RANGE IMPACT, INC. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Certain statements contained in this Annual Report are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and are subject to the “safe harbor” created by these sections. Future filings with the SEC, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may also contain forward-looking statements. Because such statements include risks and uncertainties, many of which are beyond our control, actual results may differ materially from those expressed or implied by such forward-looking statements. Some of the factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements can be found under the caption “Risk Factors” in Part I, Item 1A, and elsewhere in this Annual Report. The forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. The following discussion should be read in conjunction with the financial statements and the accompanying notes for the periods ended December 31, 2025 and December 31, 2024 appearing elsewhere in this Annual Report. Our actual results could differ materially from those expressed or implied in any forward-looking statements as a result of various factors, including those set forth under the caption “Risk Factors” in Part I, Item 1A. Items Affecting Comparability of Financial Results In the year ended December 31, 2024, the Company sold substantially all of the assets of Collins Building to its previous owner in exchange for the cancellation of all remaining debt owed to him. In the year ended December 31, 2025, the Company sold the remaining assets of Collins Building as described in more detail in Note 2 to the Consolidated Financial Statements included elsewhere in this Annual Report. All activity for Collins Building for the years ended December 31, 2024 and 2025 are shown in discontinued operations. Additionally in the year ended December 31, 2025, the Company shifted its strategy away from providing reclamation services for third parties. All results of work performed in support of third parties for the years ended December 31, 2024 and 2025 are included in discontinued operations for the years then ended. In the year ended December 31, 2024, the Company sold all of its common stock in its wholly-owned subsidiary, Graphium Biosciences, Inc. In accordance with GAAP, assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets, and results of discontinued operations are reported as a separate component of consolidated net loss in the Consolidated Statements of Operations, for all periods presented, resulting in changes to the presentation of certain prior period amounts. Plan of Operations We are a public company dedicated to improving the health and wellness of people and the planet through a novel and innovative approach to impact investing with a particular focus on acquiring, reclaiming and repurposing mine sites and other undervalued land in economically disadvantaged communities throughout Appalachia. We take an opportunistic approach to impact investing by leveraging our competitive advantages and looking at solving old problems in new ways. We seek to thoughtfully allocate our 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. 21 Critical Accounting Policies Preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions which affect amounts reported in our consolidated financial statements. On an ongoing basis, we evaluate the accounting policies and estimates that are used to prepare financial statements. Management has made their best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. We do not believe that there is great likelihood that materially different amounts would be reported under different conditions or using different assumptions related to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. Asset Retirement Cost and Obligations Reclamation. Our asset retirement obligations arise from the Federal Surface Mining Control and Reclamation Act of 1977 and similar state statutes, which require that mine property be restored in accordance with specified standards and an approved reclamation plan. Significant reclamation activities include reclaiming refuse and slurry ponds, reclaiming the pit and support acreage at surface mines, sealing portals at deep mines, and the treatment of water. We determine the future cash flows necessary to satisfy our reclamation obligations on a permit-by-permit basis based upon current permit requirements and various estimates and assumptions, including estimates of disturbed acreage, cost estimates, and assumptions regarding productivity. We are also faced with increasingly stringent environmental regulations, much of which are beyond our control, which could increase our costs and materially increase our asset retirement obligations. Estimates of disturbed acreage are determined based on approved mining plans and related engineering data. Cost estimates are based upon third-party costs. Productivity assumptions are based on historical experience with the equipment that is expected to be utilized in the reclamation activities. Our asset retirement obligations are initially recorded at fair value. In order to determine fair value, we use assumptions including a discount rate and third-party margin. Each is discussed further below: Discount Rate . Our asset retirement obligations are initially recorded at fair value. We utilize discounted cash flow techniques to estimate the fair value of our obligations. We base our discount rate on the rates of treasury bonds with maturities similar to expected mine lives and adjust for our credit standing as necessary after considering funding and assurance provisions. Changes in our credit standing could have a material impact on the valuation of our asset retirement obligations. Third-Party Margin . The measurement of an obligation at fair value is based upon the amount a third party would demand to perform the obligation. Because we plan to perform a significant amount of the reclamation activities with internal resources, a third-party margin was added to the estimated costs of these activities. This margin was estimated based upon our historical experience with contractors performing similar types of reclamation activities. The inclusion of this margin will result in a recorded obligation that is greater than our estimates of our cost to perform the reclamation activities. If our cost estimates are accurate, the excess of the recorded obligation over the cost incurred to perform the work will be recorded as a reduction to amortization within our Consolidated Statements of Operations at the time that reclamation work is completed. On at least an annual basis, we review our reclamation liabilities and make necessary adjustments for permit changes, if any, as granted by state authorities, additional costs resulting from accelerated mine closures, and revisions to cost estimates and productivity assumptions to reflect current experience and updated plans. At December 31, 2025, we recorded asset retirement obligation liabilities of $79,344,297, including amounts reported as current. While the precise amount of these future costs cannot be determined with certainty, as of December 31, 2025, we estimate that the aggregate undiscounted cost of final mine closures is approximately $129,445,432. Refer to Notes 4 and 5 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for reclamation disclosures including a table summarizing the changes in asset retirement obligations for the year ended December 31, 2025. Use of Estimates and Assumptions 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. 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. 22 Bargain purchases occur if the acquisition date amounts of the identifiable net assets acquired, excluding goodwill, exceed the sum of (1) the value of consideration transferred, (2) the value of any noncontrolling interest in the acquiree, and (3) the fair value of any previously held equity interest in the acquiree. ASC 805 requires the recognition of a gain for a bargain purchase. The FASB believes that a bargain purchase represents an economic gain, which should be immediately recognized by the acquirer in earnings. When a bargain purchase gain is recognized in a business combination, no goodwill is recognized. Goodwill As referenced by ASC 350 “Intangibles-Goodwill and Other”, management performs its annual test for goodwill at least annually or more frequently if impairment indicators arise. At December 31, 2024, it was determined that the goodwill was fully impaired and resulted in a charge against earnings in the full amount of $751,421. This amount is included in the cost of our discontinued operations as presented for the year ended December 31, 2024. 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 and for financing costs. 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 expenses for non-employees is in the same period and manner as if the Company had paid cash for the services. Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”. The core principle of the 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; and (5) recognize revenue when (or as) each performance obligation is satisfied. The Company primarily invoices customers for coal royalties and recognizes revenue on a periodic basis as the performance obligation is satisfied. The Company recognized revenue from contracts for financial reporting purposes over time for operations included in discontinued operations. Progress toward completion of the Company’s contracts was measured by the percentage of cost incurred to date compared to estimated total costs for each contract. This method was used because management considered total cost to be the best available measure of progress on contracts. Because of inherent uncertainties in estimating costs, it was at least reasonably possible that the estimates used could have changed significantly. 23 Income Taxes In accordance with ASC 740, “Income Taxes”, we account for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and the tax bases of assets and liabilities and are measured using the currently enacted tax rates. Specifically, we measure gross deferred tax assets for deductible temporary differences and carryforwards, such as operating losses and tax credits, using the applicable enacted tax rates and apply the more likely than not measurement criterion. Further, at each interim reporting period, we estimate an effective income tax rate that is expected to be applicable for the full year. Significant judgment is involved regarding the application of income tax laws and regulations and when projecting the jurisdictional mix of income. Additionally, interpretation of tax laws, court decisions or other guidance provided by taxing authorities influences our estimate of the effective income tax rate. Recent Accounting Pronouncements Please refer to Footnote 1 of the accompanying consolidated financial statements for management’s discussion of recent accounting pronouncements. Results of Operations Years Ended December 31, 2025 and December 31, 2024 The following table sets forth our results of operations for the years ended December 31, 2025 and 2024. Year Ended December 31, 2025 Year Ended December 31, 2024 Revenues $ 3,710,714 $ - Costs and expenses: Cost of services 183,191 385,265 Depreciation of property and equipment 78,383 89,947 Amortization of long-term intangible assets 1,098,737 - Accretion of asset retirement obligations 1,912,968 - General and administrative expenses 2,177,299 1,677,326 Total costs and expenses 5,450,578 2,152,538 Loss from continuing operations (1,739,864 ) (2,152,538 ) Other income (expense): Gain on bargain purchase 21,928,500 - Other income 83,627 39,227 Fixed asset impairment (831,027 ) (738,913 ) Gain on disposal of asset retirement obligations 2,444 - Gain on sale of fixed assets 1,085 - Interest expense (252,279 ) (255,972 ) Interest income 353 7,405 Total other income (expense) 20,932,703 (948,253 ) Income (loss) from continuing operations before income tax 19,192,839 (3,100,791 ) Income tax expense attributable to continuing operations - (77,368 ) Income (loss) from continuing operations 19,192,839 (3,178,159 ) Loss from discontinued operations (25,161 ) (6,619,924 ) Net income (loss) $ 19,167,678 $ (9,798,083 ) The Company’s revenue during the year ended December 31, 2024 was $9,011,081 derived from reclamation services provided to third parties. However, during 2025, the Company’s business strategy evolved from a service-based business model to a land ownership business model. As a result of this change, our revenue source from reclamation services is now included in discontinued operations, including all revenues for the year ended December 31, 2024. For the year ended December 31, 2025, the Company generated $3,710,714 from consulting and royalty revenues. Ongoing costs of services in both years ended December 31, 2024 and December 31, 2025 relate primarily to wages. Further, due to the shift in strategy, operating expenses from the year ended December 31, 2024 which will be continuing were $2,152,538 compared to $5,450,578 for the year ended December 31, 2025. This increase is primarily due to the amortization of long-term intangible assets and accretion of asset retirement obligations which were established during the year ended December 31, 2025. During the year ended December 31, 2025, continuing general and administrative expenses were $2,177,299 compared to $1,677,326 incurred during the year ended December 31, 2024 (an increase of $499,973). General and administrative expenses generally include corporate overhead, salaries and other compensation costs, financial and administrative contracted services, consulting costs and travel expenses. The largest increases related to (i) insurance bond premiums of $383,158 and property taxes of $140,549 in our Range Land segment related to the Fola Acquisition in March 2025; and (ii) increased stock option compensation expense of $246,020 during the year ended December 31, 2025 compared to the year ended December 31, 2024, offset by a $274,162 decrease in insurance and employee costs. During the year ended December 31, 2024, we incurred research and development expenses of $465,936. All of these expenses were incurred in connection with the Company’s discontinued Drug Development business and are presented as discontinued operations. There were no research and development expenses in the year ended December 31, 2025. 24 During the year ended December 31, 2025, the Company recorded bargain purchase gains related to the Fola Acquisition and the Premier-Cambrian Acquisition totaling $21,928,500. There were no bargain purchase gains in the year ended December 31, 2024. See Notes 4 and 5 to the Consolidated Financial Statements included elsewhere in this Annual Report for more details related to these transactions. In the year ended December 31, 2024, the Company designated certain non-core equipment subject to financing agreements as held for sale and recognized an impairment loss of $738,913 on this group of assets based on the overall depressed condition of the resale market for large scale construction and mining equipment at that time. During the year ended December 31, 2025, the Company surrendered this non-core equipment to its equipment lenders and incurred deficiency claims of $831,027 based on the net sale proceeds received by the equipment lenders from its sale of the surrendered equipment. During the year ended December 31, 2025, the Company recorded other income of $83,627 compared to $39,227 for the year ended December 31, 2024 (an increase of $44,400). Interest expense decreased $3,693 for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to lower debt balances. Interest income also decreased by $7,052 for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to lower interest rates and lower cash balances. During the year ended December 31, 2024, the Company recorded other expenses, consisting of (i) a loss on sale of assets of $3,677,500 in connection with the disposition of the Collins Building assets and (ii) goodwill impairment of $751,421. These expenses are presented as discontinued operations for the year ended December 31, 2024. The Company’s net income during the year ended December 31, 2025 was $19,167,678 compared to net loss of $(9,798,083) for the year ended December 31, 2024 (an increase of $28,965,761) due to the addition of $21,928,500 of bargain purchase gains recognized in connection with the Fola Acquisition and the Premier-Cambrian Acquisition during the year ended December 31, 2025, and the elimination of $6,619,924 of losses from discontinued operations related to the performance of reclamation services for third parties during the year ended December 31, 2024. Liquidity and Capital Resources As of December 31, 2025, we had an accumulated deficit of $37,712,204. As of December 31, 2025, we had total current assets of $2,758,305, primarily comprised of cash of $2,110,171, accounts receivable of $617,929, and short-term deposits and prepaid accounts of $30,205. As of December 31, 2025, we had total current liabilities of $3,702,816, primarily consisting of the current portion of long-term debt in the amount of $400,000, accounts payable of $1,136,907, and accrued expenses of $2,165,909. As a result, on December 31, 2025, the Company had negative working capital of $944,511. On December 31, 2024, the Company had positive working capital of $749,437. As of December 31, 2025, the Company had long-term assets of $120,478,387, comprised of net equipment assets of $115,375, land of $42,548,402 and long-term intangible assets of $77,814,610. As of December 31, 2025, the Company had long-term liabilities of $81,744,297, comprised of long-term debt, net of current portion of $1,400,000, long term deposits held of $1,000,000, and asset retirement obligations of $79,344,297. Sources of Capital Based on the Company’s current corporate strategy, its net operating losses for the 12 months following December 31, 2025 are expected to be approximately $1,800,000, which is comprised of general operating expenses partially offset by revenue generated by the Range Land business segment. Based on the Company’s cash balance of $2,110,171, and its estimated net operating losses of approximately $1,800,000 for the 12-month period ending December 31, 2026, the Company estimates that it may not have sufficient funds to operate its business over the next 12 months. The Company is actively managing its working capital to generate additional cash flow and is actively seeking additional financing to fund its currently estimated level of operations. Our estimated total expenditures for the 12-month period ending December 31, 2026 could increase if we encounter unanticipated lower revenues and higher expenses in connection with operating our business as presently planned. In addition, our estimates of the amount of cash necessary to fund our business may prove to be too low, and we could spend our available financial resources much faster than we currently expect. If we cannot generate operating revenues or raise the capital necessary to continue expanding our business, we will be forced to delay, scale back or eliminate some or all of our proposed operations. If any of these were to occur, there is a substantial risk that our business would fail. Since inception, we have primarily funded our operations through equity and debt financings. Until such time as our operating businesses are consistently cash flow positive, we expect to continue funding our operations, at least in part, through equity and debt financings. However, sources of additional funds may not be available when needed, on acceptable terms, or at all. If we issue equity or convertible debt securities to raise additional funds or to fund, in whole or in part, acquisitions in furtherance of our business strategy, our existing stockholders may experience substantial dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. If we incur additional debt, it may increase our leverage relative to our earnings or to our equity capitalization, requiring us to incur additional interest expenses. Obtaining commercial loans, assuming those loans are available, would increase our liabilities and future cash commitments. Moreover, regardless of the manner in which we seek to raise capital, we may incur substantial costs in those pursuits, including investment banking fees, legal fees, accounting fees, and other related costs. 25 Net Cash Provided By (Used in) Operating Activities For the year ended December 31, 2025, net cash generated by operating activities was $123,028 compared to net cash used by operating activities of $1,591,426 for the year ended December 31, 2024 (an increase of $1,714,454). This increase was primarily attributable to (i) our net profit of $19,167,678 for the year ended December 31, 2025 compared to a net loss of $9,798,083 for the year ended December 31, 2024, (ii) accretion of asset retirement obligations of $1,912,968, (iii) amortization of long-term intangible assets of $1,098,737, (iv) depreciation of property and equipment from continued and discontinued operations of $170,291, (v) stock compensation expense of $311,480, (vi) an increase in the cash adjustment for asset disposals of $878,269, (vii) an increase in accounts payable related to continuing and discontinued operations of $358,903, and (viii) a decrease in prepaid expense of $13,913, offset by the gain on bargain purchase of $21,928,500, a decrease in accounts receivable (including unbilled and contract receivables) of $213,021, a decrease in accrued expenses from continuing and discontinued operations of $149,192, a decrease in deposits of $15,395, a gain on asset retirement obligation disposal of $2,444 and cash paid for asset retirement obligations of $1,479,574. Net cash used in operating activities during the year ended December 31, 2024, consisted primarily of a (i) net loss of $9,798,083, (ii) a decrease in accounts receivable (including unbilled and contract receivables) of $4,069,297, (iii) an increase in the cash adjustment for asset disposals of $3,677,400, (iv) an increase in the cash adjustment for goodwill impairment of $751,421, (v) an increase in the cash adjustment for equipment impairment of $738,913, and (vi) depreciation of property and equipment of $1,868,997 offset by a decrease in accounts payable of $3,157,453. Net Cash Provided By Investing Activities For the year ended December 31, 2025, net cash provided by investing activities was $1,392,000, which consisted of $1,000,000 received as a deposit on two option agreements related to the Premier-Cambrian Acquisition, $492,000 proceeds from equipment sales, and $100,000 used for asset purchases. For the year ended December 31, 2024, net cash provided by investing activities was $430,100, which consisted of $270,000 received from sale of equipment, $160,000 in insurance policy proceeds from a casualty loss, and $100 received from the sale of the Graphium subsidiary. Net Cash Provided By (Used In) Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was $427,857, which consisted of $1,150,000 received from the issuance of common stock offset by $522,143 of long-term equipment debt payments and $200,000 of net payments on a bank credit line. For the year ended December 31, 2024, net cash used in financing activities was $848,188 and consisted of $1,848,188 of long-term equipment debt and bank credit line pay-downs offset by $1,000,000 received from the issuance of common stock. Off-Balance Sheet Arrangements We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that would be material to stockholders. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. Item 8. Financial Statements and Supplementary Data The financial statements required by this item are set forth at the end of this Annual Report beginning on page F-1 and are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 26