

230,000,000 shares authorized, 77,996,079 and 76,247,370 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

5 unchanged sentences

( 43,531,447 )

Non-controlling interest

( 1,561,666 )

( 1,473,852 )

Total deficit

( 81,909,744 )

( 45,005,299 )

Total liabilities and stockholders' deficit

$ 205,013,999

The accompanying footnotes are integral to the consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended

Metal recovery and sales

Service fee revenue

Royalty income

Total revenue

Operating expenses (income)

Cost of coal sales and processing

Amortization of mining rights

General and administrative

Professional fees

Litigation expense

Production taxes and royalties

Gain on sale of equipment

( 1,529,408 )

Total operating expenses

Net loss from operations

Other income (expense)

Losses from equity method investees, net

Other income, net

Interest income

Interest expense

( 8,021,459 )

( 1,988,074 )

Total other income (expenses)

( 7,107,678 )

Gain on purchase and disposal of asset, respectively

( 2,349,761 )

non-controlling interest

Net loss attributable to AREC shareholders

$ ( 40,108,926

$ ( 38,527,408

Net loss per share - basic and diluted

Weighted average shares outstanding - basic and diluted

The accompanying footnotes are integral to the consolidated financial statements.

AMERICAN RESOURCES CORPORATION

STATEMENT OF STOCKHOLDERS’ DEFICIT

DECEMBER 31, 2024 AND 2023

Balance as of December 31, 2022

$ 168,099,637

$ ( 186,764,927 )

$ ( 18,658,610 )

$ ( 1,276,297 )

$ ( 19,934,907 )

Issuance of common shares for convertible debt conversion

Stock compensation - options

Issuance of common shares for consulting services

( 38,527,408 )

( 38,257,408 )

( 38,724,963 )

Balance as of December 31, 2023

$ 181,753,261

$ ( 225,292,335 )

$ ( 43,531,447 )

( 1,473,852 )

( 45,005,299 )

Exercise of cashless warrants

Exercise of stock options

Issuance of common shares for consulting services

Dividend-in-kind of Novustera, Inc.

common stock to shareholders

( 1,361,788 )

Exercise of warrants

Issuance of common shares for consulting services

Stock compensation – options

Common stock issued to settle accounts payable and accrued expenses

( 40,108,926 )

( 40,196,740 )

Balance as of December 31, 2024

( 266,763,049 )

( 80,348,078 )

( 1,561,666 )

( 81,909,744 )

The accompanying footnotes are integral to the consolidated financial statements.

AMERICAN RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended

Cash Flows from Operating activities:

$ ( 39,746,016 )

$ ( 38,250,463 )

Adjustments to reconcile net income (loss) to net cash

Noncash stock based compensation expense

Depreciation expense

Amortization of mining rights

Accretion expense

Amortization of right-to-use assets - related party

Amortization of issuance costs and debt discount

Investment in other entities - Related Parties, net

Gain on sale of equipment

( 1,625,000 )

Issuance of common shares for services

Allowance for losses on due from related party

Allowance for losses on note receivable

Unrealized gain on short-term investments

Change in current assets and liabilities:

Interest receivable

Due from related party

Prepaid expenses and other current assets

Trade and non-trade payable

( 3,118,438 )

General and administrative

Accounts payable related party

Accrued expenses

Accrued litigation settlement

Accrued interest

Other current liabilities

Operating lease assets and liabilities, net

Operating lease assets and liabilities, net - related party

Cash used in operating activities

( 22,225,352 )

( 20,100,929 )

Professional fees

Cash Flows from Investing activities:

Purchase of property and equipment, net of capitalized interest income and (expense)

( 1,059,062 )

( 3,616,866 )

Production taxes and royalties

Repayment on current portion of long term debt

Proceeds from sale of equipment

Proceeds from short-term investments, net

Purchase of investments, net

( 4,500,000 )

Cash (used in) provided by investing activities

( 5,627,427 )

Cash Flows from Financing activities:

Proceeds from tax exempt bonds, net

Proceeds from convertible promissory note - related party

Proceeds from the exercise of stock option

Proceeds received from other financing obligation

Cash received from warrant conversions

Repayments of other financing obligation

( 7,365,639 )

( 6,083,386 )

Total expenses from operations

Cash provided by (used in) financing activities

Increase (decrease) in cash

Cash and cash equivalents, including restricted cash, beginning of period

Cash and cash equivalents, including restricted cash, end of period

$ 155,366,868

SUPPLEMENTAL CASH FLOW INFORMATION

Common stock issued to settle accounts payable and accrued expenses

Dividend-in-kind of Novustera, Inc.

common stock to shareholders

Acquisition of assets through operating leases - related party

Acquisition of assets through finance lease - related party

Conversion of convertible debt into common stock

The accompanying footnotes are integral to the consolidated financial statements.

AMERICAN RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS :

The Company has identified certain accounting errors in the Company’s historical consolidated financial statements relating to compliance with U.S.

As a result of the re-audit, the Audit Committee, in consultation with the Company’s management, concluded that the Company’s previously issued audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2023, require restatement and should not be relied upon.

The following includes descriptions of the significant adjustments to the Company’s previously reported 2023 consolidated financial statements.

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.

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.

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.

Coal inventory cost basis adjustment

A lower of cost or realizable value adjustment was not recorded for coal inventory as of December 31, 2023.

The carrying value has been decreased by this adjustment with the offsetting charge recognized in operating expenses.

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.

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.

Equity investment accounting adjustment

There were accounting errors determined in 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.

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.

Accrued litigation settlement

Certain amounts accrued under ongoing litigation matters were classified in trade, non-trade or related party accounts payable rather more appropriately classified on the balance sheet as accrued expenses or accrued litigation settlements.

The Company incorrectly included an accrued litigation settlement in the balance, alongside certain invoices that had not been accounted for.

These amounts have been reclassified on the balance sheet to accrued litigation settlements.

Accrued expenses and settlement adjustments

In connection with our 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 Statement of Financial Accounting Standards No.

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.

Borrowings for equipment adjustment

Certain expenditures for equipment were paid for by the issuance of notes rather than cash.

For these items, the notes payable to various parties and the related fixed assets obtain were not recognized on the balance sheet.

This adjustment recognizes the omitted borrowings and fixed assets on the balance sheet with corresponding adjustments to depreciation expense for the use of the equipment upon installment.

Missed invoices and accrued expenses adjustment

Various expenses incurred prior to December 31, 2023 were not recognized in the proper period.

This adjustment recognizes the required December 31, 2023 accrual with a corresponding charge to operating expenses.

To correct the error, the Company adjusted its equity investments to reflect the appropriate earnings impact, ensuring accurate financial statement presentation.

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.

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.

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.

Black-Scholes calculation adjustment

An acceptable valuation model, such as the Black-Scholes model was not utilized to determine the fair value of equity awards granted.

Black-Scholes calculations have now been used to determine the fair value of the equity awards.

This adjustment has been made to reflect the appropriate fair value of the equity awards.

Forfeited deposit recognition adjustment

A deposit was received from a potential buyer of equipment from the Company.

The potential transaction was ultimately not executed resulting in forfeiture of the deposit by the potential buyer.

Upon forfeiture of the deposit, the Company did not de-recognize the deposit liability on the balance sheet and recognize the benefit to the statement of operations.

This adjustment de-recognizes the deposit liability from the balance sheet and recognizes the income in the statement of operations.

Taxes and royalties reclassification

Certain taxes and royalties were classified in the statement of operations as development costs not accurately reflecting their nature.

This adjustment reclassifies these expenditures to the correct expense classification in the statement of operations.

* Represents revision for immaterial error correction

The following tables summarize the effect of the restatement on each financial statement line item in the consolidated financial statements.

Balance Sheet as of December 31, 2023

Cash and cash equivalents

$ ( 1,347,784 )

Restricted cash - current

Restricted investment

Short-term investments

( 28,949,297 )

Due from related party

Prepaid expenses and other current assets

Total current assets

Restricted cash

( 5,276,617 )

Property and Equipment, net

Right-of-use assets, net

( 17,479,711 )

Right-of-use assets, net - related party

Investment in other entities - Related Parties

( 15,302,700 )

Notes Receivable, net

$ ( 29,451,285 )

Trade payables

$ ( 3,337,118 )

Non-trade payables

( 1,658,000 )

Accounts Payable - Related Party

Accrued expenses

Accrued litigation settlements

Accrued interest

Other current liabilities

Bond payable, current

Current portion of long-term debt

Operating lease liabilities, current

Operating lease liabilities, current - related party

Finance lease - related party, current

( 4,806,822 )

Other financing obligations, current

Total current liabilities

Remediation liability

Bond payable, net

( 44,152,500 )

Finance lease liabilities, non-current

( 7,514,848 )

Other financing obligations, net of current portion

Operating lease liabilities, non-current

Operating lease liabilities, non-current - related party

Total liabilities

$ 109,730,475

Additional paid-in capital

Accumulated deficit

( 178,694,329 )

Total stockholders' equity (deficit)

( 43,755,291 )

Non-controlling interest

( 1,473,852 )

Total deficit

( 45,229,143 )

Total liabilities and stockholders' deficit

$ ( 27,020,988

Statement of operation for the year ended December 31, 2023

$ ( 3,509,676 )

Total revenue

( 3,509,676 )

Cost of coal sales and processing

( 2,624,288 )

Amortization of mining rights

General and administrative

Professional fees

Litigation expense

Production taxes and royalties

Gain on sale of equipment

( 8,475,468 )

Total operating expenses

Net loss from operations

1 unchanged sentence

( 24,952,869 )

Other income and (expense)

Gain on interest forgiven

Gain on depreciation recapture

Gain on sale of stock

Amortization of debt discount and debt issuance costs

(36,375,202 )

Losses from equity method investees, net

Other income, net

Unrealized gain on short-term investments

Interest income

1 unchanged sentence

( 1,336,997 )

Total other income (expenses)

( 2,382,514 )

Net loss attributable to American Resources Corporation shareholders

( 11,455,086 )

( 27,269,877 )

Net loss per share - basic and diluted

Weighted average shares outstanding

The accompanying footnotes are integral to the consolidated financial statements

AMERICAN RESOURCES CORPORATION

STATEMENT OF STOCKHOLDERS’ DEFICIT

DECEMBER 31, 2021

American Resources

Preferred series A

Preferred series C

paid in capital

Balance December 31, 2019

(38,724,963 )

Non-controlling interest

Net loss attributable to AREC shareholders

$ ( 11,455,086 )

Issuance of common stock for cash

Issuance of common stock for debt conversions

Issuance of common stock for consulting services

Issuance of common stock for warrant exercises

Issuance of common stock for account payable conversions

Issuance of common stock for note settlement

Return of common stock for asset sale

$ ( 27,072,332 )

$ (38,527,408 )

Net loss per share - basic and diluted

(As reported)

Paid-in Capital

Balance as of December 31, 2022

$ 167,517,259

Issuance of warrants in conjunction with convertible notes

Stock compensation - options

Amortization of debt discount

$ 168,099,637

2 unchanged sentences

$ (186,764,927 )

Balance December 31, 2020

( 1,276,297 )

1 unchanged sentence

(19,934,907 )

Shares issued in connection with registered offering

Shares issued in connection with warrant and option conversions

Shares issued in connection with debt and payable conversions

Shares issued for services

Amortization of debt discount

Issuance of common shares for Convertible Debt Conversion

Stock compensation – options

Assumption of membership interest

Issuance of common shares for consulting services

( 11,455,086 )

Balance December 31, 2021

Balance as of December 31, 2023

$ 178,910,546

1 unchanged sentence

$ ( 178,694,329 )

The accompanying footnotes are integral to the consolidated financial statements

AMERICAN RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

$ (225,292,335

( 1,473,852 )

Statement of Cash flows for the year ended December 31, 2023

Cash Flows from Operating activities:

1 unchanged sentence

$ ( 27,269,877 )

Adjustments to reconcile net income loss) to net cash

$ (38,724,963 )

Noncash stock-based compensation expense

Depreciation expense

1 unchanged sentence

Accretion expense

Amortization of right-to-use assets - related party

Accretion of right-to-use assets

Amortization of debt discount

Amortization of issuance costs and debt discount

Option Expense

Discount Amortization Conver

Liabilities reduced due to sale of assets

( 1,506,292 )

Issuance of common shares for services

Loan forgiveness - NMTC

Issuance of warrants in conjunction with convertible notes

Loss on settlement of accounts payable with common shares

Return of common shares for property sale

( 1,840,200 )

Change in current assets and liabilities:

Accounts receivable

Investment in other entities - Related Parties, net

Gain on sale of equipment

( 8,475,468 )

Unrealized gain on short-term investments

Due from related party

Prepaid expenses and other current assets

Accounts payable

( 1,081,075 )

Trade and non-trade payable

( 4,995,118 )

Accrued interest

Accounts payable related party

( 1,923,535 )

Funds held for others

Accounts payable related party- Due to Affiliates

Accrued expenses

Accrued litigation settlements

Accrued interest

Other current liabilities

Operating lease assets and liabilities, net

Cash used in operating activities

1 unchanged sentence

( 5,585,688 )

(20,200,929 )

Cash Flows from Investing activities:

Cash received (paid) for PPE, net

Purchase of property and equipment, net of capitalized interest income and (expense)

( 4,581,185 )

Cash invested in note receivable

Investment in LLCs

Proceeds from sale of equipment

Proceeds from short-term investments, net

( 21,426,363 )

Cash provided by investing activities

Purchases of short-term investments

( 51,865,545 )

Cash Flows from Financing activities:

Principal payments on long term debt

Cash (used in) provided by investing activities

( 28,833,246 )

Sale of Common Stock for Cash

Cash received from warrant and option conversions

Proceeds from convertible note

Convertible Note Conversions

Capitalized Interest

Issuance of common shares for debt settlement

Cash Flows from Financing activities:

Proceeds from tax exempt bonds, net

Proceeds from the exercise of stock option

( 1,112,852 )

Proceeds from long term debt (net of issuance costs $0 and $0)

Net (payments) proceeds from factoring agreement

Proceeds received from other financing obligation

Repayment on current portion of long-term debt

Repayments of other financing obligation

( 5,599,988 )

Cash provided by financing activities

Increase (decrease) in cash

Cash, beginning of year

Cash, end of year

Supplemental Information

Cash paid for interest

The accompanying footnotes are integral to the consolidated financial statements

AMERICAN RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021 and 2020

Cash provided by (used in) financing activities

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

American Resources Corporation (ARC or the Company) operates through subsidiaries that were formed or acquired in 2020, 2019, 2018, 2016 and 2015 for the purpose of acquiring, rehabilitating and operating various natural resource assets including coal used in the steel making and industrial markets, critical and rare earth elements used in the electrification economy and aggregated metal and steel products used in the recycling industries.

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.

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 $ 39 million in 2022 to $ 13 million in 2023 and $ 383,000 in 2024.

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 Rate 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 and its wholly owned subsidiaries American Carbon Corp (ACC), Deane Mining, LLC (Deane), Quest Processing LLC (Quest Processing), ERC Mining Indiana Corp (ERC), McCoy Elkhorn Coal LLC (McCoy), Knott County Coal LLC (KCC), Wyoming County Coal (WCC),Perry County Resources LLC (PCR), American Rare Earth LLC (ARE), American Metals LLC (AM) and American Opportunity Venture II, LLC (AOV II).

All significant intercompany accounts and transactions have been eliminated.

On January 5, 2017, ACC entered into a share exchange agreement with NGFC Equities, Inc (NGFC).

Under the agreement, the shareholders of ACC exchanged 100% of its common stock to NGFC for 4,817,792 newly created Series A Preferred shares that is convertible into approximately 95% of outstanding common stock of NGFC.

The previous NGFC shareholders retained 845,377 common shares as part of the agreement.

The conditions to the agreement were fully satisfied on February 7, 2017, at which time the Company took full control of NGFC.

NGFC has been renamed to American Resources Corporation ARC.

The transaction was accounted for as a recapitalization.

ACC was the accounting acquirer and ARC will continue the business operations of ACC, therefore, the historical financial statements presented are those of ACC and its subsidiaries.

The equity and share information reflect the results of the recapitalization.

On May 15, 2017, ARC initiated a one-for-thirty reverse stock split.

The financial statements have been retrospectively restated to give effect to this split.

Entities for which ownership is less than 100% a determination is made whether there is a requirement to apply the variable interest entity (VIE) model to the entity.

Where the company holds current or potential rights that give it the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, combined with a variable interest that gives the Company the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company would be deemed to have a controlling interest.

The company is the primary beneficiary of ERC Mining, LLC, which qualifies as a variable interest entity.

Accordingly, the assets, liabilities, revenue and expenses of ERC Mining, LLC have been included in the accompanying consolidated financial statements.

The company has no ownership in ERC Mining, LLC.

Determination of the company as the primary beneficiary is based on the power through its management functions to direct the activities that most significantly impact the economic performance of ERC Mining, LLC.

On March 18, 2016, the company lent ERC Mining, LLC $ 4,117,139 to facilitate the transaction described in Note 6, which represent amounts that could be significant to ERC.

No further support has been provided.

The company has ongoing involvement in the management of ERC Mining, LLC to ensure their fulfillment of the transaction described in Note 6.

The company is the primary beneficiary of Advanced Carbon Materials LLC (ACM), which qualifies as a variable interest entity.

Accordingly, the assets, liabilities, revenue and expenses of ACM have been included in the accompanying consolidated financial statements.

The company is a 49.9 % owner in ACM and has control of 90 % of the cash flow which led to the determination of the company as the primary beneficiary.

As of December 31, 2021, ACM had no assets, liabilities or operations.

Deane was formed in November 2007 for the purpose of operating underground coal mines and coal processing facilities.

Deane was acquired on December 31, 2015 and as such no operations are presented prior to the acquisition date.

Quest Processing was formed in November 2014 for the purpose of operating coal processing facilities and had no operations before March 8, 2016.

ERC was formed in April 2015 for the purpose managing an underground coal mine and coal processing facility.

Operations commenced in June 2015.

McCoy was formed in February 2016 for the purpose of operating underground coal mines and coal processing facilities.

McCoy was acquired on February 17, 2016 and as such no operations are presented prior to the acquisition date.

KCC was formed in September 2004 for the purpose of operating underground coal mines and coal processing facilities.

KCC was acquired on April 14, 2016 and as such no operations are presented prior to the acquisition date.

On August 23, 2018, KCC disposed of certain non-operating assets totaling $ 111,567 and the corresponding asset retirement obligation totaling $ 919,158 which resulted in a gain of $ 807,591 .

WCC was formed in October 2018 for the purpose of acquiring and operating underground and surface coal mine and a coal processing facility.

No operations were undergoing at the time of formation or acquisition.

On September 25, 2019, Perry County Resources LLC (PCR) was formed as a wholly owned subsidiary of ACC.

On June 8, 2020, American Rare Earth LLC was created as a wholly owned subsidiary of ARC for the purpose of developing and monetizing rare earth mineral deposits.

On June 28, 2020, American Metals LLC was created as a wholly owned subsidiary of ARC for the purpose of aggregating, processing and selling recovered steel and metals.

During January 2021, the Company invested $ 2,250,000 for 50 % ownership and become the managing member of American Opportunity Venture, LLC.

(AOV) It has been determined that AOV is a variable interest entity and that the Company is not primary beneficiary.

As such, the investment in AOV will be accounted for using the equity method of accounting.

During March 2021, the Company invested $ 25,000 for 100 % ownership and become the managing member of American Opportunity Venture II, LLC.

As such, the investment in AOVII has been eliminated in the accompanying financial statements.

As of September 30, 2021, AOVII has had no operational activity.

During March 2021, the Company licensed certain technology to an unrelated entity, Novusterra, Inc.

According to the commercial terms of the license, the Company is to receive 50 % of future cash flows and 15,750,000 common shares of Novusterra, Inc.

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 will be accounted for using the equity method of accounting.

Asset Acquisitions:

On February 12, 2019, through a share exchange, ARC merged with Empire Kentucky Land, Inc, its wholly-owned subsidiary Colonial Coal Company, Inc.

and purchased assets consisting of surface and mineral ownership and other related agreements of Empire Coal Holdings, LLC in exchange for a cash payment of $ 500,000 which was carried as a seller note until paid on February 21, 2019, a seller note of $ 2,000,000 payable in the form of a royalty from production off of the property and 2,000,000 common shares of ARC’s stock valued at $ 24,400,000 .

The note is currently in default as a result of non-payment at the earlier of i) completion of the securities offering and ii) August 20, 2019 (Maturity date).

The default interest rate is 5%.

American Resources Corporation has received a Breach of Promissory Notes from Empire Kentucky Land, Inc.

The amount being sought is $ 2,000,000 as well as additional fees and charges.

The acquired assets have an anticipated life of 25 years.

Capitalized mining rights will be amortized based on productive activities over the anticipated life of 25 years.

Amortization expense for this asset for the year ended December 31, 2021 and 2020 amounted to $ 0 and $ 0 , respectively.

The assets will be measured for impairment when an event occurs that questions the realization of the recorded value.

On May 8, 2020, the company sold Empire Kentucky Land, Inc.

and its wholly-owned subsidiary Colonial Coal Company, Inc back to the seller under a Settlement, Rescission and Mutual Release Agreement.

Under the agreement, the shares of Empire and the underlying property is sold to the seller for the consideration of the cancelation of $ 2,000,000 in seller financing and for 2,000,000 shares of the Company’s common shares.

As such, the assets have been written down to $0 as of December 31, 2019 resulting in an impairment loss of $ 25,968,667 .

On May 8, 2020, the Company entered into a Settlement, Rescission and Mutual Release Agreement with the parties of the Empire acquisition.

The agreement provides for the property of Empire to transfer back to the former parties for the return of 2,000,000 common shares of the Company and extinguishment $ 2,000,000 seller financing note.

Additionally, permits and bonding liability associated with the Point Rock Mine were also transferred back to the original permit holders for the consideration of them assuming the reclamation liability.

The transaction resulted in a gain on sale of $ 6,820,949 for the year ended December 31, 2020.

The stock and assets acquired do not represent a business as defined in FASB AS 805-10-20 due to their classification as a single asset.

Accordingly, the assets acquired are initially recognized at the consideration paid, which was the liabilities assumed, including direct acquisition costs, of which there were none.

The cost is allocated to the group of assets acquired based on their relative fair value.

The assets acquired and liabilities assumed of Empire Coal were as follows at the purchase date:

Acquired Mining Rights

On August 16, 2019, ERC acquired certain assets known as the Gold Star Acquisition in exchange for assuming certain liabilities of LC Energy Operations, LLC and the payment of $ 400,000 , of which $ 177,000 of this amount was considered recovery of previously written off bad debt.

The value of the assets received in excess of the liability assumed created a gain on purchase of $ 394,484 .

The fair values of the asset retirement obligation liabilities assumed were determined to be $ 77,831 .

The liabilities assumed do not require fair value readjustments.

The company’s intention with this property is to reclaim the former mining operations and monetize the structure and equipment acquired.

The assets acquired do not represent a business as defined in FASB AS 805-10-20 due to their classification as a single asset.

Accordingly, the assets acquired are initially recognized at the consideration paid, which was the liabilities assumed and cash, including direct acquisition costs, of which there were none.

The cost is allocated to the group of assets acquired based on their relative fair value.

The assets acquired and liabilities assumed of LC Energy Operations, LLC were as follows at the purchase date:

The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries.

The majority owned subsidiaries by segment include:

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.

ReElement Technologies LLC (RLMT), ReElement Marion LLC (RLM), and Kentucky Lithium LLC (KYL).

Electrified Materials:

Electrified Materials Corporation (EMC).

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 100 % require that a determination is made as to whether there is a requirement to apply the variable interest entity (VIE) model to the entity.

Acquisition Transactions

Effective February 5, 2024, the Company acquired a 51% interest in TR Properties & Equipment Ltd.

(TR) for consideration consisting of a 6% interest in the Company’s subsidiary , American Infrastructure Corporation (AIC).

The Company’s investment in TR substantially consists of a single asset, mining rights.

Accordingly, the transaction does not meet the definition of a business under ASC Topic 805, Business Combinations, and therefore the Company has accounted for the transaction as an asset acquisition.

In an asset acquisition, goodwill or a bargain purchase gain are not recognized, but rather, any difference between the consideration transferred and the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable assets acquired.

As of December 31, 2024, the fair value of the assets acquired and consideration exchanged has not been recognized due to the lack of an independent valuation to support fair value.

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.

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.

All investments are classified as trading securities as of December 31, 2024 and 2023.

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.

The following table sets forth the total of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets.

Cash and cash equivalents

Restricted Cash

Reclamation liability

On September 23, 2019, American Resources Corporation, (“Buyer”) entered into a binding agreement with Bear Branch Coal LLC, a Kentucky limited liability company, Perry County Coal LLC, a Kentucky limited liability company, Ray Coal LLC, a Kentucky limited liability company, and Whitaker Coal LLC, a Kentucky limited liability company (each a “Seller” and collectively, “Sellers”).

The agreement was entered into as part of the bankruptcy proceedings of Cambrian Holding Company LLC, (“Cambrian), and is subject to approval by the United States Bankruptcy Court for the Eastern District of Kentucky (the “Bankruptcy Court”) in the chapter 11 bankruptcy cases of the Sellers, Case No.

19-51200(GRS), by entry of an order in form and substance acceptable to Sellers and Buyer (the “Sale Order).

Under the agreement of the Sale Order, each Seller will sell, transfer, assign, convey and deliver to American Resources Corporation, effective as of the Closing, all assets, rights, titles, permits, leases, contracts and interests of such Seller free and clear of all liens, claims, interests and encumbrances, to the fullest extent permitted by the Bankruptcy Court.

In consideration for the purchased assets, the Buyer will assume certain liabilities.

Additionally, the Buyer will assume all liabilities relating to the transferred permits and the associated reclamation and post-mining liabilities of the purchased assets.

On September 26, 2019, the Company received notice that a certain lease assumption as part of the PCR acquisition was being disputed by the lessor.

As of the report date, the Company is in the process of transferring the permits.

On September 27, 2019, PCR closed and acquired certain assets in exchange for assuming certain liabilities of Perry County Coal, LLC and a cash payment of $1.

The preliminary fair values of the asset retirement obligation liabilities assumed were determined to be $ 2,009,181 .

Additional assumed liabilities total $ 1,994,727 .

The liabilities assumed do not require fair value readjustments.

The assets acquired do not represent a business as defined in FASB AS 805-10-20 due to their classification as a single asset.

Accordingly, the assets acquired are initially recognized at the consideration paid, which was the liabilities assumed and a cash payment of $1, including direct acquisition costs, of which there were none.

The cost is allocated to the group of assets acquired based on their relative fair value.

Because the transaction closed near the end of the reporting quarter the values assigned were provisional as of December 31, 2020 while the company continues to gather information, including evaluations of mining permits, discovery of assumed unsecured payables and timing and extent of end of mine life cost.

As of September 30, 2020, the values assigned were deemed final.

The assets acquired and liabilities assumed of Perry County Coal, LLC were as follows at the purchase date:

Coal Inventory

Mine Development

Equipment - Underground

Equipment - Surface

Processing and Loading Facility

Reclamation liability

Accrued liabilities

On March 4, 2020, PCR entered into a sales agreement with an unrelated entity for three non-core permits which were acquired during the initial purchase on September 27, 2019.

At the time of the purchase, PCR did not assign any value to the permits as they were not within the company’s plans to operate.

The sale of the permits resulted in the release of $ 2,386,439 of reclamation bonds and $ 336,995 of asset retirement obligation liability.

Consideration received was $ 700,000 in cash and $ 300,000 in equipment.

The equipment has not been received as of the report date.

The transaction resulted in a gain on sale of $ 1,061,225 .

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.

Those estimates and assumptions affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities.

Actual results could vary from those estimates.

Convertible Preferred Securities:

We account for hybrid contracts that feature conversion options in accordance with generally accepted accounting principles in the United States.

ASC 815, Derivatives and Hedging Activities (“ASC 815”) requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria.

The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

We also follow ASC 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) in its evaluation of the accounting for a hybrid instrument.

A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following:

(a) a fixed monetary amount known at inception;

(b) variations in something other than the fair value of the issuer’s equity shares;

or (c) variations inversely related to changes in the fair value of the issuer’s equity shares.

Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives, and are carried as a liability at fair value at each balance sheet date with remeasurements reported in interest expense in the accompanying Consolidated Statements of Operations.

Total cash and restricted cash presented in the consolidated statements of cash flows

$ 155,366,868

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 December 31, 2024 and 2023.

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.

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, or an immediate family member of any of the proceeding.

Transactions with related parties are reviewed and approved by the directors of the Company, as per internal policies.

Advance Royalties:

Coal leases that require minimum annual or advance payments and are recoverable from future production are generally deferred and charged to expense as the coal is subsequently produced.

Cash is maintained in bank deposit accounts which, at times, may exceed federally insured limits.

To date, there have been no losses in such accounts.

Restricted cash:

As part of the Kentucky New Markets Development Program an asset management fee reserve was set up in the amount of $ 116,115 .

The funds are held to pay annual asset management fees to an unrelated party through 2021.

The balance as of December 31, 2021 and December 31, 2020 was $ 8,818 and $ 19,138 , respectively.

During the 2020 the Company established a reclamation bonding collateral fund.

The balance of the restricted cash being held totaled $ 355,770 and $ 217,500 as of December 31, 2021 and 2020, respectively.

During 2020, the Company established an escrow account for certain assumed liabilities in the PCR acquisition.

The balance as of December 31, 2021 and 2020 includes in the amount of $ 0 and $ 347,070 , respectively, to pay for assumed liabilities in the PCR asset acquisition.

The following table sets forth a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that agrees to the total of those amounts as presented in the consolidated statement of cash flows for the year ended December 31, 2021 and December 31, 2020.

Restricted Cash

Total cash and restricted cash presented in the consolidated statement of cash flows

Coal 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 three to seven years.

Amortization of the equipment under capital lease is included with depreciation expense.

Property and equipment and amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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 three 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.

During 2019, it was determined that certain long lived assets of Wayland and ERC Mining Indiana were impaired.

The assets include mine development, processing and loading facilities used exclusively in the thermal coal market.

Because of the ongoing depression of thermal coal prices, it was determined that the net book value of these assets would not be recognized.

During 2020, the Empire property and the Point Rock Permits were sold to unrelated parties.

As such, the asset was written down to $0 during 2019.

There was no impairment loss recognized during the period ending December 31, 2020.

There was no impairment loss recognized during the period ending December 31, 2021.

Costs related to maintenance and repairs which do not prolong the asset’s useful life are expensed as incurred.

There were no impairments recognized during 2024 and 2023.

Costs related to maintenance and repairs which do not prolong the an asset’s useful life are expensed as incurred.

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 development and expansion of existing reserves are expensed as incurred.

Cost of Goods Sold and Gross Profit:

Cost of Goods Sold for coal mined and processed include direct labor, materials and utilities.

Activities related to metal recover are inherent in both direct coal labor and overhead labor and does not require additional variable costs.

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:

4 unchanged sentences

The asset retirement obligation assets are amortized based on expected reclamation outflows over estimated recoverable coal deposit lives.

We are using a discount rates ranging from 6.16% to 7.22%, risk free rates ranging from 1.76% to 2.92% and inflation rate of 2%.

We are using discount rates ranging from 6.16% to 7.22%, risk free rates ranging from 1.76% to 2.92% and inflation rate of 2% .

Revisions to estimates are a result of changes in the expected spending estimate or the timing of the spending estimate associated with planned reclamation.

1 unchanged sentence

Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry ponds.

We assess our ARO at least annually and reflect revisions for permit changes, change in our estimated reclamation costs and changes in the estimated timing of such costs.

During 2021 and 2020, $ 0 and $ 0 were incurred for gain loss on settlement on ARO.

The table below reflects the changes to our ARO:

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 fourth quarter of 2024.

The table below reflects the changes to our ARO for 2024 and 2023:

Beginning Balance

Pointrock Sale

Ending Balance

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 of the deferred tax asset will not be realized.

The Company filed an initial tax return in 2015.

Management believes that the Company’s income tax filing positions will be sustained on audit and does not anticipate any adjustments that will result in a material change.

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.

Accretion expense amounted to $ 991,520 and $ 1,015,563 for the years ended December 31, 2024 and 2023, respectively.

Revenue Recognition :

The Company adopted and recognizes revenue in accordance with ASC 606 as of January 1, 2018, using the modified retrospective approach.

The Company concluded that the adoption did not change the timing at which the Company historically recognized revenue nor did it have a material impact on its consolidated financial statements.

Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied;

1 unchanged sentence

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 services for processing coal.

All of the activity is undertaken in eastern Kentucky and Southern Indiana.

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.

2 unchanged sentences

We typically do not include extended payment terms in our contracts with customers.

As such, spot sales prices and forward contract pricing has declined.

During late 2019 management anticipated adverse market conditions globally, and in response began to selectively reduce or idle coal production operations and furlough or terminate employees.

During Q1 2020, the worldwide COVID-19 outbreak sharply reduced worldwide demand for infrastructure and steel products and their necessary inputs including Metallurgical coal.

Company management fully idled the Company’s operations accordingly, and the operations have remained idled through the report date.

These recent, global market disruptions and developments are expected to result in lower sales and gross margins for the coal industry and the Company in 2020 and possibly beyond.

Customer Concentration and Disaggregation of Revenue:

As of December 31, 2021, and 2020 75.3 % and 49.5 % of revenue came from two coal customers and three coal customers, respectively.

During December 31, 2021, 95.1 % of revenue came from two metal recovery customers.

As of December 31, 2021, and 2020, 79.5 % and 100 % of outstanding accounts receivable came from two and zero customers, respectively.

For the year ended December 31, 2021 and 2020, 100 % and 100 % of generated from sales to the steel and industrial industry, respectively.

For the year ended December 31, 2021 and 2020, 0 % and 0 % of generated from sales to the utility industry, respectively.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02 , Leases (“ASU 2016-02”) .

ASU 2016-02, along with related amendments issued from 2017 to 2018 (collectively, the “New Leases Standard”), requires a lessee to recognize a right-of-use asset and a lease liability on the balance sheet.

The Company adopted ASU 2016-02 effective January 1, 2019 using the modified retrospective approach and elected the option to not restate comparative periods in transition and also elected the package of practical expedients for all leases within the standard, which permits the Company not to reassess its prior conclusions about lease identification, lease classification and initial direct costs.

The Company leases certain equipment and other assets under noncancelable operating leases, typically with initial terms of 3 to 7 years.

Capital leases are recorded at the present value of the future minimum lease payments at the inception of the lease.

The gross amount of assets recorded under capital lease amounted to $ 333,875 , all of which is classified as surface equipment.

The Company leases certain office and facility space under noncancelable operating leases, typically with initial terms of 1 to 10 years.

Right to use assets recorded on the balance sheet as of December 31, 2021, associated with these leases amounted to $ 726,194 .

Right to use liabilities recorded on the balance sheet as of December 31, 2021, associated with these leases amounted to $ 714,234 .

Beneficial Conversion Features of Convertible Securities:

Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments.

The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815.

A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date.

In addition, our preferred stock issues contain conversion terms that may change upon the occurrence of a future event, such as antidilution adjustment provisions.

The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument.

The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date.

If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception.

When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.

The Company has a convertible note outstanding.

Principal and accrued interest is convertible into common shares at $ 1.05 per share.

Loan Issuance Costs and Discounts are amortized using the effective interest method.

Amortization expense amounted to $ 8,637 and $ 11,516 as of December 31, 2021 and 2020, respectively.

Amortization expense for the next five years is expected to be approximately $0, annually.

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.

Income Taxes:

We file a consolidated federal income tax return with our subsidiaries.

Income Taxes include U.S.

federal and state income taxes currently payable and deferred income taxes.

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.

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 4 presents the Company’s financial assets or liabilities measured at fair value as of December 31, 2024 and 2023.

The carrying amounts of the Company’s cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value as of December 31, 2024 and 2023 due to their short-term nature.

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 allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable amounts considered at risk or uncollectible.

Allowance for trade receivables as of December 31, 2021 and 2020 amounted to $ 0 and $ 0 , respectively.

Allowance for other accounts receivables as of December 31, 2021 and 2020 amounted to $0 and $0, respectively.

Allowance for trade receivables as of December 31, 2021 and 2020 amounted to $0, for both years.

Allowance for other accounts receivables, including note receivables as of December 31, 2021 and 2020 amounted to $ 1,744,570 and $ 1,494,570 , respectively.

The allowance related to the purchase of a note receivable from a third party.

The note receivable has collateral in certain mining permits which are strategic to KCC.

Timing of payment on the note is uncertain resulting a full allowance for the note.

Trade and loan receivables are carried at amortized cost, net of allowance for losses.

Amortized cost approximated book value as of December 31, 2021 and 2020.

Inventory consisting of mined coal is stated at the lower of cost (first in, first out method) or net realizable value.

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 $ 99,022 and $ 368,500 as of December 31, 2024 and 2023, respectively.

The note receivables have collateral in certain mining permits which are strategic to our subsidiary, Knott County Coal (KCC).

The timing of payment on the note is uncertain resulting in a full allowance for the note.

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 is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable vesting period of the stock award (generally 0 to 5 years) using the straight-line method.

Stock compensation to employees is accounted for under ASC 718 and stock compensation to non-employees is accounted for under 2018-07 which was adopted on July 1 2018 and ASC 505 for periods before July 1, 2018 and did not have an impact to the financial statements.

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:

1 unchanged sentence

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.

For the years ended December 31, 2021 and 2020, the Company had 10,213,764 and 8,401,221 outstanding stock warrants, respectively.

For the years ended December 31, 2021 and 2020, the Company had 4,209,269 and 2,159,269 outstanding stock options, respectively.

For the years ended December 31, 2021 and 2020, the Company had 0 and 0 shares of Series A Preferred Stock, respectively, that has the ability to convert at any time into 0 and 0 shares of common stock, respectively.

For the years ended December 31, 2021 and 2020, the Company had 0 and 0 shares of Series B Preferred Stock, respectively, that has the ability to convert at any time into 0 and 0 shares of common stock, respectively.

For the years ended December 31, 2021 and 2020, the Company had 4,209,269 and 2,159,269 restrictive stock awards, restricted stock units, or performance-based awards.

Reclassifications:

Reclassifications have been made to conform with current year presentation.

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.

ASU 2020-10, Codification Improvements , effective for years beginning after December 15, 2020.

ASU 2020-09, Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No.

33-10762 , effective for years beginning after December 31, 2021.

ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable and other Costs , effective for years beginning after December 15, 2020.

ASU 2020-06, Debt – Debt with Conversion and Other Options , effective for years beginning after December 15, 2021.

Management is still evaluating the effects of this pronouncement ahead of its effective date.

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 December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures.

The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S.

and in foreign jurisdictions.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively.

Early adoption is permitted.

The company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements 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

At December 31, 2021 and 2020, property and equipment were comprised of the following:

Processing and rail facility

Underground equipment

Surface equipment

Mine development

Property and equipment were comprised of the following:

Processing/loadout

Coal refuse storage

Rare Earth Processing

Acquired mining rights

Rare earth processing equipment

Construction in Progress

Accumulated depreciation

Less accumulated depreciation and amortization

( 25,764,623 )

( 21,459,548 )

Total Property and Equipment, Net

Depreciation expense amounted to $ 1,980,026 and $ 2,298,703 for the years of December 31, 2021 and 2020, respectively.

Amortization of mining rights amounted to $ 1,246,740 and $ 1,251,357 for the years of December 31, 2021 and 2020, respectively.

Property and equipment, net

Depreciation expense amounted to $ 2,735,972 and $ 2,323,431 for 2024 and 2023, respectively.

Amortization of mining rights amounted to $ 1,543,226 and $ 1,222,686 for 2024 and 2023, respectively.

The estimated useful lives are as follows:

Processing and Rail Facilities

Surface equipment

Underground equipment

Mine Development

Processing and rail facilities

Coal refuse storage

NOTE 3 – RIGHT OF USE ASSETS

Our principal offices are located at 12115 Visionary Way, Fishers, Indiana 46038.

We pay $ 5,726 per month in rent for the office space and the rental lease expires December 2026 .

On January 1, 2022, the Company entered into an expansion lease for the site.

The amended lease has a ten-year term and $5,869 per month rate.

We also rent office space from an affiliated entity, LRR, at 11000 Highway 7 South, Kite, Kentucky 41828 and pay $ 1,702 per month rent and the rental lease expires January 1, 2030 .

On August 17, 2021, American Rare Earth entered into a Commercial Land Lease sublease agreement with Land Betterment for nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility.

The sublease is for the period of 5 years with a rate of $ 3,500 a month.

On October 8, 2021, American Rare Earth entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility.

The is for the period of 2 years with a rate of $ 4,745 .83 a month.

At December 31, 2021.

right of use assets and liabilities were comprised of the following:

Principal Office Lease

Kite Kentucky Lease

Rare Earth Commercial Land Lease

Rare Earth Commercial Purification Facility Lease

NOTE 4 - NOTES PAYABLE

During the year ended December 31, 2021 and 2020, principal payments on long term debt totaled $ 562,318 and $ 2,586,981 , respectively.

During the year ended December 31, 2021 and 2020, new debt issuances totaled $ 562,318 and $ 5,066,129 , respectively.

During the year ended December 31, 2021 and 2020, net (payments) and proceeds from our factoring agreements totaled $ 0 and $( 1,807,443 ), respectively.

During the year ended December 31, 2021 and 2020, discounts on debt issued amounted to $ 0 and $ 134,296 , respectively related to the Sales financing arrangement discussed below and the note payable discussed further in note 3.

During 2021 and 2020, $ 8,637 and $ 11,516 was amortized into expense with $ 0 and $ 405,667 remaining as unamortized discount, respectively.

Short-term and Long-term debt consisted of the following at December 31, 2021 and 2020:

Equipment Loans - ACC

Note payable to an unrelated company in monthly installments of $1,468, With interest at 6.95%, through maturity in March 2021, when the note is due in full.

The note is secured by equipment and a personal guarantee by an officer of the Company.

On October 19, 2017, ACC entered into an equipment financing agreement with an unaffiliated entity, Inc.

to purchase certain surface equipment for $90,400.

The agreement calls for monthly payments until maturity of October 19, 2019 and interest of 9.95%.

The note is secured by the equipment purchased.

The balance of the note was repaid with cash during 2021.

On October 20, 2017, ACC entered into an equipment financing agreement with an unaffiliated entity, Inc.

to purchase certain surface equipment for $50,250.

The agreement calls for monthly payments until maturity of October 20, 2019 and interest of 10.60%.

The note is secured by the equipment purchased.

On December 7, 2017, ACC entered into an equipment financing agreement with an unaffiliated entity, to purchase certain surface equipment for $56,900.

The agreement calls for an interest rate of 8.522%, monthly payments until maturity of January 7, 2021.

The note is secured by the equipment purchased.

The balance of the note was repaid with cash during 2021.

On January 25, 2018, ACC entered into an equipment loan agreement with an unrelated party in the amount of $346,660.

The agreement calls for monthly payments of $11,360 until maturity date of December 24, 2020 and carries an interest rate of 9%.

The loan is secured by the underlying surface equipment purchased by the loan.

Loan proceeds were used directly to purchase equipment.

On May 9, 2018, ACC entered into a loan agreement with an unrelated party in the amount of $1,000,000 with a maturity date of September 24, 2018 with monthly payments of $250,000 due beginning June 15, 2018.

The note is secured by the assets and equity of the company and carries an interest rate of 0%.

Proceeds of the note were split between receipt of $575,000 cash and $425,000 payment for new equipment.

No payments have been made on the note which is in default.

The note is secured by the equipment purchased by the note and a personal guarantee of an officer.

ARC Corporate Loan

On April 23, 2020, the Company received loan proceeds in the amount of approximately $2,649,800 under the Paycheck Protection Program (“PPP”).

The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business.

The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels.

The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the period.

On January 26, 2022, the Company received forgiveness of $1,521,304 of principal.

On September 11, 2020, the Company entered into a $1,493,233.65 settlement agreement with a non-related party.

Starting April 1, 2021, the note requires monthly payments of $100,000 until the balance is paid in full.

Customer Loan Agreement – ARC

On December 31, 2018, the Company entered into a loan agreement with an unrelated party.

The loan is for an amount up to $6,500,000 of which $3,000,000 was advanced on December 31, 2018 and $3,500,000 was advanced During 2019.

The promissory agreement carries interest at 5% annual interest rate and payments of principal and interest shall be repaid at a per-ton rate of coal sold to the lender.

The outstanding amount of the note has a maturity of April 1, 2020.

The note is secured by all assets of the Company.

Loan issuance costs totaled $41,000 as of December 31, 2018.

The balance of the note was repaid with the issuance of company common shares during 2021.

Sales Financing Arrangement ARC

During May 2018, the company entered into a financing arrangement with two unrelated parties.

The notes totaled $2,859,500, carried an original issue discount of $752,535, interest rate of 0% and have a maturity date of January 2019 and are secured by future receivables as well as personal guarantees of two officers of the company.

As of December 31, 2019 and 2018, unamortized original issue discount totaled $0 and $88,685 and unamortized loan issuance costs totaled $0 and $4,611, respectively.

On April 1, 2020, the outstanding balance of $375,690.37 of this note was converted into a senior convertible note.

(See Note 10)

Equipment Loans – ERC

Equipment lease payable to an unrelated company in 48 equal payments of $771 with an interest rate of 5.25% with a balloon payment at maturity of July 31, 2019.

The note is secured by equipment and a corporate guarantee from Quest Energy Inc.

The balance of the note was repaid with cash during 2021.

Equipment lease payable to an unrelated company in 48 equal payments of $3,304 with an interest rate of 5.25% with a balloon payment at maturity of July 31, 2019.

The note is secured by equipment and a corporate guarantee from Quest Energy Inc.

The balance of the note was repaid with cash during 2021.

Equipment Loans - McCoy

On May 2, 2017, ACC entered into an equipment purchase agreement with an unaffiliated entity, Inc.

to purchase certain underground mining equipment for $250,000 which carries 0% interest.

Full payment was due September 12, 2017.

The note is secured by the equipment purchased with the note.

The balance of the note was repaid with the issuance of company common shares during 2021.

On June 12, 2017, ACC entered into an equipment purchase Agreement, which carried interest at 0% with an unaffiliated entity, Inc.

to purchase certain underground mining equipment for $22,500.

Full payment was due September 12, 2017.

The note is secured by the equipment purchased with the note.

The balance of the note was repaid with the issuance of company common shares during 2021.

On September 25, 2017, ACC entered into an equipment purchase Agreement, which carries 0% interest with an unaffiliated entity, Inc.

to purchase certain underground mining equipment for $350,000.

The agreement provided for $20,000 monthly payments until the balance is paid in full.

The note matures on September 25, 2019, and the note is in default.

The note is secured by the equipment purchased with the note.

Accounts Receivable Factoring Agreement

Factoring Arrangements

On December 19, 2019, the Company entered into a factoring arrange with an unrelated party.

The arrangement is separated into two components.

The first component is a promissory note in the amount of $1,189,223 with interest equaling 1.61% and a due date of December 31, 2021.

The principal will be repaid out of future sales and the note is secured by certain fixed assets of PCR.

The second component is advance of customer invoices totaling 2,200,486.

The advances bear interest at 7% plus a $1 per ton fee and were re-paid in January 2020, from customer receipts.

A customer of the Company advanced $550,000 for inventory.

The advance is unsecured and bears no interest and will be recouped by future sales to the customer.

The balance of the note was repaid with the issuance of company common shares during 2021.

Kentucky New Markets Development Program

Quest Processing - loan payable to Community Venture Investment XV, LLC, with interest only payments due quarterly until March 2023, at which time quarterly principal and interest payments are due.

The note bears interest at 3.698554% and is due March 7, 2046.

The loan is secured by all equipment and accounts of Quest Processing.

This note was forgiven pursuant to the loan agreement.

Quest Processing - loan payable to Community Venture Investment XV, LLC, with interest only payments due quarterly until March 2023, at which time quarterly principal and interest payments are due.

The note bears interest at 3.698554% and is due March 7, 2046.

The loan is secured by all equipment and accounts of Quest Processing.

This note was forgiven pursuant to the loan agreement.

Debt Discounts and Loan Issuance Costs

Total note payables, net of discount

Current maturities

Total Long-term note payables, net of discount

Convertible notes payable consisted of the following at December 31, 2021 and 2020:

In 2020, the Company created a convertible debt offering.

The debt matures in two years, with interest at 12.5% capitalizing monthly.

Debt Discounts

Total convertible note payables, net of discount

Affiliate notes consisted of the following at December 31, 2021 and 2020:

Notes payable to affiliate, due on demand with no interest and is uncollateralized.

Equipment purchasing was paid by an affiliate resulting in the note payable.

Total affiliate note payables

Total interest expense was $ 4,159,813 in 2021 and $ 3,383,294 in 2020.

Future minimum principal payments, interest payments and payments on capital leases are as follows:

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 cash and cash equivalents and 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 available-for-sale marketable consisting of fixed income funds are as follows:

Gross Unrealized

Allowance for

Credit Losses

December 31, 2024

$ 151,100,796

$ 156,341,349

December 31, 2023

There were no investments with unrealized losses that have been owned for more than or less than a year.

The debt securities outstanding as of December 31, 2024 have maturity dates ranging from the first quarter of 2025 through the fourth quarter of 2025.

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 $ 8,954 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.

ReElement leases office space at 1716 E Pleasant Street, Noblesville, Indiana 46060 with a current monthly rent payment of $ 5,224 .

The lease agreement expires in November 2028 and is subject to escalation payments on an annual basis.

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 $ 1,702 and a lease expiration of December 31, 2029 .

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.

The first nine months of rent for the three related party operating leases with LLR are deferred per the lease agreements and is due on the thirteenth month or January 1, 2025.

As of December 31 2024, $ 373,420 has been accrued and is included in accounts payable – related party.

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 $ 115,773 .

The lease expires in May of 2063 and is subject to escalation payments on an annual basis.

The Company has not made any payments on the related party finance lease as of December 31, 2024 and has a balance of $ 1,064,712 due for deferred rent payments included in accounts payable – related party.

The components of lease expense included on the Company’s statements of operations, inclusive of the related party component were as follows:

For the Years Ended

Expense Classification

Operating lease expense:

Amortization of ROU asset

General and administrative

Accretion of operating lease liability

General and administrative

Total operating lease expense

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:

Operating leases:

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

The future minimum lease payments required under leases as of December 31, 2024 are as follows:

Discounted cash flows

Less imputed interest

( 69,805,590 )

( 70,466,551 )

Present value of lease liabilities

NOTE 5 - RELATED PARTY TRANSACTIONS

During 2015, equipment purchasing was paid by an affiliate resulting in a note payable.

The balance of the note was $ 74,000 as of December 31, 2021 and 2020, respectively.

During 2016, the Company entered into a coal sales commission agreement with a company for which a member services as a Company Independent Director.

The company is to get 2% of the net sales price on all coal sold through pre-approved customers.

Commissions earned during 2021 and 2020 amounted to $ 0 and $ 0 , respectively.

As of December 31, 2021 and 2020, the balance owed on the agreement amounted to $ 0 and $ 0 , respectively.

During 2020, the outstanding amount was paid in full.

On April 30, 2017, the Company purchased $ 250,000 of secured debt that had been owed to that party, by an operating subsidiary of a related party.

As a result of the transaction, the Company is now the creditor on the notes.

The first note in the amount of $ 150,000 is dated March 13, 2013 , carries an interest rate of 12 % and was due on September 13, 2015.

The second note in the amount of $ 100,000 is dated July 17, 2013 , carries an interest rate of 12 % and was due January 17, 2016.

Both notes are in default and have been fully impaired due to collectability uncertainty.

During July 2017, an officer of the Company advanced $ 50,000 to Quest.

The advance is unsecured, non interest bearing and due on demand.

During October 2018, the same officer advanced $ 13,500 under the same terms.

(see Note 3).

The balance as of December 31, 2021 and 2020 amounted to $ 0 and $ 53,639 , respectively.

Subsequent to year end this note was converted into a senior secured convertible note.

(see Note 10)

During December 2018, an officer of the Company advanced $ 5,000 to American Resources.

The advance is unsecured, non interest bearing and due on demand.

(see Note 3) The balance as of December 31, 2021 and 2020 amounted to $ 0 and $ 5,000 , respectively.

Subsequent to year end this note was converted into a senior secured convertible note.

(see Note 10)

On October 24, 2016, the Company sold certain mineral and land interests to a subsidiary of an entity, LRR, owned by members of the Company’s management.

LRR leases various parcels of land to QEI and engages in other activities creating miscellaneous income.

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.

The amended contract terms state that service costs are passed through to the Company with a 12.5% mark-up and a 50% share of cost savings .

The agreement covers services across all of the Company’s properties.

For the year ended December 31, 2024 and 2023, the amounts incurred under the agreement amounted to $ 4,216,528 and $ 2,519,180 , respectively.

The amount paid for the year ended December 31, 2024 and 2023 amounted to $ 4,966,536 and $ 4,952,800 , respectively.

As of December 31, 2024 and 2023, the amount due under the agreement amounted to $ 1,683,612 and $ 2,433,620 , respectively.

In addition, $ 2,800,000 and $ 1,400,000 in 2024 and 2023, respectively, was incurred related to project management services that Land Betterment Corp.

provided for the WCC capital project.

These project management services were all payable as of December 31, 2024 and 2023.

The Company is the holder of 2,000,000 LBX Tokens with a par value of $250 for each token .

The token issuance process is undertaken by a related party, Land Betterment, and is predicated on proactive environmental stewardship and regulatory bond releases.

As of December 31, 2024 and 2023, there is no market for the LBX Token and therefore no value has been assigned, respectively.

On June 11, 2020 the Company purchased $ 1,494,570 of secured debt including accrued interest that had been owed to Samuel Coal Holding Corp., by its operating subsidiary Samuel Coal Corp.

As a result of the transaction, the Company became the creditor on the four notes.

The notes are in default and have been fully impaired due to collectability uncertainty as of December 31, 2022.

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 $ 178,683 .

The note bears no interest and is due in 2026.

As of January 28, 2017, the note was paid in full.

From October 24, 2016.

this transaction was eliminated upon consolidation as a variable interest entity.

As of July 1, 2018, the accounts of Land Resources & Royalties, LLC have been deconsolidated from the financial statements based upon the ongoing review of its status as a variable interest entity.

As of December 31, 2024 and 2023, amounts owed to LRR totaled $ 0 and $ 503,853 , respectively.

The contract terms state that service costs are passed through to the Company with a 10% mark-up and a 50% share of cost savings.

The agreement covers services across all of the Company’s properties.

During 2021, the amount incurred under the agreement amounted to $ 4,296,266 and the amount paid amounted to $ 2,578,335 .

As of December 31, 2021, the amount due under the agreement amounted to $ 2,073,830 .

The Company is the holder of 2,000,000 LBX Tokens with a par value of $ 250 for each token.

The token issuance process is undertaken by a related party, Land Betterment, and is predicated on proactive environmental stewardship and regulatory bond releases.

As of December 31, 2021, there is no market for the LBX Token and therefore no value has been assigned.

On June 11, 2020 the Company purchased $ 1,494,570 of secured debt included accrued interest that had been owed to that party, by an operating subsidiary of a related party.

As a result of the transaction, the Company is now the creditor on the four notes.

The first note in the amount of $ 75,000 is dated June 28, 2013 , carries an interest rate of 12 % and was due on June 28, 2015.

The second note in the amount of $ 150,000 is dated June 28, 2013 , carries an interest rate of 12 % and was due June 28, 2015.

The third note in the amount of $ 199,500 is dated March 18, 2014 , carries an interest rate of 4 % and was due on March 18, 2016.

The fourth note in the amount of $ 465,500 is dated March 18, 2014 , carries an interest rate of 4 % and was due on March 18, 2016.

The notes are in default and have been fully impaired due to collectability uncertainty.

On January 1, 2021, the Company purchased $ 250,000 of secured debt including accrued interest that has been owed to that party, by an operating subsidiary of a related party.

As a result of the transaction, the Company is now the creditor on the note.

The note is in default and has been fully impaired due to collectability uncertainty.

American Opportunity Venture, LLC

During January 2021, the company invested $ 2,250,000 for 50% ownership and become the managing member of American Opportunity Venture, LLC.

(AOV) It has been determined that AOV is a variable interest entity and that the Company is not primary beneficiary.

As such, the investment in AOV will be accounted for using the equity method of accounting.

Condensed Summary Financials as Of December 31, 2021:

Balance Sheet

Investment in American Acquisition Opporutnity Inc

Members Equity

Total Liabilities and Members' Equity

American Opportunity Venture II, LLC

During March 2021, the Company invested $ 25,000 for 100% ownership and become the managing member of American Opportunity Venture II, LLC.

As such, the investment in AOVII has been eliminated in the accompanying financial statements.

As of June 30, 2022, AOVII has had no operational activity.

Condensed Summary Financials as Of December 31, 2021:

Balance Sheet

Members Equity

Total Liabilities and Members' Equity

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.

The Company made cash advances to AMAO of $ 531,613 for the year ended December 31, 2023.

No cash advances were made in 2024.

As of December 31, 2024 and December 31, 2023, the Company had a balance of $ 741,243 due from RMCO.

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 $ 1,100,000 (the “Line of Credit”).

Refer to Note 8 for further information on the convertible promissory notes.

As further described in Note 5, RLMT is the lessee under a 30 year lease agreement with LRR and Electrified Materials Corporation is the lessee under three commercial leases with LRR.

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 $ 2,250,000 for 50 % ownership and became the managing member of American Opportunity Venture, LLC.

(AOV) It has been determined that AOV is a variable interest entity and that the Company is the primary beneficiary, therefore AOV has been consolidated into the Company’s financial statement.

As such, AOV’s sole investment in Royalty Management Co (RMCO) will be accounted for using the equity method of accounting.

The sole investment was initially in American Acquisition Opportunity Inc (AMAO) a SPAC that closed its reverse merger with RMCO effective October 31, 2023.

The Company recognizes the earnings or losses on a three-month lag to ensure consistency and timely filling of the Company’s financial statements.

As of December 31, 2024 and 2023 the Company held 3,076,500 shares of Class A common stock in RMCO.

Novusterra, Inc.

During March 2021, the Company licensed certain technology to an unrelated entity, Novusterra, Inc.

According to the commercial terms of the license, the Company is to receive 50% of future cash flows and 15,750,000 common shares of 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 ( 50 %) of the operating profits from Novustera’s Graphene manufacturing and marketing business activity.

As part of the agreement, Novusterra’s Chairman of the Board of Directors at the time was replaced by the Company’s Mark Jensen, Chief Executive Officer and Chairman of the Board of Directors.

On August 30, 2022, we entered into a purchase agreement to sell the exclusive rights of the patents included in the Graphene Development Agreement for 4,000,000 common shares of Novusterra with a fair market value of $ 1,784,000 in stock of Novusterra.

Pursuant to the purchase agreement, Novusterra is no longer obligated to pay the Company fifty percent ( 50 %) of the operating profits from their Graphene manufacturing and marketing business.

However, Novusterra is still obligated to pay the Company ten percent ( 10 %) of all revenue from the exclusive sublicense with Kenai Defense Company, LLC and for the Department of Defense under the contract that was transferred from the Company to Novusterra.

Any subsequent contracts entered into by Novusterra with Kenai Defense Company, LLC and for the Department of Defense will have no future revenue allocations to the Company.

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 will be accounted for using the equity method of accounting.

As of June 30, 2022, Novusterra has had no operational activity.

Condensed Summary Financials as Of December 31, 2021:

Current assets:

Cash and cash equivalents

Total current assets

Non-current assets:

Intangible assets

Operating lease right-of-use asset

Total non-current assets

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payables

Accrued interest

Other current liabilities

Current portion of operating lease liabilities

Total current liabilities

Long term debt, net of current portion

Operating lease liabilities, less current portion

Total liabilities

Commitments and contingencies

Stockholders’ Equity

Preferred stock - no par value;

400,000,000 shares authorized;

0 shares issued and outstanding as of December 31, 2021 and December 31, 2020

Class A Common stock - no par value;

2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively;

10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Class B Common stock - no par value;

0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively;

0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Accumulated deficit

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

NOTE 6 – KENTUCKY NEW MARKETS DEVELOPMENT PROGRAM

On March 18, 2016, Quest Processing entered into two loans under the Kentucky New Markets Development Program for a total of $ 5,143,186 .

Quest Processing paid $ 460,795 of debt issuance costs resulting in net proceeds of $ 4,682,391 .

The Company retains the right to call $ 5,143,186 of the loans in March 2023.

State of Kentucky income tax credits were generated for the lender which the Company has guaranteed over their statutory life of seven years in the event the credits are recaptured or reduced.

At the time of the transaction, the income tax credits were valued at $ 2,005,843 .

The Company has not established a liability in connection with the guarantee because it believes the likelihood of recapture or reduction is remote.

On March 18, 2016, ERC Mining LLC, an entity consolidated as a VIE, lent $ 4,117,139 to an unaffiliated entity, as part of the Kentucky New Markets Development Program loans.

The note bears interest at 4 % and is due March 7, 2046 .

The balance as of December 31, 2021 and 2020 was $ 0 and $ 4,117,139 , respectively.

Payments of interest only are due quarterly until March 18, 2023 at which time quarterly principal and interest are due.

The note is collateralized by the equity interests of the borrower.

The Company’s management also manages the operations of ERC Mining LLC.

ERC Mining LLC has assets totaling $ 4,117,139 and liabilities totaling $ 4,415,860 as of December 31, 2021 and 2020, respectively, for which there are to be used in conjunction with the transaction described above.

Assets totaling $ 3,325,401 and $ 3,490,087 and liabilities totaling $ 4,117,139 and $ 4,117,139 , respectively, are eliminated upon consolidation as of December 31, 2021 and 2020.

The Company’s risk associated with ERC Mining LLC is greater than its ownership percentage and its involvement does not affect the Company’s business beyond the relationship described above.

On November 9.

2021, Quest Processing fulfilled all obligations of the loans under the Kentucky New Markets Development Program.

As such, all amounts due under the notes were forgiven and ongoing requirements were ended.

NOTE 7 - INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The primary temporary differences that give rise to the deferred tax assets and liabilities are as follows:

accrued expenses.

Deferred tax assets consisted of $ 6,366,032 and $ 1,786,715 at December 31, 2021 and 2020, respectively, which was fully reserved.

Deferred tax assets consist of net operating loss carryforwards in the amount of $ 24,175,518 and $ 17,809,487 at December 31, 2021 and 2020, respectively, which was fully reserved.

The net operating loss carryforwards for years 2015, 2016, 2017, 2018.

2019 and 2020 begin to expire in 2035.

The application of net operating loss carryforwards are subject to certain limitations as provided for in the tax code.

The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and reduced the corporate income tax rate from 34% to 21% .

The Company’s deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law.

On March 25, 2020, the CARES Act was established with implications of corporate tax treatment.

The CARES Act provides that NOLs arising in a tax year beginning after December 31, 2018 and before January 1, 2021 can be carried back to each of the five tax years preceding the tax year of such loss.

The CARES Act temporarily and retroactively increases the limitation on the deductibility of interest expense under Code Sec.

163(j)(1) from 30% to 50% for the tax years beginning in 2019 and 2020.

The Company’s effective income tax rate is lower than what would be expected if the U.S.

federal statutory rate ( 21 %) were applied to income before income taxes primarily due to certain expenses being deductible for tax purposes but not for financial reporting purposes.

The Company files income tax returns in the U.S.

federal jurisdiction and various state jurisdictions.

All years are open to examination as of December 31, 2021.

NOTE 8 – EQUITY TRANSACTIONS

As of December 31, 2021, the following describes the various types of the Company’s securities:

Voting Rights .

Holders of shares of common stock are entitled to one vote per share held of record on all matters to be voted upon by the stockholders.

The holders of common stock do not have cumulative voting rights in the election of directors.

Dividend Rights .

Holders of shares of our common stock are entitled to ratably receive dividends when and if declared by our board of directors out of funds legally available for that purpose, subject to any statutory or contractual restrictions on the payment of dividends and to any prior rights and preferences that may be applicable to any outstanding preferred stock.

Please read “Dividend Policy.”

Liquidation Rights .

Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities and the liquidation preference of any of our outstanding shares of preferred stock.

Other Matters .

The shares of common stock have no preemptive or conversion rights and are not subject to further calls or assessment by us.

There are no redemption or sinking fund provisions applicable to the common stock.

All outstanding shares of our common stock, are fully paid and non-assessable.

Series A Preferred Stock

Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series A Preferred stock, par value $ 0.0001 per share, covering up to an aggregate of 100,000 shares of Series A Preferred stock.

The Series A Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights.

Additionally, the holders of preferred stock will entitled to vote at or receive notice of any meeting of stockholders.

As of the date of this filing, no shares of Series A Preferred stock are outstanding.

See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series A Preferred stockholders.

Voting Rights .

The holders of Series A Preferred Stock shall be entitled to vote on an “as-converted” basis for any matters that require voting of the Class A Common Stock.

Dividend Rights .

The holders of the Series A Preferred stock are entitled to receive its proportional distribution or accrual of the cash dividend as if the Series A Preferred Stock were converted to Class A Common Stock (plus any Class A Common Stock equivalents that may be entitled to receive a dividend).

Conversion Rights .

The holders of the Series A Preferred stock are entitled to convert into common shares, at the holder’s discretion, Into Forty Percent (40.0%) of the outstanding amount of Class A Common Stock plus common stock equivalents that are existing at the time of the conversion, at any time and from time to time.

No additional consideration is required for the conversion.

Liquidation Rights .

Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of the Series A Preferred shares shall be entitled to receive in preference to the holders of the Common Stock a per share amount equal to $ 1.00 per share.

Anti-Dilution Protections .

The Series A Preferred stock shall have full anti-dilution protection until March 1, 2020, such that, when the sum of the shares of the common stock plus the Series A Convertible stock that are held by the Series A Preferred stock holders as of the date of the Articles of Amendment are summed (the sum of which is defined as the “Series A Holdings”, and the group defined as the “Series A Holders”), the Series A Holdings held by the Series A Holders shall be convertible into, and/or equal to, no less than Seventy-Two Percent (72.0%) of the fully-diluted common stock outstanding of the company (inclusive of all outstanding “in-the-money” options and warrants).

Any amount that is less than Seventy-Two Percent (72.0%) shall be adjusted to Seventy-Two Percent (72.0%) through the immediate issuance of additional common stock to the Series A Holders to cure the deficiency , which shall be issued proportionally to each respective Series A Holder’s share in the Series A Holdings at the time of the adjustment.

This anti-dilution protection shall include the effect of any security, note, common stock equivalents, or any other derivative instruments or liability issued or outstanding during the anti-dilution period that could potential cause dilution during the anti-dilution period or in the future.

As of February 14, 2019, all Series A Preferred stock has been converted into Common shares of the company.

Series B Preferred Stock

Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series B Preferred stock, par value $ 0.001 per share, covering up to an aggregate of 20,000,000 shares of Series B Preferred stock.

The Series B Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights.

Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of stockholders.

As of the date of this filing, no shares of Series B Preferred stock are outstanding.

See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series B Preferred stock holders.

Voting Rights .

The holders of Series B Preferred shares have no voting rights.

Dividend Rights .

The holders of the Series B Preferred shall accrue a dividend based on an 8.0 % annual percentage rate, compounded quarterly in arrears, for any Series B Preferred stock that is outstanding at the end of such prior quarter.

Conversion Rights .

The holders of the Series B Preferred stock are entitled to convert into common shares, at the holder’s discretion, at a conversion price of Three Dollars and Sixty Cents ($ 3.60 ) per share of common stock, subject to certain price adjustments found in the Series B Preferred stock purchase agreements.

Liquidation Rights .

Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of Series B Preferred shares shall have a liquidation preference to the Series A Preferred and Common shares at an amount equal to the holders’ investment in the Series B Preferred stock.

Series C Preferred Stock

Our certificate of incorporation authorizes our board of directors, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time our Series C Preferred stock, par value $ 0.0001 per share, covering up to an aggregate of 20,000,000 shares of Series C Preferred stock.

The Series C Preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights.

Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of stockholders.

As of the date of this filing, no shares of Series C Preferred stock are outstanding.

See “Security Ownership of Certain Beneficial Owners and Management” for more detail on the Series C Preferred stock holders.

Voting Rights .

The holders of Series C Preferred shares are entitled to vote on an “as-converted” basis of one share of Series C Preferred Stock voting one vote of common stock.

Dividend Rights .

The holders of the Series C Preferred shall accrue a dividend based on an 10.0 % annual percentage rate, compounded annually in arrears, for any Series C Preferred stock that is outstanding at the end of such prior year.

Conversion Rights .

The holders of the Series C Preferred stock are entitled to convert into common shares, at the holder’s discretion, at a conversion price of Six Dollars ($ 6.00 ) per share of common stock, subject to certain price adjustments found in the Series C Preferred stock purchase agreements.

Should the company complete an equity offering (including any offering convertible into equity of the Company) of greater than Five Million Dollars ($ 5,000,000 ) (the “Underwritten Offering”), then the Series C Preferred stock shall be automatically and without notice convertible into Common Stock of the company concurrently with the subsequent Underwritten Offering at the same per share offering price of the Underwritten Offering.

If the Underwritten Offering occurs within twelve months of the issuance of the Series C Preferred stock to the holder, the annual dividend of 10.0% shall become immediately accrued to the balance of the Series C Preferred stock and converted into the Underwritten Offering.

Liquidation Rights .

Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of Series C Preferred shares shall have a liquidation preference to the Common shares at an amount equal to $ 1.00 per share.

As of February 21, 2019, all Series C Preferred stock has been converted into Common shares of the company.

Common Share Transactions

On October 8, 2020, the Company issued 5,200,000 shares of Class A Common Stock at a price of $2.50 per share in conjunction with its effective S-3/A Registration Statement.

Net proceeds to the Company amounted to $12,030,000.

During 2020, the Company issued 2,608,653 share of Class A Common Stock pursuant to warrant conversions.

During 2020, the Company issued 6,084,454 shares of Class A Common Stock pursuant to debt conversions.

During 2020, the Company issued 15,000 shares of Class A Common Stock pursuant to various consulting arrangements.

During 2020, the Company issued 229,373 shares of Class A Common Stock pursuant to payable conversions.

On March 17, 2021, 425,000 of restricted common shares were sold.

Gross proceeds to the Company amounted to $1,275,000.

On June 9, 2021, the Company issued 8,600,000 shares of Class A Common Stock.

Net proceeds to the Company after offering expenses amounted to $27,943,000.

During 2021, the Company issued 3,826,532 share of Class A Common Stock pursuant to warrant conversions.

During 2021, the Company issued 6,242,859 shares of Class A Common Stock pursuant to debt conversions.

During 2021, the Company issued 162,000 shares of Class A Common Stock pursuant to various consulting arrangements.

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 91 % of the Company’s ownership in Novusterra, Inc.

resulting in the Company to receive 9% of future cash flows and holding 1,417,500 common shares of Novusterra, Inc.

Due to the Company’s new ownership percentage in Novusterra, Inc.

the investment is accounted for using the cost method of accounting.

As of December 31, 2024 and 2023, the carrying value of the investment was $ 0 and $ 1,598,480 , respectively.

FUB Mineral LLC

On October 1, 2021, the Company contributed $ 250,000 for 23 % ownership of FUB Mineral LLC (FUB).

Simultaneously the Company issued a promissory note to FUB for $ 350,000 that was fully repaid as of April 15, 2022.

On February 2, 2022, the Company issued a new promissory note for $ 535,000 to FUB with an interest rate of 10 % and maturity date of February 1, 2023, which has been extended by the Company through the end of August 2024.

As of December 31, 2024 and 2023, the Company had a note receivable balance of $ 0 and $ 99,022 , respectively.

The Company recorded an allowance for the full remaining balance of the note receivable as it was doubtful to receive payment as of December 31, 2024.

Advanced Magnet Lab, Inc

On December 21, 2022 the Company issued a convertible promissory note to Advanced Magnet, Inc.

(“AML”) for $ 280,000 with a 10 % interest rate that compounds monthly.

The Company’s Chief Executive Officer is the director of AML.

The convertible promissory note may be prepaid at any time.

The Company has the option to convert the principal amounts of the convertible promissory note at a share price of $ 1.50 per share.

As of December 31, 2024 and 2023, the Company had a note receivable balance of $ 280,000 .

NOTE 7 – DEBT

Current portion of long-term debt

On September 25, 2017, the Company entered into an equipment purchase agreement, which carries 0 % interest with an unaffiliated entity (“September 2017 Note”) to purchase certain underground mining equipment for $ 350,000 .

The agreement provided monthly payments of $ 20,000 until the balance is paid in full.

The note matured on September 25, 2019 and is secured by the equipment purchased with the note.

As of December 31, 2024 and 2023, the note is in default.

As of December 31, 2024 and 2023, the principal balance was $ 181,736 .

On January 25, 2018, the Company entered into an equipment purchase agreement, which carries 9 % interest with an unrelated party (“January 2018 Note”) for $ 346,660 .

The agreement calls for monthly payments of $ 11,360 until maturity date of December 24, 2020 and carries an interest rate of 9 %.

The loan is secured by the underlying surface equipment purchased by the loan.

As of December 31, 2023, the loan was fully repaid.

On April 20, 2022, the Company entered into a non-negotiable, secured promissory note agreement (“April 2022 Note”) with an unrelated party in the amount of $ 63,000 .

The note agreement shall accrue interest from the date of the agreement at a rate of 7 % and the note agreement shall be repaid in full with principal and accrued interest on March 31, 2023 .

As of December 31, 2024 and 2023, the note was in default.

As of December 31, 2023, the principal balance was $ 63,000 , and the accrued interest balance was $ 8,202 .

For the year ending December 31, 2023, the interest expense was $ 4,800 .

As of December 31, 2024, the total outstanding principal balance and accrued interest of $ 75,478 was converted to the Company’s Class A Common Stock at a settlement price of $1.00 per share.

On June 3, 2022, the Company entered into a promissory note agreement (“June 2022 Note”) with an unrelated party in the amount of $ 2,500,000 .

The note carried an interest rate of 5 % and had a maturity date of May 27, 2023 .

As of December 31, 2024 and 2023, the loan was in default.

As of December 31, 2024 and 2023, the principal balance was $ 822,856 and the accrued interest balance was $ 259,872 and $ 157,243 , respectively.

For the years ended December 31, 2024 and 2023, the interest expense was $ 22,556 and $ 20,529 respectively.

On April 7, 2023, the Company entered into a promissory note agreement (“April 2023 Note”) with an unrelated party in the amount of $ 1,381,250 .

The note carried an interest rate of 0 % and had a maturity date of March 31, 2024 .

As of December 31, 2024 and 2023, the loan was in default.

As of December 31, 2024 and 2023, the principal balance was $ 1,072,736 and the accrued interest balance was $ 0 .

For the years ended December 31, 2024 and 2023, the interest expense was $ 0 .

The following tables reflects a summary of the outstanding principal and interest by each lender and their respective maturity date as of December 31, 2024 and December 31, 2023:

December 31, 2024

December 31, 2023

Maturity Date

Total Outstanding*

September 2017 Note

January 2018 Note

June 2022 Note

April 2022 Note

April 2023 Note

** - Total Outstanding = Principal + Interest as of December 31, 2024 and 2023

Bonds payable, net

On May 31, 2023, the West Virginia Economic Development Authority (the “Issuer”) issued $45 million aggregate principal amount of Solid Waste Disposal Facility Revenue Bonds, Series 2023 (the “2023 Tax Exempt Bonds”) pursuant to an Indenture of Trust dated as of June 8, 2023 between the Issuer and UMB Bank N.A., as trustee (the “Trustee”).

The Tax-Exempt Bonds are payable solely from payments to be made by the Company under the Loan Agreement as evidenced by a Note from the Company to the Trustee.

The Tax-Exempt Bonds were isued to finance certain costs of the acquisition, construction, reconstruction, and equipping of solid waste disposal facilities at the Company’s Wyoming County, West Virginia development, and for capitalized interest and certain costs related to issuance of the Tax-Exempt Bonds.

Bonds payable, net

The Tax-Exempt Bonds bear interest of 9 % and have a final maturity of June 8, 2038.

The Tax Exempt Bonds are subject to redemption (i) in whole or in part at any time on or after June 1, 2030 at the option of the Issuer, upon the Company’s direction at a redemption price of 103% between June 1, 2030, through May 31, 2031, 102% between June 1, 2031, through May 31, 2032, 101% between June 1, 2032, through May 31, 2033, 100% from June 1, 2033 and thereafter, plus interest accrued to the redemption date;

and (ii) at par plus interest accrued to the redemption date from certain excess Tax Exempt Bonds proceeds as further described in the Indenture of Trust .

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 December 31, 2024 and 2023, 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 $ 150,000,000 (which is equal to the aggregate principal amount of the Bonds).

The Bonds have been authorized pursuant to the laws of the Commonwealth.

The bonds were issued to develop ReElement’s Kentucky Lithium refining facility which is being designed with an initial capacity to produce 15,000 metric ton per annum of battery-grade lithium carbonate and/or lithium hydroxide .

The Bonds are being offered and sold only to a limited number of “Qualified Institutional Buyers” within the meaning of Rule 144A of the Securities Act of 1933, as amended (the “1933 Act”), or “Accredited Investors” within the meaning of Regulation D promulgated under the 1933 Act.

The Tax-Exempt Bonds bear interest of 4 % and have a final maturity of March 28, 2044 .

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 to construction in progress per ASC 835-20-30-11.

The outstanding balance on the bonds was $ 193,366,505 and $ 43,535,158 as of December 31, 2024 and 2023, respectively.

Tax Exempt Bonds ($45 million face value)

Tax Exempt Bonds ($150 million face value)

Debt issuance costs and debt discount

( 1,633,495 )

( 1,464,842 )

Bonds payable

current portion

( 43,636,752 )

( 43,535,158 )

Bonds payable, net

$ 149,729,753

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 $ 486,556 .

The notes accrued interest at a rate of 4.77 % per annum, compounded annually, on the outstanding principal balance.

All outstanding principal and accrued interest were due and payable in full on the maturity date of January 1, 2025.

As of December 31, 2024, the outstanding balances of the notes, including accrued interest, were converted into ReElement’s equity pursuant to the terms of the agreement.

In 2024, ReElement entered into additional Convertible Promissory Notes with LRR (“Note A”) in the aggregate amount of $ 1,611,485 .

Each Convertible Promissory Note carries a three-year term from the respective effective date.

The Convertible Promissory Notes mature February through December 2027.

The Convertible Promissory Notes carry an annual interest rate of 10 %, compounded quarterly.

For any Note issued on a date other than the last day of a calendar quarter, interest will be calculated for the stub period between the issuance date and the next quarter-end.

In the event of default, the interest rate will increase to 13.5 % per year, compounded quarterly, and will apply from the date of default until the Convertible Promissory Notes are fully paid or the default is remedied.

Additionally, by mutual agreement between LRR and the Company, any interest due can be added to the Note’s principal and deferred until maturity date.

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 $ 7,000,000 in cash (the “Capital Raise”), then the Promissory Notes and all accrued interest outstanding shall be immediately and automatically converted to Common Stock of the ReElements (such date, the “Conversion Date”) at the predetermined conversion price which is equal to the same per-share price as the investment under the Capital Raise.

In October to December 2024, ReElement issued four convertible promissory notes (the “Note B”) to unaffiliated investors with an aggregate principal amount of $ 500,250 .

The Notes mature between October and December of 2026.

Note B bears interest at an annual rate of 12.0 %, compounded annually.

Upon an Event of Default, the outstanding principal amount, together with any past due or accrued interest, shall bear interest at a rate of 13.5 % per annum, compounded annually, from the date of the default until such amounts are fully paid or the Event of Default is cured, whichever occurs first.

Unless previously converted, all principal and accrued interest under Note B is payable on the Maturity Date.

Note B is convertible into shares of the ReElement’s common stock at the election of the holders.

The conversion price is based on a fully diluted valuation of the ReElement’s at $ 150,000,000 .

As of December 31, 2024 and 2023, Note B had an outstanding principal balance of $ 500,250 and accrued interest of $ 5,178 and $ 0 .

As of December 31, 2024 and 2023, there was an aggregate of $ 2,111,416 and $ 0 outstanding under the Convertible Promissory Notes reported in Convertible promissory notes – related party in the consolidated balance sheets.

As of December 31, 2024 and December 31, 2023, accrued interest on the convertible promissory notes amounted to $ 71,713 and $ 0 , respectively.

For the year ended December 31, 2024 and 2023 the interest expense was $ 71,713 and $ 0 respectively.

The following tables reflects a summary of the outstanding principal and accrued interest by each lender and their respective maturity date as of December 31, 2024 and December 31, 2023:

December 31, 2024

December 31, 2023

Total Outstanding*

* Includes principal and accrued interest.

NOTE 8 – STOCKHOLDERS’ EQUITY

Common Stock Option Transactions

6 unchanged sentences

The 2018 Plan is administered by the Board of Directors, which has substantial discretion to determine persons, amounts, time, price, vesting schedules, exercise terms, and restrictions of the grants, if any.

On September 12, 2018, the Board issued a total of 636,830 options to four employees of the Company under the 2018 Plan.

The options have an expiration date of September 10, 2025 and have an exercise price of $ 1.00 per share.

Of the total options issued, 25,000 vested immediately, with the balance of 611,830 options vesting equally over the course of three years, subject to restrictions regarding the employee’s continued employment by the Company.

On June 18, 2020, the Board issued a total of 750,000 options to 2 employees of the Company under the 2018 Plan.

The options have an expiration date of June 17, 2027 and have an exercise price of $2.630.

The options vested equally over the course of seven years, subject to restrictions regarding the employee’s continued employment by the Company.

On July 16, 2020, the Board issued a total of 50,000 options to a director of the Company under the 2018 Plan as amended.

The options have an expiration date of March 15, 2021 and vest immediately.

On November 23, 2020, the Board issued a total of 302,439 options to 3 employees and 4 directors.

The options have an expiration of November 22, 2027 and vest immediately.

During December 2021, the Company issued 1,020,000 Employee Stock options under the current plan.

The individual option awards vest over a period of 1 to 9 years.

Warrant Transactions

On June 12, 2019, we entered into an agreement with Golden Properties Ltd., a British Columbia company based in Vancouver, Canada (“Golden Properties”) to amend warrants “C-1”, “C-2” “C-3”, and “C-4” that were originally part of a October 4, 2017 agreement with Golden Properties that involved a series of loans made by Golden Properties to the Company.

As a result, the following warrants are issued to Golden Properties:

Warrant B-4, for the purchase of 3,417,006 shares of common stock at $ 0.01 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $ 34,170 in cash proceeds should all the warrants be exercised.

There was no change to Warrant B-4 as part of the June 12, 2019 amendment;

Warrant C-1, for the purchase of 750,000 shares of common stock at $ 3.55 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $ 2,662,500 in cash proceeds should all the warrants be exercised;

Warrant C-2, for the purchase of 750,000 shares of common stock at $ 4.25 per share, as adjusted from time to time, expiring on October 4, 2020, and providing the Company with up to $ 2,836,000 in cash proceeds should all the warrants be exercised;

Warrant C-3, for the purchase of 750,000 shares of common stock at $ 4.50 per share, as adjusted from time to time, expiring April 4, 2022, and providing the Company with up to $ 3,375,000 in cash proceeds should all the warrants be exercised;

Warrant C-4, for the purchase of 750,000 shares of common stock at $ 5.00 per share, as adjusted from time to time, expiring April 4, 2022, and providing the Company with up to $ 3,750,000 in cash proceeds should all the warrants be exercised.

On February 3 2020, we entered into a warrant adjustment agreement with Golden Properties Ltd., a British Columbia company based in Vancouver, Canada (“Golden Properties”) to amend warrants “C-1”, “C-2” “C-3”, and “C-4” that were originally part of a October 4, 2017 agreement with Golden Properties that involved a series of loans made by Golden Properties to the Company.

As a result, the following warrants modified for Golden Properties:

Warrant C-1, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring on January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised;

Warrant C-2, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring on January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised;

Warrant C-3, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised;

Warrant C-4, for the purchase of 750,000 shares of common stock at $ 1.05 per share, as adjusted from time to time, expiring January 31, 2023 , and providing the Company with up to $ 787,500 in cash proceeds should all the warrants be exercised.

New Warrant Issuances

On February 3, 2020 Warrant C-5 was issued in connection to the conversion of $ 9,494,073 of outstanding debt into the senior convertible note.

Warrant C-5 is for 949,407 warrant shares.

The warrants carry an exercise price of $ 1.50 and an expiration date of February 3, 2023 .

On February 20, 2020 Warrant C-6 was issued in connection to the purchase of $ 200,000 of the senior convertible notes.

Warrant C-6 is for 20,000 warrant shares.

The warrants carry an exercise price of $ 1.50 and an expiration date of February 20, 2022 .

On April 1, 2020 Warrant C-7 was issued in connection to the conversion of $ 375,690 of outstanding debt into the senior convertible notes.

Warrant C-7 is for 37,569 warrant shares.