LEASES

6 Months Ended

Jun. 30, 2024

LEASES

LEASES

NOTE 8 – LEASES

The operating right-of-use assets (“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, Kentucky. 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, Indiana. 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.

As of June 30, 2024 and 2023 right of use assets and liabilities were comprised of the following:

	June 30, 2024			December 31, 2023
Assets:
ROU Assets	$	421,550		$	421,550
Accumulated Amortization		(50,027	)		(34,412	)
ROU Assets, Net		371,522			387,138
Liabilities
Current:
Operating Lease Liabilities	$	32,066			26,527
Non-Current
Operating Lease Liabilities		341,265		$	359,738

		For the Three Months Ended June 30,
	Expense Classification	2024		2023
Operating Lease Expenses:
Amortization of ROU Assets	General and Administrative	$	7,830	$	7,499
Accretion of Operating Lease Liabilities	General and Administrative		9,552		9,883
Total Operating Lease Expenses		$	17,382	$	17,382

		For the Six Months Ended June 30,
	Expense Classification	2024		2023
Operating Lease Expenses:
Amortization of ROU Assets	General and Administrative	$	15,615	$	14,766
Accretion of Operating Lease Liabilities	General and Administrative		19,149		19,998
Total Operating Lease Expenses		$	34,764	$	34,764

Other information related to leases is as follows:

	As of			As of
	June 30,			December 31,
	2024			2023
Weighted-Average Remaining Lease Term: Operating Leases (in years)		3.07			3.13
Weighted-Average Discount Rate: Operating Leases		10.00	%		10.00	%

As of June 30, 2024, remaining maturities of lease liabilities were as follows:

2025	54,492
2026	69,492
2027	81,492
2028	45,492
2029 and Thereafter	440,468
Total Lease Payment	691,436
Less Imputed Interest	(318,105	)
Present Value of Lease Liabilities	373,331