2023 Q4 Form 10-Q Financial Statement

#000121390023088847 Filed on November 20, 2023

View on sec.gov

Income Statement

Concept 2023 Q4 2023 Q3 2022 Q4
Revenue $0.00
YoY Change
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $104.8K -$138.1K
YoY Change -30.33% -259.64%
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization
YoY Change
% of Gross Profit
Operating Expenses $104.8K -$138.1K
YoY Change -30.33% -259.64%
Operating Profit -$104.8K
YoY Change -30.33%
Interest Expense $196.7K -$194.2K
YoY Change 3.32% 13.51%
% of Operating Profit
Other Income/Expense, Net -$194.6K $2.100K
YoY Change 12.4% 0.0%
Pretax Income -$299.3K -$54.01K
YoY Change -7.46% -7.26%
Income Tax $0.00
% Of Pretax Income
Net Earnings -$299.3K -$54.01K
YoY Change -7.46% -7.26%
Net Earnings / Revenue
Basic Earnings Per Share -$0.05
Diluted Earnings Per Share -$0.05 -$0.02
COMMON SHARES
Basic Shares Outstanding 14.42M shares 12.92M shares 2.675M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2023 Q4 2023 Q3 2022 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.170K $1.250K
YoY Change 37.65% -47.03%
Cash & Equivalents $36.25K $1.170K $1.251K
Short-Term Investments
Other Short-Term Assets $212.7K
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $36.39K $1.170K $1.251K
YoY Change 2809.19% 37.81% -47.06%
LONG-TERM ASSETS
Property, Plant & Equipment $3.884M $3.884M
YoY Change 0.0% 0.0%
Goodwill $7.713M
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets $8.772M $11.60M $3.884M
YoY Change 125.88% 198.6% 0.0%
TOTAL ASSETS
Total Short-Term Assets $36.39K $1.170K $1.251K
Total Long-Term Assets $8.772M $11.60M $3.884M
Total Assets $8.809M $11.60M $3.885M
YoY Change 126.75% 198.57% -0.03%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.333M $1.288M $1.133M
YoY Change 17.66% 8.09% -1.32%
Accrued Expenses $1.436M $7.212M
YoY Change -79.53% 11.64%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $4.006M
YoY Change -100.0% 8.52%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $3.265M $2.724M $12.35M
YoY Change -73.56% -77.85% 9.31%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $0.00 $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $3.265M $2.724M $12.35M
Total Long-Term Liabilities $0.00 $0.00
Total Liabilities $2.724M $12.35M
YoY Change -77.85% 9.31%
SHAREHOLDERS EQUITY
Retained Earnings -$107.9M -$107.4M -$106.5M
YoY Change 1.32% 0.91% 1.0%
Common Stock $14.42K $106.3M $2.674K
YoY Change 439.23% 3975981.26% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity -$4.244M -$1.127M -$18.47M
YoY Change
Total Liabilities & Shareholders Equity $8.809M $11.60M $3.885M
YoY Change 126.75% 198.57% -0.03%

Cashflow Statement

Concept 2023 Q4 2023 Q3 2022 Q4
OPERATING ACTIVITIES
Net Income -$299.3K -$54.01K
YoY Change -7.46% -7.26%
Depreciation, Depletion And Amortization
YoY Change
Cash From Operating Activities -$80.00 $400.00
YoY Change -88.41% 66.67%
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities
YoY Change
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities
YoY Change
NET CHANGE
Cash From Operating Activities -80.00 400.0
Cash From Investing Activities
Cash From Financing Activities
Net Change In Cash -80.00 400.0
YoY Change -88.41% 66.67%
FREE CASH FLOW
Cash From Operating Activities -$80.00 $400.00
Capital Expenditures
Free Cash Flow
YoY Change

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 1 – NATURE OF BUSINESS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">American Clean Resources Group, Inc. (“we,” “us,” “our,” “ACRG” or the “Company”) is an exploration stage company, incorporated in Nevada, having an office in Lakewood, Colorado and through its subsidiary, a property in Tonopah, Nevada. The business plan is to purchase equipment and build a facility on the Tonopah property to serve as a permitted custom processing toll milling facility (which includes an analytical lab, pyrometallurgical plant, and hydrometallurgical recovery plant).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company plans to perform permitted custom processing toll milling which is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as minerals in the gold, silver, and platinum metal groups. Custom milling and refining can include many different processes that are designed specifically for each ore load and to maximize the extraction of precious metals from carbon or concentrates. These toll-processing services also distil, dry, mix, or mill chemicals and bulk materials on a contractual basis and provide a chemical production outsourcing option for industrial companies, which lack the expertise, capacity, or regulatory permits for in-house production.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are required to obtain several permits before we can begin construction of a small-scale mineral processing facility to conduct permitted processing toll milling activities and construction of the required additional buildings and well relocation necessary for us to commence operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On September 13, 2023, American Clean Resources Group, Inc. (the “Company”) executed an agreement to acquire a 100% interest in SWIS, L.L.C. (“SWIS”). The Company issued 1,500,000 shares of restricted common stock in exchange for a 100% interest in SWIS. The Company believes this acquisition will help strengthen our economics and further our goal to decrease our environmental impact and promote environmentally conscious operations</span>. SWIS was incorporated in the state of Kentucky and is operating out of a Company office in Louisville, Kentucky.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">SWIS has developed an algorithm and a “smart” device that provides essential information to improve water quality from Combined Sewer Overflow (“CSO”). Recently, we have assigned the patent to the University of Louisville (“UofL”) with the intent to commercialize the solution on behalf of the university, community, state and country. More importantly, SWIS along with other fellow entrepreneurs and environmental stewards have assembled a team to launch SWIS, with stakeholders from U. of L, Municipal Sewer Districts (“MSD”), and several state governments. SWIS is actively ready to launch a pilot project to test its modernized approach to CSO Public Notification Programs. Currently, the patented algorithm is on standby for integration into “smart” plugs that will be used for non-invasive in-home notification. An implementation playbook has been designed for municipal use. SWIS has a management team well versed in the necessary strategies for market penetration and adoption and looks to test its behavior modification program abilities with the University of Louisville.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Combined Sewer Systems (“CSS”) were built over a century ago with the intention to divert wastewater away from households. CSS collect rainwater runoff, domestic sewage, and industrial wastewater into a single pipe system, which then transports the combined wastewater to a treatment plant. When the aged CSS is overwhelmed, the result is untreated wastewater being discharged directly into public waterways, such as creeks, streams, rivers, and other local bodies of water referred to as CSO. The resulting discharges of pollutants into public waterways increases the amount of suspended solids from point-source origins introduced to the ecosystem, creating a significant health hazard for wildlife and humans exposed to these waterways, historically tied to disease transmission. These violate the Clean Water Act and result in significant repercussions from the EPA. Currently, over forty million people in 700+ municipalities nationwide live in a municipality with a CSS.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Current solutions rely predominantly on inadequate Public Notification Programs to prevent water use at the source, the household, during high-risk CSO times. The current Public Notification Programs utilized by all municipalities in a CSS entails email signups, website banners, pamphlets, signs, etc., which remains arduous and ineffective. This antiquated, ineffective approach creates the immediate need to develop a modern, real-time notification system that gives individual households and facilities the immediately ability to positively modify their water use behavior resulting in a decrease in harmful point source pollutants unknowingly and unnecessarily being introduced to public waterways.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">This project would greatly contribute to the universities’ expanding sustainability program and would put UofL and SWIS in an advanced position to compete to be one of six universities in the US that the EPA will chose as stormwater research hubs. With the completion of a successful Research Project, these stated goals and deliverables would revolutionize a major component of the $1 trillion water infrastructure issue plaguing a growing population and prime UofL and SWIS for nationwide Public Notification Program adoption. The development of our platform will modernize Public Education and Notification Programs that will significantly reduce the monetary cost and health risk of CSO events for municipalities worldwide. The results to be discovered at UofL will give SWIS data and information capable of educating citizens of developed cities across the globe and seamlessly integrating newly developed nations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Going Concern</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the nine months ended September 30, 2023, the Company incurred net losses from operations of $916,617. At September 30, 2023, the Company had an accumulated deficit of $107,447,113 and a working capital deficit of $2,722,955. In addition, virtually all of the Company’s assets are encumbered or pledged under a senior secured convertible promissory note payable to a related party. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the nine months ended September 30, 2023, the Company had $311,319 of expenses, and $2,724,124 of accounts payable and accrued interest, plus a legal judgement sold by their holders, that were purchased directly by Granite Peak Resources, LLC (“GPR”), a related party and the Company’s convertible line of credit with GPR was increased by this same amount. During the year ended December 31, 2022, the Company had $314,433 of expenses that were paid directly by GPR, a related party and the Company’s convertible line of credit with GPR was increased by this same amount. (See Note 4).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management believes that private placements of equity capital and/or additional debt financing will be needed to fund our long-term operating requirements. The Company may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional cash. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences, or privileges senior to our common stock. Additional financing may not be available on acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. We are continuing to pursue external financing alternatives to improve our working capital position. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.</p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Acquisition</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On September 13, 2023, the Company executed an agreement to acquire a 100% interest in SWIS, L.L.C. (“SWIS”). The Company issued 1,500,000 shares of restricted common stock in exchange for a 100% interest in SWIS. The Company believes this acquisition will help strengthen our economics and further our goal of decreasing our environmental impact and promoting environmentally conscious operations</span>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the terms of the purchase agreement, the purchase price paid to the sellers was an aggregate of $7,500,000 which was paid through the issuance of 1,500,000 shares of the Company’s common stock, or $5.00 per share, which was the fair value of the stock on the closing date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The provisional fair value of the purchase consideration issued to the Seller was allocated to the net tangible assets acquired. The Company accounted for the SWIS acquisition as the purchase of a business under GAAP under the acquisition method of accounting, and the assets and liabilities acquired were recorded as of the acquisition date, at their respective fair values and consolidated with those of the Company. The fair value of the net assets acquired was approximately $7,500,000. The excess of the aggregate fair value of the net tangible assets has been allocated to goodwill.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The table below shows an analysis for the SWIS acquisition:</p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Provisional Purchase Consideration at preliminary fair value:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="width: 88%; padding-bottom: 1.5pt; padding-left: 6pt">Purchase price</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,500,000</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Amount of consideration</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,500,000</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold; text-align: left">Assets acquired and liabilities assumed at preliminary fair value</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 6pt">Inventories</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-38">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-left: 6pt">Product/Technology related intangibles</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-39">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 6pt">Marketing related intangibles</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-40">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-left: 6pt">Customer related intangibles</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-41">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 6pt">Accounts payable and accrued expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(212,730</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 6pt">Other liabilities</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-42">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net assets acquired</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(212,730</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total net assets acquired</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(212,730</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Consideration paid</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,500,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Preliminary goodwill</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,712,730</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the SWIS acquisition been completed as of January 1, 2023, or to project potential operating results as of any future date or for any future periods.</p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="6" style="font-weight: bold; text-align: center">For the Nine Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Revenues, net</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-43">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-44">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="width: 76%; text-align: left">Net loss allocable to common shareholders</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(1,120,068</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(998,631</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Net loss per share</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">(0.24</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">(0.37</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td>Weighted average number of shares outstanding</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,640,633</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,674,530</td><td style="text-align: left"> </td></tr> </table>
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