Advanced Emissions Solutions Provides Accounting Update
January 29 2015 - 5:26PM
Advanced Emissions Solutions, Inc. (Nasdaq:ADES) (the "Company")
today disclosed in its Current Report on Form 8-K that KPMG LLP
("KPMG") resigned as the Company's independent accounting firm.
Except as detailed in the Form 8-K, there are no disagreements with
KPMG on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure. Additional
information regarding KPMG's resignation can be found in the Form
8-K. The Company is in the process of engaging a new
independent accounting firm.
W. Phillip Marcum, Chairman of the Board of Directors ("Board")
stated, "We are surprised and disappointed that KPMG has resigned,
however, we continue to work to complete the accounting review as
expeditiously as possible. Since the accounting review began, the
Company has taken significant steps towards this end. These have
included the appointment of a new Audit Committee Chairman, hiring
of a new Chief Financial Officer, Chief Accounting Officer,
Corporate Controller, and other experienced accounting and finance
personnel. As well, the Company has hired FTI Consulting and
several other consulting, accounting, and legal experts, and
currently has more than 20 individuals assisting with the review.
The accounting issues involved have been extraordinarily complex
and the documentation efforts have been time-consuming. The Board
has high confidence in our CFO Heath Sampson and his team to lead
us through the accounting restatements and into the future."
In addition, the Company has determined that it is unlikely to
regain compliance with its SEC filing requirements for continued
listing of its common stock on the NASDAQ Stock Market by the
previously reported March 27, 2015 deadline set by the NASDAQ
Listing Qualifications Panel. As a result, the Company expects its
shares of common stock will be delisted from the NASDAQ Stock
Market. Following a suspension of trading in the Company's common
stock on NASDAQ, the Company expects that its shares would trade on
the OTC Markets - OTC Pink Tier while the Company works to finalize
the restatements. The Company's trading symbol would remain
ADES.
L. Heath Sampson, Chief Financial Officer of the Company
commented, "While the accounting review process is taking longer
than initially expected, the Company has made significant progress
toward completion of the financial restatements. I believe that our
review of the accounting issues is comprehensive and we have a
clear view to complete that work. We look forward to working with a
new audit team to deliver the audited financial statements and
become fully compliant as expeditiously as possible."
The resignation of KPMG does not impact the normal course of
operations of the Company or its subsidiaries. As of December
31, 2014, the Company had cash and cash equivalents in excess of
$36 million and minimal long term debt. Clean Coal Solutions,
LLC, our 42.5% owned joint venture that produces Refined Coal, now
has 17 Refined Coal facilities in full-time operations located at
coal fired plants that collectively have historically burned more
than 54 million tons of coal per year. Permanent installation work
is underway for an additional five Refined Coal facilities located
at power plants that collectively have historically burned more
than 22 million tons of coal per year.
The Company expects to provide a more comprehensive operations
update on its businesses in the coming weeks. Lastly, the Company
continues to work with Moelis & Company to evaluate
opportunities around the most advantageous use of our expected
future cash flows in order to maximize stockholder value.
About Advanced Emissions Solutions, Inc.
Advanced Emissions Solutions, Inc. (Nasdaq:ADES) serves as the
holding entity for a family of companies that provide emissions
solutions to customers in the power generation and other
industries.
ADA-ES, Inc. ("ADA") supplies Activated Carbon Injection ("ACI")
systems for mercury control, Dry Sorbent Injection ("DSI") systems
for acid gases, and technology services and other offerings in
support of our customers' emissions compliance
strategies. ADA's M-ProveTM technology, which reduces
emissions of mercury and other metals from PRB coal, is applied
directly to coal at power plants, or offered through a licensing
agreement with Arch Coal for application at their mines. In
addition, we are developing technologies to advance cleaner energy,
including CO2 emissions control technologies through projects
funded by the U.S. Department of Energy ("DOE") and industry
participants.
Clean Coal Solutions, LLC ("CCS"), is a 42.5% owned joint
venture by ADA that provides ADA's patented Refined Coal ("RC")
CyClean™ technology to enhance combustion of and reduce emissions
of NOx and mercury from coals in cyclone boilers and ADA's patent
pending M-45™ and M-45-PC™ technologies for Circulating Fluidized
boilers and Pulverized Coal boilers respectively. BCSI, LLC
is a custom designer and fabricator of engineered emissions control
technologies, bulk material handling equipment, bulk storage
systems, water/waste water treatment equipment, and custom
components. BCSI supplies Dry Sorbent Injection ("DSI")
systems for acid gas control using its technologically advanced
cool, dry conditioned conveying air systems. BCSI's technical
solutions serve a wide range of industrial clients including; coal
fired utilities, water treatment, wastewater, cement kilns, food
processing and industrial boilers. BCSI employs engineers and trade
professionals at a 190,000+sq. ft. fabrication and office facility
located in McKeesport, PA. This press release contains
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, which provides a "safe harbor" for
such statements in certain circumstances. The forward-looking
statements include statements or expectations regarding expected
timing and tonnage of operations of RC facilities, expected timing
of the lease or sale of RC facilities, cash flows, potential
impacts of KPMG's resignation, ability and timing to complete the
accounting review, restatements and audits, comprehensiveness of
our accounting review, inability to file our delinquent periodic
within the extended stay granted by the NASDAQ panel, likelihood of
our common stock being delisted from NASDAQ and the consequences
thereof, ability to engage an independent accounting firm, ability
to and timing of providing an operations update and related
matters. These statements are based on current expectations,
estimates, projections, beliefs and assumptions of our management.
Such statements involve significant risks and uncertainties. Actual
events or results could differ materially from those discussed in
the forward-looking statements as a result of various factors,
including but not limited to economic conditions and market demand;
timing of or changes to laws, regulations and any legal challenges
to or repeal of them; failure of the RC facilities to produce coal
that qualifies for tax credits; termination of or amendments to the
contracts for RC facilities; inability to begin full time
operations or to continue sales or leases of RC facilities to RC
investors; decreases in the production of RC; availability, cost of
and demand for alternative tax credit vehicles and other
technologies; technical and operational difficulties; availability
of raw materials and equipment; loss of key personnel or inability
to engage accounting personnel as needed; intellectual property
infringement claims from third parties; impact of the weather;
inability to address the previously disclosed accounting matters;
identification of additional material weaknesses or significant
deficiencies; KPMG may identify disagreements or additional
reportable events in a letter addressed to the Securities and
Exchange Commission ("SEC") pursuant to Item 304 of Regulation S-K;
failure to engage an independent accounting firm, complete the
audits and re-audits and file any required restatements and
periodic reports; adverse effects resulting from our common stock
being delisted from NASDAQ; risks relating to the substantial costs
and diversion of personnel's attention and resources due to these
matters and related litigation and other factors discussed in
greater detail in our filings with the SEC. You are cautioned not
to place undue reliance on such statements and to consult our SEC
filings for additional risks and uncertainties that may apply to
our business and the ownership of our securities. Our
forward-looking statements are presented as of the date made, and
we disclaim any duty to update such statements unless required by
law to do so.
CONTACT: Graham Mattison
Vice President, Investor Relations
(720) 889-6206
graham.mattison@adaes.com
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