AREC 10-K & 10-Q changes, risk factors and insider trading
American Resources Corp · Nasdaq · Silver Ores · CIK 1590715 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Because we are a Smaller Reporting Company, we are not required to provide the information required by this item.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
“Total operating expenses decreased in 2024 as compared to 2023. This decrease was primarily attributable to decreases in coal production and holdings costs, litigation expense, production taxes and royalties and development. These decreases were partially offset by increases in depreciation, amortization of mining, general and administrative and professional. General and administrative expenses primarily consist of contract labor, payroll, facility maintenance, stock-based compensation to employees and consultants, insurance and other routine operating costs. …”see in full comparison
“Total operating expenses decreased by $2.9 million to $11.3 million for the year ended December 31, 2025, compared to $14.3 million in 2024. The decrease was primarily driven by lower general and administrative expenses, professional fees, coal production and holdings costs, and development costs as the Company reduced legacy coal‑related activities and continued to rationalize its cost structure following the strategic shift in operations. …”see in full comparison
As of December 31,see in full comparison2024,2025, thecompanyCompanyhashad a cash balance of$604,485$31,701,916 unrestricted investments totaling $40,470,151 and a positive workingdeficitcapital balance of$73,477,808.$73,054,345.WeTheexpectCompany expects to fundourits liquidity requirements over the next 12 months primarilywiththrough cash on hand and additional debt and equity financing transactions. Additionally, through short-term investments such as the fixed income fund. See further discussion around investments in Note 4. If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may be required to rationalize our expenditures or slow down efforts to further develop our new business models.We do not have any credit lines currently available to fund our liquidity requirements. Maintaining future liquidity is subject to significant uncertainties primarily related to the generation of revenues from our new business models at levels that surpass breakeven and the ability to obtain additional debt and equity financing.
“Estimating the future ARO requires management to make estimates and judgments regarding timing and existence of a liability, as well as what constitutes adequate restoration. Inherent in the fair value calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the related asset.”see in full comparison
“The loss on debt extinguishment and litigation expense recorded during 2025 were non‑recurring in nature and are not expected to be indicative of future results.”see in full comparison
“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.”see in full comparison
Full comparison: every changed paragraph (32)
The management’s discussion, analysis of financial condition, and results of operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this annual report. Prior period amounts have been revised to reflect the correction of errors described in Note 13.
Our primary source of revenue through 20242025 has been the sale of metallurgical coal and coal used in pulverized coal injection (PCI)., Bothcritical metallurgicalmineral process technology, purified elements and PCIrecycled coalmetals; all of which are essential building blocks in the steel manufacturing process.
The overall outlook of thecritical minerals, recycled metals, metallurgical coal businessand rare earths is dependent on a variety of factors such as pricing, regulatory uncertainties and global economic conditions. Coal consumption and production in the U.S. have been driven in recent periods by several market dynamics and trends, such as the global economy, a strong U.S. dollar and accelerating production cuts.
Revenues for 2025 and 2024 were $0 and $34,070, respectively. The Company did not generate revenues during 2025 as it did not conduct metal recovery or sales activities during the period. The timing and extent of future revenues, if any, will depend on strategic, operational, and market factors, and there can be no assurance that revenue‑generating activities will resume in the near term.
Revenues for the 2024 and 2023 were $383,234 and $13,234,399, respectively. The primary drivers of the decrease were reductions in coal sales and royalty income. Declines were due to adverse market conditions and unfavorable pricing that led to our decision to suspend coal production activities beginning in 2023.
Our coal production businesses are located in the United States with our operations located in the Central Appalachian basin of eastern Kentucky and West Virgina. Our coal sales for 2024 and 2023 were all classified as metallurgical coal (“Met”) used for steel making.
For the year ended 2024, the Company had de minimis tons of coal sold to steel making end users. For the year ended 2023, tons sold to steel making end users amounted to 67,373 tons with a realized sales price of $180.
The following table summarizes the changes in operating expenses (income):
Total operating expenses decreased by $2.9 million to $11.3 million for the year ended December 31, 2025, compared to $14.3 million in 2024. The decrease was primarily driven by lower general and administrative expenses, professional fees, coal production and holdings costs, and development costs as the Company reduced legacy coal‑related activities and continued to rationalize its cost structure following the strategic shift in operations. The $1.8 million reduction in general and administrative expenses was principally attributable to lower stock‑based compensation and reduced related‑party expenses. Professional fees declined primarily due to decreased transaction‑related and advisory costs compared to the prior year. Development costs decreased as a result of lower contract labor and research and development activity. These decreases were partially offset by litigation expense incurred during 2025 and modest increases in production taxes and royalties.
Total operating expenses decreased in 2024 as compared to 2023. This decrease was primarily attributable to decreases in coal production and holdings costs, litigation expense, production taxes and royalties and development. These decreases were partially offset by increases in depreciation, amortization of mining, general and administrative and professional. General and administrative expenses primarily consist of contract labor, payroll, facility maintenance, stock-based compensation to employees and consultants, insurance and other routine operating costs. The decrease in our coal production and holding costs is aligned with the suspension of our coal production activities beginning in 2023. The decrease in litigation expense is because in 2023, American Infrastructure recognized charges for certain litigation matters where the potential loss was assessed as probable in that year. The increase in general and administrative expenses is primarily attributable to the shift in our business from coal production to other activities including the development of RLMT technology for refining rare earth and battery elements.
Total other expense increased to $6.5 million for the year ended December 31, 2025, compared to $1.7 million in 2024. The increase was primarily driven by a $5.1 million loss recognized on the extinguishment of debt during 2025. In addition, net equity method losses declined year over year as losses from equity‑method investees decreased compared to the prior year. Interest income increased due to higher average cash balances and investment yields during 2025, while interest expense increased primarily as a result of additional financing obligations entered into during the year. Other income and expense fluctuated modestly and was not a significant contributor to the overall change year over year.
The loss on debt extinguishment and litigation expense recorded during 2025 were non‑recurring in nature and are not expected to be indicative of future results.
The increase in net other expense is primarily attributable to the net increase in interest expense driven by the WCC bonds being outstanding for the full twelve months of 2024 compared to approximately seven months in 2023 and the KCC bonds that were issued in March 2024.
Our primary sources of liquidity are derived from existing unrestricted cash, reimbursements from bondshort-term funds and other debtinvestments and capital proceeds. With the suspension of our coal production activities beginning in 2023 and the development stage of our new ReElement and Electrified Materials businesses through 2024, our sources of revenue in 2024 were primarily limited to royalty income and coal processing fees. We anticipate our ReElement and Electrified Materials new businessesbusiness to achieve increasing revenues in 20252026; however, we will continue to require cash flowsflow from financing activities to support operations and the continued development of our new business models.
As of December 31, 2024,2025, the companyCompany hashad a cash balance of $604,485$31,701,916 unrestricted investments totaling $40,470,151 and a positive working deficitcapital balance of $73,477,808.$73,054,345. WeThe expectCompany expects to fund ourits liquidity requirements over the next 12 months primarily withthrough cash on hand and additional debt and equity financing transactions. Additionally, through short-term investments such as the fixed income fund. See further discussion around investments in Note 4. If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may be required to rationalize our expenditures or slow down efforts to further develop our new business models. We do not have any credit lines currently available to fund our liquidity requirements. Maintaining future liquidity is subject to significant uncertainties primarily related to the generation of revenues from our new business models at levels that surpass breakeven and the ability to obtain additional debt and equity financing.
Net cash used in operating activities was $10.4 million for the year ended December 31, 2025, compared to net cash provided of $2.0 million for the year ended December 31, 2024. The increase in cash used during 2025 was primarily attributable to the Company’s net loss, increased operating expenses associated with development and corporate activities following the spin‑off, and changes in working capital, including increased prepaid expenses and inventories, partially offset by non‑cash charges such as stock‑based compensation, depreciation, and amortization. Operating cash flows in 2024 benefited from favorable working capital movements and lower overall operating costs during the period.
Net cash used in investing activities was $39.4 million for the year ended December 31, 2025, compared to net cash provided of $0.9 million for the year ended December 31, 2024. Cash used in investing activities during 2025 was primarily related to capital expenditures for property and equipment and changes in restricted investments associated with the Company’s project development activities. In contrast, investing activities in 2024 primarily reflected net proceeds from investments and lower levels of capital expenditures.
Net cash provided by financing activities was $81.3 million for the year ended December 31, 2025, compared to net cash used of $4.4 million for the year ended December 31, 2024. Financing activities during 2025 were primarily driven by proceeds from equity issuances, warrant exercises, and other financing arrangements, partially offset by repayments of financing obligations. Financing activities in 2024 primarily reflected repayments of debt and other financing obligations, with no comparable equity financings during the period.
The $2,124,423 increase in cash used for operating activities was primarily due to a $1,471,777 increase in net loss and a $3,654,193 decrease in cash flow provided by changes in working capital offset by an increase of $3,001,547 in non-cash charges.
Cash provided by investing activities during 2024 was $55,976 compared to cash used in investing activities of $1,127,427 in 2023. The change was primarily due to purchases of property and equipment, net of capitalized interest income and (expense) of $1,059,062 offset proceeds from sales of equipment of $400,000 and proceeds from short-term investments of $715,038.
Cash provided by financing activities during 2024 was $146,661,482 compared to $45,612,289 in 2023. The change was due to proceeds from tax exempt bonds, net of $149,719,203, proceeds from convertible promissory note of $1,624,860, proceeds from exercise of stock option of $156,900, proceeds from warrant conversions of $32,339, proceeds received from other financing obligations of $2,493,819 offset by repayments of other financing obligations of $7,365,639.
Capital Resources.Resources
Mine development costs. Mine development costs represent the costs incurred to prepare future mine sites for mining. These costs include costs of acquiring, permitting, planning, research, and establishing access to identify mineral reserves and other preparations for commercial production as necessary to develop and permit the properties for mining activities. Operating expenditures, including certain professional fees and overhead costs, are not capitalized but are expensed as incurred.
Amortization of mine development costs, with respect to a specific mine, commences when mining of the related reserves begins. Amortization is computed using the units-of-production method over the proven and probable reserves dedicated to the specific mine.
Asset retirement obligations. We recognize as a liability an asset retirement obligation, or ARO, associated with the retirement of a tangible long-lived asset in the period in which it is incurred or becomes determinable, with an associated increase in the carrying amount of the related long-lived asset. The initially recognized asset retirement cost is amortized using the same method and useful life as the long-lived asset to which it relates. Amortization begins when mining of the specific mineral property begins. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value.
Estimating the future ARO requires management to make estimates and judgments regarding timing and existence of a liability, as well as what constitutes adequate restoration. Inherent in the fair value calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the related asset.
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.
Consolidation/Deconsolidation of Variable Interest Entities and Controlled Companies. We review potential consolidation and deconsolidation of variable interest entities and controlled companies both on a qualitative and quantitative basis at the end of the reporting period. If it is deemed that there are triggering events for a change in treatment the effects, including discontinued operations treatment, is assessed and recorded when the triggering event is deemed to have existed.
Fair Value of Investments. The Company reviews the stated value of its retained investments using the accepted applicable fair value framework. If there are changes in inputs the adjustments are run through the period in which the change occurred.
Stock Based Compensation. The Company records stock based compensation in accordance to the underlying documents to match the recognition of expense to the receipt of benefit. This includes an initial fair value assessment utilizing the Black Scholes Option Pricing Model and taking into account vesting schedules and any exercise or termination notices.
Income Tax Loss Carryforward and Allowance. The Company assesses its income tax loss carryforward and the level of appropriate loss allowance every quarter or when events warrant a revision.
Legal Contingencies and Accruals. The Company reviews its liabilities for potential losses associated with asserted or unasserted claims against the company.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
Largest changes
Cash provided by investing activities for thesee in full comparisonsixnine months endedJuneSeptember 30, 2025 was$2,691,099,$3,930,735, compared to cash used in investing activities of$148,271,896$145,900,141 for thesixnine months endedJuneSeptember 30, 2024. The 2025 periodincludes a net $3,686,328 ofhas cash provided byrestricted investments purchased and sold whereasthe2024 period includes $150,014,712 of cash used in the purchasesale of restrictedinvestments.investments totaling $154,878,566 compared to the use of $6,673 in 2024.
Cash provided by financing activities for thesee in full comparisonsixnine months ended 2025 was$5,980,665$9,341,649 compared to$146,703,379$145,065,317 for thesixnine months ended 2024. The change was due to the proceeds from tax exempt bonds, net of $149,719,208, which were received on March 28,2024, and a decrease in net proceeds from other financing obligations of $1,489,046.2024. This was partially offset byproceeds received from convertible promissory notes in 2025repayments of$3,505,559.other financing obligations of $ 5,737,300.
Cash used in operating activitiessee in full comparisonincreaseddecreased by$4,422,071$6,864,361 compared to the prior period. This change was primarily driven by a$2,738,510$5,424,925 decrease in net loss, which positively impacted operating cash flow; and a$1,461,359$455,740 increase in cash provided by changes in workingcapital; and an increase of $222,202 in non-cash charges, including depreciation, amortization, and other adjustments.capital.
Revenuesee in full comparisonincreaseddecreased by$9,161$185,278 for the three months endedJuneSeptember 30, 2025 compared to 2024. The primary driver of theincreasedecrease was due to$10,299the absence ofReElementrevenueservicegeneratedfeefromrevenuemetal recovery and sales for the three months endedJuneSeptember 30, 2025 as compared to 2024.
Total operating expenses decreased bysee in full comparison$3,461,909$7,519,858 for thesixnine months endingJuneSeptember 30, 2025 as compared to 2024. This decrease was primarily driven by lower coal production related costs due to idled mining operations, lower holding costs of$1,430,578$1,823,788 due to concentrated efforts to reduce labor costs, lower general and administration expenses of$1,850,056$4,912,722 and professional fees of$462,627$596,221 due to decreases in legal fees.
Revenue decreased bysee in full comparison$52,930$238,208 for thesixnine months endedJuneSeptember 30, 2025 compared to 2024. The primary driver of the decrease was a reduction of$64,667$146,055 in royalty income for thesixnine months endedJuneSeptember 30, 2025 as compared to 2024.
Full comparison: every changed paragraph (22)
The following table summarizes our results of operations for the three and sixnine months ended JuneSeptember 30, 2025 and 2024:
Results of Operations for the SixNine Months Ended JuneSeptember 30, 2025 and 2024
The following table summarizes revenue for the three months ended JuneSeptember 30, 2025 and 2024:
Revenue increaseddecreased by $9,161$185,278 for the three months ended JuneSeptember 30, 2025 compared to 2024. The primary driver of the increasedecrease was due to $10,299the absence of ReElementrevenue servicegenerated feefrom revenuemetal recovery and sales for the three months ended JuneSeptember 30, 2025 as compared to 2024.
The following table summarizes the period over period changes in operating expenses (income) for the three months ended JuneSeptember 30, 2025 and 2024:
Total operating expenses decreased by $1,653,061$3,985,618 for the three months ending JuneSeptember 30, 2025 as compared to 2024. This decrease was primarily driven by lower general and administration expenses of $1,334,893$2,997,235 due to a decrease in related party expenses.
The following table summarizes the period over period changes in other income (expense) for the three months ended JuneSeptember 30, 2025 and 2024:
The decrease in net other expense is primarily attributable to the net decrease in interest income of $353,934$137,737 and by the net decrease in interest expense of $951,824,$1,003,750 compared to the three months ended JuneSeptember 30, 2024.
Results of Operations for the SixNine Months Ended JuneSeptember 30, 2025 and 2024
The following table summarizes our revenue for the sixnine months ended JuneSeptember 30, 2025 and 2024:
Revenue decreased by $52,930$238,208 for the sixnine months ended JuneSeptember 30, 2025 compared to 2024. The primary driver of the decrease was a reduction of $64,667$146,055 in royalty income for the sixnine months ended JuneSeptember 30, 2025 as compared to 2024.
The following table summarizes the period over period changes in operating expenses (income) for the sixnine months ended JuneSeptember 30, 2025 and 2024:
Total operating expenses decreased by $3,461,909$7,519,858 for the sixnine months ending JuneSeptember 30, 2025 as compared to 2024. This decrease was primarily driven by lower coal production related costs due to idled mining operations, lower holding costs of $1,430,578$1,823,788 due to concentrated efforts to reduce labor costs, lower general and administration expenses of $1,850,056$4,912,722 and professional fees of $462,627$596,221 due to decreases in legal fees.
The following table summarizes the period over period changes in other income (expense) for the sixnine months ended JuneSeptember 30, 2025 and 2024:
The increase in net other expense for the sixnine months ended JuneSeptember 30, 2025, was primarily attributable to a decrease in interest income of $839,564$977,301 and an increase in interest expense of $137,993,$1,141,743, compared to the same period in 2024. The higher interest income in 2024 reflects interest and investment income in the bond funds and the higher interest expense in 2025 reflects the issuance of new convertible promissory notes during 2025.
As of JuneSeptember 30, 2025, the company has a cash balance of $2,254,206$2,081,780 and a working deficit of $73,851,409.$75,743,188. We expect to fund our liquidity requirements over the next 12 months primarily with cash on hand and additional debt and equity financing transactions. If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may be required to rationalize our expenditures or slow down efforts to further develop our new business models. We do not have any credit lines currently available to fund our liquidity requirements. Maintaining future liquidity is subject to significant uncertainties primarily related to the generation of revenues from our new business models at levels that surpass breakeven and the ability to obtain additional debt and equity financing.
SixNine months Ended JuneSeptember 30, 2025 and 2024
Cash used in operating activities increaseddecreased by $4,422,071$6,864,361 compared to the prior period. This change was primarily driven by a $2,738,510$5,424,925 decrease in net loss, which positively impacted operating cash flow; and a $1,461,359$455,740 increase in cash provided by changes in working capital; and an increase of $222,202 in non-cash charges, including depreciation, amortization, and other adjustments.capital.
Cash provided by investing activities for the sixnine months ended JuneSeptember 30, 2025 was $2,691,099,$3,930,735, compared to cash used in investing activities of $148,271,896$145,900,141 for the sixnine months ended JuneSeptember 30, 2024. The 2025 period includes a net $3,686,328 ofhas cash provided by restricted investments purchased and sold whereas the 2024 period includes $150,014,712 of cash used in the purchasesale of restricted investments.investments totaling $154,878,566 compared to the use of $6,673 in 2024.
Cash provided by financing activities for the sixnine months ended 2025 was $5,980,665$9,341,649 compared to $146,703,379$145,065,317 for the sixnine months ended 2024. The change was due to the proceeds from tax exempt bonds, net of $149,719,208, which were received on March 28, 2024, and a decrease in net proceeds from other financing obligations of $1,489,046.2024. This was partially offset by proceeds received from convertible promissory notes in 2025repayments of $3,505,559.other financing obligations of $ 5,737,300.
We had no material commitments for capital expenditures as of JuneSeptember 30, 2025.
As of JuneSeptember 30, 2025, we had no off-balance sheet arrangements.
AREC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding AREC (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 1,116,295 | $2.4M | 0.0% | Reduced 46% |
| Two Sigma Investments | 2026-06-30 | 402,876 | $866.2K | 0.0% | Reduced 58% |
| Millennium Management (Israel Englander) | 2026-06-30 | 261,745 | $562.8K | 0.0% | Reduced 83% |