What changed in this filing

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Item 1. Financial Statements

2023-11-14 compared with 2023-08-01 · 355 added, 318 removed, 323 unchanged (68% of the section changed)

2 unchanged sentences

FINANCIAL STATEMENTS

AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2023 AND DECEMBER 31, 2022

CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND JUNE 30, 2022

CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND JUNE 30, 2022

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND JUNE 30, 2022

AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022

CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022

NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

1 unchanged sentence

BALANCE SHEETS

June 30, 2023

September 30, 2023

December 31, 2022

7 unchanged sentences

Equipment, net of accumulated depreciation

Buildings, net of accumulated depreciation

Property, plant and equipment, net

Total long-term assets

23 unchanged sentences

Three Months Ended

Six Months Ended

Cost of services

September 30,

Nine Months Ended

September 30,

and administrative

and development

operating expenses

General and administrative

Research and development

Total operating expenses

Income (loss) from operations

Other expenses:

Interest expense

Total other expenses, net

Net income (loss)

(loss) from operations

( 1,064,870 )

on bargain purchase

on loan forgiveness

other income, net

income (loss)

$ ( 119,616 )

$ ( 1,010,776 )

Basic and diluted income (loss) per common share

Earnings per share, basic

Weighted average number of common shares outstanding:

Basic and diluted

Weighted average number of shares outstanding, basic

and diluted income (loss) per common share

average number of common shares outstanding:

accompanying notes to the consolidated financial statements.

INNOVATIONS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Number of Shares

Paid-in Capital

Accumulated Deficit

Three months ended June 30, 2023

Three months ended September 30, 2023

Number of Shares

Paid-in Capital

Accumulated Deficit

Balance as of March 31, 2023

Balance as of June 30, 2023

$ ( 50,402,952 )

1 unchanged sentence

Fair value of vested stock options

Balance as of June 30, 2023

$ ( 50,402,952 )

Balance as of September 30, 2023

$ ( 46,998,777 )

Three months ended June 30, 2022

Three months ended September 30, 2022

Number of Shares

Paid-in Capital

Accumulated Deficit

Balance as of March 31, 2022

$ ( 49,588,652 )

$ ( 829,615 )

$ ( 49,588,652 )

$ ( 829,615 )

Shares issued for cash

Shares issued in exchange for Range

Balance as of June 30, 2022

$ ( 50,031,838 )

Shares issued for cash

Balance as of September 30, 2022

$ ( 50,151,454 )

months ended June 30, 2023

Paid-in Capital

Nine months ended September 30, 2023

Number of Shares

Accumulated Deficit

Balance as of December 31, 2022

$ ( 50,212,854 )

Shares issued for cash

Fair value of vested

stock options

Balance as of June 30,

Six months ended June 30, 2022

Fair value of vested stock options

Balance as of September 30, 2023

$ ( 46,998,777 )

Nine months ended September 30, 2022

Number of Shares

Paid-in Capital

Accumulated Deficit

6 unchanged sentences

Shares issued in exchange for Range

income ( loss)

Balance as of June 30, 2022

( 1,010,776 )

Net income ( loss)

( 1,010,776 )

Balance as of September 30, 2022

$ ( 50,151,454 )

accompanying notes to the consolidated financial statements.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Months Ended September 30,

Cash flows from operating activities:

Net income (loss)

$ ( 1,010,776 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Gain on bargain purchase

( 1,875,150 )

Adjustments to reconcile net loss to net cash used in operating activities:

Fair value of vested stock options

1 unchanged sentence

Accounts receivable

Unbilled receivables

( 1,915,848 )

Interest accrued but not paid

Due from shareholder

Unbilled receivables

Forgiveness of PPP loan

Prepaid expense and other current assets

Accounts payable and accrued liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

1 unchanged sentence

( 1,134,417 )

( 1,243,329 )

Cash paid in consideration for Collins Building acquisition

( 1,000,000 )

Long-term debt issued for Collins Building acquisition

( 4,035,250 )

Cash paid for acquisition of land

Cash acquired in acquisition of Range Environmental Resources

2 unchanged sentences

( 7,146,525 )

( 1,977,502 )

Cash flows from financing activities:

Issuance of shares for cash

Proceeds from notes issued in acquisition of Collins Building

Proceeds from long-term debt

Repayment of long-term debt

Proceeds from line of credit

( 1,072,729 )

Proceeds from (payoff of) line of credit

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents – beginning of period

2 unchanged sentences

Cash paid during the period for:

Forgiveness of PPP loan

Stock issued for acquisition

2 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Innovations, Inc.

(the “Company”, “we”, “us”, “our” or “Malachite”), was

incorporated in the State of Nevada on June 29, 2007.

Malachite is a public holding company dedicated to improving the health and wellness

of people and the planet through a novel and innovative approach to impact investing.

Malachite owns and operates a balanced portfolio

of operating businesses focused on developing long-term solutions to environmental, social and health challenges, with a particular focus

on economically disadvantaged communities.

Malachite takes an opportunistic approach to impact investing by leveraging its competitive

advantages and looking at solving old problems in new ways.

Malachite seeks to thoughtfully allocate its capital into ventures that are

expected to make a positive impact on the people-planet ecosystem and generate strong investment returns for our shareholders.

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

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.

October 2021, the Company changed its name to Malachite Innovations, 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;

Malachite Innovations, Inc.

(the “Company”, “we”,

“us”, “our” or “Malachite”), was incorporated in the State of Nevada on June 29, 2007.

a public company dedicated to improving the health and wellness of people and the planet through a novel and innovative approach to impact

Malachite owns and operates several complementary operating businesses focused on developing long-term solutions to environmental,

social, and health challenges, with a particular focus on economically disadvantaged communities.

Malachite takes an opportunistic approach

to impact investing by leveraging its competitive advantages and looking at solving old problems in new ways.

Malachite seeks to thoughtfully

allocate its capital into strategic opportunities that are expected to make a positive impact on the people-planet ecosystem and generate

strong investment returns for our shareholders.

Originally founded in 2007 as Legend Mining Inc., the Company began operations

as a mineral extraction exploration business focused on Canadian gold reserves, but failed to secure any mineral reserves to execute its

In 2011, the Company changed its name to Stevia First Corp., relocated its operations to California, and pursued a new strategy

focused on developing stevia-based sweetener additives for the food and beverage industry by using a novel glycosylation process it developed

to chemically attach glucose molecules to stevia molecules.

In 2015, due a lack of commercial viability of its glycosylated stevia product,

the Company changed its name to Vitality Biopharma, Inc.

and used the same glycosylation process to develop non-psychoactive glycosylated

cannabinoids for the treatment of chronic inflammatory conditions of the gastrointestinal tract.

In October 2021, the Company changed its name to Malachite Innovations,

and created 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”)

which was formed to serve as a holding company for the Company’s future impact investing operating businesses.

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

Reclamation Entities”).

The Range Reclamation 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 Reclamation 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 Reclamation 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.

Range Natural also provides resource mining services for customers incidental

to the reclamation and repurposing of mine sites.

December 31, 2022, Daedalus was merged into Malachite Innovations, Inc., leaving Malachite Innovations, Inc., as the parent company and the Range Reclamation Entities, Aether Credit Ventures, Inc., NextGen AgriTech, Inc., Pristine

Stream Ventures, Inc., Range Security Resources, Inc., Terra Preta, Inc.

and Graphium as its wholly-owned subsidiaries.

I n 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 Reclamation Entities”).

The Range Reclamation 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 Reclamation 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 Reclamation 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.

Range Natural also provides resource mining services for customers incidental to the reclamation and

repurposing of mine sites.

In August 2023, the Company acquired Collins Building & Contracting, Inc., a West Virginia corporation

(“Collins Building”).

Collins Building is an environmental services business that primarily focuses on the reclamation of

abandoned mine land sites in West Virginia.

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 six

months ended June 30, 2023, the Company incurred a net loss of $ 190,098 and used $ 398,399 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.

ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or

As reflected in the accompanying financial statements, during the nine

months ended September 30, 2023, the Company recorded net income of $ 3,214,077 and the Company’s operating activities provided

$ 1,074,719 of cash.

The financial statements do not include any adjustments that might be necessary

should the Company be unable to continue as a going concern.

ability to continue as a going concern is dependent on the Company 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 June 30, 2023, that it has sufficient funds to operate the business for 12 months given its cash balance

The Company estimates, as of September 30, 2023, that it has sufficient funds to operate the business for 12 months given its cash balance

of $ 1,026,286 , line of credit availability of $ 100,000 , and revenues being generated by the Range Reclamation 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

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.

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 change 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.

of Presentation

consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Aether Credit Ventures, Inc.,

Graphium Biosciences, Inc., NextGen AgriTech, Inc., Pristine Stream Ventures, Inc., Range Environmental Resources, Inc., Range Natural

Resources, Inc., Range Security Resources, Inc., Terra Preta, Inc., and Daedalus Ecosciences, Inc.

(merged into Malachite Innovations,

on December 31, 2022), and have been prepared in accordance with accounting principles generally accepted in the United States of

The consolidated financial statements include the accounts of the Company

and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States

Intercompany balances and transactions have been eliminated in consolidation.

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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 also invoices customers for the provision

of environmental security services on an agreed-upon hourly rate for each project.

The Company invoices for the sales of chemicals, stone and other products

and recognizes revenue when the products are delivered to the customer’s designated site or when control of these products is transferred

to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products.

Sales and other taxes that the Company collects concurrent with revenue producing activities are excluded from revenue.

Costs for equipment,

labor and chemicals are generally expensed as incurred since the projects are generally short-term and not subject to a contract.

Company also invoices customers for the provision of environmental security services on an agreed-upon hourly rate for each project.

All revenue is recognized at a point in time.

Company recognizes revenue from contracts for financial reporting purposes over time.

Progress toward completion of the Company’s

contracts is measured by the percentage of cost incurred to date compared to estimated total costs for each contract.

This method is

used because management considers total cost to be the best available measure of progress on contracts.

Because of inherent uncertainties

in estimating costs, it is at least reasonably possible that the estimates used will change significantly within the near term.

and Cash Equivalents

5 unchanged sentences

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 months ended June 30, 2023 or the three

months ended June 30, 2022.

Accounts receivable were $ 1,273,635 and $ 981,385 at June 30, 2023 and December 31, 2022, respectively.

bad debt expense was accrued in either the three months ended June 30, 2023 or the three months ended June 30, 2022 and there is no allowance

for doubtful accounts as of June 30, 2023 or December 31, 2022.

Unbilled Receivables

receivables represent revenue that has been recognized on projects for which billings have not been presented to the customer

because the amounts were earned but not billable at the balance sheet date.

is carried at cost.

as of those dates will be immaterial and, therefore, no allowances were recorded for the three months ended September 30, 2023 or the

three months ended September 30, 2022.

Accounts receivable were $ 2,897,234 and $ 981,385 at September 30, 2023 and December 31, 2022,

respectively.

No bad debt expense was accrued in either the three months ended September 30, 2023 or the three months ended September

30, 2022 and there is no allowance for doubtful accounts as of September 30, 2023 or December 31, 2022.

receivables represent revenue that has been recognized on projects for which billings have not been presented to the customer because

the amounts were earned but not billable at the balance sheet date.

and Equipment

and 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.

June 30, 2023

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.

September 30, 2023

December 31, 2022

Property and equipment, gross

Accumulated depreciation

( 1,660,852 )

Net book value

Depreciation expense

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.

Company assesses the recoverability of its 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.

Company provides for depreciation of property and 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.

Company assesses the recoverability of its property 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.

is carried at cost.

The Company assesses the recoverability of its land by determining whether the cost of the land can be recovered

through projected future cash flows generated by the land.

No land was identified for impairment.

costs are classified as cost of sales.

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information available at lease commencement in determining the present value of unpaid lease payments.

As of June 30, 2023, the

Company had no lease commitments for longer than one year.

As of September 30, 2023, the

Company had no material lease commitments.

Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions

28 unchanged sentences

OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

June 30, 2023

September 30, 2023

December 31, 2022

Anti-dilutive loss per

Anti-dilutive loss per share

and Patent Application Costs

4 unchanged sentences

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.

relating to the acquisition, design, development and testing of the Company’s glycosylated cannabinoid drug candidates.

Research and development

5 unchanged sentences

reported in the balance sheets for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.

of June 30, 2023, the Company has five operating business segments:

(i) Environmental Services, (ii) Biochar Products and Solutions,

(iii) Stream Mitigation Banking, (iv) Environmental Security Services, and (v) Cannabinoid Drug Development.

In October 2021, the Company

began operating under two segments:

(i) Graphium Biosciences, Inc., a wholly-owned subsidiary of the Company, reports the operating results

of our cannabinoid drug development segment, which is advancing a broad portfolio of glycosylated cannabinoid prodrugs that have been

developed to unlock the rebalancing effects of the endocannabinoid system to address numerous chronic conditions, and (ii) the Range

Reclamation Entities, which are wholly-owned subsidiaries of the Company, report the operating

results of the Environmental Services segment, which provides land reclamation, water restoration and environmental consulting services

to mining and non-mining customers .

The Biochar Products and Solutions, Stream Mitigation Banking, and Environmental Security

Services business segments began operations in the first quarter of 2023.

accordance with the “Segment Reporting” Topic of the ASC, 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 “Segment Reporting” due to their similar customer base and similarities in:

As of September 30, 2023, the Company has five operating business segments:

(i) Range Reclaim, (ii) Range Water, (iii) Range Security, (iv) Range Land, and (v) Drug Development.

Previously, beginning in October

2021, the Company began operating under two segments:

(i) Graphium Biosciences, Inc., which reports the operating results of our broad

portfolio of glycosylated cannabinoid prodrugs that are being developed to unlock the rebalancing effects of the endocannabinoid system

to address numerous chronic inflammatory conditions, and (ii) the Range Reclamation Entities, which

report the operating results of the Range Reclaim segment, which provides land reclamation, water restoration and incidental mining to

mining and non-mining customers throughout Appalachia .

The Range Water, Range Security and Range Land business segments began operations

In accordance with the “Segment Reporting” Topic of the ASC,

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 and major customers.

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;

geographic location of operation;

of products and services;

and procurement, manufacturing, and distribution processes.

11 unchanged sentences

present or future financial statements.

ACQUISITION OF RANGE ENVIRONMENTAL RESOURCES AND RANGE NATURAL RESOURCES

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 Reclamation Entities”), and the two (2) shareholders of the Range Reclamation

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 Reclamation Entities.

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 Reclamation Entities, and Justice and his spouse (the “Separation Agreement”)

pursuant to which Justice:

a) acknowledged that his employment with the Range Reclamation 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 Reclamation Entities to Daedalus Ecosciences;

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 Reclamation 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 Reclamation Entities for 10 % of the Cash Dividends and Sale Proceeds (as both terms are defined in the Starks

Agreement) of the Range Reclamation Entities .

A s a result of the merger of Daedalus Ecosciences

into Malachite as of December 31, 2022 , the Range Reclamation Entities are reported as wholly-owned 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 Reclamation Entities.

ACQUISITION OF COLLINS BUILDING & CONTRACTING

On August 31, 2023, the Company entered into a stock purchase agreement

with the owner of Collins Building & Contracting, Inc.

(“Collins Building”), pursuant to which the owner agreed to sell

all of the outstanding common stock of Collins Building to the Company in exchange for (a) cash consideration of $1,000,000, (b) a five-year

secured promissory note in the principal amount of $2,000,000, bearing interest at 7.0% per annum (the “First Promissory Note”),

and (c) a two-year secured promissory note in the principal amount of $2,035,250, bearing interest at 8.25% per annum (the “Second

Promissory Note”).

The First Promissory Note is secured by the acquired real property and quarry infrastructure, and the Second

Promissory Note is secured by the acquired equipment.

Company accounted for the transaction as a business combination in accordance ASC 805 “Business Combinations”.

2 unchanged sentences

acquired are set forth below.

Because the fair values exceeded the purchase price, we recognized a gain on the purchase of $ 1,875,150 .

The allocation of the purchase price is based on management’s estimates.

1 unchanged sentence

Fair value of assets acquired:

Total assets acquired

Gain on bargain purchase price

( 1,875,150 )

Purchase price

Cash consideration

Long-term notes issued to the seller

Total purchase price

Acquisition transaction costs incurred

ACQUISITION OF RANGE ENVIRONMENTAL RESOURCES AND RANGE NATURAL RESOURCES

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.

Natural”, and collectively with Range Environmental, the “Range Reclamation Entities”), and the two (2)

shareholders of the Range Reclamation Entities (the “Range Shareholders”) (the “Range Share Purchase

Agreement”), pursuant to which the Company issued a total of 10,000,000 shares of the Company’s common stock to the

Range Shareholders and paid cash consideration of $ 1,000,000 to the Range Shareholders in exchange for 80 % of the outstanding common

stock of each of the Range Reclamation Entities.

Subsequent to entering into the Range Share Purchase Agreement, the Company

discovered that Joshua Justice, one of the Range Shareholders (“Justice”), made certain misrepresentations in the Range Share

Purchase Agreement.

On July 12, 2022, the Company entered into a Separation Agreement, by and among the Company, Daedalus Ecosciences,

the Range Reclamation Entities, and Justice and his spouse (the “Separation Agreement”) pursuant to which Justice:

a) acknowledged

that his employment with the Range Reclamation 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 Range Share Purchase Agreement;

c) transferred

his 10% interest in each of the Range Reclamation Entities to Daedalus Ecosciences;

and d) paid cash in an amount of $250,000.

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 Reclamation 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 Reclamation Entities for 10 % of the Cash Dividends and Sale Proceeds (as both terms are

defined in the Starks Agreement) of the Range Reclamation Entities.

As a result of the merger of Daedalus Ecosciences into Malachite

as of December 31, 2022, the Range Reclamation Entities are reported as wholly-owned 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 Range

Share Purchase Agreement and he remains as President of each of the Range Reclamation Entities.

Company accounted for the above transactions as a business combination in accordance ASC 805 “Business Combinations”.

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

OF BUSINESS ACQUISITION ALLOCATION OF PURCHASE PRICE

Fair value of assets acquired:

Accounts receivables

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brand reputation, customer base and employee relations.

was $ 751,421 at June 30, 2023 and at December 31, 2022.

was $ 751,421 at September 30, 2023 and at December 31, 2022.

The goodwill as of both dates represents the value

1 unchanged sentence

Goodwill by reportable segment is as follows:

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

April 11, 2023, the Company entered into securities purchase agreements providing for the issuance and sale by the Company of (i)

shares of the Company’s common stock (the “Shares”) at a price of $ 0.15

per share and (ii) warrants to purchase up to an additional 2,733,333

shares of the Company’s common stock (the “Warrants”, and the shares issuable upon exercise of the Warrant, the

“Warrant Shares”) at a price of $ 0.60

The Warrants expire on April 11, 2028.

The aggregate proceeds to the Company from the sale of the Shares and Warrants were

approximately $ 400,000 .

2,733,334 shares of the Company’s common stock (the “April Shares”) at a price of $ 0.15 per share and (ii)

warrants to purchase up to an additional 2,733,333 shares of the Company’s common stock (the “Warrants”, and the

shares issuable upon exercise of the Warrant, the “Warrant Shares”) at a price of $ 0.60 per share.

The Warrants expire

on April 11, 2028.

The aggregate proceeds to the Company from the sale of the April Shares and Warrants were approximately

August 24, 2023, the Company entered into a securities purchase agreement providing for the issuance and sale by the Company of 6,666,667

shares of the Company’s common stock (the “August Shares”) at a price of $0.15 per share.

After deducting for fees

and expenses, the aggregate net proceeds from the sale of the August Shares were approximately $ 1,000,000 .

STOCK OPTIONS

options issued during the three months ended June 30, 2023 and the three months ended June 30, 2022

the three months ended June 30, 2023, the Company granted options to two outside advisors to purchase an aggregate of 400,000

shares of the Company’s common stock with exercise prices of $ 0.18

per share that expire five

years from the date of grant.

Options to purchase 200,000

shares vested upon grant and options to purchase 200,000

vest over two years.

options issued during the three months ended September 30, 2023 and the three months ended September 30, 2022

the three months ended September 30, 2023, the Company granted options to an outside advisor to purchase 100,000 shares of the Company’s

common stock with exercise prices of $ 0.1337 per share that expire five years from the date of grant.

Options to purchase all 100,000

shares vested upon grant.

The fair value of each option award was estimated on the date of grant using the Black-Scholes-Merton Option

Pricing model based on the following assumptions:

(i) volatility rate between 273.24 %

and 273.87 % ,

(ii) discount rate between 1.4 %

expected dividend yield, and (iv) expected life of 5

years, which is the term of the options.

The total fair value of the option grants at their grant dates was approximately $ 71,840 ,

of which was allocated to general and administrative expenses during the three months ended June 30, 2023.

stock options were granted to directors, advisors, and employees during the three months ended June 30, 2022.

the three months ended June 30, 2023, total stock-based compensation expense related to vested stock options was $ 35,920 .

three months ended June 30, 2022, the Company recorded no stock-based compensation expense related to vested stock options.

2023, the remaining unamortized cost of the outstanding stock-based awards was approximately $ 35,920 and will be amortized on a straight-line

basis over the remaining vesting period of 2 years.

summary of the Company’s stock option activity during the six months ended June 30, 2023 is as follows:

(i) volatility rate of 273.24 %, (ii) discount rate of 4.27 %, (iii) zero expected dividend

yield, and (iv) expected life of 5 years, which is the term of the options.

The total fair value of the option grants at their grant

dates was approximately $ 13,340 which was allocated to general and administrative expenses during the three months ended September 30,

stock options were granted to directors, advisors, and employees during the three months ended September 30, 2022.

the three months ended September 30, 2023, total stock-based compensation expense related to vested stock options was $ 17,830 .

the three months ended September 30, 2022, the Company recorded no stock-based compensation expense related to vested stock options.

At September 30, 2023, the remaining unamortized cost of the outstanding stock-based awards was approximately $ 31,430 and will be amortized

on a straight-line basis over the remaining vesting period of 2 years.

summary of the Company’s stock option activity during the nine months ended September 30, 2023 is as follows:

OF STOCK OPTION ACTIVITY

Weighted Average

Exercise Price

Balance outstanding at December 31, 2022

Balance outstanding at June 30, 2023

Balance exercisable at June 30, 2023

June 30, 2023, the 9,792,544 outstanding stock options had no intrinsic value.

summary of the Company’s stock options outstanding as of June 30, 2023 is as follows:

Balance outstanding at September 30, 2023

Balance exercisable at September 30, 2023

September 30, 2023, the 9,862,544 outstanding stock options had intrinsic value of $ 2,630 .

summary of the Company’s stock options outstanding as of September 30, 2023 is as follows:

OF STOCK OPTION OUTSTANDING

1 unchanged sentence

Weighted Average Grant- Date Stock Price

Options Outstanding, June 30, 2023

Options Outstanding, September 30, 2023

$ 1.50 - 1.95

6 unchanged sentences

$ 4.00 - 4.70

summary of the Company’s stock options outstanding and exercisable as of June 30, 2023 is as follows:

summary of the Company’s stock options outstanding and exercisable as of September 30, 2023 is as follows:

OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE

2 unchanged sentences

Weighted Average Grant- Date Stock Price

Options Outstanding and Exercisable, June 30, 2023

Options Outstanding and Exercisable, September 30, 2023

$ 1.50 - 1.95

6 unchanged sentences

$ 4.00 - 4.70

summary of warrants to purchase common stock issued during the six months ended June 30, 2023 is as follows:

summary of warrants to purchase common stock issued during the nine months ended September 30, 2023 is as follows:

OF WARRANTS ACTIVITY

Weighted Average

Exercise Price

Balance outstanding at December 31, 2022

Balance outstanding and exercisable at June 30, 2023

June 30, 2023, the 25,046,669 outstanding stock warrants had no intrinsic value.

Balance outstanding and exercisable at September 30, 2023

September 30, 2023, the 25,046,669 outstanding stock warrants had no intrinsic value.

LINES OF CREDIT

1 unchanged sentence

The line of credit expires on November 30, 2023

30, 2023 and bears interest at one percent ( 1 % )

above the prime rate ( 9.25 %

at June 30, 2023).

As of June 30, 2023, the balance due under the line of credit was $ 200,000 .

and bears interest at one percent ( 1 %) above the prime rate ( 9.50 % at September 30, 2023).

As of September 30, 2023, the balance due

under the line of credit was $ 1,000,000 .

June 2023, the Range Reclamation Entities secured a separate bank line of credit with a limit of $ 1,000,000 .

This line of credit is secured by all of the Range Reclamation Entities’ fixed assets.

This line of credit expires on June

24, 2024 and bears interest at the prime rate

at June 30, 2023).

As of June 30, 2023, the balance due under this line of credit was $ 1,000,000 .

This line of credit is secured

by all of the Range Reclamation Entities’ fixed assets.

This line of credit expires on June 24, 2024 and bears interest at the

prime rate ( 8.50 % at September 30, 2023).

As of September 30, 2023, the balance due under this line of credit was $ 900,000 .

LONG-TERM DEBT OBLIGATIONS

debt consists of debt on vehicles and equipment, which serves as the collateral.

debt consists of debt on vehicles and equipment, which serves as the collateral, and debt issued as part of the acquisition of Collins

Interest rates range from 3.69 % to 9.95 % for 2023.

debt matures from 2023 through 2028 .

The debt matures from 2023 through 2028.

summary of payments due under the long-term debt by year is as follows:

OF MATURITIES OF LONG TERM DEBT

2023 – due between July 1, 2023 and June 30, 2024

2024 – due between July 1, 2024 and June 30, 2025

2025 – due between July 1, 2025 and June 30, 2026

2026 – due between July 1, 2026 and June 30, 2027

2027 – due between July 1, 2027 and June 30, 2028

2028 and later – due on July 1, 2028 and thereafter

2023 – due between October 1, 2023 and September 30, 2024

2024 – due between October 1, 2024 and September 30, 2025

2025 – due between October 1, 2025 and September 30, 2026

2026 – due between October 1, 2026 and September 30, 2027

2027 – due between October 1, 2027 and September 30, 2028

2028 and later – due on October 1, 2028 and thereafter

Total long-term debt

MAJOR CUSTOMER AND CONCENTRATION OF CREDIT RISK

to the Company’s largest customer were 94 % and 92 % of total sales for the three months ended June 30, 2023 and the six months ended

June 30, 2023, respectively.

Sales to the Company’s two largest customers were 91 % of total sales for the three and six months

ended June 30, 2022.

receivable from the same customer were 96 % of total accounts receivable and unbilled receivables as of June 30, 2023.

to the Company’s two largest customers were 95 % and 93 % of total sales for the three months ended September 30, 2023 and the nine

months ended September 30, 2023, respectively.

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.

receivable from one customer were 96 % of total accounts receivable and unbilled receivables as of September 30, 2023.

Accounts receivable

from the Company’s two largest customers were 93 % of total accounts receivable and unbilled receivables as of June 30, 2022.

from the Company’s largest customer were 61 % of total accounts receivable and unbilled receivables as of September 30, 2022.

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

documents and the language of the policy.

Accordingly, as of June 30, 2023, no contingent liability has been recorded in the Company’s

Accordingly, as of September 30, 2023, no contingent liability has been recorded in the Company’s

consolidated statements of financial condition for this matter.

4 unchanged sentences

The Company has five reportable segments that are based on the following business units:

(i) Environmental Services,

(ii) Biochar Products and Solutions, (iii) Stream Mitigation Banking, (iv) Environmental Security Services, and (v) Cannabinoid Drug

In accordance with the “Segment Reporting” Topic of the ASC, 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 “Segment Reporting” due to their similar customer base and similarities in:

(i) Range Reclaim,

(ii) Range Water, (iii) Range Security, (iv) Range Land, and (v) Drug Development.

In accordance with the “Segment

Reporting” Topic of the ASC, 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.

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.

nature of products and services;

and procurement, manufacturing

and distribution processes.

five reportable segments that result from applying the aggregation criteria are as follows:

Environmental Services

– land reclamation, water restoration and environmental consulting services

Biochar Products and Solutions

- biochar product development and environmental solutions business

Stream Mitigation Banking

– mitigation banks to restore waterways and support economic development

Environmental Security

Services – security services on mines transitioning to next generation industries

Cannabinoid Drug Development

– glycosylated cannabinoid drug development program

Company operated two reportable business segments during the three and six months ended June 30, 2022, the Cannabinoid Drug Development

and Environmental Services segments.

Reclaim – land reclamation, water restoration , incidental mining and land repurposing

Water - biochar product development and water solutions business

Security – security services on mine land being reclaimed and repurposed for non-fossil fuel uses

Land – mine land being acquired, reclaimed and repurposed for non-fossil fuel

Drug Development – glycosylated cannabinoid drug development program

Company operated two reportable business segments during the three and nine months ended September 30, 2022, the Drug Development

and Range Reclaim segments.

The other business segments began operating in 2023.

2 unchanged sentences

OF FINANCIAL INFORMATION OF REPORTABLE SEGMENT

Environmental Services

Biochar Products and Solutions

Stream Mitigation Banking

Environmental Security Services

Drug Development

For the three months ended June 30, 2023

Environmental Services

Biochar Products and Solutions

Stream Mitigation Banking

Environmental Security Services

For the three months ended September 30, 2023

Range Reclaim

Range Security

Drug Development

3 unchanged sentences

Capital expenditures for long-lived assets

Environmental Services

Biochar Products and Solutions

Stream Mitigation Banking

Environmental Security Services

Drug Development

For the six months ended June 30, 2023

Environmental Services

Biochar Products and Solutions

Stream Mitigation Banking

Environmental Security Services

For the nine months ended September 30, 2023

Range Reclaim

Range Security

Drug Development

1 unchanged sentence

Net income (loss)

( 1,117,898 )

Interest expense

Capital expenditures for long-lived assets

Environmental Services

Drug Development

For the three months ended June 30, 2022

Environmental Services

For the three months ended September 30, 2022

Range Reclaim

Drug Development

Cost of services

Net income (loss)

Capital expenditures for long-lived assets

Environmental Services

Drug Development

For the six months ended June 30, 2022

Environmental Services

For the nine months ended September 30, 2022

Range Reclaim

Drug Development

Cost of services

Net income (loss)

( 1,010,776 )

Capital expenditures for long-lived assets

PRO FORMA INFORMATION

unaudited pro forma sales and net income data gives effect to the acquisition of Collins Building as if it had occurred on January 1,

2023, the beginning of the Company’s 2023 fiscal year, and to the acquisition of the Range Entities as if it had occurred on January

1, 2022, the beginning of the Company’s 2022 fiscal year.

OF PRO FORMA DATA INFORMATION

For the nine months ended

September 30, 2023

Acquired companies

Collins Building

All other companies

the nine months ended

September 30, 2022

other companies

SUBSEQUENT EVENTS

October 30, 2023, the Company entered into warrant exchange agreements with certain holders of warrants to exchange warrants to purchase

a total of 21,733,334 shares of the Company’s common stock for an aggregate of 2,173,334 shares of the Company’s common stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements