SEGMENT REPORTING

6 Months Ended

Sep. 30, 2022

SEGMENT REPORTING

SEGMENT REPORTING

9. SEGMENT REPORTING

For the three months and six months ended September 30, 2022 and 2021, the Company has two reportable segments: Aggregates and Rail Park. The Aggregates segment produces chemical grade limestone for use in the aggregates market. The Rail Park segment consists of land under development to provide a rail terminal and services facility and currently has no operational activity. The Rail Park will require significant future capital investment before the segment starts generating recurring revenue. The Rail Park development commenced in the first half of calendar year 2021.

The Aggregates segment has two major construction companies “Construction A” and “Construction B”, that accounted for approximately 75% and 10% of Aggregates segment revenue for the six months ended September 30, 2022. 

As of September 30, 2022, Construction A and Construction B accounted for approximately 66% and 18% of Aggregates segment accounts receivable balance.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on profit or loss from operations before income taxes not including nonrecurring gains and losses.

The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. All assets are held and all operating activities occur within the United States.

		Three months ended September 30, 2022								Three months ended September 30, 2021
		Aggregates		Rail Park		Other/ Corporate		Total		Aggregates		Rail Park		Other/ Corporate		Total
Revenue	$	288,431	$	—	$	—	$	288,431	$	381,882	$	—	$	—	$	381,882
Gross profit (loss)		(8,003)		—		—		(8,003)		10,922		—		—		10,922
Selling, general and administrative		135,049		—		1,564,717		1,699,766		145,356		—		2,967,843		3,113,199
Property, plant and equipment, net		2,324,540		—		12,177		2,336,717		2,494,917		—		27,025		2,521,942
Land under development		—		10,481,293		—		10,481,293		—		7,707,006		—		7,707,006

		Six months ended September 30, 2022								Six months ended September 30, 2021
		Aggregates		Rail Park		Other/ Corporate		Total		Aggregates		Rail Park		Other/ Corporate		Total
Revenue	$	471,581	$	—	$	—	$	471,581	$	781,794	$	—	$	—	$	781,794
Gross profit (loss)		(99,564)		—		—		(99,564)		125,941		—		—		125,941
Selling, general and administrative		289,828		—		3,804,268		4,094,096		285,990		—		5,637,658		5,923,648
Property, plant and equipment, net		2,324,540		—		12,177		2,336,717		2,494,917		—		27,025		2,521,942
Land under development		—		10,481,293		—		10,481,293		—		7,707,006		—		7,707,006

Land Under Development

In 2018, the Company formed the Rocky Mountain Rail Park Metropolitan District (“District”) for the purpose of financing public improvements related to the development of approximately 620 acres, including open space and other right-of-way areas and providing ongoing operations and maintenance services related to the public improvements. Public improvements are generally, any part or all of the public improvements authorized to be planned, designed, acquired, constructed, installed, relocated, redeveloped, operated, maintained and/or financed, including necessary and appropriate landscaping, appurtenances and real property to effect such improvements, as generally described in the Colorado Special District Act (Title 32, Article 1, Colorado Revised Statutes) and as may be necessary to serve the future taxpayers and inhabitants of the District, as determined by the District Board, including public improvements within and without the District’s boundaries.

In April 2021, the District closed on its Limited Tax General Obligation and Water Revenue Bonds, Series 2021A and 2021B (“Tax -Exempt Bonds”) raising total proceeds of approximately $65.2 million, approximately $51.2 million of which will be directly used to fund the public improvements. The Tax - Exempt Bonds are an obligation of the District and not of the Company and will be repaid through ownership taxes and other enterprise revenues collected by the District from property owners residing in the District.

Water Rights

In September 2021, the Company sold its water rights attributable to the Land under development to the District for a sales price of approximately $5.9 million. The proceeds were received on September 30, 2021, resulting in the recording of a gain on sales of assets of approximately $4.8 million, which was recognized in the consolidated statement of operation for the quarter ended September 30, 2021.