UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report (date of earliest event reported): August 7, 2019

 

 

 

H/CELL ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada   000-55802   47-4823945

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

3010 LBJ Freeway, Suite 1200, Dallas, Texas 75234

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (972) 888-6009

 

Copy of correspondence to:

 

James M. Turner, Esq.

Marc J. Ross, Esq.

Sichenzia Ross Ference LLP

1185 Avenue of the Americas, 37th Floor

New York, New York 10036

Tel: (212) 930-9700 Fax: (212) 930-9725

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act: None

 

 

 

   
   

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 7, 2019, H/Cell Energy Corporation announced its operating results for the fiscal quarter ended June 30, 2019. A copy of the press release that discusses this matter is filed as Exhibit 99.01 to, and incorporated by reference in, this report. The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in any such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

99.01 Press Release, dated August 7, 2019, issued by H/Cell Energy Corporation*

 

 

* Furnished herewith.

 

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SIGNATURE

 

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  H/CELL ENERGY CORPORATION
     
Date: August 7, 2019 By: /s/ MATTHEW HIDALGO
    Matthew Hidalgo
    Chief Financial Officer

 

 3 
   

 

Exhibit 99.01

 

H/Cell Energy Reports FY2019 Second Quarter Financial Results

 

Dallas, TX, August 7, 2019 (GLOBE NEWSWIRE) — H/Cell Energy Corporation (OTCQB-HCCC) (“HCCC”), a company that designs and implements clean energy solutions featuring hydrogen and fuel cell technology, has announced financial results for its second quarter ended June 30, 2019.

 

For the three months ended June 30, 2019, HCCC generated revenue of $1,927,921 and a net loss of $105,223 which includes $75,980 of non-cash charges that do not affect the cash flow performance or working capital of HCCC. This amounts to a $(0.01) per share loss. For the six months ended June 30, 2019, HCCC generated revenue of $3,632,194 and a net loss of $248,861 which includes $187,133 of non-cash charges that again, do not affect the cash flow performance or working capital of HCCC. This amounts to a $(0.03) per share loss.

 

Andrew Hidalgo, CEO of HCCC, commented, “The second quarter was a very encouraging quarter for a number of reasons. Revenue production was up 12% from the previous quarter. Excluding non-cash charges that do not affect the cash flow performance or working capital of HCCC, the company only lost $29,243 on $1,927,921 of revenue for the three months ended June 30, 2019 and $61,728 on $3,632,194 of revenue for the six months ended June 30, 2019. That loss is attributed to corporate expenses as both our subsidiaries were operationally profitable. In the second quarter, we incurred most of our annual audit fees and along with the cost of concluding a financing transaction, corporate expenses were much higher than we initially projected. HCCC recently executed a $3 million equity financing line as previously reported. This was a significant milestone for HCCC and for the first time, gives us access to substantial growth capital going forward. With this new equity financing arrangement, we find ourselves in the best position yet to take HCCC to the next level. Our opportunities remain abundant. As of June 30, 2019, HCCC had over $40 million in bids of which close to $4 million is specific to renewable energy. The clean energy market is robust and we are in a unique position as an advanced clean energy integrator to take advantage of the opportunities to come. We look forward to successful quarters ahead.”

 

About H/Cell Energy Corporation:

 

H/Cell Energy Corporation is an integrator that focuses on the design and implementation of clean energy solutions including solar, battery, fuel cell and hydrogen generation systems. In addition, through its subsidiaries, HCCC also provides environmental systems and security systems integration. HCCC serves the residential, commercial and government sectors. Please visit our website at www.hcellenergy.com for more information.

 

Forward Looking Statements:

 

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on current expectations and actual results could differ materially. H/Cell Energy Corporation does not undertake an obligation to update or revise any forward-looking statement. The information set forth herein speaks only as of the date hereof.

 

Contact:

 

H/Cell Energy Corporation

Investor Relations

3010 LBJ Freeway, Suite 1200

Dallas, Texas 75234

972-888-6009 USA

 

   
   

 

H/CELL ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30, 2019   December 31, 2018 
   (Unaudited)   (Audited) 
ASSETS          
Current assets          
Cash and cash equivalents  $313,530   $359,134 
Accounts receivable   1,191,224    1,087,381 
Prepaid expenses   15,163    16,282 
Current right-of-use (ROU) asset   86,018    - 
Costs and earnings in excess of billings   14,753    45,478 
Total current assets   1,620,688    1,508,275 
           
Property and equipment, net   455,044    476,436 
Security deposits and other non-current assets   32,505    32,530 
Deferred tax asset   50,000    50,000 
Customer lists, net   73,403    83,645 
ROU asset   154,378    - 
Other long term asset   30,000    - 
Goodwill   1,373,621    1,373,621 
           
Total assets  $3,789,639   $3,524,507 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current liabilities          
Accounts payable and accrued expenses  $869,668   $891,354 
Earn-out payable   199,679    190,736 
Billings in excess of costs and earnings   37,325    195,331 
Sales and withholding tax payable   66,489    59,857 
Current equipment notes payable   32,230    38,991 
Current operating lease liability   86,018    - 
Current finance lease payable   73,091    65,265 
Current convertible notes payable – related party, net of discounts   257,659    - 
Income tax payable   32,442    48,643 
Total current liabilities   1,654,601    1,490,177 
           
Noncurrent liabilities          
Line of credit   230,415    28,359 
Lease operating liability   154,378    - 
Finance leases   284,431    232,876 
Equipment notes payable   57,083    121,038 
Convertible notes payable – related party, net of discounts   105,158    29,122 
Total noncurrent liabilities   831,465    411,395 
           
Total liabilities   2,486,066    1,901,572 
           
Commitments and contingencies          
           
Stockholders’ equity          
Preferred stock - $0.0001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding   -    - 
Common stock - $0.0001 par value; 25,000,000 shares authorized; 7,621,024 and 7,586,024 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively   762    758 
Additional paid-in capital   2,898,598    2,983,476 
Accumulated deficit   (1,534,625)   (1,285,764)
Accumulated other comprehensive loss   (61,162)   (75,535)
Total stockholders’ equity   1,303,573    1,622,935 
           
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY  $3,789,639   $3,524,507 

 

   
   

 

H/CELL ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS – OTHER COMPREHENSIVE INCOME

(UNAUDITED)

 

   For the Three Months Ended
June 30,
   For the Six Months Ended
June 30,
 
   2019   2018   2019   2018 
                 
Revenue                    
Construction income  $1,927,921   $2,009,825   $3,632,194   $3,704,360 
Related party   -    -    -    31,789 
Total revenue   1,927,921    2,009,825    3,632,194    3,736,149 
                     
Cost of goods sold                    
Direct costs   1,309,322    1,253,043    2,505,760    2,462,456 
Direct costs – related party   -    -    -    31,617 
Total cost of goods sold   1,309,322    1,253,043    2,505,760    2,494,073 
                     
Gross profit   618,599    756,782    1,126,434    1,242,076 
                     
Operating expenses                    
General and administrative expenses   631,457    687,831    1,238,509    1,243,015 
Management fees – related party   19,500    19,500    39,000    39,000 
Total operating expenses   650,957    707,331    1,277,509    1,282,015 
                     
Income (loss) from operations   (32,358)   49,451    (151,075)   (39,939)
                     
Other expenses                    
Interest expense   10,258    10,146    12,091    14,092 
Interest expense – related party   58,060    18,676    94,155    32,891 
Change in fair value earn-out   4,547    6,738    8,943    6,738 
(Gain) loss on fixed asset disposal   -    (64)   (17,403)   3,354 
Total other expenses   72,865    35,496    97,786    57,075 
                     
Net income (loss)  $(105,223)  $13,955   $(248,861)  $(97,014)
                     
Other comprehensive income (loss), net                    
                     
Foreign currency translation adjustment   (4,239)   (22,570)   14,373    (32,829)
                     
Comprehensive loss  $(109,462)  $(8,615)  $(234,488)  $(129,843)
                     
Earnings (loss) per share                    
Basic  $(0.01)  $0.00   $(0.03)  $(0.01)
Diluted  $(0.01)  $0.00   $(0.03)  $(0.01)
Weighted average common shares outstanding                    
Basic   7,621,024    7,483,980    

7,607,295

    7,450,235 
Diluted   7,621,024    8,819,225    

7,607,295

    7,450,235