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American Environmental Partners Announces Third Quarter 2023 Financial Results

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Continues Progress on Streamlining Operations to Focus on Core Environmental Services Business

CANONSBURG, PA – (NewMediaWire) – November 30, 2023 – American Environmental Partners, Inc. (“American Environmental,” “AEPT” or “the Company”) (PINK: AEPT), a mission critical environmental services company focused on remediation and processing solutions for infrastructure and industrial companies, today announced its financial results for the third quarter ended Sept. 30, 2023.

 

Third Quarter 2023 Financial Results

 

Total revenue decreased 21% to $6.7 million from $8.5 million from the year-ago period, primarily due to discontinued unprofitable services in the Apex industrial business lines.

 

General and administrative (“G&A”) expenses were $6.5 million, down 8% from $7.1 million, compared to the three months ended Sept. 30, 2022. The decrease in G&A expenses was primarily due to the discontinuation of services at Apex, partially offset by higher salaries and wages, payroll taxes and employee benefits.

 

Interest expense was $0.6 million in the third quarter of 2023 versus $0.08 million in the third quarter of 2022, primarily due to the rising cost of capital.

 

Loss from operations was $0.24 million. Net loss was $2.0 million, or $0.00 per share.

 

As of Sept. 30, 2023, current assets were $14.2 million, including cash on hand of $0.5 million. Total debt outstanding was $8.1 million.

 

Management Commentary

 

“These are exciting times for American Environmental Partners,” said Brad Domitrovitsch, Chairman and Chief Executive Officer of American Environmental Partners. “We recently rebranded our company as American Environmental Partners to better reflect the services we provide to our customers and to further our strategy to expand our environmental services platform. Additionally, on October 23, we announced our plans to reverse merge into SCWorx Corp., a publicly traded company listed on NASDAQ under ticker symbol: WORX. We expect the transaction to close by the end of the first quarter of 2024.

 

“The environmental services market is highly fragmented with many attractive acquisition targets and growing demand driven by a compelling regulatory environment, both of which are contributing to our opportunities to grow. Gaining access to the public capital markets via the Nasdaq Stock Market should allow us to capitalize on the huge opportunity we see in our market today.

 

“We believe to be well positioned for sustained growth given our strong market presence in Pennsylvania, Ohio, West Virginia and New York. Tighter environmental regulations at the federal, state and local levels and growing interest in sustainability are driving demand for our environmental services. Furthermore, AEPT meets significant regulatory standards for permitting, which has created high barriers to entry for new market participants.

 

“Looking to the future, we remain focused on executing our strategy by integrating recent acquisitions and streamlining our business to concentrate exclusively on environmental solutions, which deliver high levels of recurring revenues while reducing costs to deliver sustained profitable growth.”

 

About American Environmental Partners, Inc.

American Environmental Partners, Inc. (PINK: AEPT) provides mission critical environmental solutions to the energy and infrastructure sectors primarily in Pennsylvania, Ohio, West Virginia, and New York. Our services include remediation and processing solutions for infrastructure and industrial companies. We create shareholder value through the acquisition and growth of environmental services businesses.

 

For additional information, visit: American Environmental Partners, Inc.

 

Safe Harbor

 

This press release contains forward-looking statements, particularly as related to, among other things, the business plans of AEPT, statements relating to goals, plans and projections regarding AEPT’s financial position and business strategy. The words or phrases “would be,” “will allow,” “intends to,” “may result,” “are expected to,” “will continue,” “anticipates,” “expects,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “think”, “considers” or similar expressions are intended to identify “forward-looking statements.” These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of global economic conditions, the performance of management and our employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic reports and on documents we file from time to time with the Securities and Exchange Commission. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. AEPT cautions readers not to place undue reliance on such statements. AEPT does not undertake, and AEPT specifically disclaims any obligation to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Actual results may differ materially from AEPT’s expectations and estimates.

 

Company Contact:

Julie Kegley

John Wilfong

Financial Profiles, Inc.

AEPT@finprofiles.com

 

American Energy Partners, Inc., and Subsidiaries

Consolidated Balance Sheets

 

September 30, 2023

 

December 31, 2022

Current Assets

 

 

 

Cash

$

510,220

 

 

$

651,194

 

Accounts receivable – Environmental services

 

4,498,217

 

 

 

5,459,330

 

Accounts receivable – Other

 

 

 

 

423,464

 

Inventory

 

82,496

 

 

 

82,496

 

Prepaids and other

 

(1,896,187

)

 

 

48,138

 

Total Current Assets

 

3,194,746

 

 

 

6,664,622

 

Operating lease – right-of-use asset

 

1,609,545

 

 

 

1,609,545

 

Property and equipment – net

 

2,460,577

 

 

 

2,919,562

 

Goodwill

 

6,936,331

 

 

 

6,945,653

 

Other Assets

 

111,838

 

 

 

12,331

 

Total Assets

$

14,313,037

 

 

$

18,151,713

 

 

 

 

 

Current Liabilities

 

 

 

Accounts payable and accrued expenses

$

6,331,639

 

 

$

4,898,180

 

Notes payable

 

2,650,665

 

 

 

3,981,061

 

Operating lease liability

 

848,075

 

 

 

848,075

 

Other Current Liabilities

 

 

 

 

(3,379

)

Total Current Liabilities

 

9,830,379

 

 

 

9,723,937

 

Long Term Liabilities

 

 

 

Notes payable

 

3,740,791

 

 

 

5,216,036

 

Operating lease liability

 

822,490

 

 

 

822,490

 

Total Long-Term Liabilities

 

4,563,281

 

 

 

6,038,526

 

Total Liabilities

 

14,393,660

 

 

 

15,762,463

 

Stockholders’ Equity

 

 

 

Common stock, Class A, $0.001 par value, 1,500,000,000 shares authorized

 

377,288

 

 

 

243,228

 

377,288,277 and 243,228,277 shares issued and outstanding, respectively

 

Additional paid-in capital

 

72,412,252

 

 

 

60,964,413

 

Accumulated deficit

 

(72,870,163

)

 

 

(58,818,391

)

Total Stockholders’ Equity

 

(80,623

)

 

 

2,389,250

 

Total Liabilities and Stockholders’ Equity

$

14,313,037

 

 

$

18,151,713

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements

American Energy Partners, Inc., and Subsidiaries

Consolidated Statement of Operations

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues

 

 

 

 

 

 

 

Oil and natural gas

$

 

 

$

972,364

 

 

$

 

 

$

1,882,607

 

Environmental Services

 

6,719,583

 

 

 

7,551,295

 

 

 

19,091,684

 

 

 

13,683,599

 

Other

 

 

 

 

 

 

 

 

 

 

 

Total Revenues

 

6,719,583

 

 

 

8,523,659

 

 

 

19,091,684

 

 

 

15,566,206

 

Cost and expenses

 

 

 

 

 

 

 

General and administrative expenses

 

6,515,691

 

 

 

7,077,613

 

 

 

18,658,347

 

 

 

14,211,675

 

Lease operating expenses

 

320,902

 

 

 

258,359

 

 

 

919,091

 

 

 

525,282

 

Royalties

 

 

 

 

116,894

 

 

 

 

 

 

204,654

 

Depreciation, depletion, amortization and accretion

 

122,372

 

 

 

118,682

 

 

 

374,674

 

 

 

634,440

 

Total costs and expenses

 

6,958,965

 

 

 

7,571,548

 

 

 

19,952,112

 

 

 

15,576,051

 

Income (Loss) from operations

 

(239,382

)

 

 

952,111

 

 

 

(860,428

)

 

 

(9,845

)

Other income (expense)

 

 

 

 

 

 

 

Interest expense

 

(601,786

)

 

 

(82,841

)

 

 

(1,744,960

)

 

 

(241,161

)

Amortization of debt discount

 

 

 

 

 

 

 

 

 

 

 

Stock Issuance and Option expense

 

(1,249,930

)

 

 

 

 

 

(11,581,899

)

 

 

(321,448

)

Other income (loss)

 

7,061

 

 

 

20,579

 

 

 

135,260

 

 

 

(117,057

)

Total other income (expense) – net

 

(1,844,655

)

 

 

(62,262

)

 

 

(13,191,599

)

 

 

(679,666

)

Net Income (Loss)

$

(2,08,037

)

 

$

889,849

 

 

$

(14,052,027

)

 

$

(689,511

)

Loss per share – basic and diluted

$

 

 

$

 

 

$

(0.04

)

 

$

 

Weighted average number of shares – basic and diluted

 

377,288,277

 

 

 

    278,663,200

 

 

 

377,288,277

 

 

 

    278,663,200

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements

American Energy Partners, Inc., and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

For the Nine Months Ended September 30, 2023 and the Year Ended December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

Common Stock – Class A

 

 

 

 

 

 

 

Shares

 

Amount

 

Additional Paid-in Capital

 

Accumulated Deficit

 

Total Shareholders’ Equity

December 31, 2022

243,228,277

 

 

$

243,228

 

 

$

60,964,413

 

$

(58,818,391

)

 

$

2,981,665

 

Stock issued ($0.061/share)

134,500,000

 

 

 

134,500

 

 

 

8,070,000

 

 

 

 

 

8,204,500

 

Stock options granted in 1st Qtr. 2023

 

 

 

 

 

 

1,362,908

 

 

 

 

 

1,362,908

 

Stock canceled in 1st Qtr. 2023

(440,000

)

 

 

(440

)

 

 

 

 

 

 

 

(440

)

Net loss – 1st Qtr. 2023

 

 

 

 

 

 

 

 

(11,303,998

)

 

 

(11,303,998

)

March 31, 2023

377,288,277

 

 

$

377,288

 

 

$

70,397,321

 

$

(70,122,389

)

 

$

1,244,635

 

Stock options granted in 2nd Qtr. 2023

 

 

 

 

 

 

765,001

 

 

 

 

 

765,001

 

Stock canceled in 2nd Qtr. 2023

 

 

 

 

 

 

 

 

 

 

 

 

Net loss – 2nd Qtr. 2023

 

 

 

 

 

 

 

 

(663,737

)

 

 

(663,737

)

 

 

 

 

 

 

 

 

 

 

June 30, 2023

377,288,277

 

 

$

377,288

 

 

$

71,162,322

 

$

(70,786,126

)

 

$

1,345,899

 

Stock options granted in 3rd Qtr. 2023

 

 

 

 

 

 

1,249,930

 

 

 

 

 

1,249,930

 

Net loss – 3rd Qtr. 2023

 

 

 

 

 

 

 

 

(2,084,037

)

 

 

(2,084,037

)

 

 

 

 

 

 

 

 

 

 

September 30, 2023

377,288,277

 

 

$

377,288

 

 

$

72,412,252

 

$

(72,870,163

)

 

$

(80,623

)

       

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements

American Energy Partners, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

 

 

 

 

 

For the Nine Months Ended September 30,

 

 

2023

 

 

 

2022

 

Operating activities

 

 

 

Net (loss)

$

(14,052,027

)

 

$

(689,511

)

Adjustments to reconcile net loss to net cash provided by (used in) operations

 

 

 

Depreciation, depletion, amortization and accretion

 

374,674

 

 

 

634,440

 

Stock issued for services

 

8,204,500

 

 

 

 

Stock options issued for services

 

3,377,399

 

 

 

321,448

 

Changes in Goodwill

 

 

 

 

 

Accounts receivable – oil and natural gas

 

 

 

 

968,578

 

Accounts receivable – environmental services

 

1,384,577

 

 

 

(4,046,510

)

Prepaids and other

 

(5,307

)

 

 

(514,479

)

Increase (decrease) in

 

 

 

Accounts payable and accrued expenses

 

2,038,699

 

 

 

2,278,780

 

Operating lease liability

 

 

 

 

698

 

Net cash provided by (used in) operating activities

 

1,322,515

 

 

 

(1,046,556

)

Investing activities

 

 

 

Cash acquired in acquisition of AMS

 

 

 

 

348,871

 

Stock issued for acquisitions

 

 

 

 

2,169,303

 

Acquisition of property and equipment

 

11,756

 

 

 

(7,367,191

)

Net cash provided by investing activities

 

11,756

 

 

 

(4,849,017

)

Financing activities

 

 

 

Proceeds from issuance of debt

 

 

 

 

5,777,116

 

Repayments on notes payable

 

(1,475,245

)

 

 

 

Net cash provided by (used in) financing activities

 

(1,475,245

)

 

 

5,777,116

 

Net increase (decrease) in cash

 

(140,974

)

 

 

(118,457

)

Cash – beginning of period

 

651,194

 

 

 

1,020,432

 

Cash – end of period

$

510,220

 

 

$

901,975

 

Supplemental disclosure of cash flow information

 

 

 

Cash paid for interest

$

1,744,960

 

 

$

241,161

 

Cash paid for income tax

$

 

 

$

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

Stock issued upon exercise of stock options

$

 

 

$

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements

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