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American Environmental Partners Announces Third Quarter 2023 Financial Results


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

CANONSBURG, PA, Nov. 30, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire  – 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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