COLUMBIA, MD -- (Marketwire) -- 05/13/11 -- New Generation Biofuels Holdings, Inc. (OTCQB: NGBF) (PINKSHEETS: NGBF) (the "Company"), a clean energy company deploying novel technologies to produce cleaner, renewable biofuels, today announced its financial results for the first quarter ended March 31, 2011.
The Company reported a net loss of $2.3 million for the quarter ending March, 31, 2011 with no revenue versus a net loss of $2.9 million on revenues of $6,477 for the comparable quarter in 2010. The net loss for both periods reflect operating costs, as well as significant non-cash charges relating to stock based compensation, stock options and warrants issued for services and amortization charges relating to our technology license. The current period results also reflect non-cash charges resulting from restructuring certain debt instruments in connection with a $1 million debt placement completed in February 2011.
Net cash used in operating activities was $0.9 million for the three months ended March 31, 2011, down $0.4 million from $1.3 million used in last year's comparable period. As of March 31, 2011 the Company had cash on hand of approximately $0.1 million, and will need to complete another financing during the second quarter.
"The first quarter financial results reflect not only our efforts to reduce costs but also our need to obtain appropriate funding to move the business positively forward. These are issues that will continue to challenge us until we secure strategic sponsors," said David H. Goebel, Jr., Principal Executive and Chief Operating Officer. "Operationally our focus will be to complete the development and commercialization of our biofuel technologies utilizing pyrolysis oil as the feedstock. This activity is critical and concurrent with our efforts to address our capital needs. It is our belief that the successful development of our pyrolysis-based technology will afford us the unique opportunity to offer biofuels that are renewable, emission reducing, and economically viable with or without government incentives. We are aggressively seeking sponsors and partners who share our vision of being the preferred global renewable biofuels technology provider, delivering unique renewable fuel solutions through direct sales and technology licensing."
About the Company
The Company is a clean energy company deploying novel technologies to produce renewable biofuels. The Company has rights to a portfolio of patented and patent pending 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. The Company's business model calls for establishing direct sales from manufacturing plants that it may purchase or build and sublicensing its technology to qualified licensees. Additional information about the Company is available at http://www.newgenerationbiofuels.com.
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, 2010 and the Company's Quarterly Report on Form 10-Q for the three-month period ended March 31, 2011, and in subsequent filings with the Securities and Exchange Commission (the "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. As of the date of this press release, the Company's common stock is considered "penny stock" pursuant to the rules and regulations of the Commission, as a result, the Company is not entitled to rely on the safe harbor with respect to forward-looking statements provided under the Private Securities Litigation Reform Act of 1995.
NEW GENERATION BIOFUELS HOLDINGS, INC. Consolidated Balance Sheets March 31, December 31, 2011 2010 ----------- ----------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 108,057 $ 149,909 Restricted cash 14,708 14,706 Other receivables - 9,095 Debt issuance costs, net 52,898 25,000 Prepaid expenses and other current assets 472,629 904,254 ----------- ----------- Total current assets 648,292 1,102,964 Property, plant and equipment, net 1,167,143 1,189,620 License agreement, net 4,880,434 5,034,545 Other assets, net 383,337 370,906 ----------- ----------- Total assets $ 7,079,206 $ 7,698,035 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued expenses $ 1,684,650 $ 1,647,449 Convertible notes payable (net of unamortized debt discount of $248,114 and $11,141) 1,126,636 518,859 License agreement payable, current portion (net of unamortized debt discount of $274,302 and $291,844) 1,725,698 708,156 Accrued dividends on preferred stock 1,193,151 1,083,666 Derivative liabilities 84,877 12,692 ----------- ----------- Total current liabilities 5,815,012 3,970,822 License agreement payable (net of unamortized debt discount of $258,621 and $331,995) 1,741,379 2,668,005 Deferred rent 127,774 149,069 ----------- ----------- Total liabilities 7,684,165 6,787,896 Commitments and contingencies - - Stockholders' equity (deficit): Preferred stock; $0.001 par value; 9,450,000 shares authorized; no shares issued and outstanding at March 31, 2011 and December 31, 2010 - - Series A Cumulative Convertible Preferred Stock: $0.001 par value; $100 stated value; 300,000 shares authorized; no shares issued and outstanding at March 31, 2011 and December 31, 2010 - - 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 March 31, 2011 and December 31, 2010 respectively; aggregate liquidation preference of $5,771,685 3,094,872 3,094,872 Common stock, $0.001 par value, 350,000,000 and 100,000,000 shares authorized as of March 31, 2011 and December 31, 2010, respectively; 93,075,564 and 82,083,896 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively 93,075 82,083 Additional paid-in-capital 61,311,742 60,380,709 Accumulated deficit (65,104,648) (62,647,525) ----------- ----------- Total stockholders' equity (deficit) (604,959) 910,139 ----------- ----------- Total liabilities and stockholders' equity (deficit) $ 7,079,206 $ 7,698,035 =========== =========== NEW GENERATION BIOFUELS HOLDINGS, INC. Consolidated Statements of Operations (Unaudited) For the For the Three Months Three Months Ended March Ended March 31, 2011 31, 2010 ------------ ------------ Revenues: Product $ - $ 6,477 Alternative fuel tax credit - - ------------ ------------ Total revenue - 6,477 ------------ ------------ Operating expenses: Cost of product revenue (including depreciation and amortization of $182,730 and $179,453, respectively) 249,767 580,948 Research and development 89,875 80,858 General and administrative 1,375,176 2,344,998 ------------ ------------ Total operating expenses 1,714,818 3,006,804 ------------ ------------ Loss from operations (1,714,818) (3,000,327) Other income and (expenses): Interest income 57 314 Interest expense (239,305) (101,985) Loss on extinguishment of convertible debt (163,305) - Gain on extinguishment of license agreement payable - 154,000 Gain on settlement of trade payables 10,600 - Loss on conversion of debt (403,163) - Gain on net change in fair value of derivative liabilities 162,295 7,106 ------------ ------------ Total other income (expenses), net (632,821) 59,435 ------------ ------------ Net loss (2,347,639) (2,940,892) Dividends to preferred stockholders (109,484) (148,692) ------------ ------------ Net loss attributable to common stockholders $ (2,457,123) $ (3,089,584) ============ ============ Basic and diluted net loss per share $ (0.03) $ (0.09) ============ ============ Weighted average number of shares outstanding 86,309,266 33,614,160 ============ ============ NEW GENERATION BIOFUELS HOLDINGS, INC. Consolidated Statements of Cash Flows (Unaudited) For the For the Three Months Three Months Ended March Ended March 31, 2011 31, 2010 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,347,639) $ (2,940,892) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of prepaid consulting fee 406,500 64,539 Amortization of debt issuance costs 42,075 - Depreciation and amortization expense 22,477 20,831 Amortization of license agreement 154,111 154,117 Amortization of debt discount on license agreement payable 90,916 101,984 Amortization of patents 9,336 7,540 Amortization of debt premium on convertible notes (1,870) - Amortization of debt discount on convertible notes 86,338 - Compensation expense associated with stock options and restricted stock to employees 186,892 483,751 Stock options issued to non-employees for services - 3,318 Gain on change in fair value of derivative liabilities (162,295) (7,106) Loss on extinguishment of convertible debt 163,305 - Loss on conversion of debt 403,163 - Gain on settlement of trade payables (10,600) - Gain on extinguishment of license agreement payable - (154,000) Changes in operating assets and liabilities: Accounts receivable - 40,792 Other receivables 9,095 - Prepaid expenses and other current assets 25,125 54,146 Other assets - (1,104) Accounts payable and accrued expenses 62,533 879,631 Deferred rent (21,295) (20,136) ------------ ------------ Net cash used in operating activities (881,833) (1,312,589) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Net increase in restricted cash (2) (14,700) Purchases of property and equipment - (13,198) Capitalized patent costs (21,767) (3,888) ------------ ------------ Net cash used in investing activities (21,769) (31,786) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Payments for license agreement payable - (120,000) Proceeds from issuance of common stock, net - 1,136,388 Proceeds from the issuance of convertible notes 1,012,500 - Debt issuance costs (50,750) - Repayment of convertible notes (100,000) - ------------ ------------ Net cash provided by financing activities 861,750 1,016,388 ------------ ------------ Decrease in cash and cash equivalents (41,852) (327,987) Cash and cash equivalents - beginning of period 149,909 567,647 ------------ ------------ Cash and cash equivalents - end of period $ 108,057 $ 239,660 ============ ============ Supplemental Disclosure of Non-Cash Operating and Financing Activities Accrued dividends on preferred stock $ 109,484 $ 148,692 Common stock issued for payment of license agreement payable $ - $ 726,000 Issuance of common stock for payment of accounts payable and accrued expenses $ 10,000 $ - Anti-dilution obligation associated with issuance of common stock $ - $ 40,000 Issuance of common stock for settlement of anti-dilution obligation $ - $ 58,449 Issuance of warrants for debt issuance costs $ 19,223 $ - Issuance of warrants with convertible debt $ 157,777 $ - Embedded conversion feature on convertible debt $ 57,480 $ - Debt discount as a result of beneficial conversion feature associated with convertible debt modification $ 341,965 $ - Conversion of debt to common stock $ 4 -
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