Quarterly Report for Quarter Ending March 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of the Company. The Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and notes thereto for the quarter ended March 31, 2025. This report contains forward-looking statements or forward-looking information (collectively, "forward-looking statements") made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as well as the safe harbor provisions of applicable Canadian securities legislation, that are based on management's beliefs and assumptions and involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.

Forward-looking statements can also be identified by words such as "future", "anticipates", "believes", "projects", "estimates", "expects", "intends", "plans", "predicts", "will", "should", "would", "could", "can", "may", or similar terms. Forward-looking statements are not guarantees of future performance and ACRG's actual results may differ significantly from the results discussed in the forward-looking statements. ACRG cautions that these statements are subject to numerous important risks, uncertainties, assumptions, and other factors, some of which are beyond ACRG's control. These risks could cause ACRG's actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to adverse macroeconomic conditions; geopolitical tensions; laws and policies resulting from change in federal government administration; impact of trade tarrifs; changes in consumer confidence and spending in response to economic volatility; our ability to develop and commercialize our products; our ability to integrate our acquisitions successfully into our business; supply chain disruptions that increase our costs and impair our ability to manufacture our products; our ability to attract and keep senior management and key scientific personnel; our ability to obtain and maintain intellectual property protection; the accuracy of our estimates regarding expenses, future revenues, and capital requirements; and the "Risk Factors" described in our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K"). The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We undertake no duty to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations, except as required by applicable law.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Quarterly Report. In addition to historical information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See "Forward-looking Statements" for a discussion of the uncertainties and assumptions associated with these statements. Our actual results may differ materially from those discussed below.

Business Overview

General

American Clean Resources Group, Inc. ("we," "us," "our," "ACRG" or the "Company") is an exploration stage company having offices in Lakewood, Colorado and, through its subsidiaries, a property in Tonopah, Nevada. Our business plan is to purchase equipment and build a facility on our Tonopah property to serve as a permitted custom processing toll milling facility (which includes an analytical lab, pyrometallurgical plant, and hydrometallurgical recovery plant).

The Company plans to perform permitted custom processing toll milling, which is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as minerals in the gold, silver, and platinum metal groups. Custom milling and refining can include many different processes that are designed specifically for each ore load and to maximize the extraction of precious metals from carbon or concentrates. These toll-processing services also distill, dry, mix, or mill chemicals and bulk materials on a contractual basis and provide a chemical production outsourcing option for industrial companies, which lack the expertise, capacity, or regulatory permits for in-house production.

We are required to obtain several permits before we can begin construction of a small-scale mineral processing facility to conduct permitted processing toll milling activities and construction of the required additional buildings for us to commence operations.

Any reference herein to "ACRG" "the Company," "we," "our," or "us" is intended to mean American Clean Resources Group, Inc., a Nevada corporation, and all of our subsidiaries unless otherwise indicated.

Subsidiaries

The Company has two wholly owned subsidiary, Aurielle Enterprises, Inc. ("AE"), a Nevada corporation and SWIS, LLC ("SWIS"), a Kentucky limited liability corporation.. AE has two wholly owned subsidiaries, Tonopah Resources, Inc., ("TR") a Nevada corporation and Tonopah Custom Processing, Inc., ("TCP") a Nevada corporation.

Plans of Operations

We seek to establish ourselves as a custom processing and permitted toll milling service provider. Our business plan is to build a facility on our Tonopah property, which includes an analytical lab, pyrometallurgical, and hydrometallurgical recovery plant.

We seek to establish ourselves as a custom processing and permitted toll milling service provider. Our business plan is to build a facility on our Tonopah property, which includes an analytical lab, pyrometallurgical, and hydrometallurgical recovery plant.

Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024.

The following table summarized our results of operations for the periods presented:

		For Three Months Ended March 31,
		2025				2024
						RESTATED
Operating expenses:
General and administrative expenses		$	294,932			$	211,498
Total operating expenses			294,932				211,498
Loss from operations			(294,932	)			(211,498	)
Other income (expense):
Other income			2,414				7,099
Interest expense			(105,123	)			(87,875	)
Total other expense, net			(102,709	)			(80,776	)
Loss before income tax provision			(397,641	)			(292,274	)
Income tax provision			-				-
Net loss		$	(397,641	)		$	(292,274	)
Net loss per common shares:
Basic net loss per common share		$	(0.03	)		$	(0.02	)
Weighted average shares outstanding per common shares:
Basic weighted average common shares outstanding			13,912,236				13,907,436

Revenues

We had no revenues from any operations for the three months ended March 31, 2025 and 2024. Furthermore, we do not anticipate any significant future revenue until we have sufficiently funded construction and begin operations.

General and Administrative Expenses

General and administrative expenses were $294,932 and $211,498 for the three months ended March 31, 2025 and 2024, respectively. The increase was primarily due to increases in expenses related to engineering fees, consulting fees, and professional fees. These increases were offset by decreases in legal expense and amortization expense. We anticipate that future administration and operating expenses will increase for fiscal year 2025 as we work toward completion of the planned merger.

Other Income and Expenses

During the three months ended March 31, 2025 and 2024, other expenses increased by $21,933. The increase is primarily due to a increase in interest expense of $17,248 and an decrease in other income of $4,685. The $17,248 increase in interest expense relates to higher debt balance during the three months ended March 31, 2025 compared to 2024.

Liquidity and Capital Resources

Since inception, we have financed our operations from a combination of:

●

issuance and sales of our Class A common stock;

●

issuance of promissory notes payable with related and non-related parties;

●

issuance of convertible promissory notes payable with related and non-related parties; and

●

cash advances from related parties

We have experienced operating losses since our inception and had a total accumulated deficit of $113,951,578 as of March 31, 2025. We expect to incur additional cost and require additional capital as we continue to implement our expansion plan. During the three months ended March 31, 2025, our cash used in operating activities was $237,803. During the three months ended March 31, 2024, our cash provided by operating activities was $75,494.

Known Trends and Uncertainties

As of June 30, 2024, our current assets were significantly less than our current liabilities, resulting in a working capital deficit. This deficit, along with recurring operating losses and negative cash flows from operations, raises substantial doubt about our ability to continue as a going concern for the next twelve months from the date these financial statements were issued. Our ability to continue as a going concern is dependent on our ability to obtain additional financing and to generate revenue and cash flow to meet our obligations on a timely basis. Management is actively seeking additional sources of capital, including debt and equity financing, and is evaluating cost containment measures to preserve liquidity. There is no assurance that such funding will be available on acceptable terms, or at all.

Internal and External Sources of Liquidity

Our primary internal source of liquidity is cash on hand, which was $2,119 as of March 31, 2025. We do not currently generate positive operating cash flows. Our external sources of liquidity include related party financing (notably from GPR), potential equity issuances, and possible third-party debt arrangements. The Company does not have any off-balance sheet financing arrangements.

Material Cash Requirements and Commitments

Our primary short-term cash requirements are to fund working capital and service short-term debt. Working capital requirements can vary significantly from period to period, particularly as a result of additional development expenses. As of June 30, 2024, the Company had no material commitments for capital expenditures. However, significant capital will be required to fund the construction of the Tonopah processing facility and the planned industrial park. The Company anticipates that these requirements will be met through a combination of equity and debt financing, as well as potential government grants and strategic partnerships. The general purpose of these expenditures is to advance the Company's business plan, including the development of permitted custom processing toll milling operations and the ACRG Greenway to Power™ Renewable Energy Industrial Park.

Trends in Capital Resources and Changes in Mix/Cost

During the period, the Company's capital structure shifted from debt to equity as a result of the conversion of the GPR line of credit into common stock. This reduced interest expense but increased shareholder dilution. The cost of capital remains high due to the Company's financial condition and market volatility. Future financing may be more expensive or dilutive, and there is no assurance that such financing will be available on acceptable terms.

Risks and Uncertainties

The Company is subject to risks from inflation, rising interest rates, and volatility in capital markets, which may adversely affect its ability to raise capital. Additionally, the mining and renewable energy sectors are experiencing increased regulatory scrutiny and competition for funding, which could impact the Company's liquidity and capital resources.

Convertible Promissory Notes Payable

On March 16, 2020, the Company executed a Line of Credit ("LOC") with GPR, related party. The LOC is for up to $2,500,000, matures over three years and may be increased by up to another $1,000,000 and extended an additional two years, respectively, at GPR's sole option. The LOC bears interest at 10% per annum, is convertible into shares of the Company's common stock at a per share price of $0.04 based on the last closing sale price on the date of execution and will be secured by the real and personal property GPR already has under lien.

The Company entered into a Second Amendment and Forbearance Agreement with GPR on January 5, 2023 wherein GPR agreed to: (a) increase the existing LOC from $5,000,000 due March 16, 2025 to $35,000,000 due March 16, 2027, (b) roll two existing promissory notes (Tina Gregerson and Krupp notes) purchased by GPR into the LOC resulting in the extinguishment of such notes as separate instruments, and (c) to forebear until January 12, 2024, on exercising its foreclosure rights under its defaulted Senior Secured Note. The Company's Board of Directors approved a revision in the conversion price at which the LOC may convert into the Company's common stock from $1.65 per share to $1.05 per share, based upon the market price of the Company's common stock over the 3 days preceding the agreement. GPR is the Company's majority shareholder and largest debtholder. GPR holds a senior secured interest in all of the assets of the Company, including the stock of its subsidiary entities.

On June 12, 2023, the Company entered into a Third Amendment Agreement with GPR, wherein the LOC was increased to $52,500,000 and both the Senior Secured Promissory Note (previously held by PPMC and acquired in 2019) and the Flechner Judgment were rolled into the balance of the LOC and the Deed of Trust was increased to $250,000,000. The LOC bears interest at 10% per annum and is convertible into shares of the Company's common stock at $2.00 per share and is secured by the Company's real and personal property and its subsidiaries stock.

In furtherance of the preparation for the planned merger with the SMS Group, GPR converted a $5,250,000 portion of the LOC into 5 million shares of restricted common stock effective August 2, 2023. The remaining $4,969,551 balance of the LOC was converted into 4,732,906 shares of restricted common stock effective August 15, 2023. GPR now owns 10,542,989 shares of common stock, which is 73% of the Company's outstanding shares of common stock, 511,324 of those shares are classified on the statements of stockholders' deficit as shares issued in excess.

As of March 31, 2025 the outstanding principal and accrued interest balance was $664,792 and $39,351, respectively. During the three months ended March 31, 2025, the Company had $0 and $239,203 expenses that were paid directly by GPR - related party and proceeds from convertible notes - related party, respectively. The Company's convertible note line of credit with GPR was increased by this same amount.

Going Concern

The accompanying 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. The Company has incurred recurring losses and as of March 31, 2025, had an accumulated deficit of $113,951,578. For the three months ended March 31, 2054, the Company sustained a net loss of $397,641. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the date these financial statements were issued. 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 may be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. The Company will continue to seek to raise additional funding through debt or equity financing during the next twelve months from the date of issuance of these financial statements. There is no guarantee the Company will be successful in achieving obtaining additional funding and may have to cease operations.

Cash Flows

		Three Months Ended March 31,
		2025				2024
Net cash used in operating activities		$	(237,803	)		$	(75,494	)
Net cash provided by investing activities			239,203				40,000
Net cash provided by financing activities			-				-
Increase (decrease) in cash		$	1,400			$	(35,494	)

Operating Activities

Net cash used in operating activities was $237,803 for the three months ended March 31, 2025, primarily due to the net loss for the year, offset by increases in accrued interest, accrued interest-related parties, accounts payable, accounts payable-related parties and decrease in prepaid expenses.

Net cash used in operating activities was $75,494 for the three months ended March 31, 2024, primarily due to the net loss for the year and decrease in accounts payable-related parties. These activities were offset by decreases in prepaid expenses, increases in accounts payable, accrued interest, and accrued interest-related parties.

Investing Activities

For the three months ended March 31, 2025, and 2024 the Company conducted no investing activities.

Financing Activities

Net cash provided by financing activities was $239,203 for the three months ended March 31, 2025, primarily due to proceeds from convertible promissory notes, related party.

Net cash provided by financing activities was $40,000 for the three months ended March 31, 2024, primarily due to proceeds from convertible promissory notes, related party.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.