CHESTNUT RIDGE, N.Y.,
June 30, 2020 /PRNewswire/ --
BioHiTech Global, Inc. ("BioHiTech" or the "Company") (NASDAQ:
BHTG), a technology and services company that provides
cost-effective and sustainable waste management solutions, reported
financial results for the first quarter 2020 ended March 31, 2020.
Company Highlights
Received a Purchase Contract for Its Revolution Series
Digesters from Carnival Corp with a Potential
Value of up to $14 Million –
After an extensive evaluation conducted in 2019, the Company
received a purchase contract from Carnival Corporation in
January 2020 whereby Carnival can
potentially acquire several hundred Revolution Series Digesters
along with the Company's patented data analytics platform for its
fleet of ships. The digesters will help Carnival meet its
sustainability goals while the data analytics platform will
provide real-time supply chain transparency to help in Carnival's
food waste reduction efforts. While the COVID-19 pandemic has
delayed the deployment plan in the first half of 2020, the Company
anticipates beginning delivery of its digesters in the second half
of 2020 as restrictions on travel are eased.
Raised $1.5 Million in
Equity Capital to Further the Growth of Its Environmentally
Friendly Technology Solutions – In February and March of
2020, the Company sold $1.5 million
in an offering of units consisting of newly issued shares of the
Company's Series F Preferred shares convertible into shares of
Common Stock at a fixed conversion price of $2.10 per
share and 178,597 warrants to purchase Common Stock
at $2.30 per share. The proceeds from
the two transactions are being utilized to support the growth of
the Company's proprietary technology solutions.
Appointed Former Walmart Executive Tony Fuller to the Position of Chief
Administrative Officer – Mr. Fuller's distinguished
service at Walmart spanned over three decades, culminating with his
role as Senior Vice President. During that tenure, he served
as one of the twelve executives on Walmart's Global Sustainability
Steering Committee, providing direction for all of the company's
sustainability efforts. For over 20 years he led the
teams which provided both property management and maintenance for
Walmart's global portfolio. Mr. Fuller served as the chairman of
the transaction committee as well as the real estate finance
committee and was involved in the development of over 100
distribution centers ranging in size from 250,000 to 4 million
square feet. He also managed a team responsible for disbursing more
than $2 billion per year for items as diverse as supplies
and structural steel. He is currently a member of the Board of
Advisors of Global Healthcare Capital, a leading healthcare
investor and asset manager.
Teamed Up with Crestmark and US Equity Funding to Offer
Customers Equipment Lease Financing for its Revolution Series
Digesters – The Company entered into a financing
arrangement to utilize lease financing through Crestmark, a leading
business to business lender, and US Equity Funding, a full service
commercial financing firm, in place of the Company's
traditional rental agreements for new Revolution Series Digester
customer contract applications that receive business credit
approval from either leasing company. The new financing
program is expected to significantly improve cash flow by enabling
BioHiTech to monetize approved contracts upfront.
Subsequent to the End of Q1, The Company Entered Into an
Agreement to Distribute Altapure High-Level Disinfectant Technology
That Can Effectively Kill Bacteria, Fungus, C.Difficile Spores, and
Viruses Such as Coronavirus 2 (SARS-CoV-2) – The Company
entered into an agreement with Altapure, LLC ("Altapure"), a
technology developer and manufacturer of ultrasonic based
disinfecting products, to distribute its patented line of
environmentally-friendly, high-level disinfecting products.
Altapure's newest product, the AP-4™, was launched in 2017, and is
an enhanced, automated and touchless high-level disinfection
sub-micron aerosol system providing a safe process and rapid kill
of spores, viruses, and vegetative bacteria, such as but not
limited to: COVID-19, Acinetobacter baumannii, Pseudomonas
aeruginosa, VRE, MRSA, Bacillus atrophaeus, Geobacillus
stearothermophilus, Polio virus, C. auris and Clostridium
difficile (C. difficile).
"Despite the challenges arising from the COVID-19 pandemic, we
made significant progress in positioning BioHiTech for future
success," stated Frank E. Celli, CEO
of BioHiTech Global. "We believe our contract with Carnival
Corporation has validated our Revolution Series Digesters as the
industry leading technology solution for environmentally
responsible on-site food waste disposal. Additionally, the
lease financing arrangement with Crestmark and USA Funding will enable us to monetize lease
contracts immediately and provide greater leverage for us to grow
this business in the future as conditions normalize for our
customers affected by the pandemic. We continue to see signs
of increasing business activity as customers are beginning to
reopen in certain parts of the country and others plan for a return
to business in the coming months. Our HEBioT business also made
progress during the quarter as revenue at our Martinsburg facility rebounded by over 100%
sequentially from the fourth quarter of 2019 and we continued to
advance the permit application processes in other areas. In
addition, we have received numerous inquiries from various
municipalities interested in deploying the technology."
Mr. Celli continued, "We are excited about our new distribution
partnership with Altapure and the marketing progress we have made
just a month into that relationship. We have already
conducted live demonstrations of the AP4's capabilities in
achieving high level disinfection to potential customers in the
healthcare, government and education markets and expect to conduct
additional demonstrations in the coming weeks. We are very
pleased with the initial feedback we have received from those
demonstrations, and while we are still early in the sales process,
we are excited about the potential opportunities ahead of us and
look forward to expanding this business."
Financial Highlights for Q1 2020
Revenues: Total revenue in the first quarter of 2020
was $1.4 million, an increase of
84.3% compared to revenue from $738,000 in the first quarter of 2019. The
increase in revenue was due to revenue from the Martinsburg HEBioT
facility which had not yet commenced operations in the first
quarter of 2019, and an increase in digester equipment sales, which
is the result of a strategic focus on sales as compared to rentals.
While rental revenue increased by $44,590 or 13.1% to $386,254 in the first quarter of 2020, as
compared to $341,664 in the first
quarter of 2019 as a result of an increase in the number of rental
units, service and maintenance revenue decreased by $61,198 or 41.9% to $84,838 in the first quarter of 2020 due to the
improved reliability of the newer Revolution Series of digesters.
This resulted in a slight decline in overall rental, service and
maintenance revenue. Revenue from management advisory fees
declined by 70% to $75,000 as the
Company reduced the level of support provided under its advisory
agreement in order to focus its resources on the Company's core
technology services.
Operating Expenses: Operating expenses in the first
quarter of 2020 increased by $1,094,287 or 41.2% to $3,753,291 mainly due to $812,427 in new HEBioT facility costs, excluding
depreciation, as well as increased costs associated with digester
equipment sales, and the Company scaling its core infrastructure in
anticipation of executing on its contract with Carnival Corporation
prior to the onset of COVID-19. Contribution margins for digester
equipment sales and rental service and maintenance in the first
quarter of 2020 were 54.7% and 44.6%, respectively. The increases
in operating expenses were partially offset by a decrease in
selling, general and administrative expenses primarily due to a
first quarter 2019 write-off of a HEBioT site that was discontinued
in favor of a larger more suitable site.
Loss from Operations: The Company recorded an
operating loss of $(2,393,950) in the
first quarter of 2020 compared to an operating loss of $(1,921,303) in the first quarter of 2019. The
Company recorded a net loss attributable to parent of $(2,571,297) in the first quarter of 2020
compared to ($1,949,466) in the first
quarter of 2019. Net loss per share in the first quarter of
2020 was $(0.16) on 17.4 million
weighted average shares outstanding compared to a net loss of
$(0.14) per share on 14.8 million
weighted average shares outstanding.
Select Balance Sheet Items: The Company
had unrestricted cash of $1,934,846 with shareholder
equity of $5.8 million as of March 31,
2020 compared to unrestricted cash of $1,847,526 and
shareholder equity of $7.4 million as of December
31, 2019
"As we navigate through the COVID-19 pandemic we continue to
focus on increasing revenue while managing expenses," said
Brian C. Essman, CFO of BioHiTech
Global. "Contribution margins from our digester business
remained strong in the first quarter, and while staffing expenses
increased prior to the pandemic, we have taken subsequent measures
to manage cash going forward including reducing executive cash
compensation and temporarily reducing head count. We remain
optimistic regarding business activity in our digester business,
our progress in Martinsburg, and
the initial activity for our Altapure distribution business.
We believe we remain well positioned to capitalize on delivering
cost-effective environmentally responsible solutions to our
customer's needs which in turn will deliver long term value for our
stockholders."
About BioHiTech Global
BioHiTech Global, Inc. (NASDAQ: BHTG), is changing the way we
think about managing waste. Our cost-effective technology
solutions include the patented processing of municipal solid waste
into a valuable renewable fuel, biological disposal of food waste
on-site, and proprietary real-time data analytics tools to reduce
food waste generation. Our unique solutions enable businesses and
municipalities of all sizes to lower disposal costs while having a
positive impact on the environment. When used individually or
in combination, our solutions lower the carbon footprint associated
with waste transportation and can reduce or virtually eliminate
landfill usage. For more information, please
visit www.biohitech.com.
Forward Looking Statements
Statements in this press release contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, as
amended. Without limiting the foregoing, words such as
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"explore," "evaluate," "intend," "may," "might," "plan,"
"potential," "predict," "project," "seek," "should," or "will," or
the negative thereof or other variations thereon or comparable
terminology. These forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, many of
which are beyond the Company's control. These statements are also
based on many assumptions and estimates and are not guarantees of
future performance. These statements are estimates, based on
information available to management as of the date of this release,
and are subject to further changes. These statements may involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of BioHiTech
Global, Inc. to be materially different from future results,
performance or achievements expressed or implied by such
forward-looking statements. BioHiTech Global, Inc. assumes no
obligation to publicly update or revise these forward-looking
statements for any reason, or to update the reasons actual results
could differ materially from those anticipated in these
forward-looking statements, even if new information becomes
available in the future in these forward-looking statements, even
if new information becomes available in the future. Further, the
Company has only recently begun operations at its HEBioT Facility
and there can be no assurance that the Company will be able to meet
the projections contained in this release. Our actual results may
differ materially from the results anticipated in these
forward-looking statements due to a variety of factors, including,
without limitation those set forth as "Risk Factors" in our filings
with the Securities and Exchange Commission ("SEC"). There may be
other factors not mentioned above or included in the BioHiTech's
SEC filings that may cause actual results to differ materially from
those projected in any forward-looking statement. BioHiTech Global,
Inc. assumes no obligation to update any forward-looking statements
as a result of new information, future events or developments,
except as required by securities laws.
Company Contact:
BioHiTech Global, Inc.
Richard Galterio
Executive Vice President
Direct: 845.367.0603
ir@biohitech.com
www.biohitech.com
|
|
BioHiTech
Global, Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
|
|
|
Three Months Ended March 31,
|
|
2020
|
|
2019
|
Revenue
|
|
|
|
|
|
HEBioT (related
entity)
|
$
|
490,132
|
|
$
|
-
|
Rental, service and
maintenance
|
|
471,093
|
|
|
487,701
|
Equipment
sales
|
|
323,116
|
|
|
-
|
Management advisory
and other fees (related entity)
|
|
75,000
|
|
|
250,000
|
Total
revenue
|
|
1,359,341
|
|
|
737,701
|
Operating
expenses
|
|
|
|
|
|
HEBioT processing
(related entity)
|
|
812,427
|
|
|
-
|
Rental, service and
maintenance
|
|
260,835
|
|
|
203,203
|
Equipment
sales
|
|
146,404
|
|
|
-
|
Selling, general and
administrative
|
|
1,918,423
|
|
|
2,326,362
|
Depreciation and
amortization
|
|
615,202
|
|
|
129,439
|
Total operating
expenses
|
|
3,753,291
|
|
|
2,659,004
|
Loss from
operations
|
|
(2,393,950)
|
|
|
(1,921,303)
|
Other
expenses
|
|
|
|
|
|
Interest
income
|
|
(12,267)
|
|
|
-
|
Interest
expense
|
|
1,012,291
|
|
|
339,864
|
Total other
expenses
|
|
1,000,024
|
|
|
339,864
|
Net
loss
|
|
(3,393,974)
|
|
|
(2,261,167)
|
Net loss attributable
to non-controlling interests
|
|
(822,677)
|
|
|
(311,701)
|
Net loss
attributable to Parent
|
|
(2,571,297)
|
|
|
(1,949,466)
|
Other
comprehensive income (loss)
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(28,699)
|
|
|
1,253
|
Comprehensive
loss
|
$
|
(2,599,996)
|
|
$
|
(1,948,213)
|
|
|
|
|
|
|
Net loss attributable
to Parent
|
$
|
(2,571,297)
|
|
$
|
(1,949,466)
|
Preferred stock
dividends
|
|
(177,373)
|
|
|
(127,919)
|
Net loss attributable
to common shareholders
|
|
(2,748,670)
|
|
|
(2,077,385)
|
Net loss per common
share - basic and diluted
|
$
|
(0.16)
|
|
$
|
(0.14)
|
Weighted average
number of common shares outstanding - basic and diluted
|
|
17,376,507
|
|
|
14,816,734
|
|
|
|
BioHiTech
Global, Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash
|
$
|
1,934,846
|
|
$
|
1,847,526
|
Restricted
cash
|
|
1,137,714
|
|
|
1,133,581
|
Accounts receivable,
net of allowance for doubtful accounts of $ 98,366 and $170,038 as
of March 31, 2020 and December 31, 2019, respectively
(related entity $1,860,171 and $1,370,867 as of March 31, 2020
and December 31, 2019, respectively)
|
|
2,485,691
|
|
|
2,155,921
|
Inventory
|
|
366,482
|
|
|
467,784
|
Prepaid expenses and
other current assets
|
|
172,655
|
|
|
126,357
|
Total Current
Assets
|
|
6,097,388
|
|
|
5,731,169
|
Restricted
cash
|
|
2,563,978
|
|
|
2,555,845
|
Equipment on
operating leases, net
|
|
1,654,753
|
|
|
1,724,998
|
HEBioT facility,
equipment, fixtures and vehicles, net
|
|
36,979,350
|
|
|
37,421,333
|
Operating lease right
of use assets
|
|
918,585
|
|
|
945,047
|
License and
capitalized MBT facility development costs
|
|
8,042,938
|
|
|
8,049,929
|
Goodwill
|
|
58,000
|
|
|
58,000
|
Other
assets
|
|
48,849
|
|
|
53,726
|
Total
Assets
|
$
|
56,363,841
|
|
$
|
56,540,047
|
|
|
|
BioHiTech
Global, Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets, continued:
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|
(Unaudited)
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Line of credit, net
of financing costs of $18,644 and $20,152 as of March 31, 2020
and December 31, 2019, respectively
|
$
|
1,481,356
|
|
$
|
1,479,848
|
Advances from related
parties
|
|
1,410,000
|
|
|
210,000
|
Accounts payable
(related entity $2,654,592 and $2,531,034 as of March 31, 2020
and December 31, 2019, respectively
|
|
5,378,697
|
|
|
4,688,339
|
Accrued interest
payable
|
|
558,624
|
|
|
1,148,570
|
Accrued expenses and
liabilities
|
|
1,871,445
|
|
|
1,926,965
|
Deferred
revenue
|
|
98,008
|
|
|
89,736
|
Customer
deposits
|
|
6,792
|
|
|
44,792
|
Note
payable
|
|
100,000
|
|
|
100,000
|
Senior Secured Note,
net of financing costs of $101,007 and unamortized discounts of
$657,415 as of March 31, 2020
|
|
4,241,578
|
|
|
-
|
Current portion of WV
EDA Senior Secured Bonds payable
|
|
2,860,000
|
|
|
1,390,000
|
Current portion of
long term debt
|
|
4,219
|
|
|
4,605
|
Total Current
Liabilities
|
|
18,010,719
|
|
|
11,082,855
|
Junior note due to
related party, net of unamortized discounts of 89,592 and $95,043
as of March 31, 2020 and December 31, 2019,
respectively
|
|
954,885
|
|
|
949,434
|
Accrued
interest (related party)
|
|
1,567,311
|
|
|
1,510,193
|
WV EDA Senior Secured
Bonds payable, net of current portion, and financing costs of
$1,747,267 and $1,792,574 as of March 31, 2020 and
December 31, 2019, respectively
|
|
28,392,733
|
|
|
29,817,426
|
Senior Secured Note,
net of financing costs of $113,268 and unamortized discounts of
$726,242 as of December 31, 2019
|
|
-
|
|
|
4,160,490
|
Non-current lease
liabilities
|
|
916,973
|
|
|
915,170
|
Long-term debt, net
of current portion
|
|
7,126
|
|
|
8,201
|
Total
Liabilities
|
|
49,849,747
|
|
|
48,443,769
|
Series A
redeemable convertible preferred stock, 333,401 shares designated
and issued, and 145,312 outstanding as of March 31, 2020 and
December 31, 2019
|
|
726,553
|
|
|
726,553
|
Commitments and
Contingencies
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
Preferred stock,
$0.0001 par value; 10,000,000 shares authorized; 3,209,210 and
3,179,120 designated as of March 31, 2020 and
December 31, 2019; 1,935,648 and 1,922,603 issued
as of March 31, 2020 and December 31, 2019; 869,226 and
856,181 outstanding as of March 31, 2020 and December 31,
2019:
|
|
|
|
|
|
Series B
Convertible preferred stock, 1,111,200 shares designated: 428,333
shares issued, no shares outstanding as of March 31, 2020 and
December 31, 2019
|
|
-
|
|
|
-
|
Series C
Convertible preferred stock, 1,000,000 shares designated, 427,500
shares issued and outstanding as of March 31, 2020 and
December 31, 2019
|
|
3,050,142
|
|
|
3,050,142
|
Series D
Convertible preferred stock, 20,000 shares designated: 18,850
shares issued and outstanding as of March 31, 2020 and
December 31, 2019
|
|
1,505,262
|
|
|
1,505,262
|
Series E
Convertible preferred stock, 714,519 shares designated: 714,519
shares issued, 264,519 outstanding as of March 31, 2020 and
December 31, 2019
|
|
698,330
|
|
|
698,330
|
Series F
Convertible preferred stock, 30,090 shares designated, and 13,045
shares issued and outstanding as of March 31, 2020
|
|
1,444,614
|
|
|
-
|
Common stock, $0.0001
par value, 50,000,000 shares authorized, 17,417,288 and 17,300,899
shares issued and outstanding as of March 31, 2020 and
December 31, 2019, respectively
|
|
1,741
|
|
|
1,730
|
Additional paid in
capital
|
|
49,953,089
|
|
|
49,597,059
|
Accumulated
deficit
|
|
(55,374,103)
|
|
|
(52,785,242)
|
Accumulated other
comprehensive (loss)
|
|
(14,439)
|
|
|
(43,138)
|
Stockholders' equity
attributable to Parent
|
|
1,264,636
|
|
|
2,024,143
|
Stockholders' equity
attributable to non-controlling interests
|
|
4,522,905
|
|
|
5,345,582
|
Total
Stockholders' Equity
|
|
5,787,541
|
|
|
7,369,725
|
Total Liabilities
and Stockholders' Equity
|
$
|
56,363,841
|
|
$
|
56,540,047
|
|
|
|
BioHiTech
Global, Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net loss
|
$
|
(3,393,974)
|
|
$
|
(2,261,167)
|
Adjustments to
reconcile net loss to net cash used in operations:
|
|
|
|
|
|
Depreciation and
amortization
|
|
615,202
|
|
|
129,439
|
Amortization of
operating lease right of use assets
|
|
26,462
|
|
|
24,565
|
Provision for bad
debts
|
|
31,119
|
|
|
15,000
|
Share based employee
compensation
|
|
280,205
|
|
|
297,749
|
Interest resulting
from amortization of financing costs and discounts
|
|
133,355
|
|
|
109,789
|
Loss resulting from
write-off of proposed MBT site
|
|
-
|
|
|
346,654
|
Changes in operating
assets and liabilities
|
|
(207,843)
|
|
|
125,322
|
Net cash used in
operating activities
|
|
(2,515,474)
|
|
|
(1,212,649)
|
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
Purchases of
construction in-progress, equipment, fixtures and
vehicles
|
|
(20,849)
|
|
|
(2,794,824)
|
MBT facility
development costs incurred
|
|
(24,509)
|
|
|
(13,600)
|
MBT facility
development costs refunded
|
|
-
|
|
|
66,000
|
Net cash used in
investing activities
|
|
(45,358)
|
|
|
(2,742,424)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from the
sale of Series F convertible preferred stock units
|
|
1,495,450
|
|
|
-
|
Proceeds from the
sale of Series D convertible preferred stock units
|
|
-
|
|
|
750,000
|
Deferred financing
costs incurred
|
|
-
|
|
|
(43,941)
|
Repayments of
long-term debt
|
|
(1,460)
|
|
|
(2,264)
|
Related party
advances
|
|
1,200,000
|
|
|
150,000
|
Net cash provided
by financing activities
|
|
2,693,990
|
|
|
853,795
|
Effect of exchange
rate on cash (restricted and unrestricted)
|
|
(33,572)
|
|
|
19,851
|
Net change in cash
(restricted and unrestricted)
|
|
99,586
|
|
|
(3,081,427)
|
Cash - beginning of
period (restricted and unrestricted)
|
|
5,536,952
|
|
|
9,126,380
|
Cash - end of
period (restricted and unrestricted)
|
$
|
5,636,538
|
|
$
|
6,044,953
|
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SOURCE BioHiTech Global, Inc.