American Environmental Partners Announces Third Quarter 2023 Financial Results

Rhea-AI Summary

American Environmental Partners, Inc. (AEPT) announced its financial results for the third quarter of 2023. The total revenue decreased by 21% to $6.7 million, and the net loss was $2.0 million. The company is planning to merge into SCWorx Corp., listed on NASDAQ under ticker symbol WORX, by the end of the first quarter of 2024. The company is focused on streamlining operations to concentrate on core environmental services.

Positive

• None.

Negative

• Total revenue decreased by 21% to $6.7 million
• Net loss was $2.0 million

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

FAQ

What are the financial results for the third quarter of 2023 for American Environmental Partners, Inc. (AEPT)?

The total revenue decreased by 21% to $6.7 million, and the net loss was $2.0 million.

What is the plan for American Environmental Partners, Inc. (AEPT) to merge into SCWorx Corp.?

The company is planning to merge into SCWorx Corp., listed on NASDAQ under ticker symbol WORX, by the end of the first quarter of 2024.

What is the focus of American Environmental Partners, Inc. (AEPT) regarding its operations?

The company is focused on streamlining operations to concentrate on core environmental services.