RANGE IMPACT, INC. 10-Q

Item 1. Financial Statements (unaudited) MALACHITE INNOVATIONS, INC. CONSOLIDATED BALANCE SHEETS September 30, 2022 (unaudited) December 31, 2021 Assets Current Assets Cash and cash equivalents $ 1,156,799 $ 38,343 Unbilled receivables 161,263 - Accounts receivable 335,738 - Prepaid expenses 884 3,884 Total current assets 1,654,684 42,227 Long-term Assets Operating lease asset 109,248 - Equipment, net of accumulated depreciation 1,683,406 - Goodwill 751,421 - Deposits 8,892 8,692 Total long-term assets 2,552,967 8,692 Total Assets $ 4,207,651 $ 50,919 Liabilities and Stockholders’ Equity (Deficit) Current Liabilities Accounts payable and accrued liabilities $ 324,146 $ 82,560 Current portion of long-term debt 396,939 - Line of credit - 350,000 Total current liabilities 721,085 432,560 Long-term Debt Long-term debt, net of current portion 769,735 - Operating lease liability 109,248 - Total long-term debt 878,983 - Total liabilities 1,600,068 432,560 Stockholders’ Equity (Deficit) Common stock, par value $ 0.001 per share; 1,000,000,000 shares authorized; 78,116,814 and 51,450,147 shares issued and outstanding, as of 9/30/22 and 12/31/21, respectively 78,117 51,450 Additional paid-in-capital 52,680,920 48,707,587 Accumulated deficit ( 50,151,454 ) ( 49,140,678 ) Total stockholders’ equity (deficit) 2,607,583 ( 381,641 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 4,207,651 $ 50,919 See accompanying notes to the consolidated financial statements. 3 MALACHITE INNOVATIONS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) 2022 2021 2022 2021 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 1,547,258 $ - $ 2,186,617 $ - Cost of services 1,189,475 - 1,763,882 - Gross profit 357,783 - 422,735 - Operating expenses: General and administrative 449,041 436,523 1,147,308 1,538,158 Research and development 106,744 67,838 340,297 236,287 Total operating expenses 555,785 504,361 1,487,605 1,774,445 Loss from operations ( 198,002 ) ( 504,361 ) ( 1,064,870 ) ( 1,774,445 ) Other income (expense): Gain on extinguishment of liabilities - - - 296,653 Gain on loan forgiveness 109,435 - 109,435 - Interest expense ( 31,049 ) - ( 55,341 ) - Other income - 3 - 568 Total other income (expenses), net 78,386 3 54,094 297,221 Net loss $ ( 119,616 ) $ ( 504,358 ) $ ( 1,010,776 ) $ ( 1,477,224 ) Basic and diluted loss per common share $ ( 0.00 ) $ ( 0.01 ) $ ( 0.02 ) $ ( 0.03 ) Weighted average number of common shares outstanding: Basic and diluted 77,084,205 50,711,017 64,740,745 50,775,229 See accompanying notes to the consolidated financial statements. 4 MALACHITE INNOVATIONS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited) Number of shares Amount Additional Paid-in Capital Accumulated Deficit Total Three Months Ended September 30, 2022 Common Stock Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Total Balance as of June 30, 2022 76,450,147 $ 76,450 $ 52,432,587 $ ( 50,031,838 ) $ 2,477,199 Shares issued for cash 1,666,667 1,667 248,333 - 250,000 Net loss - - - ( 119,616 ) ( 119,616 ) Balance as of September 30, 2022 78,116,814 $ 78,117 $ 52,680,920 $ ( 50,151,454 ) $ 2,607,583 Three Months Ended September 30, 2021 Common Stock Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Total Balance as of June 30, 2021 50,700,147 $ 50,700 $ 48,286,942 $ ( 48,039,944 ) $ 297,698 Shares issued for cash 500,000 500 118,500 - 119,000 Net loss - - - ( 504,358 ) ( 504,358 ) Balance as of September 30, 2021 51,200,147 $ 51,200 $ 48,405,442 $ ( 48,544,302 ) $ ( 87,660 ) Nine Months Ended September 30, 2022 Common Stock Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Total Balance as of December 31, 2021 51,450,147 $ 51,450 $ 48,707,587 $ ( 49,140,678 ) $ ( 381,641 ) Shares issued for cash 21,666,667 21,667 3,228,333 - 3,250,000 Shares issued in exchange for Range 5,000,000 5,000 745,000 - 750,000 Net loss - - - ( 1,010,776 ) ( 1,010,776 ) Balance as of September 30, 2022 78,116,814 $ 78,117 $ 52,680,920 $ ( 50,151,454 ) $ 2,607,583 Nine Months Ended September 30, 2021 Common Stock Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Total Balance as of December 31, 2020 50,840,147 $ 50,840 $ 48,127,953 $ ( 47,067,078 ) $ 1,111,715 Balance 50,840,147 $ 50,840 $ 48,127,953 $ ( 47,067,078 ) $ 1,111,715 Shares issued for cash 500,000 500 118,500 - 119,000 Cancellation of common shares ( 140,000 ) ( 140 ) 140 - - Fair value of vested stock options - - 158,849 - 158,849 Net loss - - - ( 1,477,224 ) ( 1,477,224 ) Balance as of September 30, 2021 51,200,147 $ 51,200 $ 48,405,442 $ ( 48,544,302 ) $ ( 87,660 ) Balance 51,200,147 $ 51,200 $ 48,405,442 $ ( 48,544,302 ) $ ( 87,660 ) See accompanying notes to the consolidated financial statements. 5 MALACHITE INNOVATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 2022 2021 Nine Months Ended September 30, 2022 2021 Cash flows from operating activities: Net loss $ ( 1,010,776 ) $ ( 1,477,224 ) Adjustments to reconcile net loss to net cash used in operating activities: Fair value of vested stock options - 158,849 Gain on extinguishment of liabilities - ( 296,653 ) Operating lease expense - 22,817 Depreciation 187,923 - Changes in operating assets and liabilities: Unbilled receivables ( 161,263 ) - Accounts receivable 554,181 - Forgiveness of PPP loan ( 109,435 ) - Prepaid expense 3,000 13,195 Deposits ( 200 ) 15,571 Accounts payable and accrued liabilities ( 31,966 ) 83,593 Operating lease liability - ( 23,194 ) Net cash used in operating activities ( 568,536 ) ( 1,503,046 ) Cash flows from investing activities: Cash acquired in acquisition of Range Environmental Resources 15,827 - Equipment purchases ( 1,243,329 ) - Cash paid for acquisition of Range Environmental Resources ( 750,000 ) - Net cash used in investing activities ( 1,977,502 ) - Cash flows from financing activities: Issuance of shares for cash 3,250,000 119,000 Proceeds from long-term debt 923,309 - Payoff of SBA disaster loan ( 158,815 ) - Payoff of line of credit ( 350,000 ) - Net cash provided by financing activities 3,664,494 119,000 Net increase (decrease) in cash 1,118,456 ( 1,384,046 ) Cash and cash equivalents - beginning of period 38,343 1,441,471 Cash and cash equivalents - end of period $ 1,156,799 $ 57,425 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 55,341 $ - Forgiveness of PPP loan $ 109,435 - Stock issued for acquisition $ 750,000 $ - Income taxes $ - $ - See accompanying notes to the consolidated financial statements. 6 MALACHITE INNOVATIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Malachite Innovations, Inc. (the “Company”) was incorporated in the State of Nevada on June 29, 2007. Originally founded in 2007 as Legend Mining Inc., the Company began operations as a mineral extraction exploration business. In 2011, the Company changed its name to Stevia First Corp. and pursued a new strategy focused on developing stevia-based additives for the food and beverage industry. In 2015, the Company changed its name to Vitality Biopharma, Inc. and pursued a new strategy focused on developing cannabinoid-based prodrugs anticipated to treat inflammatory conditions of the gastrointestinal tract by unlocking the therapeutic properties of cannabinoids but without their unwanted psychoactive side effects. In October 2021, the Company changed its name to Malachite Innovation, Inc. and reorganized its corporate structure and created the following two wholly-owned operating subsidiaries: (i) Graphium Biosciences, Inc., a Nevada corporation (“Graphium”), into which the Company contributed all of its drug development assets; and (ii) Daedalus Ecosciences, Inc., a Nevada corporation (“Daedalus”). Graphium plans to focus its business activities on the health and wellness of people, with a particular focus on advancing the Company’s broad portfolio of over 100 glycosylated cannabinoid prodrugs. Daedalus plans to focus its business activities on the health and wellness of the planet through ESG investments, with a particular focus on deploying technological innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged communities. In May 2022, Daedalus acquired Range Environmental Resources, Inc., a West Virginia corporation (“Range Environmental”) and Range Natural Resources, Inc., a West Virginia corporation (“Range Natural” and together with Range Environmental, the “Range Entities”). The Range Entities provide land reclamation, water restoration and environmental consulting services to mining and non-mining customers throughout the Appalachian region with the goal of returning land to pre-mining conditions or repurposing the land for natural, commercial, agricultural or recreational use. The Range Entities’ water restoration services seek to improve rivers, streams and discharges through novel and innovative treatment applications to help customers meet their various regulatory standards and requirements. The Range Entities also provide environmental consulting services to customers typically in connection with land reclamation and water restoration projects and as an additional value-add service, sells water treatment chemicals manufactured by third parties to their customers. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, during the nine months ended September 30, 2022, the Company incurred a net loss of $ 1,010,776 and used $ 568,536 of cash in the Company’s operating activities. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company estimates, as of September 30, 2022, that it has sufficient funds to operate the business for 18 months given its cash balance of $ 1,156,799 , line of credit availability of $ 1,000,000 , the availability of $4,830,050 under its $5,000,000 equity financing line via an executed securities purchase agreement, and revenues being generated by the Range Entities . Although the Company’s existing cash balances are estimated to be sufficient to fund its currently planned level of operations, the Company is actively seeking additional financing and other sources of capital to accelerate the funding and execution of its growth strategy and value creation plan. However, these estimates could differ if the Company encounters unanticipated difficulties, or if its estimates of the amount of cash necessary to operate its business prove to be wrong, and the Company uses its available financial resources faster than it currently expects. No assurance can be given that any future financing or capital, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. 7 Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned direct subsidiaries, Graphium Biosciences, Inc., Daedalus Ecosciences, Inc., and Vitality Healthtech, Inc. (dissolved in May 2021), and its wholly-owned indirect subsidiaries, Range Environmental Resources, Inc. and Range Natural Resources, Inc., and have been prepared in accordance with accounting principles generally accepted in the United States of America. Intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year end is December 31. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The more significant estimates and assumptions by management include, among others, assumptions used in valuing assets acquired in business acquisitions, reserves for accounts receivable, assumptions used in valuing equity instruments issued for services, the valuation allowance for deferred tax assets, and accruals for potential liabilities. Actual results could differ from those estimates. Revenue Recognition The Company applies the following standards and recognizes revenue when (1) services have been provided pursuant to an agreed-upon equipment and labor hourly rate sheet or a fixed amount for a project, (2) products have been shipped to and accepted by the customer, and (3) amounts are reasonably assured of collection, including the consideration of the customer’s ability and intention to pay when the amount is due. The Company primarily invoices customers and recognizes revenue on a periodic basis for equipment and labor hours provided to a customer on a particular job based on an agreed-upon hourly rate sheet or a fixed amount for a project. The Company also invoices customers and recognizes revenue for equipment mobilization fees and materials and supplies required to complete a project. The Company invoices for the sales of chemicals and recognizes revenue when the products are delivered to the customer’s designated site. Costs for equipment, labor and chemicals are generally expensed as incurred since the projects are generally short-term and not subject to a contract. The Company’s performance obligations are satisfied at the point in time when the services are performed or when products are received by the customer, which is when the customer has title and the significant risks and rewards of ownership. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. From time to time, the Company’s cash account balances exceed the balances covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. Accounts Receivable Trade accounts receivable are stated at the amount management expects to collect from the balances outstanding at the end of each fiscal period reflected in the consolidated balance sheets. Based on management’s assessment, it has concluded that losses on balances outstanding as of those dates will be immaterial and, therefore, no allowances were recorded for the three or nine months ended September 30, 2022 or September 30, 2021. 8 Equipment Equipment is carried at cost. Expenditures for maintenance and repairs are charged to cost of services. Additions and betterments are capitalized. The cost and related accumulated depreciation of equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is reflected in the current year’s earnings. SCHEDULE OF EQUIPMENT September 30, 2022 December 31, 2021 Equipment $ 1,683,406 $ - Depreciation expense $ 187,923 $ - The Company provides for depreciation of equipment using the straight-line method for both financial reporting and federal income tax purposes over the estimated six-year useful lives of the equipment. The Company assesses the recoverability of its property, plant, and equipment by determining whether the depreciation of the assets over their remaining lives can be recovered through projected future cash flows generated by the assets. There were no assets identified for impairment. Fair Value of Financial Instruments FASB ASC 825 “Financial Instruments” requires that the Company disclose estimated fair values of financial instruments. Financial instruments held by the Company include, among others, accounts receivable, accounts payable and long-term debt. The carrying amounts reported in the balance sheets for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value. Leases FASB ASC 842 “Leases” requires the Company to determine whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. Income Taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized as income (loss) in the period that includes the enactment date. Stock-Based Compensation The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services. The Company accounts for such grants issued and vesting based on FASB ASC 718 “Compensation-Stock Compensation” whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The Company recognizes the fair value of stock-based compensation within its Consolidated Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods. 9 Basic and Diluted Loss Per Share Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of outstanding common shares during the period. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted unless they are antidilutive. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive: SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE September 30, 2022 December 31, 2021 Options 6,742,544 6,882,544 Warrants 22,313,335 646,668 Total 29,055,879 7,529,212 Patents and Patent Application Costs Although the Company believes that its patents and underlying technology have continuing value, the future benefits to be derived from the patents is uncertain. Accordingly, patent costs are expensed as incurred. Research and Development Research and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and other expenses relating to the acquisition, design, development and testing of the Company’s treatments and product candidates. Research and development costs are expensed as incurred. Segments As of October 1, 2021, the Company began operating under two segments: (i) Graphium Biosciences, Inc., a wholly-owned subsidiary of the Company, will report the operating results of its health and wellness innovations serving people, with a particular focus on advancing its broad portfolio of over 100 glycosylated cannabinoid prodrugs, and (ii) Daedalus Ecosciences, Inc., a wholly-owned subsidiary of the Company, will report the operating results of its health and wellness innovations serving the planet, with a particular focus on deploying technological innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged communities. In accordance with FASB ASC 280 “Segment Reporting”, the Company’s chief operating decision maker has been identified as the Chief Executive Officer of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing, and distribution processes. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments . ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning April 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. 10 Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. 2. ACQUISITION OF RANGE ENVIRONMENTAL RESOURCES AND RANGE NATURAL RESOURCES In May 2022, the Company and its wholly-owned subsidiary, Daedalus Ecosciences, Inc., entered into a share purchase agreement with Range Environmental Resources, Inc. (“Range Environmental”), and Range Natural Resources, Inc. (“Range Natural”, and collectively with Range Environmental, the “Range Entities”), and the two (2) shareholders of the Range Entities (the “Range Shareholders”) (the “Share Purchase Agreement”), under which the Company issued a total of 10,000,000 shares of the Company’s common stock to the Range Shareholders and Daedalus Ecosciences paid cash consideration of $ 1,000,000 to the Range Shareholders for 80 % of the outstanding common stock of each of the Range Entities. Subsequent to entering into the Share Purchase Agreement, the Company discovered that Joshua Justice, one of the Range Shareholders (“Justice”), made certain misrepresentations in the Share Purchase Agreement. On July 12, 2022, the Company entered into a Separation Agreement, by and among the Company, Daedalus Ecosciences, the Range Entities, and Justice and his spouse (the “Separation Agreement”) pursuant to which Justice: a) acknowledged that his employment with the Range Entities was terminated for cause effective June 30, 2022; b) returned the 5,000,000 shares of the Company’s common stock that had been issued to him under the terms of the Share Purchase Agreement; c) transferred his 10% interest in each of the Range Entities to Daedalus Ecosciences; and d) paid Daedalus Ecosciences cash in an amount of $250,000. As a result, only 5,000,000 of the Company’s common stock issued to the Range Shareholders is considered to have been issued in exchange for 90% of the outstanding common stock of each of the Range Entities . Subsequently, on October 11, 2022, Daedalus Ecosciences and Jeremy Starks, the remaining Range Shareholder (“Starks”), entered into a share purchase agreement, effective as of May 11, 2022 (the “Starks Agreement”), pursuant to which Starks exchanged his 10 % common stock ownership of the Range Entities for 10 % of the Cash Dividends and Sale Proceeds (as both terms are defined in the Starks Agreement) of the Range Entities, as a result of which, the Range Entities are now wholly-owned subsidiaries of Daedalus Ecosciences and the Range Entities are reported as wholly-owned indirect subsidiaries of the Company in the financial statements made part of this Form 10-Q. No other changes were made to the consideration received by Starks as part of the Share Purchase Agreement and he remains as President of each of the Range Entities. The Company accounted for the transaction as a business combination in accordance ASC 805 “Business Combinations”. The Company has performed an allocation of the purchase price paid for the assets acquired and the liabilities assumed. The fair values of the assets acquired are set forth below. The allocation of the purchase price is based on management’s estimates. SCHEDULE OF BUSINESS ACQUISITION ALLOCATION OF PURCHASE PRICE Fair value of assets acquired: Cash $ 15,827 Accounts receivables 889,919 Property and equipment 628,000 Goodwill 751,421 Total assets acquired 2,285,167 Fair value of liabilities assumed ( 785,167 ) Purchase price $ 1,500,000 Cash consideration 750,000 Common stock consideration 750,000 Total purchase price $ 1,500,000 Acquisition transaction costs incurred $ 20,592 Goodwill has an assigned value of $ 751,421 and represents the value of the Range Entities’ brand reputation, customer base and employee relations. 11 3. GOODWILL Goodwill increased to $ 751,421 at September 30, 2022. There had been no goodwill at December 31, 2021. The increase in goodwill was driven by the addition of the Range Entities in the period and represents the value of the Range Entities’ brand reputation, customer base and employee relations . Goodwill by reportable segment is as follows: SCHEDULE OF GOODWILL September 30, 2022 December 31, 2021 ESG Operations Segment: Beginning Balance $ - $ - Acquisitions 751,421 - Adjustments - - Ending Balance $ 751,421 $ - 4. EQUITY Issuance of Common Stock and Warrants In May 2022, the Company entered into two securities purchase agreements providing for the issuance and sale by the Company of (i) 20,000,000 shares of the Company’s common stock (the “May Shares”) at a price of $ 0.15 per share and (ii) warrants to purchase up to an additional 20,000,000 shares of the Company’s common stock (the “May Warrants”, and the shares issuable upon exercise of the Warrants, the “May Warrant Shares”) at a price of $ 0.60 per share. The May Warrants expire on May 10, 2027. The aggregate proceeds to the Company from the sale of the May Shares and May Warrants was $ 3,000,000 . In August 2022, the Company entered into a securities purchase agreement providing for the issuance and sale by the Company of (i) 1,666,667 shares of the Company’s common stock (the “August Shares”) at a price of $ 0.15 per share and (ii) warrants to purchase up to an additional 1,666,667 shares of the Company’s common stock (the “August Warrants”, and the shares issuable upon exercise of the Warrants, the “August Warrant Shares”) at a price of $ 0.60 per share. The August Warrants expire on August 26, 2027. The aggregate proceeds to the Company from the sale of the August Shares and August Warrants was $ 250,000 . In May 2022, the Company purchased 90 % of the outstanding common stock of each of the Range Entities for a combination of Company shares and cash, as described in Note 2. Only 5,000,000 of the Company’s common stock issued to the Range Shareholders is considered outstanding as of September 30, 2022, in order to reflect the effects of the Separation Agreement. 5. STOCK OPTIONS A summary of the Company’s stock option activity during the nine months ended September 30, 2022 is as follows: SCHEDULE OF STOCK OPTION ACTIVITY Shares Weighted Average Exercise Price Balance outstanding at December 31, 2021 6,882,544 $ 0.69 Granted - - Exercised - - Expired ( 140,000 ) 1.12 Cancelled - - Balance outstanding at September 30, 2022 6,742,544 $ 0.68 Balance exercisable at September 30, 2022 6,742,544 $ 0.68 12 A summary of the Company’s stock options outstanding and exercisable as of September 30, 2022 is as follows: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Number of Options Weighted Average Exercise Price Weighted Average Grant- date Stock Price Options Outstanding, September 30, 2022 1,150,000 $ 0.277 $ 0.277 750,000 $ 0.30 $ 0.30 2,000,000 $ 0.35 $ 0.35 1,664,542 $ 0.50 $ 0.50 128,000 $ 0.96 $ 0.96 350,834 $ 1.50 – 1.95 $ 1.50 – 1.95 597,500 $ 2.00 – 2.79 $ 2.00 – 2.79 83,334 $ 3.10 – 3.80 $ 3.10 – 3.80 18,334 $ 4.00 – 4.70 $ 4.00 – 4.70 6,742,544 Options Exercisable, September 30, 2022 1,150,000 $ 0.277 $ 0.277 750,000 $ 0.30 $ 0.30 2,000,000 $ 0.35 $ 0.35 1,664,542 $ 0.50 $ 0.50 128,000 $ 0.96 $ 0.96 350,834 $ 1.50 – 1.95 $ 1.50 – 1.95 597,500 $ 2.00 – 2.79 $ 2.00 – 2.79 83,334 $ 3.10 – 3.80 $ 3.10 – 3.80 18,334 $ 4.00 – 4.70 $ 4.00 – 4.70 6,742,544 There is no remaining unamortized cost of the outstanding stock-based awards at September 30, 2022. At September 30, 2022, the 6,742,544 outstanding stock options had no intrinsic value. 6. WARRANTS A summary of the Company’s warrant activity during the nine months ended September 30, 2022 is as follows: SCHEDULE OF WARRANTS ACTIVITY Shares Weighted Average Exercise Price Balance outstanding at December 31, 2021 646,668 $ 0.93 Granted 21,666,667 0.60 Exercised - - Expired/Cancelled - - Balance outstanding and exercisable at September 30, 2022 22,313,335 $ 0.61 At September 30, 2022, the 22,313,335 outstanding stock warrants had no intrinsic value. 13 7. NOTES PAYABLE Range Environmental was granted a loan (the “PPP loan”) from United Bank for $ 109,435 on March 9, 2021, pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act. The PPP loan had a maturity date of March 9, 2023 and bore interest at a rate of 1 % per annum, with the first six months of interest deferred. On August 19, 2022, Range Environmental received notice that the U.S. Small Business Administration (“SBA”) had reviewed the forgiveness application of Range Environmental’s PPP loan and provided forgiveness of the entire principal of the PPP loan plus accrued interest. The Company recognized a gain on extinguishment of the PPP loan of $ 109,435 during the three and nine months ended September 30, 2022. On June 17, 2020, Range Environmental was granted an SBA Disaster Loan in the amount of $ 150,000 with an interest rate of 3.75 % per annum. On September 14, 2022, the Company paid the entire balance due on this loan of $ 162,575 , including $ 12,575 in accrued interest. The Company had no notes payable outstanding as of September 30, 2022. 8. LINE OF CREDIT In November 2021, the Company obtained an unsecured revolving line of credit with a bank with a limit of $ 1,000,000 . The line of credit has a maturity date of November 30, 2022 , and bears interest at one percent ( 1 % ) above the prime rate. As of September 30, 2022, there was no balance due under the line of credit. 9. EQUITY LINE In August 2021, the Company entered into a $ 5,000,000 equity line transaction with Triton Funds, LP (“Triton”) providing for the issuance and sale by the Company to Triton of a number of shares of the Company’s common stock having an aggregate value of up to $ 5,000,000 and warrants to purchase up to an equal number of shares of the Company’s common stock. In its sole discretion and subject to certain agreed upon funding conditions, the Company may submit, from time to time, notices obligating Triton to purchase shares with a value of up to $250,000 until the financing arrangement expires on December 31, 2022 or Triton has purchased the $5,000,000 of shares pursuant to the equity line transaction. As of September 30, 2022, $ 4,830,050 was available under this equity line . 10. GAIN ON EXTINGUISHMENT OF ADVANCE In July 2018, the Company received a payment from a third party in the amount of $ 296,653 . Since the Company has not been able to confirm the nature of this payment, it had previously recorded this payment as an advance that was included in current liabilities. At March 31, 2021, the Company, after consultation with outside legal counsel, determined that any claim to recover that payment was time barred by the statute of limitations and the Company recorded relief of this liability and a gain from debt extinguishment of $ 296,653 during the nine months ended September 30, 2021. 11. LONG-TERM DEBT OBLIGATIONS Long-term debt consists of debt on vehicles and equipment, which serves as the collateral. Interest rates range from 3.69 % to 8.99 % for 2022. The debt matures from 2022 through 2028. The aggregate amount of the debt was $ 1,166,674 at September 30, 2022, $ 396,939 of which is due within one year of September 30, 2022, and $ 769,735 is due after September 30, 2023. A summary of payments due under the long-term debt by year is as follows: SCHEDULE OF MATURITIES OF LONG TERM DEBT 2022 (due between 10/1/22 and 9/30/23) $ 396,939 2023 (due between 10/1/23 and 9/30/24) 418,407 2024 (due between 10/1/24 and 9/30/25) 300,969 2025 (due between 10/1/25 and 9/30/26) 37,380 2026 (due between 10/1/26 and 9/30/27) 12,647 2027 and later (due on or after 10/1/27) 332 Total long-term debt $ 1,166,674 14 12. OPERATING LEASE The Company has an operating lease agreement for one piece of equipment leased by Range Environmental with a remaining lease term of 31 months. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its lease as a single lease component. Lease expense is recognized on a straight-line basis over the lease term. Under FASB ASC 842, an operating lease right-of-use (“ROU”) asset and liability is recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE Three Months Ended September 30, 2022 Lease Cost Operating lease cost (included in general and administrative expenses in the Company’s unaudited consolidated statements of operations) $ 12,945 Other Information Cash paid for amounts included in the measurement of lease liabilities for the three months ended September 30, 2022 $ 12,945 Weighted average remaining lease term – operating leases (in years) 2.6 Average discount rate – operating leases 6.0 % The supplemental balance sheet information related to leases for the period is as follows: SCHEDULE OF LEASES SUPPLEMENTAL BALANCE SHEET INFORMATION At September 30, 2022 Operating leases Long-term right-of-use asset $ 109,248 Short-term operating lease liability $ - Long-term operating lease liability 109,248 Total operating lease liabilities $ 109,248 Maturities of the Company’s lease liabilities are as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES Year Ending December 31 Operating Lease 2022 (remaining 3 months) $ 12,945 2023-2025 107,877 Total lease payments 120,822 Less: Imputed interest/present value discount ( 11,574 ) Present value of lease liabilities $ 109,248 15 Lease expenses related to leases with a duration of one year or less were $ 8,746 and $ 8,013 during the three months ended September 30, 2022 and September 30, 2021, respectively. Lease expenses related to leases with a duration of one year or less were $ 25,417 and $ 23,733 during the nine months ended September 30, 2022 and September 30, 2021, respectively. 13. MAJOR CUSTOMER AND CONCENTRATION OF CREDIT RISK Sales to the Company’s largest customer were 74 % and 73 % of total sales for the three and nine months ended September 30, 2022, respectively. Accounts receivable from the same customer were 61 % of total accounts receivable and unbilled receivables as of September 30, 2022. 14. COMMITMENTS AND CONTINGENCIES The Company received a letter in February 2021 from counsel for the Company’s director’s and officer’s insurance carrier (the “insurer”) demanding that the Company reimburse the insurer for sums advanced by the insurer to a former director of the Company as defense costs in connection with a claim purportedly arising under a previous director’s and officer’s insurance policy. The Company believes it has no liability for this claim on the basis of, among other things, Nevada law, the Company’s governing documents and the language of the policy. Accordingly, as of September 30, 2022, no contingent liability has been recorded in the Company’s consolidated statements of financial condition for this matter. 15. SEGMENT INFORMATION FASB ASC 280 “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about services, categories, business segments and major customers in financial statements. The Company has two reportable segments that are based on the following business units: ● Therapeutic Operations – research and development primarily related to the advancement of the Company’s cannabinoid-based drug development program ● ESG Operations – development and operation of businesses addressing the health and wellness of people and the planet, with a particular focus on deploying technological innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged communities In accordance with FASB ASC 820, the Company’s chief operating decision-maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under FASB ASC 820 due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below: SCHEDULE OF FINANCIAL INFORMATION OF REPORTABLE SEGMENT By Categories For the Three Months Ended September 30, 2022 Therapeutic Operations ESG Operations Corporate Total Revenue $ - $ 1,547,258 $ - $ 1,547,258 Cost of services - 1,189,475 - 1,189,475 Gross profit - 357,783 - 357,783 Net income (loss) ( 106,744 ) $ 213,865 $ ( 226,737 ) $ ( 119,616 ) Total assets 8,334 3,518,019 681,298 4,207,651 Capital expenditures for long-lived assets $ - $ 135,495 $ - $ 135,495 16 For the Nine Months Ended September 30, 2022 Therapeutic Operations ESG Operations Corporate Total Revenue $ - $ 2,186,617 $ - $ 2,186,617 Cost of services - 1,763,882 - 1,763,882 Gross profit - 422,735 - 422,735 Net income (loss) ( 340,297 ) $ 153,719 $ ( 824,198 ) $ ( 1,010,776 ) Total assets 8,334 3,518,019 681,298 4,207,651 Capital expenditures for long-lived assets $ - $ 1,243,328 $ - $ 1,243,328 For the Three Months Ended September 30, 2021 Therapeutic Operations ESG Operations Corporate Total Net loss $ ( 67,838 ) $ - $ ( 436,520 ) $ ( 504,358 ) Total assets - - 68,011 68,011 Capital expenditures for long-lived assets $ - $ - $ - $ - For the Nine Months Ended September 30, 2021 Therapeutic Operations ESG Operations Corporate Total Net loss $ ( 236,287 ) $ - $ ( 1,240,937 ) $ ( 1,477,224 ) Total assets - - 68,011 68,011 Capital expenditures for long-lived assets $ - $ - $ - $ - 16. SUBSEQUENT EVENTS On October 11, 2022, Daedalus Ecosciences and Starks entered into the Starks Agreement pursuant to which Daedalus Ecosciences acquired Starks’ 10 % common stock ownership interest in the Range Entities. As a result of this transaction, Daedalus Ecosciences is the sole shareholder of the Range Entities. No other changes were made to the consideration received by Starks as part of the Share Purchase Agreement entered into on May 11, 2022, and he remains as President of each of the Range Entities. 17