Media
Contact: Bryan McPhee ph: (410) 652-1159
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IR
Contact: Rob Schatz ph: (212) 370-4500
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Or bkmcphee@newgenerationbiofuels.com
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Rob@wolfeaxelrod.com
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·
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On August 17, 2010 we closed a registered direct
offering of common stock and warrants receiving $1,000,000 in gross
proceeds. Net proceeds are estimated at $915,000 after
deducting fees and offering
expenses.
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·
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On July 21, 2010 we announced that
we have filed for a patent application for our new pyrolysis oil based
biofuels.
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·
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On July 14, 2010, we announced
that we and Burmeister and Wain Energy A/S ("BWE") an engineering
organization located in Lyngby, Denmark have entered into a Memorandum of
Understanding (MOU) to cooperatively expand the use of NGBF’s renewable
biofuels technology with BWE's engineering expertise in power generation
and green renewable applications. The two companies believe there are
substantial mutual benefits that can arise from the collaborations of
BWE's expertise in combustion systems and our biofuel production know-how
and proprietary technology. The companies intend to explore business
opportunities to provide renewable energy solutions to BWE's existing
customers.
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·
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On June 24, 2010, we announced
that the Baltimore
City Board of School
Commissioners has approved a long term boiler test and evaluation of our
proprietary biofuel in two of Baltimore City's public schools over a one year
period. The maximum volume for the program is capped at 1,000,000 gallons,
but can be increased up to 2,000,000 gallons if both parties
agree.
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·
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On
June 10, 2010, we completed a private placement of our common stock and
warrants, raising $500,000 in gross proceeds and approximately $407,000 in
net proceeds, after deducting finders’ fees and offering
expenses.
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·
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On
June 3, 2010, we and Regent Trend Investment Ltd. (soon to be Milestone
Biofuels Limited) (“Milestone”) announced an amendment to our non-binding
Memorandum of Understanding (MOU), dated March 12, 2010 to extend the due
diligence period an additional 90 days to August 25, 2010 to more fully
explore the opportunities available for both parties. As previously
disclosed, the MOU contemplates a strategic relationship between Milestone
and us, including a $20 million direct equity investment in us and
collaboration with Milestone to fund a joint venture to develop and
operate biofuel production plants in the continental United States with a
production capacity of 250 million gallons per year. In addition to
satisfactory completion of due diligence, any transaction also remains
subject to negotiation and execution of definitive agreements and board
approval by both parties. The transaction obtained shareholder
approval as required under NASDAQ listing rules, at our annual
shareholders’ meeting on July 8, 2010. There can be no
assurance that the transaction will be completed, either on the proposed
terms and within the timeframe currently anticipated, or at
all.
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·
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On May 27, 2010 we announced we
have filed a patent application on our new glycerin-based
biofuel.
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·
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On
May 12, 2010, we issued a termination notice to Fenix Energy (Fenix) to
terminate our biofuel contract with Fenix as a result of
Fenix’s failure to post the mandatory letter of credit equal to
one month’s projected sales that we requested in March 2010. The
termination is effective immediately, although Fenix had a 30 day
cure period, which they did not meet. The contract is now fully
terminated. This contract was our largest single biofuel sales
contract, under which Fenix Energy had agreed to purchase a minimum
of 750,000 gallons of our biofuel per month for 12
months.
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·
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On
May 7, 2010, the Company’s board of directors appointed John E. Mack, our
current audit committee chairman, as non-executive Chairman of the Board;
appointed David H. Goebel, our Chief Operating Officer, as a director; and
accepted the resignation of Lee S. Rosen as Chairman of the Board and as a
director and approved and executed a separation agreement with Mr.
Rosen.
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·
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On
April 30, 2010, we completed a private placement of 90-day secured
convertible notes and warrants to two investors, raising $700,000 in gross
proceeds and $630,000 in net proceeds, after deducting finders’ fees. In
August the investors agreed to extend the maturity dates of the notes to
August 31, 2010 ($500,000 note) and August 19,
2010 ($200,000 note) respectively. We have a 10 business day cure
period if we fail to payoff the notes or the investor does not
convert upon the maturity date
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June
30,
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December
31,
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|||||||
2010
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2009
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
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$
|
262,031
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$
|
567,647
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||||
Restricted
cash
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14,702
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-
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||||||
Accounts
receivable
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-
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63,900
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||||||
Other
receivables
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41,406
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41,406
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||||||
Inventory
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11,708
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11,708
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||||||
Deferred
financing costs
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33,652
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|||||||
Prepaid
expenses and other current assets
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59,230
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237,635
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||||||
Total
current assets
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422,729
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922,296
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||||||
Property
and equipment – net
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1,131,212
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1,120,911
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||||||
Other
assets
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385,184
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346,073
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||||||
License
agreement
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5,282,487
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5,650,988
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||||||
TOTAL
ASSETS
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$
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7,221,612
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$
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8,040,268
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||||
LIABILITIES AND
STOCKHOLDER'S (DEFICIENCY) EQUITY
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||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued expenses
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$
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3,113,612
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$
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1,472,519
|
||||
Loan
payable
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50,000
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50,000
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||||||
Convertible
notes
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||||||||
(net
of unamortized discount of $46,651 and $0)
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653,349
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-
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||||||
License
agreement payable, current portion
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||||||||
(net
of unamortized discount of $337,353 and $375,467)
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662,647
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624,533
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||||||
Accrued
dividend on preferred stock
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864,148
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1,078,003
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||||||
Common
stock warrant liability and antidilution obligation
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97,421
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110,874
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||||||
Total
current liabilities
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5,441,177
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3,335,929
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||||||
License
agreement payable
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||||||||
(net
of unamortized discount of $467,974 and $622,274)
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2,532,026
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3,377,726
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||||||
Deferred
rent
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284,137
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324,409
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||||||
Total
liabilities
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8,257,340
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7,038,064
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||||||
Stockholders'
(deficiency) equity:
|
||||||||
Preferred
stock; $0.001 par value; 9,450,000 shares authorized; no shares issued and
outstanding at
June 30, 2010 and December 31, 2009
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-
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-
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||||||
Series
A Cumulative Convertible Preferred Stock: $0.001 par value; $100 stated
value, 300,000 shares authorized, 0 and 18,400 shares issued and
outstanding as of June 30, 2010 and December 31, 2009, respectively;
aggregate liquidation preference of $0
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-
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710,970
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||||||
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 June 30, 2010 and December 31, 2009, respectively;
aggregate liquidation preference of $5,442,696
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3,094,872
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3,094,872
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||||||
Common
stock, $0.001 par value, 100,000,000 shares authorized; 37,582,361 and
31,711,578 shares issued and outstanding as of June 30, 2010 and December
31, 2009, respectively
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37,582
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31,712
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||||||
Additional
paid-in-capital
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52,455,767
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47,593,489
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||||||
Accumulated
deficit
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(56,623,949
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)
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(50,428,839
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)
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||||
Total
stockholders' (deficiency) equity
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(1,035,728
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)
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1,002,204
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|||||
TOTAL LIABILITIES AND
STOCKHOLDERS' (DEFICIENCY) EQUITY
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$
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7,221,612
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$
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8,040,268
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For the
Three
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For
the Three
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For
the Six
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For
the Six
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|||||||||||||
Months
Ended
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Months
Ended
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Months
Ended
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Months
Ended
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|||||||||||||
June
30,
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June
30,
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June
30,
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June
30,
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|||||||||||||
2010
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2009
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2010
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2009
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|||||||||||||
Revenues:
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||||||||||||||||
Product
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$ | - | $ | 42,637 | $ | 6,477 | $ | 42,637 | ||||||||
Total
revenue
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- | 42,637 | 6,477 | 42,637 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Cost
of product revenue (including depreciation and amortization for the three
and six months ended June 30, 2010 and 2009 of $239,612, $419,064,
$171,758, and $332,612, respectively)
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526,404 | 597,840 | 1,107,352 | 806,495 | ||||||||||||
Research
and development expenses
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72,302 | 95,769 | 153,160 | 290,035 | ||||||||||||
General
and administrative expense
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2,088,705 | 2,601,685 | 4,433,704 | 4,496,284 | ||||||||||||
Total
operating expenses
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2,687,411 | 3,295,294 | 5,694,216 | 5,592,814 | ||||||||||||
Loss
from operations
|
(2,687,411 | ) | (3,252,657 | ) | (5,687,739 | ) | (5,550,177 | ) | ||||||||
Interest
income
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71 | 937 | 385 | 1,656 | ||||||||||||
Interest
expense
|
(280,297 | ) | (110,579 | ) | (382,281 | ) | (219,663 | ) | ||||||||
Gain
on debt extinguishment
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- | - | 154,000 | 241,500 | ||||||||||||
Loss
on fair value adjustment
|
(12,102 | ) | (2,935,039 | ) | (4,996 | ) | (3,140,648 | ) | ||||||||
Net
loss
|
(2,979,739 | ) | (6,297,338 | ) | (5,920,631 | ) | (8,667,332 | ) | ||||||||
Preferred
stock dividends
|
(125,787 | ) | (170,017 | ) | (274,479 | ) | (4,381,821 | ) | ||||||||
Net
loss available to common stockholders
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$ | (3,105,526 | ) | $ | (6,467,355 | ) | $ | (6,195,110 | ) | $ | (13,049,153 | ) | ||||
Basic
and diluted net loss per share
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$ | (0.09 | ) | $ | (0.25 | ) | $ | (0.18 | ) | $ | (0.56 | ) | ||||
Weighted
average number of shares outstanding
|
36,337,173 | 25,726,050 | 34,983,189 | 23,326,692 |
Six Months
Ended June 30,
2010
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Six Months
Ended June
30,
2009
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|||||||
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (5,920,631 | ) | $ | (8,667,332 | ) | ||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Bad
debt expense
|
5,609 | - | ||||||
Amortization
of prepaid consulting fee
|
71,339 | - | ||||||
Amortization
of deferred financing costs
|
74,513 | - | ||||||
Depreciation
and amortization expense
|
56,667 | 34,623 | ||||||
Amortization
of license agreement
|
368,501 | 310,784 | ||||||
Amortization
of license payable discount
|
192,414 | 219,663 | ||||||
Amortization
of convertible notes discount
|
103,298 | - | ||||||
Compensation
expense associated with stock options and restricted stock to
employees
|
1,189,613 | 1,435,439 | ||||||
Stock
options issued to non-employees for services
|
3,318 | 260,121 | ||||||
Loss
on change in fair value of warrant liability and antidilution
obligation
|
4,996 | 3,140,648 | ||||||
Gain
on extinguishment of debt
|
(154,000 | ) | (241,500 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
58,291 | (16,841 | ) | |||||
Prepaid
expenses and other current assets
|
107,066 | 73,627 | ||||||
Other
assets
|
(54,031 | ) | 116,735 | |||||
Accounts
payable and accrued expenses
|
1,591,093 | 168,840 | ||||||
Deferred
rent
|
(40,272 | ) | - | |||||
Net
cash used in operating activities
|
(2,342,216 | (3,165,193 | ) | |||||
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
||||||||
Net
increase in restricted cash
|
(14,702 | ) | - | |||||
Purchase
of property and equipment
|
(52,048 | ) | (615,209 | ) | ||||
Payment
for patents
|
- | (116,735 | ) | |||||
Net
cash used in investing activities
|
(66,750 | ) | (731,944 | ) | ||||
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
||||||||
Payments
for license agreement payable
|
(120,000 | ) | - | |||||
Proceeds
from convertible notes
|
700,000 | - | ||||||
Payment
of financing costs
|
(20,000 | ) | - | |||||
Proceeds
from issuance of common stock, net
|
1,543,350 | 2,958,748 | ||||||
Net
cash provided by financing activities
|
2,103,350 | 2,958,748 | ||||||
Decrease
in cash and cash equivalents
|
(305,616 | ) | (938,389 | ) | ||||
Cash
and cash equivalents - beginning of period
|
567,647 | 1,476,246 | ||||||
Cash
and cash equivalents - end of period
|
$ | 262,031 | $ | 537,857 |