{"url_path":"/sec/arec/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 Certain Relationships and Related Transactions, and Director Independence.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-05-20","source_url":"https://www.sec.gov/Archives/edgar/data/1590715/0001477932-26-003317-index.html","accession_number":"0001477932-26-003317","cik":"0001590715","ticker":"AREC","issuer_name":"American Resources Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/1590715/0001477932-26-003317-index.html","primary_entity_key":"0001590715","primary_entity_name":"American Resources Corp"},"word_count":1317,"has_tables":true,"body_markdown":"**Item 13. Certain Relationships and Related Transactions, and Director Independence.**\n\n \n\n*Transactions with Related Persons, Promoters and Certain Control Persons.*\n\n \n\n*Royalty Management Co.*\n\n \n\nIn January 2021, the Company invested $2.25 million to acquire a 50% ownership interest in American Opportunity Venture, LLC (“AOV”) and became its managing member. AOV was determined to be a variable interest entity for which the Company is the primary beneficiary and is therefore consolidated in the Company’s consolidated financial statements. AOV’s sole investment is an equity interest in Royalty Management Co. (“RMCO”), which is accounted for under the equity method of accounting.\n\n \n\nThe investment was initially held in American Acquisition Opportunity Inc., a special purpose acquisition company, which completed a reverse merger with RMCO effective October 31, 2023. The Company recognizes earnings or losses related to its investment in RMCO on a three‑month lag to allow for the timely preparation of its financial statements. As of December 31, 2025 and 2024, the Company indirectly held 428,446 shares of Class A common stock of RMCO and 884,783 shares directly. In addition, as of December 31, 2025 and 2024, the Company held 381,243 and zero shares, respectively, of Series A Preferred Stock of RMCO.\n\n \n\n*ReElement Technologies Corporation (“RLMT”)*\n\n \n\nPrior to its deconsolidation, ReElement Technologies Corporation (“RLMT”) was determined to be a variable interest entity for which the Company was the primary beneficiary and was therefore consolidated in the Company’s consolidated financial statements during the applicable periods.\n\n \n\nUpon completion of the spin‑off transaction, the Company determined that it was no longer the primary beneficiary of RLMT and deconsolidated RLMT in accordance with the guidance under ASC 810. Following deconsolidation, the Company no longer controls RLMT and does not direct the activities that most significantly impact RLMT’s economic performance.\n\n \n\nAs of December 31, 2025, the Company retained approximately 19% ownership interest in RLMT, which is accounted for under the equity method of accounting. The Company does not participate in the day‑to‑day operations, management, or governance of RLMT. Other than its retained ownership interest and the recognition of its proportionate share of earnings or losses under the equity method, the Company does not have any material ongoing contractual arrangements, guarantees, service agreements, or other transactions with RLMT.\n\n \n\nRLMT is considered a related party of the Company subsequent to the deconsolidation date.\n\n \n\n*American Infrastructure Corporation (“AIC”)*\n\n \n\nThe Company previously determined that its involvement with American Infrastructure Corporation (“AIC”) was subject to consolidation under the variable interest entity model. On December 25, 2025, the Company determined that it was no longer the primary beneficiary and deconsolidated AIC.\n\n \n\nFollowing deconsolidation, the Company retained approximately 9% ownership interest in AIC, which does not provide the Company with significant influence over AIC’s operating or financial activities and is accounted for as a financial asset measured at fair value. The Company does not direct the activities that most significantly impact AIC’s economic performance and does not participate in AIC’s management or operations. Other than the retained ownership interest and rights, if any, described elsewhere in this Annual Report, the Company does not have any material ongoing transactions or arrangements with AIC.\n\n \n\nAIC is considered a related party of the Company subsequent to the deconsolidation date.\n\n \n\n*Novusterra, Inc.*\n\n \n\nNovusterra, Inc. (“Novusterra”) is a related party due to management and governance relationships between the Company and Novusterra. On March 31, 2021, the Company entered into a Graphene Development Agreement with Novusterra, pursuant to which the Company received a non‑exclusive sublicense entitling it to fifty percent (50%) of the operating profits from Novusterra’s graphene manufacturing and marketing activities. In connection with this agreement, the Company’s Chief Executive Officer, Mark Jensen, replaced Novusterra’s Chairman of the Board of Directors.\n\n \n\nOn August 30, 2022, the Company entered into a purchase agreement under which it sold exclusive rights to certain patents previously included in the Graphene Development Agreement in exchange for 4,000,000 shares of Novusterra’s common stock, with a fair value of $1.78 million at the transaction date. In connection with this transaction, Andrew Weeraratne resigned as Novusterra’s Chief Executive Officer and director, and Gregory Jensen, the Company’s general counsel, was appointed Chief Executive Officer and director of Novusterra. Mr. Jensen also resigned as Chairman of Novusterra’s Board of Directors.\n\n \n\nFollowing the transaction, Novusterra is no longer obligated to remit fifty percent (50%) of operating profits to the Company. However, Novusterra remains obligated to remit ten percent (10%) of revenues derived from an exclusive sublicense agreement with Kenai Defense Company, LLC and the U.S. Department of Defense that was transferred from the Company to Novusterra. Any subsequent contracts entered into by Novusterra with Kenai Defense Company, LLC or the Department of Defense are not subject to revenue‑sharing with the Company.\n\n \n\nNovusterra was determined to be a variable interest entity for which the Company is not the primary beneficiary. Accordingly, the investment was accounted for under the equity method. Effective March 6, 2024, the Company distributed 91% of its ownership interest in Novusterra to the Company’s stockholders as a special dividend, resulting in the Company retaining a 9% ownership interest represented by 1,417,500 common shares. Following this distribution, the remaining investment has been accounted for using the cost method. As of December 31, 2025 and 2024, the carrying value of the investment was $0.\n\n \n\n*FUB Mineral LLC*\n\n \n\nThe Company owns a 23% interest in FUB Mineral LLC (“FUB”), which is accounted for under the equity method. The Company evaluated FUB under the variable interest entity guidance in ASC 810 and concluded that FUB is a variable interest entity; however, the Company is not the primary beneficiary and therefore is not consolidated. As of December 31, 2025 and 2024, there were no outstanding note receivable balances with FUB, and the Company recorded an allowance on the remaining carrying value of the note receivable due to collectability concerns.\n\n \n\n*Land Betterment Corporation*\n\n \n\nEffective January 1, 2022, the Company amended a Contract Services Agreement with Land Betterment Corp, an entity controlled by certain members of the Company’s management who are also directors and shareholders. The amended contract terms state that service costs are passed through to the Company with a 12.5% mark-up and a 50% share of cost savings. The agreement covers services across all of the Company’s properties. For the year ended December 31, 2025 and 2024, the amounts incurred under the agreement amounted to $5,224,238 and $4,216,528, respectively. The amount paid for the year ended December 31, 2025 and 2024 amounted to $2,627,440 and $4,966,536, respectively. As of December 31, 2025 and 2024, the amount due under the agreement amounted to $5,314,599 and $1,683,612, respectively. These project management services were all payable as of December 31, 2025 and 2024.\n\n \n\n*Land Resources and Royalties LLC*\n\n \n\nOn October 24, 2016, the Company sold certain mineral and land interests to a subsidiary of an entity, Land Resources & Royalties, LLC (“LRR”), owned by members of the Company’s management. LRR leases various parcels of land to AIC and engages in other activities creating miscellaneous income. The consideration for the transaction was a note in the amount of $178,683, which was fully settled during the year ended December 31, 2025. No interest expense related to this note was outstanding as of period‑end.\n\n \n\n*Director Independence.*\n\n \n\nThe Board of Directors has determined that Ms. Botte and Messrs. Hawes and Taplin are independent within the meaning of the listing standards of the NASDAQ Capital Market. Under these standards, the Audit Committee is required to be composed solely of independent directors. The Board has also determined that all members of the Audit Committee satisfy the applicable independence requirements imposed by the Securities and Exchange Commission.\n\n \n\nTo the extent required by the trading market on which the Company’s securities are listed, the Company will continue to ensure that the composition of its Board of Directors complies with the Sarbanes‑Oxley Act and applicable listing standards, including the requirement that at least one director qualify as an audit committee financial expert.\n\n \n\n \n\n28\n\n*Table of Contents*"}