Quarterly report [Sections 13 or 15(d)]

Segment Information

v3.25.1
Segment Information
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Segment Information

Note 17 – Segment Information

 

Continuing Operations

 

The Company is an operating, acquisition, and investment business. Subsidiaries in which the Company has a controlling financial interest are consolidated. The Company generally has two reportable segments: 1) the historic residual operations segment, which includes the fully impaired settlement payments receivable from G Farma and its co-defendants in the amount of $2,539,597 plus $437,646 at March 31, 2025 and the operation of subsidiaries Mentor IP, Partner I, Partner II, and TWG, and 2) its classic energy segment which consists of the Company’s operations and investment in the classic energy space. The classic energy segment includes the fair value of securities investments in (i) oil and gas through Exxon Mobil Corp. (XOM) stock, Occidental Petroleum Corp. (OXY) stock, and Chevron Corp. (CVX) stock, (ii) uranium through Cameco Corp. (CCJ) stock, (iii) coal through Core Natural Resources, Inc. (CNR) stock, and (iv) energy pipelines through Energy Transfer LP (ET) stock, plus the Company’s March 2025 acquisition of three fractional, non-operating royalty interests in oil and gas properties covering approximately one-hundred twenty-one (121) wells in the Spraberry Field of the Permian Basin in West Texas for total consideration of $1,369,899. The Company’s primary aim for its classic energy segment is to acquire revenue-generating energy assets, such as oil and gas royalties, oil service businesses or other private energy operating companies as viable opportunities for such acquisition(s) become available. Additionally, the Company formerly had small investments in securities listed on the NYSE and NASDAQ, an investment in note receivable from a non-affiliated party that was fully impaired on June 11, 2024, and the fair value of convertible notes receivable and accrued interest from NeuCourt, which on July 15, 2022, was exchanged for a NeuCourt SAFE security investment that is carried at cost as a long-term investment and is included with the Company’s long term investments on the Company’s consolidated balance sheet. The investment in NeuCourt and unrealized and realized investment gains and losses are included in the Corporate, Other, and Eliminations section below.

 

Our Chief Operating Decision Maker (“CODM”) is our Chairman and Chief Executive Officer, Chet Billingsley. Our CODM evaluates the performance of the Company’s operating segments on an ongoing weekly basis and he routinely monitors each segment’s exposure to risk due to potential economic factors, societal trends, and market conditions in order to assess and determine the proper allocation of resources related to segment expenses. Our CODM uses segment operating income (loss) to review monthly, quarterly, and annual segment trends. Additionally, he regularly monitors actual and prospective cash and cash equivalent balances weekly.

 

The Company’s three (3) fractional royalty interests entitled the Company to receive a proportional share of revenues generated from the production of hydrocarbons from the underlying property, without incurring any operating or production costs. Working interest owners of our royalty interests bear the costs of operation and development. Accrued royalty income is estimated and recognized in the month it is earned. The difference between this accrued royalty revenue and the amount finally received is adjusted when royalty payments are actually paid out. Accrual of estimated royalty income was $2,000 and $0, at March 31, 2025 and 2024, respectively. Royalty income received was $0 and $0, at March 31, 2025 and 2024, respectively. The Company’s CODM monitors changes in market conditions, commodity prices, production volumes, and other factors, which may materially impact the recoverability of our royalty interests.

 

 

Note 17 – Segment Information (continued)

 

Costs not allocated to our two reportable segments represent activities associated with the Company’s management and headquarters functions, especially with regard to accounting and audits for the Company and its majority-owned subsidiaries. The Company’s headquarters functions also include monitoring our less than majority positions for value and investment security and reviewing possible acquisition candidates and acquisition assets on an ongoing basis. These costs primarily included administrative expenses, professional service fees, adverting and promotion expenses, travel related expenses, employee and officer salaries, employee and officer accrued benefits, employee and officer payroll tax expenses, board fees, and depreciation expenses. See Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, Selling, General, and Administrative Expenses for a further disclosure and discussion of the Company’s management and headquarters related expenses.

 

Segment information for our current operating segments is as follows:

 

   

Energy

Segment

     Historic Segment     Corporate and Eliminations     Consolidated  
Three months ended March 31, 2025                                
Net revenue   $ 2,000     $ -     $ -     $ 2,000  
Operating income (loss)     -       (180 )     (193,795 )     (193,975 )
Interest and dividend income     29,649       -       2       29,651  
Interest expense     -       -       -       -  
Property additions     -       -       -       -  
Fixed asset depreciation and amortization     -       -       85       85  
Other asset additions     1,369,899       -       103,923       1,473,822  
Other asset amortization     508       -       -       508  
Total assets     2,365,252       1,564       887,689       3,254,505  
                                 
Three months ended March 31, 2024                                
Net revenue   $ -     $ -     $ -     $ -  
Operating income (loss)     -       (188 )     (271,075 )     (271,263 )
Interest and dividend income     5,574       -       41,525       47,099  
Interest expense     -       -       -       -  
Property additions     -       -       -       -  
Fixed asset depreciation and amortization     -       -       269       269  
Other asset additions     -       -       -       -  
Other asset amortization     -       -       -       -  
Total assets     678,850       2,284       3,625,225       4,306,359  

 

 

Note 17 – Segment Information (continued)

 

The following table reconciles operating segments and corporate-unallocated operating income (loss) to consolidated income before income taxes for the three months ended March 31, 2025 and 2024, as presented in the unaudited condensed consolidated income statements:

 

    2025     2024  
    Three Months Ended
March 31,		  
    2025     2024  
Operating loss   $ (193,975 )   $ (271,263 )
Realized gain (loss) on investment in securities     9,547       -  
Unrealized gain (loss) on investment in securities     (52,538 )     31,487  
Unrealized gain (loss) on investment in gold     7,043       -  
Interest and dividend income     29,651       47,099  
Interest expense     -       -  
Other income     -       -  
Income before income taxes   $ (200,272 )   $ (192,677 )

 

Discontinued Operation – Facilities Operations Segment

 

As disclosed in Note 3 of the consolidated financial statements, we sold our entire ownership interest in WCI, our facilities operations segment, on October 4, 2023 for $6,000,000. Following our sale of WCI, we received no new income from WCI and had no further involvement or continuing influence over its operations. Consequently, our facilities operations segment was eliminated at the time of sale. Additionally, the results of operations associated with our facilities operations segment were excluded from our continuing operations and presented as a discontinued operation in our consolidated financial statements. WCI worked with business park owners, governmental centers, and apartment complexes to reduce their facility-related operating costs. The WCI facilities operations segment is now reported as a discontinued operation. See Note 3.