UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol | Name of each exchange on which registered: | ||
| OTCQB |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐
No
As of May 15, 2025, there were shares of the registrant’s common stock, $ par value per share, outstanding.
RANGE IMPACT, INC.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended
March 31, 2025
INDEX
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
RANGE IMPACT, INC.
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| 3 |
RANGE IMPACT, INC.
CONSOLIDATED BALANCE SHEETS
| March 31, 2025 (unaudited) | December 31, 2024 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Contract assets | ||||||||
| Prepaid expenses | ||||||||
| Equipment held for sale | ||||||||
| Total current assets | ||||||||
| Long-term Assets | ||||||||
| Land | ||||||||
| Property and equipment, net of accumulated depreciation | ||||||||
| Deposits | ||||||||
| Total long-term assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Line of credit | $ | $ | ||||||
| Current portion of long-term debt | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Total current liabilities | ||||||||
| Long-term Liabilities | ||||||||
| Long-term debt, net of current portion | ||||||||
| Asset retirement obligation | ||||||||
| Total long-term debt | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, par value $ per share; shares authorized; and shares issued and outstanding, respectively | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
| 4 |
RANGE IMPACT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of services | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Other income | ||||||||
| Gain on bargain purchase | ||||||||
| Gain on sale of fixed assets | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other income (expense) | ( | ) | ||||||
| Income (loss) from continuing operations | ( | ) | ||||||
| Loss from discontinued operations | ( | ) | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Net income (loss) per share – basic and diluted | $ | $ | ) | |||||
| Weighted average number of common shares outstanding – basic and diluted | ||||||||
See accompanying notes to the consolidated financial statements.
| 5 |
RANGE IMPACT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
| Three Months Ended March 31, 2025 | ||||||||||||||||||||
| Common Stock | Additional | |||||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Shares issued | ||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||
| Net income | - | |||||||||||||||||||
| Balance as of March 31, 2025 (Unaudited) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| 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 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to the consolidated financial statements.
| 6 |
RANGE IMPACT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Gain on bargain purchase | ( | ) | ||||||
| Net gain on asset disposals | ( | ) | ||||||
| Fair value of vested stock options | ||||||||
| Depreciation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Contract assets | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Deposits | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Contract liabilities | ||||||||
| Accrued expenses | ( | ) | ||||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Equipment purchases | ( | ) | ||||||
| Proceeds from asset sales | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from stock issuance | ||||||||
| Repayment of long-term debt | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents - beginning of period | ||||||||
| Cash and cash equivalents - end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
| 7 |
RANGE IMPACT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(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 expanded its corporate strategy to include impact investing.
In May 2022, the Company acquired Range Environmental Resources, Inc., a West Virginia corporation (“Range Environmental”) and Range Natural Resources, Inc., a West Virginia corporation (“Range Natural”) to provide land reclamation and water restoration services to mining and non-mining customers throughout the Appalachian region. 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 September 2023, the Company, through its wholly-owned subsidiary CLV
Azurite Land, LLC, acquired
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 a 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.
In August 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 (“Collins Sale”). In September 2024, the Company sold Graphium Biosciences, Inc. and all of its drug development assets (“Graphium Sale”). The Collins Sale and Graphium Sale are described in more detail in Note 4.
In March 2025, the Company, through its wholly-owned
subsidiary Range Sky View Land, LLC, acquired
As a result of the various transactions referenced in this Note 1, the Company has reorganized its operations into two operating business segments: (i) Range Land and (ii) Range Services.
Going Concern
The accompanying
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, during the
three months ended March 31, 2025, the Company incurred a net loss of $
The ability to
continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising
additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. The
Company estimates, as of March 31, 2025, that it may not have sufficient funds to operate the business for 12 months given its cash
balance of $
| 8 |
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) and with the instructions to Form 10-K and Article 8 of Regulation S-X. 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. (sold in September 2024 and included in discontinued operations in 2024), Range Environmental Resources, Inc., Range Land, LLC, Range Minerals, LLC, Range Natural Resources, Inc., Range Reclaim, LLC, Range Rock Creek Land, LLC, Range Security, LLC, Range Security Resources, LLC, Range Sky View Land, LLC, Range Water, LLC, and Terra Preta, LLC, 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.
Reclassifications
Certain prior period amounts have been reclassified to conform with the current period’s presentation.
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.
Discontinued Operations
During the third quarter of 2024, the Company sold 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 or net income in the Consolidated Statements of Operations, for all periods presented, resulting in changes to the presentation of certain prior period amounts.
Refer to Note 4 for additional discussion of discontinued operations and disposition of assets. All other notes to these consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented.
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, 2025 and 2024.
| Quarter Ended March 31, 2025 | Quarter Ended March 31, 2024 | |||||||
| Earned over time | $ | $ | ||||||
| Point in time | ||||||||
| Total revenue | ||||||||
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. There were
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, 2025 and December 31, 2024 are as follows. The Company did not have any active abandoned mine land projects as of March 31, 2025 therefore no contract assets were recognized on that date.
| December 31, 2024 | ||||
| Costs incurred on contracts in progress | $ | |||
| Estimated earnings | ||||
| Revenue earned on contracts in progress | ||||
| Less: Billings to date | ( | ) | ||
| Total contract assets | $ | |||
| December 31, 2024 | ||||
| Costs and estimated earnings in excess of billings on contracts in progress | $ | |||
| Billings in excess of costs and estimated earnings on contracts in progress | ||||
| Net contract assets | $ | |||
Equipment Held for Sale
Following the completion of specific
projects in the fourth quarter of 2024, management concluded that certain pieces of equipment would no longer be required for future
projects. Consequently, these items were separated and prepared for sale. The Company is expecting to sell these assets to a private
party by September 30, 2025. It is not yet known whether there will be a gain or loss on the disposal of the equipment held for sale, but management believes the
assets are currently held at fair value. The Company recorded an impairment loss of $
Land
Land is carried at cost, which includes an amount of asset retirement costs equal to the amount of asset retirement obligations recognized in connection with the Fola Acquisition. 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. Land is reported within the Range Land operating business segment. Refer to Note 3 for more details.
| 10 |
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.
| March 31, 2025 | December 31, 2024 | |||||||
| Equipment | $ | $ | ||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Net book value | ||||||||
| Depreciation expense | $ | $ | ||||||
The Company provides for depreciation of its 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. These assets are reported within the Range Services operating business segment.
Asset Retirement Obligations
The Company recognizes asset retirement obligations (“AROs”) in accordance with ASC 410, “Asset Retirement and Environmental Obligations.” These obligations relate primarily to the Company’s legal and regulatory requirements to perform reclamation, closure, and environmental remediation activities at coal mining sites currently under management by the Company.
Under federal and state mining laws, including the Surface Mining Control and Reclamation Act of 1977 (“SMCRA”), the Company is required to restore land and water resources disturbed by coal mining activities to their original or approved alternative condition. AROs are recognized when the legal obligation is incurred, generally at the time mining activity commences or when the Company assumes responsibility for a previously disturbed mine site.
The Company records the fair value of a liability for an ARO in the period in which it is incurred if a reasonable estimate of fair value can be made. Upon initial recognition, the Company capitalizes the cost as part of the carrying amount of the related long-lived asset. The liability is subsequently accreted over time through charges to operating expense, and the capitalized asset is depreciated over its useful life.
As of March 31, 2025, the Company recorded AROs of $
The total undiscounted amount of estimated future
cash flows required to satisfy the Company’s AROs over a 25-year projection period was approximately $
The Company periodically reviews the estimated reclamation costs and timing assumptions used in calculating AROs. Changes in estimates are reflected in the period in which they occur. Actual costs may differ from those estimated due to changes in applicable laws and regulation, inflation, post-mine land use changes, and the final scope of the reclamation and water restoration activities.
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, 2025, the Company had no material lease commitments for longer than one year.
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 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:
| March 31, 2025 | December 31, 2024 | |||||||
| Options | ||||||||
| Warrants | ||||||||
| Total | ||||||||
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.
As defined in FASB ASC 280 “Fair Value Measurements”, fair value is the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable firm inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the examination of inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories.
| ● | Level 1: | Quoted market prices in active markets for identical assets or liabilities | |
| ● | Level 2: | Inputs to the valuation methodology include: | |
| ○ | Quoted prices for similar assets or liabilities in active markets; | ||
| ○ | Quoted prices for identical assets or similar assets or liabilities in inactive markets; | ||
| ○ | Inputs other than quoted prices that are observable for the asset or liability; | ||
| ○ | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||
| ● | Level 3: | Unobservable inputs that are not corroborated by market data |
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.
The equipment held for sale is carried at the lower of carrying amount or fair value, and is considered level 2 as it is based on market prices for similar assets.
Segments
As of March 31, 2025, the Company has
| 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, this 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. This 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 has adopted this ASU. The Company will continue to evaluate its segment disclosures in future reporting periods to ensure continued compliance with evolving accounting guidance and disclosure best practices.
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, this 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 will make the requisite updates in the notes to the annual financial statements for the period ending December 31, 2025.
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 $
The Company accounted for the transaction as
a business combination in accordance ASC 805 “Business Combinations”. The Company performed an allocation of the
purchase price paid for the assets acquired and the liabilities assumed. The fair values of the assets acquired in that transaction
are set forth below. Because the fair values exceeded the purchase price, we recognized a gain on the purchase of $
| Fair value of assets acquired: | ||||
| Equipment | $ | |||
| Land | ||||
| Buildings | ||||
| Total assets acquired | ||||
| Less: Gain on bargain purchase price | ( | ) | ||
| Purchase price | $ | |||
| Cash consideration | ||||
| Long-term notes issued to the seller | ||||
| Total purchase price | $ | |||
| Acquisition transaction costs incurred | $ |
As discussed in Note 4, on August 22, 2024, nearly all of the equipment, as well as the land and buildings were sold to the previous owner of Collins Building in consideration of the full and complete cancellation of the First Promissory Note and the Second Promissory Note.
Collins Building contributed revenues of
$
3. ACQUISITION OF FOLA MINE SITE
On March 31, 2025, the Company, through its wholly-owned subsidiary Range
Sky View Land, LLC, acquired
| Estimated asset retirement obligation on 15 acquired permits | $ | |||
| Contingent reclamation obligation on 21 permits | ||||
| Total asset retirement obligation capitalized to land | $ | |||
| Fair value of Fola Mine land acquired | ||||
| Total land value of Fola Mine property | $ | |||
| Beginning land value as of December 31, 2024 | ||||
| Land value as of March 31, 2025 | $ |
The fair value of the land acquired by the Company in connection with the
Fola Acquisition was $
| Fair value of Fola Mine land acquired | $ | |||
| Accounts receivable credited in lieu of cash | ( | ) | ||
| Bargain purchase gain recognized | $ |
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4. DISPOSALS AND DISCONTINUED OPERATIONS
On August 22, 2024,
substantially all of the assets of Collins Building were sold to its previous owner in exchange for the cancellation of all
remaining debt owed to him arising from the Company’s acquisition of Collins Building in August 2023. Any projects related to
Collins Building will be completed either by subcontractors or with equipment and resources of Range Environmental. The Company
recognized a net loss on the Collins Building sale of $
On September 30, 2024,
the Company sold all of its common stock of Graphium Biosciences to a newly-formed entity, Placer Biosciences, Inc. (“Placer”),
owned by two former officers of the Company, in exchange for a warrant to purchase
Loss from Discontinued Operations
Discontinued operations for the three months ended March 31, 2024 consists of results from Graphium Biosciences operations. The following table provides details about the major classes of line items constituting “Loss from discontinued operations” presented on the Company’s Consolidated Statements of Operations:
| March 31, 2024 | ||||
| Operating expenses: | ||||
| Research and development | $ | |||
| Total operating expenses | ||||
| Loss from discontinued operations | $ | ( | ) | |
Issuance of Common Stock
On January 21, 2025, the Company entered into a securities
purchase agreement for the issuance and sale of shares of the Company’s common stock at a price of $ per share. The aggregate proceeds to the Company were approximately
$
On February 6, 2025, the Company entered into a securities purchase agreement
for the issuance and sale of shares of the Company’s common stock at a price of $ per share. The aggregate proceeds to the Company were approximately $
Stock options issued during the three months ended March 31, 2025 and the three months ended March 31, 2024
stock options were granted to directors, advisors, and employees during the three months ended March 31, 2025 or the three months ended March 31, 2024.
For each of the three months ended March 31, 2025 and March 31, 2024, the Company recorded $ in stock-based compensation expense related to vested stock options. At March 31, 2025, there was $ of unamortized cost of the outstanding stock-based awards.
| Shares | Weighted Average Exercise Price | |||||||
| Balance Outstanding at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Exchanged | ||||||||
| Exercised | ||||||||
| Expired | ( | ) | ||||||
| Forfeited | ||||||||
| Balance Outstanding at March 31, 2025 | $ | |||||||
| Balance Exercisable at March 31, 2025 | $ | |||||||
At March 31, 2025, the outstanding stock options had $ of intrinsic value.
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| Number of Options | Weighted Average Exercise Price | Weighted Average Grant-Date Stock Price | ||||||||||
| Options Outstanding, March 31, 2025 | $ | $ | ||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | - | $ | - | |||||||||
| $ | - | $ | - | |||||||||
| Number of Options | Weighted Average Exercise Price | Weighted Average Grant- Date Stock Price | ||||||||||
| Options Outstanding and Exercisable, March 31, 2025 | $ | $ | ||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | $ | |||||||||||
| $ | - | $ | - | |||||||||
| $ | - | $ | - | |||||||||
7. WARRANTS
A summary of warrants to purchase common stock issued during the three months ended March 31, 2025 is as follows:
| Shares | Weighted Average Exercise Price | |||||||
| Balance Outstanding and Exercisable at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | ||||||||
| Balance Outstanding and Exercisable at March 31, 2025 | $ | |||||||
At March 31, 2025, the
8. LINE OF CREDIT
In November 2022, the
Company secured a bank line of credit with a limit of $
In June 2023, Range Environmental secured a bank
loan with a limit of $
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9. LONG-TERM DEBT OBLIGATIONS
Long-term debt consists of debt on
equipment, which serves as the collateral. Interest rates on the equipment financings range from
As described in Note 4, in August 2024, the
Collins Building debt was cancelled in exchange for the property and substantially all of the equipment acquired in the original
transaction. The Collins Building debt consisted of a five-year
secured promissory note with an original principal amount of $
In November 2024, certain equipment items no
longer needed by the Company were surrendered to the financing company which held liens on the equipment, in exchange for a release
of debt. The result of this transaction was a reduction of the net equipment values on the balance sheet and a reduction in long-term
debt of $
A summary of payments due under the Company’s long-term debt by year is as follows:
| Equipment Financing | ||||
| 2025 – due between April 1, 2025 and March 31, 2026 | ||||
| 2026 – due between April 1, 2026 and March 31, 2027 | ||||
| 2027 – due between April 1, 2027 and March 31, 2028 | ||||
| 2028 – due between April 1, 2028 and March 31, 2029 | ||||
| 2029 and later – due on April 1, 2029 and thereafter | ||||
| Total long-term debt | $ | |||
10. MAJOR CUSTOMER AND CONCENTRATION OF CREDIT RISK
Sales to the Company’s largest customer
were
Accounts receivable from the same customer
were
11. 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.
12. 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
| ● | Range Land – mine land acquired, reclaimed and repurposed for next generation uses |
| ● | Range Services – services in support of reclamation and repurposing of acquired mine land |
The Company had no inter-segment sales for the periods presented.
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Summarized financial information concerning the Company’s reportable segments is shown as below:
By Categories
| For the three months ended March 31, 2025 | ||||||||||||||||
| Range Land | Range Services | Corporate | Total | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Gross profit (loss) | ( | ) | ||||||||||||||
| Net income (loss) | ( |
) | ( | ) | ||||||||||||
| Total assets | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Interest expense | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
| For the three months ended March 31, 2024 | ||||||||||||||||
| Range Land | Range Services | Corporate | Total | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Gross profit (loss) | ||||||||||||||||
| Net income (loss) | ( |
) | ( | ) | ( | ) | ||||||||||
| Total assets | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Interest expense | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
14. SUBSEQUENT EVENTS
In April 2025, the Company issued options to purchase a total of shares of the Company’s common stock to two directors and one officer with exercise prices of $ per share that expire ten years from the date of grant.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Unaudited Condensed Financial Statements and the related notes thereto contained in Part I, Item 1 of this Quarterly Report. The information contained in this Quarterly Report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2024 filed on March 31, 2025, and the related audited financial statements and notes included therein.
Certain statements made in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. These risks and uncertainties include: general economic and financial market conditions; our ability to obtain additional financing as necessary; our ability to continue operating as a going concern; any adverse occurrence with respect to our business: other factors beyond our control; and the other risks described under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 31, 2025.
Although we believe that the expectations and assumptions reflected in the forward-looking statements we make are reasonable, we cannot guarantee future results, levels of activity or performance. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those expressed by any forward-looking statements. As a result, readers should not place undue reliance on any of the forward-looking statements we make in this report. Forward-looking statements speak only as of the date on which they are made. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any reason.
Company Overview
Range is a public company dedicated to improving the health and wellness of people and the planet through a novel and innovative approach to impact investing. We are focused on developing long-term solutions to environmental, social, and health challenges, with a particular focus on acquiring, reclaiming and repurposing mine sites and other undervalued land in economically disadvantaged communities throughout Appalachia. We seek to 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 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.
Our corporate headquarters is located in Cleveland, Ohio, with an additional office in Fola, West Virginia. As of May 15, 2025, we employed 18 full-time employees. In addition, we have, from time to time, engaged various consultants and professional service firms to provide us with flexible and experienced resources to advance our corporate objectives in order to maintain a cost-effective overhead structure. We strive to instill a corporate culture of honesty, integrity and respect while advancing our mission of doing well by doing good.
Impact Investing Strategy
Our impact investing strategy aims to improve the health and wellness of people and the planet, while also generating long-term sustainable financial returns for our shareholders. We believe that doing well and doing good are not mutually exclusive, and that an impact investing strategy can balance the environmental, social and economic needs of people and the planet while also generating attractive risk-adjusted financial returns for shareholders.
Our impact investing strategy provides an opportunity for our dedicated team to address pressing environmental, social and economic challenges, such as air and water pollution, educational inequality and economic disparity, and climate change, through the development and implementation of innovative and creative solutions. By actively directing investment capital towards businesses that are working to create positive environmental, social and economic outcomes, we believe that our impact investing strategy can contribute to an improved people-planet ecosystem and a healthier and happier way of life.
We have a particular interest in providing environmental and social solutions in economically-disadvantaged regions of the United States. Initially, the Company is targeting the Appalachian region, which is home to communities with some of the most disadvantaged income, education and employment demographics in the United States. Our ambitious strategy is to acquire large mine sites burdened by substantial legacy reclamation obligations and use our team and resources to perform the requisite reclamation activities and obtain full bond release, thereby unlocking the underlying value of the land and creating a critical catalyst for sustainable, long-term economic development in the disadvantaged coal communities of Appalachia.
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Operating Business Segments
Our two operating business segments are Range Land and Range Services.
Range Land
Range Land, LLC, an Ohio limited liability company (“Range Land”), is a wholly-owned subsidiary focused on acquiring former mine lands with the goal of reclaiming and repurposing the sites for non-fossil fuel uses, including commercial, industrial, residential and recreational developments, with a particular focus on renewable energy facilities, innovative agricultural installations, and projects focused on improving the quality and condition of our air, land and waterways.
According to industry estimates, Appalachia contains nearly one million acres of abandoned, idled and non-performing mine sites that are burdened with significant land reclamation and water restoration obligations. Many of these troubled mine sites are subject to mining permits and associated reclamation bonds, which as a result, prevents the land from being repurposed for non-mining uses until the land has been reclaimed and the permits and bonds have been released by the applicable state’s environmental protection department. Water quality is a particularly challenging issue since a permit can only be released if the site has at least 12-months of compliant water samples without active chemical treatment, which heightens the need for water restoration solutions to help transition former mine land to economically viable non-mining uses.
The Company has assembled the internal resources and capabilities to reclaim land, restore waterways, install innovative water treatment solutions, and secure mine sites to protect the significant historical investment in infrastructure. In addition, the Company has expertise in the permit and bond release process, which is a critical to unlocking the underlying value of a former mine land for non-fossil fuel uses. Range Land is actively reviewing several mine sites throughout Appalachia to acquire, reclaim and repurpose in order to improve the land and create non-fossil fuel economic development opportunities for disadvantaged local coal communities.
In September 2023, Range Land, through its wholly-owned subsidiary, CLV Azurite Land, LLC (“CLV Azurite”), acquired over 1,700 acres of surface interest at an idled mine complex in West Virginia. CLV Azurite is in active discussions with the holder of the permits and bonds associated with the acquired land in order that the acquired surface acreage can be repurposed for alternative non-fossil fuel uses. CLV Azurite is in concurrent active discussions with two experienced and well-capitalized solar developers to convert the former mine land into a large solar energy facility on a majority of the acquired surface acreage, as well as additional acreage for commercial, industrial, recreational and residential development pursuant to which the solar developer would pay a negotiated amount on a per acre basis.
On March 31, 2025, the Company, through its wholly-owned subsidiary, Range Sky View Land, LLC, acquired 120,154 acres of fee, surface and mineral interests at the Fola mine complex (“Fola Mine”) located in Clay and Nicholas Counties, West Virginia pursuant to which the Company acquired 15 mining permits with an estimated reclamation obligation of $29,282,126 and assumed an obligation to manage an additional 21 mining permits with an estimated reclamation obligation of $13,796,945. As a result, on March 31, 2025, the Company recorded AROs of $43,079,071 related to the Fola Acquisition and capitalized an equal amount onto the fair value of the acquired land on that same date. The Company also assumed two coal royalty contracts and one 25-year solar lease with a multi-national corporation for the development of a large-scale solar project located on more than 1,500 acres at the Fola Mine.
Range Services
Range Services is our operating business segment that provides environmental and operational support services to help reclaim and repurpose former mine land into next-generation uses. All of the Company’s reclamation, water treatment and security employees, equipment and trucks, and technological innovations are classified within the Range Services business segment. Range Services is dedicated to reclaiming and repurposing land owned by the Company and does not currently provide any reclamation, water treatment or security services to third-parties.
Reclamation support services on mine sites includes grading, recontouring, revegetation, erosion control, and other activities necessary to meet federal and state post-mining land use requirements. Water treatment services include the operation and maintenance of passive and active treatment systems designed to manage and treat mine-impacted water, including acid mine drainage, in compliance with applicable environmental permits. Range Services is also responsible for collecting water samples, coordinating testing with certified laboratories, and treating water with chemicals and other more innovative solutions, such as the Company’s proprietary biochar water filtration products and system currently in development. Range Services also provides physical site security, access control, and risk mitigation activities to ensure the safety, compliance, and regulatory protection of the Company’s land assets.
Competition
Our Company is focused on a large and growing marketplace for impact investing initiatives, and therefore, is anticipated to face competition from a variety of operating businesses and investment funds who are developing similar business plans and operating strategies to satisfy the increasing demands of these types of investments in the marketplace. In many cases, these competitors are larger and better capitalized operating businesses and investment funds.
Our Company competes on the basis of a number of factors, including our geographic focus on Appalachia, access to mission-driven energy-transition capital, access to impact investing opportunities, strategic relationships with reclamation bond insurance companies, recruitment and retention of key personnel, market share with key customers, and supply relationships with critical vendors. Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existing employees.
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Results of Operations
Three Months Ended March 31, 2025 and March 31, 2024
The Company’s revenue for the three months ended March 31, 2025 was $695,701 and its gross profit was $3,851. The Company’s revenue for the three months ended March 31, 2024 was $3,909,893 and its gross profit was $18,854. The significant decrease in revenue is primarily a result of management’s decision to exit the mining business and the AML reclamation business in 2024.
For the three months ended March 31, 2025, general and administrative expenses were $559,147, compared to $943,901 incurred for the three months ended March 31, 2024 (a decrease of $384,754). General and administrative expenses generally include corporate overhead, salaries and other compensation costs, financial and administrative contracted services, legal and audit fees, other professional and consulting fees, insurance, marketing, and travel expenses. The largest decrease in general and administrative expenses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was attributable to labor and benefit costs of $147,023, insurance costs of $120,313, professional and legal fees of $94,225, and utilities of $20,000.
For the three months ended March 31, 2025, the Company incurred net other income in the amount of $5,654,923, compared to total net other expense of $157,153 recorded for the three months ended March 31, 2024 (an increase of $5,812,076). This increase in net other income was attributable to a gain on bargain purchase of $5,602,484, other income of $83,627, gain on sale of fixed assets of $59,680, and lower interest expense of $84,390.
Net income for the three months ended March 31, 2025 was $5,099,627 compared to a net loss of $1,213,840 for the three months ended March 31, 2024 (an increase of $6,313,467).
Liquidity and Capital Resources
As of March 31, 2025, the Company had total current assets of $1,208,068, comprised of: (i) cash of $252,695; (ii) accounts receivable of $153,938; (iii) equipment held for sale of $733,613; and (iv) prepaid expenses of $67,822. As of March 31, 2025, the Company had total current liabilities of $3,067,577, consisting of: (i) outstanding amounts on lines of credit of $2,000,000; (ii) accounts payable of $444,419; (iii) accrued expenses of $148,377, and (iv) the current portion of long-term debt of $474,781. As a result, as of March 31, 2025, the Company had negative working capital of $(1,859,509). As of December 31, 2024, the Company had positive working capital of $749,437.
As of March 31, 2025, the Company had long-term assets of $53,240,251, comprised of: (i) land, including asset retirement cost, of $52,648,968, (ii) net equipment assets of $585,669; and (iii) deposits of $5,614. As of March 31, 2025, the Company had long-term liabilities of $44,842,220, comprised of (i) asset retirement obligations of $43,079,071 and (ii) long-term debt, net of current portion of $1,763,149. As of December 31, 2024, the Company had long-term assets of $1,899,669, comprised of (i) land of $1,008,897 and (ii) net equipment assets of $890,772. As of December 31, 2024, the Company had long-term liabilities of $1,814,701, comprised of long-term debt, net of current portion.
Sources of Capital
Based on the Company’s current corporate strategy, we expect our general operating expenses to be substantially offset by royalty income generated by Range Land. Based on the Company’s current cash balance of $252,695 and no current availability under its revolving credit line, the Company may not have sufficient funds to operate its business over the next 12 months. If additional capital is needed in excess of our current capital resources, we will explore financing options to accelerate the funding and execution of our growth strategy and shareholder value creation plan.
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Our estimated total net cash flow for the 12-month period ending March 31, 2026 could decrease 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 raise the capital necessary to continue to develop 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.
Until such time as the Company is 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, we would incur additional interest expenses, and assuming those loans would be available, it 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 and other related costs.
Net Cash Provided By (Used In) Operating Activities
For the three months ended March 31, 2025, net cash used in operating activities was $(428,101), comprised of: (i) net income of $5,099,627; (ii) non-cash depreciation of $84,783; (iii) add-back of the non-cash bargain purchase gain of $5,602,484; (iv) a gain on asset disposals of $59,680; (v) non-cash vested stock option expense of $4,490; (vi) an increase in current assets of $206,256; and (vii) a decrease in current liabilities of $161,093. For the three months ended March 31, 2024, net cash used in operating activities was $(1,113,045), comprised of: (i) net income of $(1,213,840); (ii) non-cash depreciation of $638,435; (iii) non-cash vested stock option expense of $4,490; (iv) an increase in current assets of $827,087; and (v) a decrease in current liabilities of $1,369,217,
Net Cash Provided By (Used In) Investing Activities
For the three months ended March 31, 2025, net cash provided by investing activities was $280,000, comprised of $380,000 of proceeds from the sale of equipment, partially offset by $100,000 for equipment purchases. For the three months ended March 31, 2024, there was no net cash provided by or used in investing activities.
Net Cash Provided By (Used In) Financing Activities
For the three months ended March 31, 2025, net cash provided by financing activities was $233,510, comprised of $600,000 from the sale of common stock, partially offset by the repayment of long-term debt of $366,490. For the three months ended March 31, 2024, net cash used in financing activities was $(396,057), comprised entirely of the repayment of long-term debt of $396,057.
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.
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Critical Accounting Policies
Our financial statements and accompanying notes included in this report have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) applied on a consistent basis. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from the estimates made by management.
We believe the following critical accounting policies require us to make significant judgments and estimates in the preparation of our consolidated financial statements included in this report:
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The more significant estimates and assumption by management include, among others, assumptions used in valuing assets acquired in business acquisitions, reserves for accounts receivable, assumptions used in valuing equity instruments issued for services, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity. 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.
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 and recognizes revenue on a periodic basis for equipment and labor hours provided to a customer on a particular job based on an agreed-upon hourly rate sheet or a fixed amount for a project. The Company also invoices customers and recognizes revenue for equipment mobilization fees and materials and supplies required to complete a project. The Company invoices for the sales of chemicals and recognizes revenue when the products are delivered to the customer’s designated site. Costs for equipment, labor and chemicals are generally expensed as incurred since the projects are generally short-term and not subject to a contract. The Company 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.
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 within the near term.
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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 expense for non-employees is in the same period and manner as if the Company had paid cash for the services.
Recent Accounting Pronouncements
Please refer to Footnote 1 of the accompanying financial statements for management’s discussion of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that information relating to the Company is accumulated and communicated to management, including our principal officers, as appropriate to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025, and have concluded that our disclosure controls and procedures were effective as of March 31, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently a party to and our properties are not currently the subject of any material pending legal proceedings the adverse outcome of which, individually or in the aggregate, would be expected to have a material adverse effect on our financial position or results of operations.
Item 1A. Risk Factors
Please refer to the risks described under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds: None
Item 3. Defaults Upon Senior Securities: None
Item 4. Mine Safety Disclosures:
The information concerning mine safety violations and other regulatory matters is filed as Exhibit 95 to this Form 10-Q pursuant to the requirements of Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104).
Item 5. Other Information: None
Item 6. Exhibits
† Furnished herewith.
* Filed herewith.
# Indicates a management contract or any compensatory plan, contract or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RANGE IMPACT, INC. | ||
| By: | /s/ Michael Cavanaugh | |
| Michael Cavanaugh | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: May 15, 2025 | ||
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EXHIBIT INDEX
† Furnished herewith.
* Filed herewith.
# Indicates a management contract or any compensatory plan, contract or arrangement.
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