Form 10-Q American Clean Resources For: Jun 30
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
(Address of Principal Executive Offices)
Issuer’s telephone number including area
code:
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
N/A
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the issuer (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No
On August 13, 2026, there were
Documents Incorporated by Reference: None.
AMERICAN CLEAN RESOURCES GROUP, INC.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended June 30, 2026
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
American Clean Resources Group, Inc.
Unaudited Condensed Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Mineral rights | ||||||||
| Right-of-use asset - related party | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ deficit | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable - related parties | ||||||||
| Accrued expenses | ||||||||
| Accrued expenses - related parties | ||||||||
| Accrued interest | ||||||||
| Accrued interest - related party | ||||||||
| Promissory note | ||||||||
| Operating lease liability - related party | ||||||||
| Convertible promissory notes - related party | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability - related party, non-current | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Mezzanine equity: | ||||||||
| Series A preferred stock, $ | ||||||||
| Stockholders’ deficit: | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements
1
American Clean Resources Group, Inc.
Unaudited Condensed Consolidated Statements of Operations
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income tax provision | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision | - | - | ||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted net loss per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted weighted average common shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements
2
American Clean Resources Group, Inc.
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common Stock Issued for Services | ||||||||||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements
3
American Clean Resources Group, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Common stock issued for services | ||||||||
| Amortization of operating right of use assets | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ||||||||
| Accounts payable | ||||||||
| Accounts payable - related parties | ||||||||
| Accrued expenses | ( | ) | ||||||
| Accrued expenses - related parties | ||||||||
| Accrued interest | ||||||||
| Accrued interest - related party | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from convertible notes - related party | ||||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Noncash investing and financing activity: | ||||||||
| Cash paid during the period for interest | $ | $ | ||||||
| Cash paid during the period for income taxes | $ | $ | ||||||
| Acquisition of assets through operating leases | $ | $ | ||||||
| Note payable issued in settlement of accounts payable pursuant to debt modification | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements
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AMERICAN CLEAN RESOURCES GROUP, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
| 1. | Nature of Business |
American Clean Resources Group, Inc. (“we,” “us,” “our,” “ACRG” or the “Company”) is an exploration stage company, incorporated in Nevada. The Company’s primary business plan is to purchase equipment and build a facility on its Tonopah property to serve as a permitted custom processing toll milling facility while it explores new technologies that allow greater effectiveness in achieving industry sustainability goals, including an analytical lab, pyrometallurgical plant, and hydrometallurgical recovery plant. The Company is required to obtain several permits before it can begin construction of the planned facility.
Effective January 1, 2026, the Company, through
its wholly owned subsidiary ACRG Energy Holdings, Inc. (“ACRG Energy Holdings”), and Phoenix New Era, LLC (“Phoenix”)
formed American Clean Energy, LLC (“ACE”), a Nevada limited liability company organized to pursue clean-energy and processing-related
business opportunities. As of June 30, 2026, ACRG Energy Holdings held a
| 2. | Summary of Significant Accounting Policies |
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2025.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the Company’s financial position as of June 30, 2026, and its results of operations and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
Principles of Consolidation
The condensed consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries: Aurielle Enterprises, Inc. (f/k/a Tonopah Milling and Metals Group,
Inc.) and its wholly owned subsidiaries Tonopah Custom Processing, Inc. and Tonopah Resources, Inc.; ACRG Energy Holdings, Inc.; and ACE,
which is consolidated as a wholly-controlled subsidiary under ASC 810, Consolidation. As of June 30, 2026, ACRG Energy Holdings held a
5
During the fourth quarter of 2025, the Company rescinded its prior acquisition of SWIS LLC and deconsolidated the entity effective November 21, 2025. As a result, SWIS LLC is not included in the consolidated financial statements as of and for the three and six months ended June 30, 2026. The comparative periods ended June 30, 2025 did not include material assets, liabilities, or results of operations attributable to SWIS LLC.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Changes in circumstances could cause actual results to differ materially from these estimates.
Changes in Accounting Policies
We have consistently applied the accounting policies for the periods presented as described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2025.
Costs Incurred in Connection with Related-Party Matters
From time to time the Company incurs and pays third-party legal, regulatory, and consulting costs in connection with matters in which an entity under common control with the Company also has an interest, including under a Master Services Agreement with Sustainable Metals Solutions, LLC (“SMS”) (see Note 6). The Company recognizes such costs as operating expenses within general and administrative expenses in the period incurred unless, and only to the extent that, an enforceable and collectible right to reimbursement exists at the balance-sheet date, in which case a related-party receivable is recognized. Receivables from entities under common control are outside the scope of the current expected credit loss model in ASC 326-20. As of June 30, 2026, no related-party receivable had been recognized under this policy, and the CECL scope exception in ASC 326-20 accordingly had no effect on the Company’s condensed consolidated financial statements for the periods presented.
Going Concern
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In accordance with ASC 205-40, Presentation of Financial Statements—Going Concern, management has evaluated whether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued.
The principal conditions and events giving rise
to this evaluation are: (i) recurring losses from operations and negative operating cash flows, including a net loss of $
6
Management’s plans to address these conditions include seeking additional debt or equity financing, continuing to rely on advances from GPR, and pursuing the strategic transactions described in Note 9 and Note 11. Because these plans have not yet been finalized, are not entirely within the Company’s control, and depend on the continued willingness and ability of GPR and third parties to provide funding, management has concluded that it is not probable that the plans will be effectively implemented and will mitigate the conditions described above. Accordingly, substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued has not been alleviated. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or the amounts and classification of liabilities, that might be necessary should the Company be unable to continue as a going concern.
Basic and Diluted Net Loss Per Share
Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during each period. Diluted net loss per share of common shares includes the effect, if any, from the potential exercise or conversion of securities, such as convertible debt, share options and warrants, which would result in the issuance of incremental shares of common shares. For diluted net loss per share, the weighted-average number of common shares is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. For all periods presented, basic and diluted net loss per share are the same, as any additional share equivalents would be anti-dilutive.
As of June 30, 2026 and December 31, 2025, the
Company’s convertible promissory note – related party was convertible into
Recently issued accounting pronouncements not yet adopted
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires disclosure of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement and disclosures about selling expenses. ASU 2024-03 will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating ASU 2024-03 and does not expect it to have a material effect on the Company’s consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“VIE”), which provides clarifying guidance on determining the accounting acquirer in certain transactions involving VIEs. The update aims to improve consistency and comparability in financial reporting. The guidance will be effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. Upon adoption, the guidance will be applied prospectively. The Company is currently evaluating the provisions of the amendments and the impact on its future financial statements.
| 3. | Mineral rights |
The Company is preparing its Tonopah property
site for the construction of a permitted custom processing toll milling facility, including grading the land, installing fencing, and
drilling and servicing wells for future operations. During the three and six months ended June 30, 2026, management performed a qualitative
impairment assessment under ASC 360-10, considering current commodity prices, the status of permitting activities, the condition of the
underlying property, and the Company’s intent and ability to develop the property. Based on this assessment, management concluded
that no indicators of impairment existed and that the carrying value of $
7
| 4. | Operating Lease – Related Party |
The Company leases its principal office space
from SMS Lakewood, LLC (“SMS Lakewood”), an entity that is an affiliate of GPR, the Company’s majority stockholder,
and therefore an affiliate of the Company’s Chief Executive Officer. Effective April 1, 2025, the Company entered into a three-year
non-cancelable operating lease with SMS Lakewood for approximately
As of June 30, 2026, the operating lease right-of-use
asset was $
The following table presents the undiscounted future lease payments for the related-party operating lease and a reconciliation to the operating lease liability as of June 30, 2026:
| Fiscal Year | Future Lease Payments | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted payments | ||||
| Less: imputed interest ( | ( | ) | ||
| Present value of operating lease liability | $ | |||
The Company had other operating or finance lease commitments as of June 30, 2026.
8
| 5. | Debt |
Convertible Promissory Notes Payable – Related Party
On March 16, 2020, the Company entered into a
Line of Credit (“LOC”) agreement with GPR, a related party and the Company’s majority stockholder. The LOC, as amended,
provided for borrowings of up to $
During the three and six months ended June 30,
2026, the Company received cash proceeds of $
The stated and effective interest rate on the
note is
Promissory Note – LaunchIT
In November 2025, the Company entered into a Share
Return, Payment, and SWIS LLC Transfer Agreement (the “LaunchIT Agreement”) with LaunchIT LLC (“LaunchIT”), pursuant
to which the Company rescinded its prior acquisition of SWIS LLC. Total consideration was $
The scheduled installments were not paid on their
original due dates, and the LaunchIT Note was in default. On May 19, 2026, the Company and LaunchIT entered into a First Amendment to
Promissory Note and Waiver of Default (the “Amendment”). Pursuant to the Amendment, the Company paid LaunchIT $
As more fully described above, the Company was
in default under the original terms of the LaunchIT Note from January 2026 through May 19, 2026 due to the non-payment of four scheduled
installments aggregating $
9
As of June 30, 2026, the LaunchIT Note is carried
at its amended principal balance of $
The LaunchIT promissory note matures no later
than December 31, 2026 and the convertible promissory note – related party matures on
Interest on Outstanding Legal Service Obligation
Included in accounts payable and accrued interest
at June 30, 2026 is an obligation to a legal service provider with an outstanding principal balance of approximately $
| 6. | Related Party Transactions |
The Company has entered into a number of transactions with related parties. These related parties include GPR; entities affiliated with GPR, including SMS Lakewood and SMS; executive officers and consultants who provide executive and strategic services; and the Company’s consolidated joint venture, ACE.
Granite Peak Resources, LLC
GPR is controlled by the Company’s Chief
Executive Officer and Chairwoman of the Board, Tawana Bain, and is the Company’s controlling stockholder. As of June 30, 2026, GPR
beneficially owned
Related-Party Operating Lease
The Company leases its principal office space from SMS Lakewood, an affiliate of its majority stockholder. See Note 4 – Operating Lease – Related Party for the lease terms and balances.
Master Services Agreement – Sustainable Metals Solutions, LLC
In March 2026, the Company and SMS, an entity
under common control with the Company (SMS is majority-owned by GPR), entered into a Master Services Agreement (the “SMS MSA”)
that establishes an administrative and funding framework under which the Company, with SMS’s prior approval, may engage and pay
certain third-party legal, regulatory, and other professional advisors in connection with regulatory and permit matters in which SMS also
has an interest. The Company charges no fee, markup, or interest under the arrangement. During the three and six months ended June 30,
2026, the Company incurred and paid $
10
Executive Consultants and Other Related-Party Balances
The Company engages certain individuals as independent
contractors to provide executive and strategic services; these individuals are considered related parties due to their roles as executive
officers or their involvement in the Company’s strategic decision-making. Accounts payable – related parties consists primarily
of fees for executive and consulting services and amounts due to SMS Lakewood, and totaled $
The Company evaluates the aggregate of its related-party transactions against the disclosure threshold in Item 404 of Regulation S-K and provides the disclosures required by that item in its Annual Report on Form 10-K and proxy statement, as applicable.
| 7. | American Clean Energy, LLC |
ACE is governed by an operating agreement (the
“ACE Operating Agreement”) between the Company’s wholly owned subsidiary, ACRG Energy Holdings, and Phoenix. As of June
30, 2026, ACRG Energy Holdings held a
Because the Company, through ACRG Energy Holdings,
holds a
Under the ACE Operating Agreement, ACE may fund
up to $
| 8. | Stockholders’ Deficit and Mezzanine Equity |
Series A Preferred Stock
The Series A Preferred Stock is classified as
mezzanine equity because, upon the occurrence of certain contingent events outside the Company’s control, the holders may require
redemption for cash at the liquidation value described below. The Series A Preferred Stock has a liquidation preference of $
The Series A Preferred Stock does not participate in dividends or undistributed earnings with the common stock under any contractual formula, is not convertible into common stock, and has no rights to share in the Company’s earnings other than its stated liquidation preference, which is payable only upon the occurrence of specified contingent liquidity or valuation events. Accordingly, management concluded that the Series A Preferred Stock is not a participating security within the meaning of ASC 260-10-45-59A through 45-61, and the two-class method of computing earnings per share is not applicable.
11
Common Stock
As of June 30, 2026, the Company is authorized
to issue
Common Stock Issued for Services
During the six months ended June 30, 2026, the
Company issued
| 9. | Commitments and Contingencies |
Contemplated Transaction with the SMS Group
On January 10, 2022, the Company executed a definitive agreement to acquire a controlling interest in SMS and its subsidiaries (collectively, the “SMS Group”), a company majority-owned by GPR. The purchase price for the controlling interest will be determined based on the price of the Company’s common stock on the closing date, to be agreed by the parties in good faith after all conditions precedent are met. These conditions precedent include, but are not limited to, completion of SMS’s audited financial statements by an independent PCAOB-registered accounting firm; delivery of a completed and SEC-compliant SK-1300 technical report summary; uplisting of ACRG’s common stock to the Nasdaq Capital Market; SEC clearance of a Form S-4 registration statement and proxy materials; approval of the transaction by ACRG’s shareholders; and satisfaction of customary closing conditions. As of June 30, 2026, the transaction had not closed and no amounts related to the contemplated transaction are reflected in the accompanying financial statements.
Separately, the Company and SMS are party to a Master Services Agreement entered into in March 2026 relating to the funding of certain third-party advisory costs, which is described in Note 6 – Related Party Transactions.
Joint Venture with AMI Strategies
Effective June 3, 2024, the Company executed a Memorandum of Understanding for a joint venture with AMI Strategies (“AMI”). The parties intend to form a joint operation utilizing the technology and talent of both organizations, including the Company’s planned renewable energy generation and AMI’s utility-cost management platform. The parties will work together to draft definitive documents, including the formation of the joint venture and its governing documents. No amounts related to the contemplated AMI joint venture are reflected in the accompanying financial statements.
Legal Proceedings
From time to time the Company may be subject to claims and legal proceedings arising in the ordinary course of business. As of June 30, 2026, the Company was not a party to any material pending legal proceedings.
12
| 10. | Segment Information |
The Company operates as a single reportable segment
consisting of the development and preparation of a permitted custom processing toll milling facility on the Company’s Tonopah property
in Nevada, and has not commenced mining or processing operations as of June 30, 2026. There were no changes in the basis of segmentation
from that described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The significant expense category regularly provided
to the CODM is general and administrative expenses, which are presented as a single caption on the condensed consolidated statements of
operations and totaled $
| 11. | Subsequent Events |
The Company has evaluated subsequent events from the balance sheet date through the date on which these unaudited condensed financial statements were issued. Other than as described in the notes herein and below, the Company did not have any material subsequent events that impacted its unaudited condensed financial statements or disclosures.
Elko Joint Exploration and Development Agreement
On July 16, 2026, the Company entered into a Joint Exploration and Development Agreement (the “Elko JEDA”) with TRG Holdings, LLC relating to the development of a critical mineral processing hub in Elko, Nevada. The Elko JEDA establishes a framework for the parties’ joint exploration, technical evaluation, regulatory coordination, and commercial scoping, and does not itself create an operating joint venture. A Current Report on Form 8-K describing the Elko JEDA was filed with the SEC under Item 1.01 (Entry into a Material Definitive Agreement). As the agreement was executed after June 30, 2026, no amounts related to the Elko JEDA are reflected in the accompanying financial statements.
Elko Heat Company Letter of Intent
On July 1, 2026, the Company received a non-binding
letter of intent from Elko Heat Company under which it confirmed its commitment to use commercially reasonable good-faith efforts to arrange
and provide up to $
13
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management’s current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.
Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.
Overview
ACRG is an exploration stage company whose primary business plan is to build and operate a permitted custom processing toll milling facility on its Tonopah property in Nevada. We are also exploring the development of an integrated renewable energy, critical minerals processing, and data center campus on our Millers property in Esmeralda County, Nevada, and clean-energy project development through our consolidated joint venture, ACE. We have not generated revenue from our planned operations and do not anticipate doing so until our Tonopah facility is constructed, permitted, and operational, which is dependent on obtaining substantial additional capital and regulatory approvals.
Results of Operations – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
General and administrative expenses were $301,162 for the three months ended June 30, 2026, compared to $244,269 for the three months ended June 30, 2025, an increase of $56,893, or 23.3%. The increase was driven principally by higher insurance expense associated with the Company’s directors’ and officers’ liability coverage, expanded consulting and professional fees supporting audit-readiness and regulatory compliance, and $36,051 of third-party legal and consulting costs incurred in connection with matters involving a related party under common control, which the Company recognized as general and administrative expense because an enforceable and collectible right to reimbursement did not exist at June 30, 2026. These increases were partially offset by lower engineering and accounting fees, the latter reflecting vendor-credit adjustments in the current quarter.
Other income was $2,444 for the three months ended June 30, 2026, compared to $2,413 for the three months ended June 30, 2025, and consisted of ground-lease income from a communications-tower tenant. Interest expense was $124,346 for the three months ended June 30, 2026, compared to $114,069 for the three months ended June 30, 2025, an increase of $10,277, or 9.0%, reflecting accrued interest on the amended LaunchIT promissory note, including fixed late fees, and on the GPR convertible promissory note. As a result, net loss was $423,064, or $(0.03) per basic and diluted share, for the three months ended June 30, 2026, compared to $355,925, or $(0.03) per basic and diluted share, for the three months ended June 30, 2025.
14
Results of Operations – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
General and administrative expenses were $606,246 for the six months ended June 30, 2026, compared to $539,201 for the six months ended June 30, 2025, an increase of $67,045, or 12.4%. The increase was attributable primarily to higher insurance expense of approximately $36,700 associated with the Company’s directors’ and officers’ liability coverage, for which there was no comparable coverage in the prior-year period; increased consulting and professional fees; board and advisory compensation of $16,266 recognized in the first quarter of 2026; organization and startup costs of the ACE joint venture; and the $36,051 of related-party legal and consulting costs described above. These increases were partially offset by lower accounting and engineering fees, driven principally by the completion of technical evaluation activities performed in the comparable prior-year period that did not recur in the current period.
Other income was $4,889 for the six months ended June 30, 2026, compared to $4,827 for the six months ended June 30, 2025. Interest expense was $244,055 for the six months ended June 30, 2026, compared to $219,192 for the six months ended June 30, 2025, an increase of $24,863, or 11.3%, driven by accrued interest on the amended LaunchIT promissory note, including fixed late fees, together with accrued interest on the GPR convertible promissory note. As a result, net loss was $845,412, or $(0.06) per basic and diluted share, for the six months ended June 30, 2026, compared to $753,566, or $(0.05) per basic and diluted share, for the six months ended June 30, 2025.
We do not expect to generate operating revenue unless and until our Tonopah facility becomes operational, and we expect to continue to incur operating losses and negative operating cash flows as we fund legal, accounting, insurance, regulatory, and other public-company costs, along with permitting and technical evaluation activities. We are not aware of any other known trends, events, or uncertainties that are reasonably likely to have a material favorable or unfavorable impact on our results of operations, other than the going-concern conditions and the capital-raising and permitting matters described herein.
Liquidity and Capital Resources
As of June 30, 2026, we had cash of $2,914 and total current assets of $8,642, compared to total current liabilities of approximately $5.2 million, resulting in a working capital deficit of approximately $5.2 million. We have not generated revenue from operations and have incurred recurring operating losses, including a net loss of $845,412 for the six months ended June 30, 2026, and had an accumulated deficit of $116,319,711 as of June 30, 2026. These conditions raise substantial doubt about our ability to continue as a going concern, which has not been alleviated (see Note 2 to the accompanying financial statements). Our ability to continue as a going concern is dependent on our ability to obtain additional financing and, over time, to generate revenue and cash flows sufficient to meet our obligations.
Short-term liquidity (next twelve months) Our primary internal source of liquidity is cash on hand, and our primary external source of liquidity has been discretionary advances from GPR under our related-party line of credit. Based on our current rate of cash usage, we estimate that our existing cash on hand of $2,914 is not sufficient to fund our anticipated operating expenses — including professional, insurance, consulting, and permitting costs — or our scheduled contractual obligations beyond the very near term without continued advances from GPR or additional financing. We do not have any committed sources of financing; advances under the GPR line of credit are discretionary and are not contractually committed. Our known contractual cash requirements over the next twelve months consist principally of (i) six remaining monthly installments of $5,000 each under the amended LaunchIT promissory note from June 2026 through November 2026, with a final payment of $162,500 due on or before December 31, 2026, representing total scheduled payments of $192,500 (which exceed the $165,000 amended principal balance by $27,500 of contractual late fees and other charges provided for under the amendment); (ii) the maturity of the $447,464 GPR convertible promissory note on March 16, 2027, which is convertible into common stock at the holder’s election; and (iii) related-party operating lease payments of approximately $4,344 for the remainder of 2026. There can be no assurance that additional capital will be available on acceptable terms, or at all, and a failure to obtain such capital would have a material adverse effect on our liquidity and our ability to continue operations.
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Long-term liquidity (beyond twelve months) Over the longer term, the construction and permitting of our Tonopah toll milling facility and the development of our Millers property will require substantial additional capital, which we expect to fund through a combination of equity and debt financing, government grants, and potential strategic partnerships, including the arrangements described in Note 9 and Note 11 to the accompanying financial statements. As of June 30, 2026, we had no material commitments for capital expenditures. The mix and cost of our capital resources may change materially depending on the availability and terms of future financing, and any future equity financing would be dilutive to existing stockholders.
Cash Flows
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (449,846 | ) | $ | (503,766 | ) | ||
| Net cash provided by investing activities | - | - | ||||||
| Net cash provided by financing activities | 447,464 | 511,492 | ||||||
| (Decrease) increase in cash | $ | (2,382 | ) | $ | 7,726 | |||
Operating Activities
Net cash used in operating activities was $449,846 for the six months ended June 30, 2026, compared to $503,766 for the six months ended June 30, 2025, a decrease in cash used of $53,920. Cash used in operating activities in the current period reflects the net loss for the period, adjusted for non-cash items including common stock issued for services of $16,266 and amortization of the operating right-of-use asset of $3,841, together with changes in operating assets and liabilities, principally a decrease in prepaid expenses of $36,661 and increases in accounts payable of $64,375 and accrued interest of $232,399. Interest expense for the six months ended June 30, 2026 consisted principally of approximately $219,899 of interest accruing at 12% per annum on the Company’s outstanding legal-services obligation, together with $11,656 on the GPR convertible promissory note and $12,500 of fixed late fees on the amended LaunchIT promissory note. The decrease in cash used compared to the prior-year period was driven primarily by a larger increase in accounts payable and accrued liabilities in the current period as the Company deferred payment of certain professional, legal, and engineering costs, partially offset by a higher net loss.
Investing Activities
There were no investing activities during the six months ended June 30, 2026 or 2025.
Financing Activities
Net cash provided by financing activities was $447,464 for the six months ended June 30, 2026, compared to $511,492 for the six months ended June 30, 2025, consisting of advances under the Company’s line of credit with GPR.
Critical Accounting Estimates
The preparation of our financial statements requires us to make estimates and judgments that involve a significant level of estimation uncertainty and that have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Our critical accounting estimates include the assessment of impairment of mineral rights under ASC 360-10; the going concern assessment under ASC 205-40; the measurement of stock-based compensation under ASC 718; the consolidation of ACE under ASC 810; and the determination of whether costs funded in connection with matters involving entities under common control give rise to a collectible reimbursement asset at the balance-sheet date. The mineral-rights impairment assessment is sensitive to assumptions regarding commodity prices, the status and timing of permitting, and our intent and ability to develop the property; a change in those assumptions could result in a future impairment charge. The going-concern assessment is sensitive to assumptions about the availability and timing of future financing. Except for the estimates and judgments associated with the consolidation of ACE and the evaluation of costs incurred in connection with matters involving entities under common control, there have been no material changes to the methods or key assumptions underlying our critical accounting estimates from those described in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion supplements, and does not duplicate, the description of our significant accounting policies in Note 2 to the accompanying financial statements.
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Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements, as defined in Item 303(a)(4) of Regulation S-K, during the six months ended June 30, 2026.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information required by this Item. Our market risk exposure relates primarily to fluctuations in interest rates, inflation, and changes in the regulatory environment. As of June 30, 2026, our outstanding debt bore interest at fixed rates, and we had limited exposure to interest-rate risk. There have been no material changes in our reported market risks since the end of the most recent fiscal year.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026, due to material weaknesses previously disclosed, including insufficient accounting personnel and segregation of duties and inadequate formal documentation of internal control policies and procedures over financial reporting. Notwithstanding these material weaknesses, management believes that the unaudited condensed consolidated financial statements included in this Quarterly Report fairly present, in all material respects, the Company’s financial position, results of operations, and cash flows for the periods presented.
Changes in Internal Control over Financial Reporting
Other than the ongoing remediation activities described in our Annual Report on Form 10-K for the year ended December 31, 2025, there were no changes in our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not aware of any material pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of their property is subject.
ITEM 1A. RISK FACTORS.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the six months ended June 30, 2026, the Company issued 1,925 shares of restricted common stock to members of its Advisory Board and Development Committee as compensation for services, as described in Note 8. These issuances were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 and Rule 506 of Regulation D thereunder. No underwriters were involved and no commissions were paid.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
None of the Company’s directors or officers
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ITEM 6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this Quarterly Report on Form 10-Q or are incorporated herein by reference.
| ** | Filed herewith electronically |
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMERICAN CLEAN RESOURCES GROUP, INC. | ||
| Dated: August 14, 2026 | By: | /s/ TAWANA BAIN |
| Tawana Bain | ||
| Chief Executive Officer and Chairwoman of the Board | ||
Each person whose signature to this Quarterly Report appears below hereby constitutes and appoints Tawana Bain and Luke McPherson as their true and lawful attorney-in-fact and agents, with full power of substitution, to sign on their behalf individually and in the capacity stated below and to perform any acts necessary to be done in order to file all amendments to this Quarterly Report and any and all instruments or documents filed as part of or in connection with this Quarterly Report or any amendments thereto and each of the undersigned does hereby ratify and confirm all that said attorney-in-fact and agent, or their substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Company, in the capacities and dates indicated.
| Name | Title | Date | ||
| /s/ TAWANA BAIN | Chief Executive Officer and Chairwoman of the Board | August 14, 2026 | ||
| Tawana Bain | ||||
| /s/ LUKE MCPHERSON | Chief Financial Officer | August 14, 2026 | ||
| Luke McPherson |
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ATTACHMENTS / EXHIBITS
DESCRIPTION OF SECURITIES REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
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