Victory Clean Energy Reports Significant Financial Changes Following Merger, Announces Renewable Hydrogen Production Plans

Victory Clean Energy, Inc. (formerly Victory Oilfield Tech, Inc.) reported significant financial changes for the three months ended March 31, 2024, following its merger with H2 Energy Group Inc. on January 1, 2024. The company’s total assets decreased to $76.6 million from $247.2 million as of December 31, 2023, while total current assets fell to $71.2 million from $240.7 million. Cash and cash equivalents also saw a decline, ending the period at $35,455 compared to $240,654 at the start of the quarter.

The company experienced a substantial increase in operating expenses, which rose to $4.5 million from $29,797 in the same period of the previous year. This increase is attributed to costs associated with the merger and the hiring of additional personnel. Consequently, the net loss before income tax for the quarter was $(3.8 million), a significant rise from $(31,093) in Q1 2023. The net loss for the quarter matched this figure, reflecting the company's ongoing financial challenges, with an accumulated deficit of $(5.5 million) as of March 31, 2024.

Despite these losses, the company reported a notable increase in other income, totaling $718,446, primarily due to a gain on the forgiveness of debt amounting to $1.1 million, which was partially offset by a loss from the disposal of its subsidiary, Pro-Tech Hardbanding Services, Inc., sold for $4 million. The sale resulted in a loss of $328,794.

In terms of strategic developments, Victory Clean Energy amended its Articles of Incorporation to authorize 2 billion common shares and completed the sale of Pro-Tech Hardbanding Services on January 1, 2024. The company is now focused on constructing a renewable hydrogen production facility and installing hydrogen refueling stations in California, aiming to position itself as a leader in the green hydrogen sector.

The company’s financial condition remains precarious, with a working capital deficit of $(781,000) and ongoing negative cash flow from operating activities. Management anticipates continued operating losses in the near term but is exploring new sources of capital to meet its obligations. The company has also engaged in a consulting agreement with a monthly fee of $15,000 and has plans for further investments, including a commitment from Flagstaff International, LLC for $4 million in exchange for Series E Preferred Stock.