Idaho Strategic Resources, Inc. 10-Q

ITEM 1: Financial Statements Idaho Strategic Resources, Inc. Condensed Consolidated Balance Sheets (Unaudited) March 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,306,124 $ 1,106,901 Investments in US treasury notes 8,077,325 7,775,193 Gold sales receivable 1,833,385 1,578,694 Inventories 1,171,594 899,924 Joint venture receivable 1,927 2,892 Other current assets 337,448 378,469 Total current assets 12,727,803 11,742,073 Property, plant and equipment, net of accumulated depreciation 15,868,020 12,904,065 Mineral properties, net of accumulated amortization 10,994,040 10,573,349 Investment in Buckskin Gold and Silver, Inc 342,782 341,436 Investment in joint venture 435,000 435,000 Investments in US treasury notes, non-current 6,995,829 7,208,930 Reclamation bond 330,110 249,110 Deposits 373,566 567,667 Total assets $ 48,067,150 $ 44,021,630 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 1,022,270 $ 1,006,078 Accrued payroll and related payroll expenses 561,805 564,090 Notes payable, current portion 1,330,738 709,381 Total current liabilities 2,914,813 2,279,549 Asset retirement obligations 310,296 305,409 Notes payable, long term 2,339,803 1,023,358 Total long-term liabilities 2,650,099 1,328,767 Total liabilities 5,564,912 3,608,316 Commitments Note 5 - - Stockholders’ equity: Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding - - Common stock, no par value, 200,000,000 shares authorized; March 31, 2025- 13,668,780 and December 31, 2024- 13,665,058 shares issued and outstanding 46,554,464 46,059,318 Accumulated deficit ( 6,764,974 ) ( 8,373,953 ) Total Idaho Strategic Resources, Inc stockholders’ equity 39,789,490 37,685,365 Non-controlling interest 2,712,748 2,727,949 Total stockholders' equity 42,502,238 40,413,314 Total liabilities and stockholders’ equity $ 48,067,150 $ 44,021,630 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents Idaho Strategic Resources, Inc. Condensed Consolidated Statements of Operations (Unaudited) For the Three-Month Periods Ended March 31, 2025 and 2024 March 31, 2025 2024 Revenue: Sales of products, net $ 7,278,536 $ 5,898,938 Total revenue 7,278,536 5,898,938 Costs of Sales: Cost of sales and other direct production costs 3,030,829 2,558,913 Depreciation and amortization 549,621 501,788 Total costs of sales 3,580,450 3,060,701 Gross profit 3,698,086 2,838,237 Other operating expenses: Exploration 1,371,433 267,848 Management 264,745 109,100 Professional services 183,738 154,244 General and administrative 237,018 160,663 Loss on sale of equipment 239,898 4,409 Total other operating expenses 2,296,832 696,264 Operating income 1,401,254 2,141,973 Other (income) expense: Equity income on investment in Buckskin Gold and Silver, Inc ( 1,346 ) ( 1,867 ) Timber revenue net of costs ( 3,856 ) ( 13,357 ) (Gain) loss on investment in equity securities - 453 Interest income ( 185,395 ) ( 19,635 ) Interest expense - 20,565 Total other (income) expense ( 190,597 ) ( 13,841 ) Net income 1,591,851 2,155,814 Net loss attributable to non-controlling interest ( 17,128 ) ( 15,295 ) Net income attributable to Idaho Strategic Resources, Inc $ 1,608,979 $ 2,171,109 Net income per common share-basic $ 0.12 $ 0.17 Weighted average common share outstanding-basic 13,666,321 12,513,374 Net income per common share-diluted $ 0.12 $ 0.17 Weighted average common shares outstanding-diluted 13,735,770 12,673,172 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents Idaho Strategic Resources, Inc. Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) For the Three-Month Periods Ended March 31, 2025 and 2024 Common Stock Shares Common Stock Amount Accumulated Deficit Attributable to Idaho Strategic Resources, Inc Non- Controlling Interest Stockholders' Equity Balance January 1, 2024 12,397,615 $ 34,963,739 $ ( 17,210,638 ) $ 2,782,497 $ 20,535,598 Contribution from non-controlling interest in New Jersey Mill Joint Venture - - - 1,598 1,598 Issuance of common stock for cash, net of offering costs 127,152 847,492 - - 847,492 Issuance of common stock for warrants exercised 147,026 823,346 - - 823,346 Issuance of common stock for stock options exercised 5,357 29,999 - - 29,999 Issuance of common stock for cashless stock options exercised 5,887 - - - - Net income (loss) - - 2,171,109 ( 15,295 ) 2,155,814 Balance March 31, 2024 12,683,037 $ 36,664,576 $ ( 15,039,529 ) $ 2,768,800 $ 24,393,847 Balance January 1, 2025 13,665,058 $ 46,059,318 $ ( 8,373,953 ) $ 2,727,949 $ 40,413,314 Contribution from non-controlling interest in New Jersey Mill Joint Venture - - - 1,927 1,927 Stock options issued to management, directors and employees - 495,146 - - 495,146 Issuance of common stock for cashless stock options exercised 3,722 - - - - Net income (loss) - - 1,608,979 ( 17,128 ) 1,591,851 Balance March 31, 2025 13,668,780 $ 46,554,464 $ ( 6,764,974 ) $ 2,712,748 $ 42,502,238 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents Idaho Strategic Resources, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three-Month Periods Ended March 31, 2025 and 2024 March 31, 2025 2024 Cash flows from operating activities: Net income $ 1,591,851 $ 2,155,814 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 549,621 501,788 Loss on sale of equipment 239,898 4,409 Accretion of asset retirement obligation 4,887 4,575 Loss on investment in equity securities - 453 Equity income on investment in Buckskin Gold and Silver, Inc ( 1,346 ) ( 1,867 ) Stock-based compensation 495,146 - Change in operating assets and liabilities: Gold sales receivable ( 254,691 ) ( 199,607 ) Inventories ( 271,670 ) 79,845 Joint venture receivable 965 482 Other current assets 41,021 27,013 Accounts payable and accrued expenses 16,192 1,142 Accrued payroll and related payroll expenses ( 2,285 ) 5,806 Net cash provided by operating activities 2,409,589 2,579,853 Cash flows from investing activities: Purchases of property, plant, and equipment ( 1,408,468 ) ( 322,596 ) Deposits on equipment - ( 123,060 ) Proceeds from sale of equipment 40,400 - Additions to mineral property ( 455,029 ) ( 564,355 ) Purchase of US treasury notes ( 89,031 ) - Proceeds from sale of investment in equity securities - 5,196 Purchase of reclamation bond ( 81,000 ) - Net cash used by investing activities ( 1,993,128 ) ( 1,004,815 ) Cash flows from financing activities: Proceeds from sale of common stock, net of issuance cost - 847,492 Proceeds from issuance of common stock for warrants exercised - 823,346 Proceeds from issuance of common stock for stock options exercised - 29,999 Principal payments on notes payable ( 219,165 ) ( 269,015 ) Contributions from non-controlling interest 1,927 1,598 Net cash provided (used) by financing activities ( 217,238 ) 1,433,420 Net change in cash and cash equivalents 199,223 3,008,458 Cash and cash equivalents, beginning of period 1,106,901 2,286,999 Cash and cash equivalents, end of period $ 1,306,124 $ 5,295,457 Non-cash investing and financing activities: Deposit on equipment applied to purchase $ 194,101 $ 30,719 Notes payable for equipment purchase $ 2,156,967 $ 559,752 Note payable for mineral property purchase $ - $ 650,000 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 1. The Company and Significant Accounting Policies These unaudited interim condensed consolidated financial statements have been prepared by the management of Idaho Strategic Resources, Inc. (“IDR”, “Idaho Strategic” or the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair statement of the interim condensed consolidated financial statements have been included. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's consolidated financial position and results of operations. Operating results for the three-month periods ended March 31, 2025, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025. The effective tax rate expected for the full year ended December 31, 2025 is 0%. For further information refer to the financial statements and footnotes thereto in the Company’s audited consolidated financial statements for the year ended December 31, 2024, in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 31, 2025. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (“NJMJV”). Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the condensed consolidated balance sheets and statements of operations. Revenue Recognition Gold Revenue Recognition and Receivables- Sales of gold sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer. For sales of doré and metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner. Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. Costs charged by customers include fixed costs per ton of concentrate and price escalators. Refining, selling, and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred. See Note 4 for more information on the Company’s sales of products. Other Revenue Recognition -Revenue from harvest of raw timber is recognized when the performance obligation under a contract and transfer of the timber have both been completed. Sales of timber found on the Company’s mineral properties are not a part of normal operations. Inventories Inventories are stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion, and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. Supplies inventory is stated at the lower of cost or estimated net realizable value. Mine Exploration and Development Costs The Company expenses exploration costs as such in the period they occur. The exploration stage occurs up until the point ore reserves are identified. The pre-development stage begins once the Company identifies ore reserves which is based on a determination whether an ore body can be economically developed. Expenditures incurred during the pre-development stage are capitalized as deferred development costs and include such costs for drifts, ramps, and infrastructure. Costs to improve, alter, or rehabilitate primary development assets which appreciably extend the life, increase capacity, or improve the efficiency or safety of such assets are also capitalized. The pre-development stage ends when the production stage of ore reserves begins, thus entering the secondary development stage. Drilling, and related costs are either classified as exploration, pre-development or secondary development, as defined above, and charged to operations as incurred, or capitalized, based on the following criteria: · whether the costs are incurred to further define resources or exploration targets at and adjacent to existing reserve areas or intended to assist with mine planning within a reserve area; · whether the drilling or development costs relate to an ore body that has been determined to be commercially mineable, and a decision has been made to put the ore body into commercial production; and · whether, at the time the cost is incurred: (a) the expenditure embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows, (b) the Company can obtain the benefit and control others’ access to it, and (c) the transaction or event giving rise to the Company’s right to or control of the benefit has already occurred. If all of these criteria are met, drilling, development and related costs are capitalized. Drilling and development costs not meeting all of these criteria are expensed as incurred. The following factors are considered in determining whether or not the criteria listed above have been met, and capitalization of drilling and development costs is appropriate: · completion of a favorable economic study and mine plan for the ore body targeted; · authorization of development of the ore body by management and/or the Board of Directors; and 7 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 1. The Company and Significant Accounting Policies (continued) · there is a justifiable expectation, based on applicable laws and regulations, that issuance of permits or resolution of legal issues and/or contractual requirements necessary for the Company to have the right to or control of the future benefit from the targeted ore body have been met. Amortization of development costs is calculated using the units-of-production method over the expected life of the operation based on the estimated recoverable tonnes of mineral resources and reserves. Fair Value Measurements When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At March 31, 2025 and December 31, 2024, the Company had no assets or liabilities that required measurement at fair value on a recurring basis. Accounting for Investments in Joint Ventures (“JV”) and Equity Method Investments Investment in JVs -For JVs where the Company holds more than 50% of the voting interest and has significant influence, the JV is consolidated with the presentation of non-controlling interest. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee. For JVs in which the Company does not have joint control or significant influence, the cost method is used. For those JVs in which there is joint control between the parties, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in JVs and its investments therein are adjusted by a similar amount. The Company periodically assesses its investments in JVs for impairment. If management determines that a decline in fair value is other than temporary it will write-down the investment and charge the impairment against operations. Equity Method Investments -Investments in companies and joint ventures in which the Company has the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and representation on governing bodies. Under the equity method of accounting, the Company’s share of the net earnings or losses of the investee are included in net income (loss) in the consolidated statements of operations. The Company evaluates equity method investments whenever events or changes in circumstance indicate the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. At March 31, 2025, and December 31, 2024, the Company's 37 % common stock holding of Buckskin Gold and Silver, Inc. (“Buckskin”) is accounted for using the equity method (Note 11). At March 31, 2025 and December 31, 2024, the Company’s percentage ownership and method of accounting for each JV and equity method investment is as follows: March 31, 2025 December 31, 2024 JV/Equity % Ownership Significant Influence? Accounting Method % Ownership Significant Influence? Accounting Method NJMJV 65 % Yes Consolidated 65 % Yes Consolidated Butte Highlands JV, LLC 50 % No Cost 50 % No Cost Buckskin 37 % Yes Equity 37 % Yes Equity Reclassifications Certain prior period amounts have been reclassified to conform to the 2025 financial statement presentation. Reclassifications had no effect on net loss, stockholders’ equity, or cash flows as previously reported. Investments in US Treasury Notes The Company holds short term investments in United States Treasury notes and are classified as held to maturity based on management’s intent and ability to hold them to maturity. Such debt securities are stated at cost, adjusted for unamortized purchase premiums and discounts and are amortized using the interest method over the stated terms of the securities. Amortization of the premium or discount is included in interest income on the consolidated statement of operations. Government Grant Income The Company occasionally receives grant income from various government agencies. Government grant income is recognized in earnings on a systematic basis in a manner that mirrors how the Company recognizes underlying costs for which the grant is intended to compensate. A grant receivable is recognized for expenses or losses already incurred but for which grant funding has not yet been received. Grant funding received in excess of expenses or losses incurred is recognized as deferred revenue. If a grant is received based solely on a capital expenditure, the amount of the asset is reduced by the amount received from the grant. Segment Reporting The Company operates as a single operating segment in accordance with Accounting Standards Update (“ASU”) 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. All financial information is presented on a consolidated basis and reviewed by the Company’s Chief Executive Officer as the Chief Operating Decision Maker (CODM). The CODM uses consolidated net income, as presented in the consolidated statement of operations, to assess segment performance and allocate resources. The measure of segment assets is reported on the balance sheet as total consolidated assets. 8 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 1. The Company and Significant Accounting Policies (continued) Recent Accounting Pronouncements In August 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which clarifies the business combination accounting for JV formations. The amendments in the ASU seek to reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of JVs in separate financial statements. The amendments also seek to clarify the initial measurement of JV net assets, including businesses contributed to a JV. The guidance is applicable to all entities involved in the formation of a JV. The amendments are effective for all JV formations with a formation date on or after January 1, 2025. Early adoption and retrospective application of the amendments are permitted. The Company has adopted this new guidance and there was no material impact on its consolidated financial statements and disclosures due to no new JV arrangement forming on or after January 1, 2025. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company's annual periods for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine the impact on its consolidated financial statements and disclosures. Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. 2. Investments in US Treasury Notes The table below provides the components of investments in US treasury notes held to maturity at amortized cost and fair value at March 31, 2025 and December 31, 2024. March 31, 2025 Amortized Cost Gross Unrealized gains Gross Unrealized losses Fair value US Treasury notes, current (Matures within 1 year) $ 8,077,325 $ 10,675 $ - $ 8,088,000 US Treasury notes, non-current (Matures in 1-5 years) 6,995,829 87,171 - 7,083,000 Total $ 15,073,154 $ 97,846 $ - $ 15,171,000 December 31, 2024 US Treasury notes, current (Matures within 1 year) $ 7,775,193 $ 30,807 $ - $ 7,806,000 US Treasury notes, non-current (Matures in 1-5 years) 7,208,930 72,070 - 7,281,000 Total $ 14,984,123 $ 102,877 $ - $ 15,087,000 Fair value of investments in US treasury notes is determined using Level 1 inputs. 3. Inventories At March 31, 2025 and December 31, 2024, the Company’s inventories consisted of the following: March 31, 2025 December 31, 2024 Concentrate inventory Finished goods $ 643,028 $ 334,033 Total concentrate inventory 643,028 334,033 Supplies inventory Mine parts and supplies 445,496 475,336 Mill parts and supplies 83,070 90,555 Total supplies inventory 528,566 565,891 Total $ 1,171,594 $ 899,924 9 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 4. Sales of Products The Company’s products consist of both gold flotation concentrates which are sold to a single broker (H&H Metals (“H&H”)), and an unrefined gold-silver product known as doré which is sold to a precious metal refinery (Cascade Refining). At March 31, 2025, metals that had been sold but not finally settled included 6,768 ounces of which 1,543 ounces were sold at a predetermined price with the remaining 5,225 exposed to future price changes until prices are locked in based on the month of settlement. The Company has received provisional payments on the sale of these ounces with the remaining amount due reflected in gold sales receivable. Sales of products by metal type for the three-month periods ended March 31, 2025 and 2024 were as follows: March 31, 2025 2024 Gold $ 7,405,388 $ 6,121,129 Silver 31,755 24,245 Less: Smelter and refining charges ( 158,607 ) ( 246,436 ) Total $ 7,278,536 $ 5,898,938 Sales by significant product type for the three-month periods ended March 31, 2025, and 2024 were as follows: March 31, 2025 2024 Concentrate sales to H&H $ 7,278,536 $ 5,898,938 Dore sales to refinery - - Total $ 7,278,536 $ 5,898,938 At March 31, 2025 and December 31, 2024 the gold sales receivable balance of $ 1,833,385 , and $ 1,578,694 , respectively, consisted only of amounts due from H&H. There is no allowance for doubtful accounts. 5. Related Party Transactions The Company leases office space from certain related parties on a month-to-month basis. $ 2,000 per month is paid to NP Depot LLC, a company owned by the Company’s president, John Swallow and approximately $ 1,700 is paid quarterly to Mine Systems Design, Inc. which is partially owned by the Company’s vice president, Grant Brackebusch. Payments under these short-term lease arrangements are included in general and administrative expenses on the Consolidated Statement of Operations and for the three-month periods ended March 31, 2025 and 2024 are as follows: March 31, 2025 2024 $ 7,688 $ 7,620 10 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 6. JV Arrangements NJMJV Agreement The Company owns 65% of the NJMJV and has significant influence in its operations . Thus, the JV is included in the consolidated financial statements along with presentation of the non-controlling interest. At March 31, 2025 and December 31, 2024, an account receivable existed with Crescent Silver, LLC (“Crescent”), the other JV participant, for $ 1,927 and $ 2,892 , respectively, for shared operating costs as defined in the JV agreement. This account receivable is included in the Balance Sheet as Joint venture receivable. Butte Highlands JV, LLC On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (“BHJV”) for a total consideration of $ 435,000 . Highland Mining, LLC (“Highland”) is the other 50 % owner and manager of the JV. Under the agreement, Highland will fund all future project exploration and mine development costs. The agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $ 2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the JV’s activities, it accounts for its investment on a cost basis. 7. Earnings per Share Net income (loss) per share is computed by dividing the net amount excluding net income (loss) attributable to a non-controlling interest by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. Such common stock equivalents are included or excluded from the calculation of diluted net income (loss) per share for each period as follows: March 31, 2025 March 31, 2024 Three-Months Three-Months Incremental shares included in diluted net income per share Stock options 69,449 109,243 Stock purchase warrants - 50,555 69,449 159,798 11 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 8. Property, Plant, and Equipment Property, plant and equipment at March 31, 2025 and December 31, 2024 consisted of the following: March 31, 2025 December 31, 2024 Mine Equipment $ 10,230,346 $ 8,223,596 Accumulated Depreciation ( 3,919,876 ) ( 3,845,349 ) Total Mine Equipment 6,310,470 4,378,247 Mill Equipment 8,529,039 7,580,452 Accumulated Depreciation ( 2,709,346 ) ( 2,453,673 ) Total Mill Equipment 5,819,693 5,126,779 Buildings 3,068,069 2,715,931 Accumulated Depreciation ( 308,915 ) ( 295,595 ) Total Buildings 2,759,154 2,420,336 Land 978,703 978,703 Total $ 15,868,020 $ 12,904,065 9. Mineral Properties Mineral properties at March 31, 2025 and December 31, 2024 consisted of the following: March 31, 2025 December 31, 2024 Golden Chest Mineral Property $ 5,159,084 $ 5,159,084 Infrastructure 5,177,358 4,722,328 Total Golden Chest 10,336,442 9,881,412 New Jersey 256,768 256,768 McKinley-Monarch 200,000 200,000 Potosi 150,385 150,385 Park Copper/Gold 78,000 78,000 Eastern Star 250,817 250,817 Oxford 40,000 40,000 Accumulated Amortization ( 318,372 ) ( 284,033 ) Total $ 10,994,040 $ 10,573,349 For the three-month periods ended March 31, 2025 and 2024, interest expense was capitalized in association with infrastructure at the Golden Chest Mine as follows. March 31, 2025 March 31, 2024 $ 43,387 $ 19,377 12 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 10. Notes Payable At March 31, 2025 and December 31, 2024, notes payable are as follows: March 31, 2025 December 31, 2024 Mine Equipment Monthly payments of $ 127,288 and $ 55,803 as of March 31, 2025 and December 31, 2024, respectively $ 2,804,567 $ 962,384 Mill Equipment Monthly payments of $ 15,621 and $ 11,498 as of March 31, 2025 and December 31, 2024, respectively 640,537 540,773 Buildings/Land Monthly payments of $ 2,500 and $ 2,500 as of March 31, 2025 and December 31, 2024, respectively 225,437 229,582 Total notes payable 3,670,541 1,732,739 Due within one year 1,330,738 709,381 Due after one year $ 2,339,803 $ 1,023,358 All notes are collateralized by the property or equipment purchased in connection with each note. Future principal payments of notes payable at March 31, 2025 are as follows: 4/1/2025 – 3/31/2026 $ 1,330,738 4/1/2026 – 3/31/2027 964,215 4/1/2027 – 3/31/2028 774,268 4/1/2028 – 3/31/2029 322,314 4/1/2029 – 3/31/2030 279,006 Total $ 3,670,541 11. Investment in Buckskin The investment in Buckskin is being accounted for using the equity method and resulted in recognition of equity income on the investment of $ 1,346 and $ 1,867 for the respective three-month periods ended March 31, 2025 and 2024. The Company makes an annual payment of $ 12,000 to Buckskin per a mineral lease covering 218 acres of patented mining claims. As of March 31, 2025, the Company holds 37 % of Buckskin’s outstanding shares. 13 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 12. Stockholders’ Equity Stock Issuance Activity In the first quarter of 2025 the Company issued common stock as follows: · Issued 3,722 shares of common stock for outstanding stock options via cashless exercises by employees. Stock Purchase Warrants Outstanding There was no activity in the Company’s stock purchase warrants since December 31, 2024, therefore there were no stock purchase warrants outstanding at March 31, 2025. Activity in stock purchase warrants is as follows: Number of Warrants Exercise Prices Balance December 31, 2023 289,294 $ 5.60 - 7.00 Exercised ( 147,026 ) $ 5.60 Balance March 31, 2024 142,268 $ 5.60 - 7.00 Exercised ( 142,268 ) $ 5.60 - 7.00 Balance December 31, 2024 and March 31, 2025 - $ - 13. Stock Options On January 15, 2025, the Company granted 400,000 stock options to employees with an exercise price of $ 11.50 . These options expire on January 15, 2028, and vest equally on June 30, 2025, December 31, 2025, June 30, 2026 and December 31, 2026 (Exhibit 10.1) The stock-based compensation expense for these options in the current period was $ 495,146 . The fair value of stock option awards granted, and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follow: Fair value $ 1,901,360 Options issued 400,000 Exercise price $ 11.50 Expected term (in years) 3.0 Risk-free rate 4.34 % Volatility 64.2 % Activity in the Company’s stock options is as follows: Number of Options Weighted Average Exercise Prices Balance December 31, 2023 477,449 $ 5.47 Exercised ( 22,073 ) $ 5.50 Forfeited ( 10,144 ) $ 5.50 Balance March 31, 2024 445,232 $ 5.47 Exercised ( 354,517 ) $ 5.53 Forfeited ( 13,715 ) $ 5.52 Balance December 31, 2024 77,000 $ 5.17 Granted 400,000 $ 11.50 Exercised ( 6,000 ) $ 5.25 Outstanding at March 31, 2025 471,000 $ 10.55 In the first quarter of 2025, 6,000 options were exchanged for 3,722 shares in cashless exercises by employees. The intrinsic value of these options was $ 51,476 . At March 31, 2025, outstanding stock options have a weighted average remaining term of approximately 2.44 years and have an intrinsic value of $ 1,773,200 . 14. Subsequent Events Subsequent to March 31, 2025: · 380,000 shares of common stock have been issued for net proceeds of $ 6,246,713 . · 11,000 stock options were exchanged for 7,658 shares of common stock in cashless exercises by employees. 14 Table of Contents Forward-Looking Statements Certain statements contained in this Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s forward-looking statements include current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. The Company has tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions. These forward-looking statements are based on information currently available to the Company and are expressed in good faith and believed to have a reasonable basis. However, these forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those set forth under Part I, Item 1A.–Risk Factors in the Company’s 2024 Form 10-K and in Part II, Item 1.A.-Risk Factors in this Form 10-Q. Given these risks and uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. All subsequent written and oral forward-looking statements attributable to Idaho Strategic or to persons acting on the Company’s behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, the Company does not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.