(15) Hourglass Sands

In February 2018, we invested $4 million in Hourglass Sands, LLC (Hourglass), a frac sand mining company in the State of Colorado. We own 100% of the Class A units and are consolidating the activity of Hourglass in these statements. Class A units are entitled to 100% of profit until our capital investment and interest is returned, then 90% of profits are allocated to us with remainder to Class B units. We do not own any Class B units.

In February 2018, a Yorktown company associated with one of our directors also invested $4 million in Hourglass in return for a royalty interest in Hourglass. This investment coupled with our $4 million investment brings the initial capitalization of Hourglass to $8 million. We report the royalty interest as a redeemable noncontrolling interest in the consolidated balance sheets. A representative of the Yorktown company holds a seat on the board of managers, and, with a change of control, the Yorktown company may be entitled to receive a portion of the net proceeds realized, as prescribed in the Hourglass operating agreement.

Below is a condensed Hourglass balance sheet and a condensed statement of operations as of December 31, 2018 Current assets include cash totaling $2.9 million and sand inventory totaling $1.3 million. Expenses are included in operating costs and expenses, exploration costs, and SG&A in our consolidated statements of comprehensive income.

Condensed Balance Sheet


Current assets	$	4,241
Property and equipment		3,092
Total assets	$	7,333

Total liabilities	$	502
Redeemable noncontrolling interests		4,000
Members' equity		2,831
Total liabilities and equity	$	7,333

Condensed Statement of Operations


Revenue	$	255
Expenses		1,424
Net loss	$	(1,169	)