XML 19 R9.htm IDEA: XBRL DOCUMENT
v3.23.1

INVESTMENTS | 3 Months Ended
--- | ---
Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
INVESTMENTS | INVESTMENTS Summary of Investments At March 31, 2023 and December 31, 2022 our non-current investments include:
| March 31, 2023 |  | December 31, 2022
Equity Method Investments: | Investment |  | Ownership % |  | Investment |  | Ownership %
Quantum Generative Materials LLC | $ | 12,868,811 |  |  | 48.19% |  | $ | 13,312,433 |  |  | 48.19%
Pelen Limited Liability Company | 597,641 |  |  | 25.00% |  | 619,184 |  |  | 25.00%
Total equity method investments | 13,466,452 |  |  |  |  | 13,931,617 |  |  |
Alternative Measurement Method Investments: |  |  |  |  |  |  |
Green Li-ion Pte. Ltd. | 4,517,710 |  |  |  |  | 4,517,710 |  |  |
Sierra Springs Opportunity Fund, Inc., at cost | 335,000 |  |  |  |  | 335,000 |  |  |
Total Investments | $ | 18,319,162 |  |  |  |  | $ | 18,784,327 |  |  |
Summary financial information for affiliated companies (20% to 50%-owned) accounted for by the equity method is as follows:
| March 31, 2023* |  | December 31, 2022*
Current assets | $ | 669,124 |  |  | $ | 1,023,023 |
Non-current assets | 9,979,955 |  |  | 12,034,506 |
Current liabilities | 3,625 |  |  | 89,584 |
Non-current liabilities | — |  |  | — |
| March 31, 2023* |  | March 31, 2022*
Revenues | 17,450 |  |  | 73,697 |
Gross Profit | 17,450 |  |  | 73,697 |
Net income (loss) and net income (loss) attributable to the entity | $ | (1,269,167) |  |  | $ | (2,956,597) |
* The information is presented as of December 31, 2022 and September 30, 2022, and for the three months ended December 31, 2022 and 2021, respectively. All equity method investments are accounted for on a one-quarter lag. The excess of our investment values over the net assets of the individual equity method investees is comprised of goodwill and mineral interest. We periodically assess the net assets of our equity method investees and confirm there are no other assets that may require additional adjustments. Significant amounts due to and from equity method investees included in the summarized financial information include the aggregate value of the Company's stock held by investees and make-whole derivatives of $8.9 million and $10.9 million, which is included in non-current assets as of March 31, 2023 and December 31, 2022, respectively, in the table above. Investment in Quantum Generative Materials LLC On June 24, 2021, we invested in the equity of GenMat, and we received 465,000 membership units and committed $5,000,000 in cash and $10,000,000 in guaranteed stock value for a total of $15,000,000 for the initial seed investment and committed an additional $35,000,000 based upon GenMat’s realization of key development milestones, for up to 50% ownership of GenMat. At closing we issued 3,000,000 restricted shares of our common stock with a fair value of $10,530,000 toward the $10,000,000 required stock purchase price and recorded a $530,000 related derivative asset (See Note 10, Equity). Through December 31, 2022, we paid $7,450,000 consisting of the full $5,000,000 cash commitment and $2,450,000 against the make-whole for the deficiency in the common stock value. During the three months ended March 31, 2023 and 2022, we paid $1,200,000 and $0, respectively, against the make-whole for the deficiency in common stock value. For the three months ended March 31, 2023 and 2022, the Company recorded $443,622 and $205,405, respectively, in equity loss from affiliates for our investment in GenMat at 37.5% of voting rights since 165,000 membership units were not vested as of March 31, 2023. The Company’s executive chairman and chief executive officer serves as the chairman of GenMat and the Company’s chief technology officer and another employee of the Company serve on the board of directors of GenMat. The GenMat board of directors is composed of the three employees of the Company having one vote each along with the chief executive officer and founder of GenMat who receives four votes. The Company's chief executive officer, chief technology officer and employee of the Company have not received compensation of any kind from GenMat. Investment in Pelen LLC In April 2020, the Company invested $602,500 in Pelen LLC in exchange for 25% ownership and retained an option to purchase the remaining 75% ownership interest. At March 31, 2023 and December 31, 2022, the balance of option payments applicable to the purchase price totaled $150,000 and are included in deposits on the condensed consolidated balance sheets. The Company recorded $21,543 in equity loss from affiliates and $16,755 in equity income from affiliates for its investment in Pelen for the three months ended March 31, 2023 and 2022, respectively. Investment in Green Li-ion Pte, Ltd. As part of our acquisition of the LINICO assets on December 30, 2021, we acquired 20.22% of Green Li-ion Pte, Ltd., a Singaporean company ("Green Li-ion"). The investment had a fair value of $4,577,000 at acquisition and was accounted for under the equity method through March 31, 2022. On January 5, 2022 and April 11, 2022, Green Li-ion issued additional equity and decreased our ownership to 16.45%, resulting in the loss of our ability to exercise significant influence. Accordingly, we elected the measurement alternative for equity investments that do not have a readily determinable fair value and we are now accounting for the investment at cost, with all losses previously recognized under the equity method remaining as part of the carrying value of the investment. On February 28, 2023, Green Li-ion issued additional equity and decreased our ownership to 14.01%. The Company monitors additional equity issuances of Green Li-ion to assess whether the equity securities are similar instruments requiring adjustments of the investment carrying values to fair value. At March 31, 2023, no adjustments were made to the investment's carrying value as a result of Green Li-ion equity raises. For the three months ended March 31, 2022, we recognized $59,290, in equity losses from affiliates for the investment in Green Li-ion. After March 31, 2022, the investment is accounted for using the alternative cost method. Investment in LP Biosciences LLC On February 28, 2022, the LP Biosciences LLC ("LPB") 2021 transactions were terminated and each of the parties were relieved of their respective rights, liabilities, expenses, and obligations under the transactions except termination obligations. In connection with the termination, 3,500,000 restricted shares of the Company’s common stock were transferred back to the Company for cancellation upon receipt. The combined value of $5,110,000, representing the carrying value of our investment of $4,173,000 and the derivative asset of $937,000, was recorded directly to additional paid-in capital in the statement of equity as of March 31, 2022. The original acquisition cost of $10,812,669 was recognized as a reduction in equity. For the three months ended March 31, 2022, the Company recorded other expense of approximately $250,000 in the condensed consolidated statement of operations, in connection with the termination of the transaction. There were no such expense in 2023. Investment in Mercury Clean Up LLC and MCU Philippines, Inc. In March 2022, based on the lack of a known, cash-generating operating sites for MCU-P operations, and the costs associated with relocating and deploying to a new site, there is no known reasonable possibility of future cash flows from MCU and MCU-P and we determined that the investment was not recoverable. During the three months ended March 31, 2022, investment of $1,960,448 in MCU and the investment of $494,884 and notes receivable of $1,628,913 to MCU-P were deemed unrecoverable, and all amounts were fully impaired. On June 18, 2022, the members of MCU agreed to distribute 100% of MCU's assets to the Company, including the cash held by MCU and MCU-P of $895,204 and the remaining 50% of MCU-P common stock, in exchange for forgiveness of the debt owed by MCU-P to the Company which was fully impaired in the three months ended March 31, 2022. The cash and proceeds of assets liquidated of $895,204 were recognized as a recovery of impairment of assets in other income (expense) of the Company with $590,000 coming from MCU and $305,204 coming from MCU-P during the second quarter of 2022. As of June 18, 2022, the Company owns 100% of the membership interest of MCU, which has since been dissolved, and 100% of the stock of MCU-P, respectively. The carrying value of the investment on the acquisition date of both MCU and MCU-P was $0 and the net assets remaining after distributing the cash in repayment of the note receivable were insignificant. MCU and MCU-P hold equipment that was fully impaired prior to the acquisitions, and the remaining net assets include insignificant amounts of cash and accounts payable. The Company recorded equity losses from affiliates for the investment in MCU of $0 and $14,578 for the three months ended March 31, 2023 and 2022, respectively. The Company recorded equity losses from affiliates for the investment in MCU-P of $0 and $4,385 for the three months ended March 31, 2023 and 2022, respectively. Investment in Sierra Springs Opportunity Fund, Inc. During 2019, the Company invested $335,000 into a qualified opportunity zone fund, SSOF which owns Sierra Springs Enterprises, Inc. ("SSE"), a qualified opportunity zone business. At March 31, 2023, our $335,000 investment in SSOF and 6,700,000 voting shares represent 11.64% of the total, fully diluted SSOF common shares. The Company monitors additional equity issuances of SSOF to assess whether the equity securities are similar instruments requiring adjustments of the investment carrying values to fair value. The Company did not make any adjustments to the investments carrying value. At March 31, 2023 and December 31, 2022, the Company’s investment in SSOF is presented on the condensed consolidated balance sheets as a non-current investment. The Company's CEO is an executive and director of SSOF. The SSOF investment is accounted for at cost less impairment as there is no ready market for the investment units and is recorded to non-current investments on the condensed consolidated balance sheets. Management identified no events or changes in circumstances that might have a significant adverse effect on the carrying value of the investment. Management concluded it was impractical to estimate fair value due to the early stages of the fund and the absence of a public market for its stock. The Company’s maximum exposure to loss as a result of its involvement with SSOF is limited to its initial investment of $335,000 and the advances of $5,540,000 outstanding at March 31, 2023.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investment. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 321 -URI https://asc.fasb.org/topic&trid=75115024 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 325 -URI https://asc.fasb.org/topic&trid=2197064 Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
Name: | us-gaap_InvestmentTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration