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17.08.2020 13:00:00
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BioHiTech Global Reports Second Quarter 2020 Financial Results
CHESTNUT RIDGE, N.Y., Aug. 17, 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 on August 14, 2020 for the second quarter of 2020 ended June 30, 2020.
Company Highlights
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).
Partnered with Crestmark and US Equity Funding to Offer Customers Equipment Lease Financing for the Altapure Products and Began Live Product Demonstrations of the Altapure-AP4 – The Company entered into a financing arrangement to offer lease financing through Crestmark, a leading business to business lender, and US Equity Funding, a full service commercial financing firm, for potential customers of its Altapure high-level disinfection technology distribution business. The Company began conducting product demonstrations of the Altapure-AP4 high-level disinfection system in June of 2020 as it seeks to actively ramp up distribution efforts for this new product category.
Achieved 21% Quarter over Quarter Revenue Growth Despite the Business Disruptions Caused by the COVID-19 Pandemic – Revenue from the Company's HEBioT business increased significantly quarter over quarter as the Company continued to increase utilization rates at its Martinsburg resource recovery facility. That increase in revenue was partially offset by a slowdown in its food waste digester business largely related to the COVID-19 pandemic and a decline in consulting revenue as the Company transitioned from providing those services.
Subsequent to the End of the Second Quarter
Received Purchase Orders from Carnival Cruise Lines as it Reinitiated the Installation Program of the Company's Revolution Series Food Waste Digesters on its Ships in Preparation for the Resumption of Cruising – The Company received purchase orders from Carnival Cruise Lines ("Carnival") valued at approximately $1 million. The purchase orders are part of a previously announced purchase contract between the two companies with an estimated value of up to $14 million.
Completed an $8.2 Million Underwritten Offering of Common Stock – The Company completed the sale of $8.2 million of common stock at a price of $1.81 per share in July. The Company intends to use the capital to support operations and the growth of its environmentally responsible technology solutions businesses.
"We continue to position BioHiTech for growth as we navigate through the uncertain business environment arising from the COVID-19 pandemic," stated Frank E. Celli, CEO of BioHiTech. "Our facility in Martinsburg achieved significant growth both sequentially and year over year and our digester business is poised for a substantial rebound in the second half of 2020 as Carnival has resumed its installation program. We have also expanded our business into high-level disinfection through our distribution agreement with Altapure and are pleased with the progress we are making in sales demonstrations and discussions for potential product deployments. We are confident that our new lease finance arrangement for the Altapure-AP4 machine with Crestmark and USA Funding will serve to enhance those efforts. While we still face challenges related to this uncertain environment that may intermittently affect our business, the recent infusion of equity capital has placed us on solid financial ground moving forward. We are also continuing to see improving business activity in our digester business as companies emerge from COVID-related business interruptions. As we move through the second half of 2020, we are focused on maintaining lean operations, growing our revenue streams, and seeking to opportunistically grow our business. We are confident that this strategy will enable us to achieve significant long-term value for our stockholders."
Financial Highlights for Q2 2020
Revenues: Total revenue in the second quarter of 2020 was $1.3 million, an increase of 21.2% compared to revenue from $1.1 million in the second quarter of 2019. The increase in revenue was due to revenue of $892,889 at the Company's Martinsburg HEBioT facility, a more than threefold year-over-year increase in compared to revenue of $277,041 in the second quarter of 2019 when the facility initiated the commissioning process. This growth HEBioT revenue was partially offset by decreases in digester rental, service and maintenance resulting from lower service and maintenance revenue, digester equipment sales and management advisory fees as the Company reduces the level of support provided under the agreement in order to maintain adequate focus on the Company's core services.
Operating Expenses: Operating expenses in the second quarter of 2020 increased by $662,298 or 22.2% to $3,639,178, mainly due to a $526,731 increase in HEBioT facility costs related to the increase in activity at the facility. Professional fees also increased by $117,790, or 43.2%, to $390,663 for the second quarter of 2020 as compared to the second quarter of 2019, primarily related to fund raising and strategic activities.
Loss from Operations: The Company recorded an operating loss of $(2,365,246) in the second quarter of 2020 compared to an operating loss of $(1,925,668) in the second quarter of 2019. The Company recorded a net loss attributable to parent of $(2,664,881) in the second quarter of 2020 compared to ($2,068,641) in the second quarter of 2019. Net loss per share in the second quarter of 2020 was $(0.16) on 17.4 million weighted average shares outstanding compared to a net loss of $(0.15) per share on 14.9 million weighted average shares outstanding.
Select Balance Sheet Items: Prior to the completion of its $8.2 million common equity offering in July of 2020 and the underwriter's $1.1 million exercise of its overallotment option in August of 2020, the Company had unrestricted cash of $342,182 with total stockholders equity of $2.8 million as of June 30, 2020 compared to unrestricted cash of $1,847,526 and total stockholders equity of $7.4 million as of December 31, 2019
"With the onset of the COVID-19 pandemic we have taken extensive measures to manage cash including reducing executive cash compensation and temporarily reducing head count, without sacrificing the ability to forward our business opportunities," said Brian C. Essman, CFO of BioHiTech. "Now, having completed our financing, and with Carnival resuming its digester deployment coupled with the opportunities presented by our Altapure distribution business, we believe we are poised to forge a new growth track as we head toward 2021. We continue to make progress at our Martinsburg HEBioT facility despite certain business dislocations related to the COVID-19 pandemic and we are confident in our ability to reach planned capacity in the future. With our newly strengthened balance sheet, we believe we are in the best position in our corporate history to capitalize on the opportunities in front of us for the benefit of our company and its 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
Investors:
ir@biohitech.com
BioHiTech Global, Inc. and Subsidiaries
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Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenue | ||||||||||||||||
HEBioT (related party) | $ | 892,899 | $ | 277,041 | $ | 1,383,031 | $ | 277,041 | ||||||||
Rental, service and maintenance | 356,033 | 448,937 | 827,126 | 936,638 | ||||||||||||
Equipment sales | - | 75,234 | 323,116 | 75,234 | ||||||||||||
Management advisory and other fees (related party) | 25,000 | 250,000 | 100,000 | 500,000 | ||||||||||||
Total revenue | 1,273,932 | 1,051,212 | 2,633,273 | 1,788,913 | ||||||||||||
Operating expenses | ||||||||||||||||
HEBioT processing | 1,020,277 | 493,546 | 1,832,704 | 493,546 | ||||||||||||
Rental, service and maintenance | 151,695 | 128,311 | 412,530 | 331,514 | ||||||||||||
Equipment sales | - | 38,726 | 146,404 | 38,726 | ||||||||||||
Selling, general and administrative | 1,897,442 | 1,706,324 | 3,815,865 | 4,032,686 | ||||||||||||
Depreciation and amortization | 569,764 | 609,973 | 1,184,966 | 739,412 | ||||||||||||
Total operating expenses | 3,639,178 | 2,976,880 | 7,392,469 | 5,635,884 | ||||||||||||
Loss from operations | (2,365,246) | (1,925,668) | (4,759,196) | (3,846,971) | ||||||||||||
Other expenses | ||||||||||||||||
Interest (income) | (5,355) | - | (17,622) | - | ||||||||||||
Interest expense | 1,025,319 | 962,004 | 2,037,610 | 1,301,868 | ||||||||||||
Total other expenses | 1,019,964 | 962,004 | 2,019,988 | 1,301,868 | ||||||||||||
Net loss | (3,385,210) | (2,887,672) | (6,779,184) | (5,148,839) | ||||||||||||
Net loss attributable to non-controlling interests | (720,329) | (819,031) | (1,543,006) | (1,130,732) | ||||||||||||
Net loss attributable to Parent | (2,664,881) | (2,068,641) | (5,236,178) | (4,018,107) | ||||||||||||
Other comprehensive income | ||||||||||||||||
Foreign currency translation adjustment | (1,437) | 3,944 | (30,136) | 5,197 | ||||||||||||
Comprehensive loss | $ | (2,666,318) | $ | (2,064,697) | $ | (5,266,314) | $ | (4,012,910) | ||||||||
Net loss attributable to Parent | $ | (2,664,881) | $ | (2,068,641) | ) | $ | (5,236,178) | $ | (4,018,107) | |||||||
Less – preferred stock dividends | (204,941) | (164,308) | (382,313) | (292,227) | ||||||||||||
Net loss – common shareholders | (2,869,822) | (2,232,949) | (5,618,491) | (4,310,334) | ||||||||||||
Net loss per common share - basic and diluted | $ | (0.16) | $ | (0.15) | $ | (0.32) | $ | (0.29) | ||||||||
Weighted average number of common shares outstanding - basic and diluted | 17,437,068 | 14,927,846 | 17,406,788 | 14,872,597 | ||||||||||||
BioHiTech Global, Inc. and Subsidiaries
| ||||||||
June 30, | December 31, | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current Assets | ||||||||
Cash | $ | 342,182 | $ | 1,847,526 | ||||
Restricted cash | 1,237,097 | 1,133,581 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $128,321 and $170,038 as of June 30, 2020 and December 31, 2019, respectively (related entity $2,102,095 and $1,370,867 as of June 30, 2020 and December 31, 2019, respectively) | 2,807,521 | 2,155,921 | ||||||
Inventory | 352,467 | 467,784 | ||||||
Prepaid expenses and other current assets | 179,906 | 126,357 | ||||||
Total Current Assets | 4,919,173 | 5,731,169 | ||||||
Restricted cash | 2,646,381 | 2,555,845 | ||||||
Equipment on operating leases, net | 1,537,142 | 1,724,998 | ||||||
HEBioT facility, equipment, fixtures and vehicles, net | 36,592,281 | 37,421,333 | ||||||
Operating lease right of use assets | 1,304,142 | 945,047 | ||||||
License and capitalized MBT facility development costs | 8,023,925 | 8,049,929 | ||||||
Goodwill | 58,000 | 58,000 | ||||||
Other assets | 38,799 | 53,726 | ||||||
Total Assets | $ | 55,119,843 | $ | 56,540,047 | ||||
BioHiTech Global, Inc. and Subsidiaries
| ||||||||
June 30, | December 31, | |||||||
(Unaudited) | ||||||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities: | ||||||||
Line of credit, net of financing costs of $2,050 and $20,152 as of June 30, 2020 and December 31, 2019, respectively | $ | 1,497,950 | $ | 1,479,848 | ||||
Advances from related parties | 935,000 | 210,000 | ||||||
Accounts payable (related entity $3,727,095 and $2,531,034 as of June 30, 2020 and December 31, 2019, respectively) | 6,036,103 | 4,688,339 | ||||||
Accrued interest payable | 1,255,389 | 1,148,570 | ||||||
Accrued expenses and liabilities | 1,832,068 | 1,926,965 | ||||||
Deferred revenue | 99,563 | 89,736 | ||||||
Customer deposits | 4,890 | 44,792 | ||||||
Note payable | - | 100,000 | ||||||
Senior Secured Note, net of financing costs of $88,508 and unamortized discounts of $587,249 as of June 30, 2020 | 4,324,243 | - | ||||||
Current portion of WV EDA Senior Secured Bonds payable | 2,860,000 | 1,390,000 | ||||||
Current portion of long term debt and Payroll Protection Program Loan | 168,111 | 4,605 | ||||||
Total Current Liabilities | 19,013,317 | 11,082,855 | ||||||
Junior note due to related party, net of unamortized discounts of $84,110 and $95,043 as of June 30, 2020 and December 31, 2019, respectively | 960,367 | 949,434 | ||||||
Accrued interest (related party) | 1,651,079 | 1,510,193 | ||||||
WV EDA Senior Secured Bonds payable, net of current portion, and financing costs of $1,719,392 and $1,792,574 as of June 30, 2020 and December 31, 2019, respectively | 28,420,608 | 29,817,426 | ||||||
Payroll Protection Program Loan | 257,461 | - | ||||||
Senior Secured Note, net of financing costs of $113,268 and unamortized discounts of $726,242 as of December 31, 2019 | - | 4,160,490 | ||||||
Note Payable | 100,000 | |||||||
Non-current lease liabilities | 1,220,780 | 915,170 | ||||||
Long-term debt, net of current portion | 6,038 | 8,201 | ||||||
Total Liabilities | 51,629,650 | 48,443,769 | ||||||
Series A redeemable convertible preferred stock, 333,401 shares designated and issued, and 145,312 outstanding as of June 30, 2020 and December 31, 2019 | 726,553 | 726,553 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity (Deficit) | ||||||||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 3,209,210 and 3,179,120 designated as of June 30, 2020 and December 31, 2019; 1,936,214 and 1,922,603 issued as of June 30, 2020 and December 31, 2019; 869,792 and 856,181 outstanding as of June 30, 2020 and December 31, 2019: | ||||||||
Series B Convertible preferred stock, 1,111,200 shares designated: 428,333 shares issued, no shares outstanding as of June 30, 2020 and December 31, 2019 | - | - | ||||||
Series C Convertible preferred stock, 1,000,000 shares designated, 427,500 shares issued and outstanding as of June 30, 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 June 30, 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 June 30, 2020 and December 31, 2019 | 698,330 | 698,330 | ||||||
Series F Convertible preferred stock, 30,090 shares designated, and 13,611 shares issued and outstanding as of June 30, 2020 | 1,507,408 | - | ||||||
Common stock, $0.0001 par value, 50,000,000 shares authorized, 17,809,592 and 17,300,899 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | 1,780 | 1,730 | ||||||
Additional paid in capital | 50,267,673 | 49,597,059 | ||||||
Accumulated deficit | (58,056,529) | (52,785,242) | ||||||
Accumulated other comprehensive (loss) | (13,002) | (43,138) | ||||||
Stockholders' (deficit) equity attributable to Parent | (1,038,936) | 2,024,143 | ||||||
Stockholders' equity attributable to non-controlling interests | 3,802,576 | 5,345,582 | ||||||
Total Stockholders' Equity | 2,763,640 | 7,369,725 | ||||||
Total Liabilities and Stockholders' Equity | $ | 55,119,843 | $ | 56,540,047 | ||||
BioHiTech Global, Inc. and Subsidiaries | ||||||||
Six Months Ended | ||||||||
2020 | 2019 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (6,779,184) | (5,148,839) | |||||
Adjustments to reconcile net loss to net cash used in operations: | ||||||||
Depreciation and amortization | 1,184,966 | 739,412 | ||||||
Amortization of operating lease right of use assets | 53,552 | - | ||||||
Provision for bad debts | 61,119 | 30,000 | ||||||
Share based employee compensation | 707,653 | 531,603 | ||||||
Interest resulting from amortization of financing costs and discounts | 265,776 | 221,078 | ||||||
Loss resulting from write-off of proposed MBT site | - | 346,654 | ||||||
Changes in operating assets and liabilities | 593,507 | 1,261,037 | ||||||
Net cash used in operating activities | (3,912,611) | (2,019,055) | ||||||
Cash flow from investing activities: | ||||||||
Purchases of construction in-progress, equipment, fixtures and vehicles | (50,731) | (4,164,592) | ||||||
Refund of deposit | 5,000 | - | ||||||
MBT facility development costs incurred | (36,996) | (26,269) | ||||||
MBT facility development costs refunded | - | 66,000 | ||||||
Net cash used in investing activities | (82,727) | (4,124,861) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from the sale of Series F convertible preferred stock units | 1,560,450 | - | ||||||
Proceeds from Payroll Protection Program Loan | 421,300 | - | ||||||
Proceeds from the sale of Series D convertible preferred stock units | 1,787,500 | |||||||
Affiliate investment in subsidiary | 1,400,000 | |||||||
Deferred financing costs incurred | (43,941) | |||||||
Repayments of long-term debt | (2,496) | (4,549) | ||||||
Related party advances, net | 725,000 | 210,000 | ||||||
Net cash provided by financing activities | 2,704,254 | 3,349,010 | ||||||
Effect of exchange rate on cash (restricted and unrestricted) | (20,208) | 17,398 | ||||||
Net change in cash (restricted and unrestricted) | (1,311,292) | (2,777,508) | ||||||
Cash - beginning of period (restricted and unrestricted) | 5,536,952 | 9,126,380 | ||||||
Cash - end of period (restricted and unrestricted) | $ | 4,225,660 | 6,348,872 | |||||
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SOURCE BioHiTech Global, Inc.
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