| BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1.
BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Range
Impact, Inc. (the “Company”, “we”, “us” or “our”), was incorporated in the State of Nevada
on June 29, 2007. Originally
founded in 2007 as Legend Mining Inc., the Company began operations as a mineral extraction exploration business. In 2011, the Company
changed its name to Stevia First Corp. and pursued a new strategy focused on developing stevia-based additives for the food and beverage
industry. In 2015, the Company changed its name to Vitality Biopharma, Inc. and pursued a new strategy focused on developing cannabinoid-based
prodrugs anticipated to treat inflammatory conditions of the gastrointestinal tract. In
October 2021, the Company changed its name to Malachite Innovations, Inc. and formed two wholly-owned operating subsidiaries: (i)
Graphium Biosciences, Inc., a Nevada corporation (“Graphium”), into which the Company contributed all of its drug
development assets; and (ii) Daedalus Ecosciences, Inc., a Nevada corporation (“Daedalus”) which was formed to serve as
a holding company for the Company’s future impact investing businesses. In
May 2022, Daedalus acquired Range Environmental Resources, Inc., a West Virginia corporation (“Range Environmental”) and
Range Natural Resources, Inc., a West Virginia corporation (“Range Natural” and together with Range Environmental, the “Range
Reclamation Entities”). The Range Reclamation Entities provide land reclamation, water restoration and environmental consulting
services to mining and non-mining customers throughout the Appalachian region with the goal of returning land to pre-mining conditions
or repurposing the land for natural, commercial, agricultural or recreational use. The Range Reclamation Entities’ water restoration
services seek to improve rivers, streams and discharges through novel and innovative treatment applications to help customers meet their
various regulatory standards and requirements. The Range Reclamation Entities also provide environmental consulting services to customers
typically in connection with land reclamation and water restoration projects and as an additional value-add service, sells water treatment
chemicals manufactured by third parties to their customers. Range Natural also provides resource mining services for customers incidental
to the reclamation and repurposing of mine sites. In
December 2022, Daedalus was merged into the Company as a result of which the Company became the parent of all of its wholly-owned
operating subsidiaries. In
August 2023, the Company acquired Collins Building & Contracting, Inc., a West Virginia corporation (“Collins
Building”), an environmental services business primarily focus ing 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. 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, Catalyst Land Ventures, LLC, CLV Azurite Land LLC, Collins
Building & Contracting, Inc., Use
of Estimates The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates. Business
Combinations Business
combinations are accounted for using the purchase method of accounting under ASC 805, “Business Combinations.” This method
requires the Company to record assets and liabilities of the businesses acquired at their estimated fair values as of the acquisition
date. Any excess of the cost of the acquisition over the fair value of the net assets acquired is recorded as goodwill. Any excess of
the fair value of the net assets acquired over the cost of the acquisition is accounted for as a bargain purchase gain. Determining the
fair value requires management to make estimates and assumptions including discount rates, rates of return on assets, and long-term sales
growth rates. Revenue
Recognition The
Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”. The core principle of the ASC 606
revenue recognition 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 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 transaction 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 are 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. For stabilization contracts, costs are generally 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. Revenue
earned over time compared to a point in time is as follows for the years ended December 31, 2023 and 2022. SCHEDULE
OF REVENUE EARNED OVERTIME COMPARED TO A POINT IN TIME
Year ended December 31, 2023 Year ended December 31, 2022
Earned over time $ 2,824,387 $ -
Point in time 16,521,919 4,832,278
Total revenue 19,346,306 4,832,278 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
System. The Company has never suffered a loss due to such excess balances. Accounts
Receivable Included
as a component of accounts receivable are contract receivables that represent the Company’s unconditional right, subject only to
the passage of time, to receive consideration arising from performance obligations under reclamation contracts with customers. Billed
contract receivables have been invoiced to customers based on contracted amounts. Contract receivables were $ 2,100,255 no The
Company recognizes an allowance for losses on accounts and contract receivables in an amount equal to the current expected credit losses.
The estimation of the allowance is based on an analysis of historical loss experience, current receivables aging and management’s
assessment of current conditions and reasonable and supportable expectations of future conditions, as well as an assessment of specific
identifiable customer accounts considered at risk or uncollectible. Based on management’s assessment, it has concluded that losses
on balances outstanding as of December 31, 2023 and 2022 will be immaterial and, therefore, no no No no 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 December 31, 2023 are as follows: SCHEDULE
OF CONTRACT ASSETS
Costs incurred on contracts in progress $ 425,634
Estimated earnings 340,528
Revenue earned on contracts in progress 766,162
Less: Billings to date (518,852 )
Total contract assets $ 247,310 There
were no Property
and Equipment Property
and equipment is carried at cost. Expenditures for maintenance and repairs are charged to cost of services. Additions and betterments
are capitalized. The cost and related accumulated depreciation of equipment sold or otherwise disposed of are removed from the accounts
and any gain or loss is reflected in the current year’s earnings. SCHEDULE
OF PROPERTY AND EQUIPMENT
December 31, 2023 December 31, 2022
Equipment $ 13,835,929 $ 6,637,814
Land 1,563,797 -
Buildings 199,500 -
Property and equipment, gross 199,500 -
Accumulated depreciation (2,297,324 ) (592,300 )
Net book value 13,301,902 6,045,514
Depreciation expense $ 1,781,573 $ 395,543 The
Company provides for depreciation of property and equipment using the straight-line method for both financial reporting and federal income
tax purposes over the estimated six-year useful lives of the equipment. All of the Company’s buildings were acquired in the purchase
of Collins Building and are also being depreciated over an estimated six 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. Goodwill U.S.
GAAP requires that goodwill be tested for impairment annually and more frequently if events or changes in circumstances indicate that
it is more likely than not (i.e., a likelihood greater than 50%) that the reporting unit is impaired. During interim periods, ASC 350
requires companies to focus on those events and circumstances that affect the significant inputs used to determine the fair value of
the reporting unit to determine whether an interim quantitative impairment test is required. The
Company performed its annual impairment test for goodwill on December 31, 2023. The Company first assessed certain qualitative factors
to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, and whether
it is therefore necessary to perform the quantitative impairment test. The qualitative analysis
indicated that a quantitative impairment test was not necessary Income
Taxes The
Company follows the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities
are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their
respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates
is recognized as income (loss) in the period that includes the enactment date. Leases The
Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right
to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease
payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the
estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the
information available at lease commencement in determining the present value of unpaid lease payments. The Company had no lease
commitments for longer than one year as of December 31, 2023 or 2022. The laboratory space lease in Rocklin, California was renewed
in March 2022 and ends on March 31, 2023. The space is currently being leased on a month to month basis. Stock-Based
Compensation The
Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions
for services. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation, whereby the value
of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the
vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash
for the services. The Company recognizes the fair value of stock-based compensation within its Consolidated Statements of Operations
with classification depending on the nature of the services rendered. 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. The assumptions
used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods. Basic
and Diluted Income (Loss) Per Share Basic
loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of outstanding common
shares during the period. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from
the time they vest. Diluted 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 loss per share excludes all potential common shares if their effect is
anti-dilutive. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as
their inclusion would be anti-dilutive: SCHEDULE
OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE
December 31, 2023 December 31, 2022
Options 11,392,544 9,392,544
Warrants 3,313,335 22,313,335
Total 14,705,879 31,705,879
Anti-dilutive loss per share 14,705,879 31,705,879 Patents
and Patent Application Costs Although
the Company believes that its patents and underlying technology have continuing value, the amount of future benefits to be derived from
the patents is uncertain. Accordingly, patent costs are expensed as incurred. Research
and Development Research
and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and other expenses
relating to the acquisition, design, development and testing of the Company’s treatments and product candidates. Research and development
costs are expensed as incurred. Fair
Value of Financial Instruments FASB
ASC 825, “Financial Instruments” requires that the Company disclose estimated fair values of financial instruments. Financial
instruments held by the Company include, among others, accounts receivable, accounts payable and long-term debt. The carrying amounts
reported in the balance sheets for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value. Segments As
of December 31, 2023, the Company has five which provides land reclamation, water restoration and incidental mining
to mining and non-mining customers throughout Appalachia In
accordance with the “Segment Reporting” Topic of ASC 280, the Company’s chief operating decision-maker has been
identified as the Company’s Chief Executive Officer, who reviews operating results to make decisions about allocating
resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment
reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures
about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All
material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and
similarities in: economic characteristics; nature of products and services; and procurement, manufacturing, and distribution
processes. Recent
Accounting Pronouncements In
June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. The standard requires a financial asset (including trade
receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement
will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of
expected credit losses that have taken place during the period. This standard was effective for smaller reporting companies for fiscal
years beginning after December 15, 2022. The Company has fully adopted the standard with no material impact to the financial statements. In
November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures.” This ASU enhances reportable segment disclosures on both an annual and interim basis primarily in regards to the
disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included
within the reported measure(s) of segment profit or loss. In addition, the ASU requires disclosure, by segment, of other items
included in the reported measure(s) of segment profit or loss, including qualitative information describing the composition, nature
and type of each item. The ASU also expands disclosure requirements related to the CODM, including how the reported measure(s) of
segment profit or loss are used to assess segment performance and allocate resources, and the method used to allocate overhead for
significant segment expenses. All current required annual segment reporting disclosures under Topic 280 are now
effective for interim periods. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within
fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this
ASU. In
December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU
enhances income tax disclosures by providing information to better assess how an entity’s operations, related tax risks, tax planning
and operational opportunities affect its tax rate and prospects for future cash flows. This ASU requires additional disclosures to the
annual effective tax rate reconciliation including specific categories and further disaggregated reconciling items that meet the quantitative
threshold. Additionally, the ASU requires disclosures relating to income tax expense and payments made to federal, state, local and foreign
jurisdictions. This ASU is effective for fiscal years and interim periods beginning after December 15, 2024. The Company is evaluating
the impact of adopting this ASU. |
