RANGE IMPACT, INC. 10-Q

Item 1. Financial Statements (unaudited) RANGE IMPACT, INC. CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) CONSOLIDATED UNAUDITED BALANCE SHEETS AS OF MARCH 31, 2024 AND DECEMBER 31, 2023 4 CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND MARCH 31, 2023 5 CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND MARCH 31, 2023 6 CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND MARCH 31, 2023 7 NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS 8 3 RANGE IMPACT, INC. CONSOLIDATED BALANCE SHEETS March 31, 2024 (unaudited) December 31, 2023 Assets Current Assets Cash and cash equivalents $ 667,698 $ 2,176,800 Accounts receivable 6,003,777 7,185,411 Contract assets 626,425 247,310 Prepaid expenses 90,756 115,324 Total current assets 7,388,656 9,724,845 Long-term Assets Property and equipment, net of accumulated depreciation 12,663,467 13,301,902 Goodwill 751,421 751,421 Deposits 9,976 9,976 Total long-term assets 13,424,864 14,063,299 Total Assets $ 20,813,520 $ 23,788,144 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable $ 1,706,394 $ 3,714,014 Line of credit 2,400,000 2,400,000 Current portion of long-term debt 2,513,820 2,755,792 Contract liabilities 205,327 - Accrued expenses 71,670 101,283 Total current liabilities 6,897,211 8,971,089 Long-term Liabilities Long-term debt, net of current portion 5,095,940 5,250,027 Total long-term debt 5,095,940 5,250,027 Total liabilities 11,993,151 14,221,116 Stockholders’ Equity Common stock, par value $ 0.001 per share; 1,000,000,000 shares authorized; 101,023,485 and 101,023,485 shares issued and outstanding, respectively 101,023 101,023 Additional paid-in-capital 56,552,294 56,547,804 Accumulated deficit ( 47,832,948 ) ( 47,081,799 ) Total stockholders’ equity 8,820,369 9,567,028 Total Liabilities and Stockholders’ Equity $ 20,813,520 $ 23,788,144 See accompanying notes to the consolidated financial statements. 4 RANGE IMPACT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 2024 2023 Revenues $ 3,909,893 $ 3,014,887 Cost of services 3,428,348 2,365,885 Gross profit 481,545 649,002 Operating expenses: General and administrative 943,901 726,048 Research and development 131,640 106,177 Total operating expenses 1,075,541 832,225 Loss from operations ( 593,996 ) ( 183,223 ) Other income (expense): Other income 18,105 - Interest expense ( 175,258 ) ( 43,637 ) Total other income (expense) ( 157,153 ) ( 43,637 ) Net loss $ ( 751,149 ) $ ( 226,860 ) Net loss per share – basic and diluted $ ( 0.01 ) $ ( 0.00 ) Weighted average number of common shares outstanding – basic and diluted 101,023,485 78,116,814 See accompanying notes to the consolidated financial statements. 5 RANGE IMPACT, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited) Number of shares Amount Paid-in Capital Accumulated Deficit Total Three Months Ended March 31, 2024 Common Stock Additional Number of Shares Amount Paid-in Capital Accumulated Deficit Total Balance as of December 31, 2023 101,023,485 $ 101,023 $ 56,547,804 $ ( 47,081,799 ) $ 9,567,028 Stock based compensation - - 4,490 - 4,490 Net loss - - - ( 751,149 ) ( 751,149 ) Balance as of March 31, 2024 (Unaudited) 101,023,485 $ 101,023 $ 56,552,294 $ ( 47,832,948 ) $ 8,820,369 Three Months Ended March 31, 2023 Common Stock Additional Number of Shares Amount Paid-in Capital Accumulated Deficit Total Balance as of December 31, 2022 78,116,814 $ 78,117 $ 53,074,180 $ ( 50,212,854 ) $ 2,939,443 Balance 78,116,814 $ 78,117 $ 53,074,180 $ ( 50,212,854 ) $ 2,939,443 Net loss - - - ( 226,860 ) ( 226,860 ) Balance as of March 31, 2023 (Unaudited) 78,116,814 $ 78,117 $ 53,074,180 $ ( 50,439,714 ) $ 2,712,583 Balance 78,116,814 $ 78,117 $ 53,074,180 $ ( 50,439,714 ) $ 2,712,583 ) See accompanying notes to the consolidated financial statements. 6 RANGE IMPACT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 751,149 ) $ ( 226,860 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Fair value of vested stock options 4,490 - Depreciation 638,435 354,184 Changes in operating assets and liabilities: Accounts receivable 1,181,634 ( 252,147 ) Contract assets ( 379,115 ) - Prepaid expenses and other current assets 24,568 - Accounts payable ( 2,007,621 ) 800,619 Contract liabilities 205,327 Accrued expenses ( 29,614 ) Deposits - - Net cash provided by (used in) operating activities ( 1,113,045 ) 675,796 Cash flows from investing activities: Equipment purchases - ( 746,226 ) Net cash used in investing activities - ( 746,226 ) Cash flows from financing activities: Proceeds from long-term debt - 383,202 Repayment of long-term debt ( 396,057 ) ( 626,123 ) Proceeds from line of credit - 100,000 Net cash used in financing activities ( 396,057 ) ( 142,921 ) Net decrease in cash and cash equivalents ( 1,509,102 ) ( 213,351 ) Cash and cash equivalents - beginning of period 2,176,800 442,369 Cash and cash equivalents - end of period $ 667,698 $ 229,018 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 89,570 $ 43,637 See accompanying notes to the consolidated financial statements. 7 RANGE IMPACT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (Unaudited) 1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Range Impact, Inc. (the “Company”, “we”, “us”, or “our”), 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. In October 2021, the Company changed its name to Malachite Innovations, Inc. and formed 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 businesses. 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 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 the water quality in 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 its customers. Range Natural also provides resource mining services for customers incidental to the reclamation and repurposing of mine sites. In December 2022, Daedalus was merged into the Company. In August 2023, the Company acquired Collins Building & Contracting, Inc., a West Virginia corporation (“Collins Building”), an environmental services business primarily focusing on the reclamation of abandoned mine land sites in West Virginia, as described in more detail in Note 2. In December 2023, the Company changed its name to Range Impact, Inc., and reorganized into five operating business segments: (i) Range Reclaim; (ii) Range Water; (iii) Range Security; (iv) Range Land; and (v) Drug Development. In January 2024, the Company added Range Minerals as its sixth operating business segment. Range Minerals was previously reported within the Range Reclaim operating business segment. The Drug Development segment was also renamed Graphium Biosciences. 8 Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: CLV Azurite Land LLC, Collins Building & Contracting, Inc., Graphium Biosciences, Inc., Range Environmental Resources, Inc., Range Land, LLC, Range Minerals, LLC, Range Natural Resources, Inc., Range Reclaim, LLC, Range Security, LLC, Range Security Resources, LLC, Range Water, LLC, Terra Preta, LLC, Aether Credit Ventures, Inc. (dissolved in November 2023), Pristine Stream Ventures, Inc. (dissolved in November 2023), NextGen AgriTech, Inc. (dissolved in November 2023), and Daedalus Ecosciences, Inc. (merged into Range Impact, Inc. in December 2022), 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. 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. Actual results could differ from those estimates. Business Combinations Business combinations are accounted for using the purchase method of accounting under ASC 805, “Business Combinations.” This method requires the Company to record assets and liabilities of the businesses acquired at their estimated fair values as of the acquisition date. Any excess of the cost of the acquisition over the fair value of the net assets acquired is recorded as goodwill. Any excess of the fair value of the net assets acquired over the cost of the acquisition is accounted for as a bargain purchase gain. Determining the fair value requires management to make estimates and assumptions including discount rates, rates of return on assets, and long-term sales growth rates. Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”. The core principle of the ASC 606 revenue standard is that a company should recognize revenue by analyzing the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) each performance obligation is satisfied. 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, 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 taxes 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. The Company also invoices customers for the provision of environmental security services at an agreed-upon hourly rate for each project. All revenue is recognized at a point in time. The Company recognizes revenue on reclamation contracts over time as performance obligations are satisfied due to the continuous transfer of control to the customer. The Company’s contracts are generally accounted for as a single performance obligation since the Company is providing a significant service of integrating components into a single project. The Company recognizes revenue using a cost-based input method by which actual costs incurred relative to total estimated contract costs determine, as a percentage, progress toward contract completion. This percentage is applied to the contract price to determine the amount of revenue to recognize. The Company believes the cost-based input method is the most faithful depiction of performance because it directly measures the value of the services transferred to the customer. Contract Estimates Due to the nature of the Company’s performance obligations, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgment. Since a significant change in one or more of these variables could affect the profitability of contracts, the Company reviews and updates contract-related estimates regularly through a review process in which the Company reviews the progress and execution of performance obligations and the estimated cost at completion. The Company recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, a provision for the entire loss is recognized in the period it is identified. Contract Modifications Contract modifications can occur during the performance of the Company’s contracts. Contracts may be modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. Cost and Expense Recognition Contract costs include all direct labor, materials, equipment mobilization, subcontractor, and equipment costs, and those indirect costs related to contract performance, such as indirect labor, tools and supplies. Costs are recognized as incurred. The 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 over the course of the contract’s performance. 9 Revenue earned over time compared to a point in time is as follows for the quarters ended March 31, 2024 and 2023. SCHEDULE OF REVENUE EARNED OVERTIME COMPARED TO A POINT IN TIME Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Earned over time $ 870,494 $ - Point in time 3,039,399 3,014,887 Total revenue 3,909,893 3,014,887 Cost of Services Contract costs include all direct labor, materials, subcontractor, and equipment costs and those indirect costs related to contract performance, such as indirect labor, tools and supplies. For construction contracts, costs are generally recognized as incurred. Under certain circumstances, costs incurred in the period related to future activity on contracts may be capitalized. Costs incurred that do not contribute to satisfying performance obligations are excluded from the cost input calculation for revenue recognition. Excluded costs include both uninstalled materials and abnormal costs. Abnormal costs comprise wasted materials, wasted or rework labor and other resources to fulfill a contract that were not reflected in the price of the contract. A limited allowance for material overages and labor inefficiencies is typically included in our contract costs estimates (and by extension, in the contract price). 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 Corporation. The Company has never suffered a loss due to such excess balances. Accounts Receivable Included as a component of accounts receivable are contract receivables that represent the Company’s unconditional right, subject only to the passage of time, to receive consideration arising from performance obligations under reclamation contracts with customers. Billed contract receivables have been invoiced to customers based on contracted amounts. Contract receivables were $ 504,050 at March 31, 2024 and $ 2,100,255 as of December 31, 2023. Trade accounts receivable are stated at the amount management expects to collect from the balances outstanding as of March 31, 2024 or December 31, 2023 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 months ended March 31, 2024 or the three months ended March 31, 2023. Accounts receivable, including contract receivables, were $ 6,003,777 and $ 7,185,411 at March 31, 2024 and December 31, 2023, respectively. No bad debt expense was accrued in either the three months ended March 31, 2024 or the three months ended March 31, 2023 and there is no allowance for doubtful accounts as of March 31, 2024 or December 31, 2023. Contract Assets Billing practices are governed by the contract terms of each project based upon costs incurred, achievement of milestones or predetermined schedules. Billings do not necessarily correlate with revenue recognized over time using the percentage-of-completion method. Contract assets include unbilled amounts typically resulting from revenue under long-term contracts when the percentage-of-completion method of revenue recognition is utilized, and revenue recognition exceeds the amount billed to the customer. The Company’s contract assets are reported on a contract-by-contract basis at the end of each reporting period. The Company classifies contract assets as current or noncurrent based on whether the revenue is expected to be recognized sooner or later than one year from the balance sheet date. Details of contract assets arising from reclamation contracts in process as of March 31, 2024 and December 31, 2023 are as follows: SCHEDULE OF CONTRACT ASSETS March 31, 2024 December 31, 2023 Costs incurred on contracts in progress $ 920,618 $ 425,634 Estimated earnings 716,038 340,528 Revenue earned on contracts in progress 1,636,656 766,162 Less: Billings to date ( 1,215,558 ) ( 518,852 ) Total contract assets $ 421,098 $ 247,310 10 March 31, 2024 December 31, 2023 Costs and estimated earnings in excess of billings on contracts in progress $ 626,425 $ 247,310 Billings in excess of costs and estimated earnings on contracts in progress ( 205,327 ) - Net contract assets $ 421,098 $ 247,310 Property & Equipment Property 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. SCHEDULE OF PROPERTY AND EQUIPMENT March 31, 2024 December 31, 2023 Equipment $ 13,835,929 $ 13,835,929 Land 1,563,797 1,563,797 Buildings 199,500 199,500 Property and equipment, gross 199,500 199,500 Accumulated depreciation ( 2,935,759 ) ( 2,297,324 ) Net book value 12,663,467 13,301,902 Depreciation expense $ 638,435 $ 1,781,573 The Company provides for depreciation of its buildings, 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 assets. The 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. Land Land 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. Delivery Costs Delivery costs are classified as cost of sales. Goodwill U.S. GAAP requires that goodwill be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not (i.e., a likelihood greater than 50%) that the reporting unit is impaired. During interim periods, ASC 350 requires companies to focus on those events and circumstances that affect the significant inputs used to determine the fair value of the reporting unit to determine whether an interim quantitative impairment test is required. The Company performed its quarterly impairment test for goodwill on March 31, 2024. The Company first assessed certain qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, and whether it is therefore necessary to perform the quantitative impairment test. The qualitative analysis indicated that a quantitative impairment test was not necessary . 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. Leases The Company determines 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. As of March 31, 2024, the Company had no material lease commitments for longer than one year. 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 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. 11 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. Basic and Diluted Income (Loss) Per Share Basic income (loss) per share is computed by dividing the net income (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 income (loss) per share is computed by dividing net income (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. Diluted income (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 March 31, 2024 December 31, 2023 Options 11,385,877 11,392,544 Warrants 3,313,335 3,313,335 Total 14,699,212 14,705,879 Anti-dilutive loss per share 14,699,212 14,705,879 Patents and Patent Application Costs Although the Company believes that its patents and underlying technology have continuing value, the amount of 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. 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. Segments As of March 31, 2024, the Company has six operating business segments: (i) Range Reclaim; (ii) Range Minerals; (iii) Range Water; (iv) Range Security; (v) Range Land’ and (vi) Graphium Biosciences. Previously, beginning in October 2021, the Company began operating under two segments: (A) the Drug Development segment, which reports the operating results of the Company’s broad portfolio of glycosylated cannabinoid prodrugs operating under the name Graphium Biosciences, and (B) 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 2023. Beginning in January 2024, Range Minerals, which was previously reported within the Range Reclaim operating business segment, was separately reported as its own operating business segment focused on mining and related reclamation activities, and the Drug Development segment was renamed Graphium Biosciences. 12 In accordance with the “Segment Reporting” Topic of the ASC 280, 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: economic characteristics; nature of products and services; and procurement, manufacturing, and distribution processes. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU enhances reportable segment disclosures on both an annual and interim basis primarily in regards to the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within the reported measure(s) of segment profit or loss. In addition, the ASU requires disclosure, by segment, of other items included in the reported measure(s) of segment profit or loss, including qualitative information describing the composition, nature and type of each item. The ASU also expands disclosure requirements related to the CODM, including how the reported measure(s) of segment profit or loss are used to assess segment performance and allocate resources, and the method used to allocate overhead for significant segment expenses. All current required annual segment reporting disclosures under Topic 280 are now effective for interim periods. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this ASU. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU enhances income tax disclosures by providing information to better assess how an entity’s operations, related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU requires additional disclosures to the annual effective tax rate reconciliation including specific categories and further disaggregated reconciling items that meet the quantitative threshold. Additionally, the ASU requires disclosures relating to income tax expense and payments made to federal, state, local and foreign jurisdictions. This ASU is effective for fiscal years and interim periods beginning after December 15, 2024. The Company is evaluating the impact of adopting this ASU. 2. 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. 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. 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 and a third-party assessment of the fair value of the equipment purchased. SCHEDULE OF BUSINESS ACQUISITION ALLOCATION OF PURCHASE PRICE Fair value of assets acquired: Equipment $ 6,156,000 Land 554,900 Buildings 199,500 Total assets acquired 6,910,400 Less: Gain on bargain purchase price ( 1,875,150 ) Purchase price $ 5,035,250 Cash consideration 1,000,000 Long-term notes issued to the seller 4,035,250 Total purchase price $ 5,035,250 Acquisition transaction costs incurred $ 167,212 Collins Building contributed revenues of $ 173,788 and net loss of $ 96,967 to the Company’s consolidated revenues and net loss for the three months ended March 31, 2024. Collins Building did not contribute any revenue or net income to the Company’s consolidated revenues and net income for the three months ended March 31, 2023. 13 3. GOODWILL Goodwill is $ 751,421 at March 31, 2024 and at December 31, 2023. The goodwill as of both dates represents the value of the Range Reclamation Entities’ employee relations. Goodwill by reportable segment is as follows: SCHEDULE OF GOODWILL March 31, 2024 December 31, 2023 Environmental Services: Beginning Balance $ 751,421 $ 751,421 Acquisitions - - Adjustments - - Ending Balance $ 751,421 $ 751,421 4. STOCK OPTIONS Stock options issued during the three months ended March 31, 2024 and the three months ended March 31, 2023 No stock options were granted to directors, advisors, and employees during the three months ended March 31, 2024 or the three months ended March 31, 2023. During the three months ended March 31, 2024, the Company recorded $ 4,490 in stock-based compensation expense. For the three months ended March 31, 2023, the Company recorded no stock-based compensation expense related to vested stock options. At March 31, 2024, there was $ 17,960 of unamortized cost of the outstanding stock-based awards. A summary of the Company’s stock option activity during the three months ended March 31, 2024 is as follows: SUMMARY OF STOCK OPTION ACTIVITY Shares Weighted Average Exercise Price Balance outstanding at December 31, 2023 11,392,544 $ 0.47 Granted - - Exchanged - - Exercised - - Expired ( 6,667 ) 4.70 Forfeited - - Balance outstanding at March 31, 2024 11,385,877 $ 0.46 Balance exercisable at March 31, 2024 11,185,877 $ 0.47 At March 31, 2024, the 11,385,877 outstanding stock options had $ 1,133,480 of intrinsic value. 14 A summary of the Company’s stock options outstanding as of March 31, 2024 is as follows: SCHEDULE OF STOCK OPTION OUTSTANDING Number of Options Weighted Average Exercise Price Weighted Average Grant- Date Stock Price Options Outstanding, March 31, 2024 100,000 $ 0.1337 $ 0.1337 3,050,000 $ 0.18 $ 0.18 1,550,000 $ 0.212 $ 0.212 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 33,334 $ 3.10 - 3.80 $ 3.10 - 3.80 11,667 $ 4.00 - 4.20 $ 4.00 - 4.20 11,385,877 A summary of the Company’s stock options outstanding and exercisable as of March 31, 2024 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 and Exercisable, March 31, 2024 100,000 $ 0.1337 $ 0.1337 2,850,000 $ 0.18 $ 0.18 1,550,000 $ 0.212 $ 0.212 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 33,334 $ 3.10 - 3.80 $ 3.10 - 3.80 11,667 $ 4.00 - 4.20 $ 4.00 - 4.20 11,185,877 5. WARRANTS A summary of warrants to purchase common stock issued during the three months ended March 31, 2024 is as follows: SCHEDULE OF WARRANTS ACTIVITY Shares Weighted Average Exercise Price Balance outstanding and exercisable at December 31, 2023 3,313,335 $ 0.66 Granted - - Exercised - - Expired - - Balance outstanding and exercisable at March 31, 2024 3,313,335 $ 0.66 At March 31, 2024, the 3,313,335 outstanding stock warrants had $ 30,000 of intrinsic value. 6. NOTES PAYABLE The Company had no notes payable outstanding as of March 31, 2024, or December 31, 2023. 7. LINE OF CREDIT In November 2022, the Company secured a line of credit with a bank with a limit of $ 1,000,000 . In November 2023, the Company amended and restated this line of credit. The line of credit has a maturity date of November 30, 2024 , and bears interest at one percent ( 1 %) above the prime rate ( 9.50 % at March 31, 2024). As of March 31, 2024, the balance due under the line of credit was $ 1,000,000 . As of December 31, 2023, the balance due under the line of credit was $ 1,000,000 . In June 2023, Range Environmental secured a bank loan with a limit of $ 1,000,000 . In November 2023, the loan amount was increased to $ 1,400,000 . Principal and accrued interest payments are required in March, June, September and December 2024. The loan has a maturity date of December 31, 2024 , and bears interest at the prime rate ( 8.50 % at March 31, 2024). As of March 31, 2024, the balance due under the line of credit was $ 1,400,000 . As of December 31, 2023, the balance due under the loan was $ 1,400,000 . 15 8. LONG-TERM DEBT OBLIGATIONS Long-term debt consists of debt on vehicles and equipment, which serves as the collateral, and debt issued as part of the acquisition of Collins Building. Interest rates on the equipment financings range from 3.69 % to 9.95 % for 2024 and mature between 2025 through 2029 . The Collins Building debt consists of a five-year secured promissory note with an original principal amount of $ 2,000,000 , bearing interest at 7.0 % per annum (the “First Promissory Note”), and a two-year secured promissory note with an original principal amount of $ 2,035,250 , bearing interest at 8.25 % per annum (the “Second Promissory Note”, and, together with the First Promissory Note, the “Collins Promissory Notes”). 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. At March 31, 2024, the First Promissory Note had an outstanding balance of $ 1,830,106 and the Second Promissory Note had an outstanding balance of $ 1,557,549 . A summary of payments due under the long-term debt by year is as follows: SCHEDULE OF MATURITIES OF LONG TERM DEBT Equipment Financing Collins Promissory Notes 2024 – due between April 1, 2024 and March 31, 2025 $ 1,139,038 $ 1,374,782 2025 – due between April 1, 2025 and March 31, 2026 971,776 924,611 2026 – due between April 1, 2026 and March 31, 2027 799,740 413,000 2027 – due between April 1, 2027 and March 31, 2028 784,521 442,375 2028 and later – due on April 1, 2028 and thereafter 527,030 232,887 Total long-term debt $ 4,222,105 $ 3,387,655 9. MAJOR CUSTOMER AND CONCENTRATION OF CREDIT RISK Sales to the Company’s largest customer were 67 % of total sales for the three months ended March 31, 2024. Sales to the Company’s largest customer for the year ended December 31, 2023 was 70 % . Accounts receivable from the same customer were 89 % of total accounts receivable as of March 31, 2024 and 70 % as of December 31, 2023. 10. COMMITMENTS AND CONTINGENCIES From time to time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have an adverse effect on its business, financial condition or results of operations. 11. SEGMENT INFORMATION 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 six reportable segments that are based on the following business units: (i) Range Reclaim; (ii) Range Minerals; (iii) Range Water’ (iv) Range Security; (v) Range Land; and (vi) Graphium Biosciences. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision-maker has been identified as the Company’s 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) economic characteristics, (ii) nature of products and services, and (iii) procurement, manufacturing and distribution processes. The six reportable segments that result from applying the aggregation criteria are as follows: ● Range Reclaim – land reclamation, water restoration and land repurposing ● Range Minerals – mining and reclamation activities ● Range Water – biochar product development and water solutions business ● Range Security – security services on mine land being reclaimed and repurposed for non-fossil fuel uses ● Range Land – mine land being acquired, reclaimed and repurposed for non-fossil fuel uses ● Graphium Biosciences – glycosylated cannabinoid drug development program The Company had no inter-segment sales for the periods presented. 16 Summarized financial information concerning the Company’s reportable segments is shown as below: SCHEDULE OF FINANCIAL INFORMATION OF REPORTABLE SEGMENT By Categories Range Reclaim Range Minerals Range Water Range Security Range Land Graphium Biosciences Corporate Total For the three months ended March 31, 2024 Range Reclaim Range Minerals Range Water Range Security Range Land Graphium Biosciences Corporate Total Sales $ 1,505,983 $ 1,982,115 $ - 421,795 $ - $ - $ - $ 3,909,893 Gross profit ( 579,683 ) 799,503 - 261,725 - - - 481,545 Net income (loss) ( 1,046,372 ) 699,267 ( 33,582 ) 232,240 - ( 131,640 ) ( 471,062 ) ( 751,149 ) Total assets 13,090,077 5,487,595 13,219 199,184 1,009,866 8,753 1,004,826 20,813,520 Depreciation 634,905 - 640 2,890 - - - 638,435 Interest expense 92,978 - - - - - 82,280 175,258 Tax expense - - - - - - - Capital expenditures for long-lived assets $ - $ - $ - - $ - $ - $ - $ - Range Reclaim Range Water Range Security Range Land Graphium Biosciences Corporate Total For the three months ended March 31, 2023 Range Reclaim Range Water Range Security Range Land Graphium Biosciences Corporate Total Sales $ 2,988,487 $ - $ 26,400 $ - $ - $ - $ 3,014,887 Gross profit 638,579 - 10,423 - - - 649,002 Net income (loss) 186,643 ( 19,164 ) ( 17,105 ) - ( 106,177 ) ( 271,057 ) ( 226,860 ) Total assets 8,550,781 15,564 77,962 - 8,584 8,412 8,661,303 Depreciation 352,756 - 1,428 - - - 354,184 Interest expense 42,750 - - - - 887 43,637 Tax expense - - - - - - - Capital expenditures for long-lived assets $ 678,202 $ 15,350 $ 52,674 $ - $ - $ - $ 746,226 12. SUBSEQUENT EVENTS In April 2024, the Company issued options to purchase 250,000 shares of the Company’s common stock to an officer. 17