New Generation Biofuels Holdings, Inc. (NASDAQ: NGBF) ("NGBF" or
the "Company"), a leader in renewable fuels technology, announced
today its financial results for the third quarter ended September
30, 2010.
Net loss for the third quarter ending September 30, 2010, was
$1.2 million, compared to a net loss of $1.7 million for the third
quarter of 2009. For the first nine months of 2010, the net loss
was $7.1 million, versus a net loss of $10.3 million for the first
nine months of 2009. For the three months and nine months ended
September 30, 2010, the Company had revenues of $-0- and $6,351,
respectively. This is compared to revenues of $34,412 for the three
and $77,048 for the nine months ended September 30, 2009. The
decrease in revenue was due solely to working capital constraints,
not customer demand. During 2010, the production facility in
Baltimore has been utilized primarily to make fuel for prospective
customer testing and for R&D activities including testing new
production processes. We expect to produce and ship fuel once we
have secured additional working capital.
Net cash used in operating activities was $3.7 million for the
nine months ended September 30, 2010, versus $5.2 million used in
last year's comparable period. As of September 30, 2010, the
Company had cash on hand of approximately $0.22 million, and will
need to complete another financing during the fourth quarter.
Recent Developments
-- Miles F. Mahoney joined the Company as President and Chief Executive
Officer. He also serves as a Director. Mr. Mahoney brings strong
experience in technology development, business development and product
commercialization. Most recently, Mr. Mahoney served as President and
COO of Evergreen Energy, a leader in the global $3 trillion greenhouse
gas and carbon credit trading marketplace.
-- The Company received gross proceeds of approximately $2.4 million in a
series of four transactions with institutional investors. Three of the
transactions were completed under the Company's shelf registration
statement in August, September and October. The most recent
transaction, closed in early November, consists of convertible notes
carrying a conversion price of $0.14 per share.
-- In the third quarter, the Company recorded a gain on debt
extinguishment of $1.3 million resulting from the negotiated settlement
of certain liabilities and the amendment of the lease on the Baltimore
production facility. Pursuant to the agreement to amend the lease the
Company made a payment of $290,000 in cash and also issued 300,000
shares of restricted common stock. In consideration of the payment,
the landlord agreed to forfeit past due amounts under the lease
agreement, terminate and forfeit minimum payments due for terminating
services under a separate agreement, and reduce the monthly lease rate
from $80,000 to $25,000 for the remaining lease term of three years.
Included in the $290,000 payment is $100,000 representing the August
reduced lease payment and prepayment of the monthly $25,000 rent for
September, October and November of 2010. As a result of the lease
amendment, the Company recorded a gain of approximately $570,000 and
reduced future obligations by approximately $2.9 million. The balance
of the recorded gain was related to settling trade payables, primarily
professional services rendered by 19 vendors. The Company settled
$1.9M of debt for cash payments totaling $467,000 and 585,000 shares of
restricted common stock.
"I'm excited to be joining New Generation Biofuels at this
important juncture in the Company's development and I'm prepared to
address the challenges we face, including ensuring that we have the
financial resources needed to grow the Company and create long-term
value for our shareholders," commented Miles, F Mahoney, President
and Chief Executive Officer. "The Company has been able to improve
its financial condition by raising capital and settling a number of
debts and we must continue to make rapid progress in putting the
Company on a solid financial footing. Securing adequate funding,
continuing to advance our technology, completing a strategic
partnership, and commercializing our technology are my highest
priorities."
Mr. Maloney continued, "I appreciate the Board's confidence in
presenting me with this opportunity to lead the Company. I would
also like to thank our shareholders for their continued interest
and patience. Moving forward, we are committed to clear, consistent
communications with stated objectives by which we can measure our
progress. I invite you to visit our website and view the recently
posted CEO letter for additional comments on my objectives and the
Company's value drivers."
About New Generation Biofuels Holdings, Inc.
New Generation Biofuels is a renewable fuels provider. The
Company holds an exclusive license for North America, Central
America and the Caribbean to commercialize proprietary technology
to manufacture alternative biofuels from plant oils and animal fats
that it markets as a new class of biofuel for power generation,
commercial and industrial heating and marine use. The Company
believes that its proprietary biofuel can provide a lower cost,
renewable alternative energy source with significantly lower
emissions than traditional fuels. New Generation Biofuels' business
model calls for establishing direct sales from manufacturing plants
that it may purchase or build and sublicensing its technology to
qualified licensees.
Forward-Looking Statements
This news release contains forward-looking statements. These
forward-looking statements concern the Company's operations,
prospects, plans, economic performance and financial condition and
are based largely on the Company's beliefs and expectations. These
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results to be materially different
from any future results expressed or implied by such
forward-looking statements. The risks and uncertainties related to
our business, which include all the risks attendant an emerging
growth company in the volatile energy industry, including those set
forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 2009, and in subsequent filings with the
Securities and Exchange Commission. These forward-looking
statements are made as of the date of this news release, and the
Company assumes no obligation to update the forward-looking
statements or to update the reasons why the actual results could
differ from those projected in the forward-looking statements.
NEW GENERATION BIOFUELS HOLDINGS, INC.
Consolidated Balance Sheets
September 30, December 31,
2010 2009
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 216,762 $ 567,647
Restricted cash 14,704 -
Accounts receivable - 63,900
Other receivables 41,406 41,406
Inventories 11,708 11,708
Prepaid expenses and other current assets 1,654,972 237,635
------------- -------------
Total current assets 1,939,552 922,296
Property, plant and equipment - net 1,124,212 1,120,911
License agreement - net 5,104,840 5,650,988
Other assets - net 413,103 346,073
------------- -------------
TOTAL ASSETS $ 8,581,707 $ 8,040,268
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,647,292 $ 1,472,519
Loan payable - 50,000
Convertible notes payable
(net of unamortized discount of $- and $-) 200,000 -
License agreement payable, current portion
(net of unamortized discount of $314,746
and $375,467) 685,254 624,533
Accrued dividends on preferred stock 973,895 1,078,003
Common stock warrant liability and
antidilution obligation 31,900 110,874
------------- -------------
Total current liabilities 3,538,341 3,335,929
License agreement payable (net of
unamortized discount of $400,152 and
$622,274) 2,599,848 3,377,726
Deferred rent 170,365 324,409
------------- -------------
Total liabilities 6,308,554 7,038,064
============= =============
Commitments and contingencies - -
Stockholders' equity:
Preferred stock; $0.001 par value;
9,450,000 shares authorized; no shares
issued and outstanding at September 30,
2010 and December 31, 2009 - -
Series A Cumulative Convertible Preferred
Stock: $0.001 par value; $100 stated value,
300,000 shares authorized, - and 18,400 shares
issued and outstanding as of September 30, 2010
and December 31, 2009, respectively; aggregate
liquidation preference of $- - 710,970
Series B Cumulative Convertible Preferred Stock:
$0.001 par value; $100 stated value, 250,000
shares authorized, 45,785 and 45,785 shares
issued and outstanding as of September 30,
2010 and December 31, 2009 respectively;
aggregate liquidation preference of
$5,552,424 3,094,872 3,094,872
Common stock, $0.001 par value, 100,000,000
shares authorized; 60,353,205 and 31,711,578
shares issued and outstanding as of September
30, 2010 and December 31, 2009, respectively 60,353 31,712
Additional paid-in-capital 57,003,899 47,593,489
Accumulated deficit (57,885,971) (50,428,839)
------------- -------------
Total stockholders' equity 2,273,153 1,002,204
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 8,581,707 $ 8,040,268
============= =============
NEW GENERATION BIOFUELS HOLDINGS, INC.
Consolidated Statements of Operations
(Unaudited)
For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
September 30, September 30, September 30, September 30,
2010 2009 2010 2009
----------- ----------- ----------- -----------
Revenues:
Product $ - $ 34,412 $ 6,351 $ 77,048
----------- ----------- ----------- -----------
Total revenue - 34,412 6,351 77,048
Operating
expenses:
Cost of product
revenue (including
depreciation and
amortization for
the three and nine
months ended
September 30, 2010
and 2009 of $205,011,
$178,670, $624,075,
and $511,282,
respectively) 301,699 584,745 1,408,925 1,391,240
Research and
development
expense 87,770 73,126 240,930 363,160
General and
administrative
expense 1,920,911 2,279,523 6,354,618 6,775,806
----------- ----------- ----------- -----------
Total operating
expenses 2,310,380 2,937,394 8,004,473 8,530,206
----------- ----------- ----------- -----------
Loss from
operations (2,310,380) (2,902,982) (7,998,122) (8,453,158)
Interest income 75 1,294 461 2,951
Interest expense (276,973) (119,029) (659,253) (338,692)
Gain on debt
extinguishment 50,000 - 204,000 241,500
Gain on settlement
of trade payables
and lease
termination 1,319,483 - 1,319,483 -
Gain (loss) on
net change in
fair value of
derivative
liabilities 65,521 1,343,577 60,525 (1,797,071)
----------- ----------- ----------- -----------
Net loss (1,152,274) (1,677,140) (7,072,906) (10,344,470)
Dividends to
preferred
stockholders (109,748) (167,919) (384,226) (4,549,741)
----------- ----------- ----------- -----------
Net loss
attributable
to common
stockholders $ (1,262,022) $ (1,845,059) $ (7,457,132) $ (14,894,211)
============= ============= ============= =============
Basic and
diluted net
loss per share $ (0.03) $ (0.06) $ (0.20) $ (0.61)
============= ============= ============= =============
Weighted average
number of shares
outstanding 42,962,197 28,465,378 37,672,085 24,345,980
============= ============= ============= =============
Media Contact: Bryan McPhee ph: (410) 652-1159 Email Contact IR
Contact: Matthew Haines ph: (212) 710-9686 Email Contact
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