American Resources Corp Income Taxes Disclosure

NOTE 10 – INCOME TAXES

The Company adopted Accounting Standards Update (ASU) 2023‑09, “Improvements to Income Tax Disclosures,” on a retrospective basis within its annual reporting for the year ended December 31, 2025. The adoption of ASU 2023‑09 resulted in enhanced disclosures related to the effective tax‑rate reconciliation, including additional disaggregation requirements prescribed by the standard. For further details, see Note 1, Recently Adopted Accounting Pronouncements.

The components of income tax expense for the years ended December 31, 2025, and 2024 consist of the following: 

Reconciliations between the statutory rate and the effective tax rate for the years ended December 31, 2025, and 2024 consist as follows:

Significant components of the Company’s deferred tax assets as of December 31, 2025, and 2024 are summarized below. The calculations presented below reflect the new U.S. federal statutory corporate tax rate of 21% effective January 1, 2018. See Note 2 – Income Taxes

As of December 31, 2025, the Company had approximately $134.3 million of net operating loss carryforwards. Net operating losses generated prior to January 1, 2018 expire beginning in 2035, while net operating losses generated thereafter may be carried forward indefinitely, subject to an annual limitation. A full valuation allowance has been recorded against the Company’s deferred tax assets as it is more likely than not that such assets will not be realized.

We reviewed all income tax positions taken or that we expect to be taken for all open years and determined that our income tax positions are appropriately stated and supported for all open years. The Company is subject to U.S. federal income tax examinations by tax authorities for years after 2021 due to unexpired net operating loss carryforwards originating in and subsequent to that year. The Company may be subject to income tax examinations for the various taxing authorities which vary by jurisdiction.

The Company has calculated federal and state net operating loss carryforwards based on the preparation of its income tax returns; however, such returns have not yet been finalized or filed. Accordingly, the NOL amounts reflected in the accompanying financial statements represent management’s best estimates and are subject to change upon completion of the tax returns. Any such changes could be material to the Company’s deferred tax assets; however, a full valuation allowance has been recorded against these amounts.

In addition, tax years including 2021 and after remain unfiled as of December 31, 2025, and therefore the statute of limitations for those years remains open.