LEASES

3 Months Ended

Mar. 31, 2024

LEASES

LEASES

NOTE 7 – LEASES

The operating right-of-use asset (“ROU”) is the Company’s right to use an asset over the life of a lease. The asset is calculated as the initial amount of the lease liability, plus any lease payments made to the lessor before the lease commencement date, plus any initial direct costs incurred, minus any lease incentives received. The Company leases certain land and office space under noncancelable operating leases, typically with initial terms of 5 to 21 years.

.

The Company leases an office from an affiliated entity, Land Resources & Royalties (“LRR”), located in Hazard, KY. We pay $250 a month, plus common charges, in rent with an initial lease term of 10 years.

The Company subleases an office from an affiliated entity, American Resources Corporation (“ARC”), located in Fishers, IN. Historically we have paid $2,143 a month in rent, but starting January 2024 that rent was lowered to $1,500 per month, with an initial lease term of 10 years.

The Company leases land from an affiliated entity, LRR, located in Pike County, Kentucky. We pay $2,000 a month in rent with an initial lease term of 21 years.

The Company leases land from an affiliated entity, LRR, located in Hamilton County, Indiana. We pay a minimum of $2,000 a month in rent or 20% of the immediately prior month’s total monthly gross revenues from the lessee’s operations. The initial lease term is 5 years.

At March 31, 2024 and December 31, 2023, right of use assets and liabilities were comprised of the following:

	March 31, 2024		December 31, 2023
Assets:
ROU Asset	$	445,335	$	453,686
Liabilities
Current:
Operating Lease Liabilities	$	34,777		33,923
Non-Current
Operating Lease Liabilities		409,641	$	418,662

As of March 31, 2024 and 2023 right of use assets and liabilities were comprised of the following:

		For the Three Months Ended March 31,
	Expense Classification	2024			2023
Operating lease expense:
Amortization of ROU asset	General and administrative	$	8,351		$	7,547
Accretion of Operating lease liability	General and administrative		8,167			9,361
Total operating lease expense		$	16,518		$	16,908
Other information related to leases is as follows:		As of			As of
		March 31,			December 31,
		2024			2023
Weighted-average remaining lease term: Operating leases (in years)			3.08			3.12
Weighted-average discount rate: Operating leases			10.00	%		10.00	%

 As of March 31, 2024, remaining maturities of lease liabilities were as follows:

2025	34,777
2026	39,941
2027	56,338
2028	23,370
2029 and thereafter	289,992
	444,418