American Noble Gas, Inc. (Ticker: AMNI), an exploration and development company focused on domestic gas and oil properties, has recently reported its financial results for the first quarter of 2023. The company managed to achieve a net income of $101,672, showing a significant improvement from a net loss of $554,634 during the first quarter of 2022. This article delves into the details of the company’s financial performance, capital raising, and liquidity situations based on its Q1 2023 SEC report.
In the first quarter of 2023, American Noble Gas treated its recorded Letter Agreement as an extinguishment of old notes, which resulted in a gain on extinguishment of $64,985.
Moreover, the change in warrant derivative liability was an expense of $367,467 compared to no gain in the same period of the previous year. The estimated fair value of the company’s derivative liabilities, related to the detachable warrants issued with the issuance of Series A Convertible Preferred Stock, were estimated using a closed-ended option pricing model.
The company recorded no income tax benefit or expense, as it has been in a cumulative tax loss position and has substantial net operating losses carryforwards available for its utilization at the end of Q1 2023. With regard to the Series A Convertible Preferred Stock dividends, the company recorded $62,941 and $52,861 in the first quarters of 2023 and 2022, respectively. The outstanding shares of Series A Convertible Preferred Stock bore a cumulative dividend at a 10% rate based on its stated/liquidation value.
American Noble Gas’s net income applicable to common stockholders was $38,731 for the first quarter of 2023, compared to a net loss of $607,495 for the same period in 2022, representing a substantial turnaround in the company’s financial performance. The basic and diluted net income attributable to common stockholders per share was $0.00 for the first quarter of 2023, an improvement from a net loss per share of $(0.03) in the first quarter of 2022. Potential Common Stock Equivalents as of March 31, 2023, totaled 38,569,025 shares of Common Stock.
Liquidity and Capital Resources: American Noble Gas has had a history of losses and has generated little or no operating revenues for several years.
However, the company has been successful in raising liquidity through private transactions with accredited investors. In May 2023, the company issued 7,500 shares of May 2023 Series B Convertible Preferred Stock, convertible into an aggregate of up to 15,000,000 shares of Common Stock, and received an aggregate investment of $750,000. The company intends to use the proceeds for the development of the Hugoton Gas Field, Central Kansas Uplift Properties, and general working capital purposes.
The company’s cash and cash equivalents balance decreased from $10,163 as of December 31, 2022, to $2,008 as of March 31, 2023. However, in light of the reported net income for the first quarter of 2023, it appears that American Noble Gas is showing signs of improvement in its financial performance. With its ongoing efforts to raise capital and develop its gas and oil properties, the company remains optimistic about its ability to achieve sustained profitability in the future.
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