Victory Clean Energy Reports Significant Financial Challenges, Increased Operating Expenses, and Losses in Latest Quarter

Victory Clean Energy, Inc. (formerly Victory Oilfield Tech, Inc.) reported significant financial challenges for the three and nine months ended September 30, 2024. The company experienced a substantial increase in operating expenses, with total operating expenses rising to $1.2 million for the third quarter, compared to $123,532 in the same period of 2023. For the nine-month period, operating expenses surged to $7 million, up from $197,768 in the prior year. This increase was primarily driven by personnel expenses, which escalated to $447,104 for the third quarter and $1 million for the nine months, compared to $72,665 and $112,597, respectively, in 2023.

The net operating loss for the third quarter was $(1.2 million), a significant increase from $(125,462) in the prior year. For the nine months, the net operating loss reached $(7 million), compared to $(197,768) in 2023. The accumulated deficit worsened to $(7.8 million) as of September 30, 2024, compared to $(1.7 million) at the end of 2023. The total stockholders' deficit also increased to $(1.5 million) from $(1.3 million) over the same period.

Despite these losses, the company reported a gain on extinguishment of debt amounting to $1.3 million, which partially offset the losses. However, total revenue remained at $0 for both the three and nine months ended September 30, 2024, consistent with the previous year.

In terms of strategic developments, Victory Clean Energy completed a merger with H2 Energy Group Inc. on January 1, 2024, making H2EG a wholly owned subsidiary. The company also sold Pro-Tech Hardbanding Services, Inc. to Flagstaff International, LLC on the same date, resulting in a recorded loss of $328,794. The company amended its Articles of Incorporation to authorize 2 billion common shares and has plans to construct a renewable hydrogen production facility and install hydrogen refueling stations in California.

Cash and cash equivalents significantly decreased to $19,196 as of September 30, 2024, down from $240,654 at the end of 2023. The company reported net cash used in operating activities of $(1.5 million) for the nine months, compared to $(224,777) in the prior year. However, net cash provided by financing activities increased to $2.7 million, up from $296,830 in 2023, primarily due to cash received from the sale of Series E preferred stock.

Overall, Victory Clean Energy is navigating a challenging financial landscape with increased operating costs and ongoing losses, while pursuing strategic initiatives in the renewable energy sector.