The financial report presents the financial statements of Vyantix Biotechnology, Inc. for the quarter ended March 31, 2024. The company reported a net loss of $X million, with total revenues of $X million and total expenses of $X million. The company’s balance sheet shows total assets of $X million, total liabilities of $X million, and total stockholders’ equity of $X million. The report also includes notes to the financial statements, which provide additional information about the company’s financial position and results of operations.
Introduction
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the Victory Clean Energy, Inc. MD&A and is presented in the following seven sections:
MD&A is provided as a supplement to, and should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
CAUTIONARY INFORMATION ABOUT FORWARD-LOOKING STATEMENTS
Many statements made in the following discussion and analysis of our financial condition and results of operations and elsewhere in this Quarterly Report on Form 10-Q that are not statements of historical fact, including statements about our beliefs and expectations, are “forward-looking statements” within the meaning of federal securities laws and should be evaluated as such. These forward-looking statements are subject to various risks and uncertainties that could materially affect our actual financial results or results of operations.
Business Overview
General
Victory Clean Energy, Inc. is a Green Hydrogen energy company dedicated to developing and implementing clean, sustainable low-cost energy solutions with applications across various industries, including transportation, power generation, and industrial processes. The company’s innovative TrueGreen Hydrogen™ production solutions are expected to provide clean, reliable, and cost-effective energy sources to a diverse range of clients.
Recent Developments
In 2024, Victory completed a merger agreement with H2 Energy Group Inc. and sold its subsidiary Pro-Tech Hardbanding Services, Inc. The company also amended its Articles of Incorporation to authorize more common shares and change its name to Victory Clean Energy, Inc.
Results of Operations
Three Months Ended March 31, 2024 compared to the Three Months Ended March 31, 2023
The company had no revenue during the three months ended March 31, 2024 and 2023. Consulting expenses increased significantly due to the issuance of warrants and restricted stock for services related to the merger. Personnel expenses and general and administrative costs also increased due to the expanded operations. As a result, the company reported a loss from operations of $4,539,811 in the first quarter of 2024, compared to a loss of $29,797 in the same period of 2023.
Other income increased to $718,446 in the first quarter of 2024, primarily due to a gain on extinguishment of debt related to the merger, offset by a loss on disposal of the Pro-Tech Hardbanding subsidiary.
Liquidity and Capital Resources
Going Concern
The company has experienced recurring net losses, negative cash flow, and working capital deficits, which raise substantial doubt about its ability to continue as a going concern. Management is addressing this by developing additional capital sources, including a $4 million investment commitment from Flagstaff International, LLC, to fund ongoing operations and execute the company’s growth plan.
Capital Resources
As of March 31, 2024, Flagstaff has invested $250,000 of the $4 million commitment, with an additional $1,522,500 invested as of October 17, 2024. The company is currently reliant on this agreement to fund its current operations.
Material Cash Requirements
The company estimates its monthly operating expenditures may range from $300,000 to $400,000 over the next twelve months.
Cash Flow
Net cash used in operating activities was $47,441 in the first quarter of 2024, compared to $28,618 in the same period of 2023. Net cash used in investing activities of $572,758 in the first quarter of 2024 was due to the acquisition of assets through the reverse recapitalization. Net cash provided by financing activities was $415,000 in the first quarter of 2024, primarily from the sale of Series E preferred stock and proceeds from convertible notes payable.
Conclusion
Victory Clean Energy, Inc. is a Green Hydrogen energy company that has experienced significant growth and changes in 2024, including a merger, asset sale, and name change. While the company has reported substantial losses and liquidity concerns, it is actively pursuing additional capital sources to fund its operations and growth plans. The company’s innovative TrueGreen Hydrogen™ technology positions it as a potential leader in the low-cost Green Hydrogen sector, focused on decarbonization in heavy transportation and industrial Hydrogen markets.