PR Newswire | Nov 19, 2020 04:10PM EST

11/19 15:10 CST

BioHiTech Global Reports Third Quarter 2020 Financial ResultsConference call to be held today, November 19, at 4:30 p.m. Eastern Time CHESTNUT RIDGE, N.Y., Nov. 19, 2020

CHESTNUT RIDGE, N.Y., Nov. 19, 2020 /PRNewswire/ -- BioHiTech Global, Inc. ("BioHiTech" or the "Company") (NASDAQ: BHTG), a sustainable technology and services company, today announces financial results for its third quarter 2020 ended September 30, 2020.

Third Quarter Highlights:

* Announced that Carnival Corp., the world's largest cruise company, reinitiated its installation program of the BioHiTech's Revolution Series Digesters aboard its ships in preparation for the eventual resumption of cruising * Announced a total of $1.4 million in new food waste digester purchase orders for its Revolution Series Digesters from Carnival Corp. as part of its previously announced purchase contract between the two companies with an estimated value of up to $14 million * Received first Altapure AP-4(tm) disinfectant systems purchase contract from Hazelton Area School District in Pennsylvania to protect its schools against COVID-19 and other viral infections * Shipped the first Altapure AP-4(tm) disinfectant system to the cruise industry where it will be installed on the SeaDream I yacht, a mega-yacht boutique ship * Closed an $9.5 million (gross) underwritten public offering, including the underwriter's over-allotment, with net proceeds of $8.4 million to the Company

Developments Subsequent to the End of the Third Quarter

* Appointed Anthony Fuller as Chief Executive Officer * Received contract to install seven new food waste digesters at various Hackensack Meridian Health healthcare facility locations * Made strategic investment in Rensselaer, NY land venture as a material step to establishing a renewable energy campus, including New York state's first waste conversion facility * Announced a total of $1.9 million in new food waste digester purchases, bringing total orders received from Carnival Corp. for the Company's Revolution Series(tm) food waste digesters to $3.3 million, including $600,000 in digester orders from Princess Cruises, since Carnival reinitiated the installation of digesters on its ships in July 2020

"While the third quarter fell short of our expectations financially, a number of significant events during the quarter and after September 30 provide reasons to believe better quarters are ahead," commented BioHiTech's CEO Anthony Fuller. "Carnival Corp. has placed $3.3 million worth of food waste digesters orders since July, providing what we believe is an incredible testimony to our technology and ability to solve real-world food waste problems for the travel and hospitality industry. Additionally, our multi-unit order for food digesters from the Hackensack Meridian Healthcare system provides further validation for our Revolution Series Digesters that convert food waste into a liquid that can be safely discharged through any standard sewer line.

"The Altapure AP-4 disinfectant system saw initial deployments in a school district as well as on a cruise ship, and we are confident it can address future needs across a range of industries, all of which have been affected by COVID-19. We continue to ascend the learning curve of operating our Martinsburg, W.V. plant using our patented High Efficiency Biological Treatment ("HEBioT") process. In many ways, are still in the commissioning phase with this plant. We've made notable changes and are pleased with the progress we are seeing. Our learnings from the Martinsburg facility will prove vital as we progress towards our potential development of a 'renewable energy campus' planned for Rensselaer, N.Y. Quite simply, BioHiTech provides cost-effective technology solutions for sustainable waste management, whether on a large scale like our Martinsburg resource recovery facility or on a smaller scale via our food waste digesters.

"As we look ahead to 2021 and beyond, and as the newly appointed CEO, we are setting course with enhanced corporate initiatives. These initiatives are designed to maximize shareholder value and help investors better measure our progress moving forward. I've laid out five goals on which we are focused heading into 2021: 1) increase revenue appreciably, 2) reduce SG&A meaningfully, 3) improve the plant operations measurably, 4) tell the story clearly, and 5) function as a team effectively. I look forward to elaborating more on these goals in our earnings conference call later this afternoon and throughout the quarter," concluded Mr. Fuller.

Financial Highlights for Q3 2020

Revenues:Total revenue in the third quarter of 2020 was $742,877, a decrease of 48% compared to revenue of $1,426,775 in the third quarter of 2019. Third quarter revenue decreased primarily due to a reconfiguration process conducted at the Martinsburg (W.V.) High Efficiency Biological Treatment (HEBioT) facility during the quarter by the facility's new management team that temporarily reduced production and caused its revenue to decline by 59% year-over-year to $248,274 prior to a $247,649 negative adjustment in previously estimated take-or-pay contract revenue. Rental, service, and maintenance revenue declined 13% from $489,555 in the third quarter of 2019 to $423,996 in the third quarter of 2020. Equipment sales partially offset the declines in the HEBioT and rental, service, and maintenance revenue and rose 370% from $62,565 in the third quarter of 2019 to $293,876 in the third quarter of 2020 due to purchases from Carnival Cruise Lines under their master purchase contract. Furthermore, management advisory and other fees derived support for Gold Medal, a related entity, decreased from $264,750 in the third quarter of 2019 to $24,380 in the third quarter of 2020 in order for management to devote more focus to the Company's core services.

Operating Expenses:Total Operating Expenses, including $1,256,477 in cost of goods sold and a $917,420 impairment expense at the Martinsburg waste facility, in the third quarter increased 53% from $3,042,020 in the third quarter of 2019 to $4,660,333 in the third quarter of 2020. Increased production expenses, the aforementioned impairment expense, stock-based compensation, legal and social media expenses, insurance costs at the HEBioT facility, Directors and Officers insurance, and management transition expenses at the HEBioT facility primarily drove the increased operating expenses from the comparable period in 2019.

Loss from Operations:The loss from operations increased from ($1,615,245) in the third quarter of 2019 to a loss of ($3,917,456) in the third quarter of 2020.

Net Loss: Net loss per share in the third quarter of 2020 was ($0.16) on 22.0 million weighted average shares outstanding, compared to a net loss of ($0.13) per share on 15.6 million weighted average shares outstanding in third quarter of 2019.

Cash:Unrestricted cash at September 30, 2020 was $4,950,112 following an underwritten public offering completed during the third quarter that netted the Company $8,437,480 in proceeds, including the underwriter's over-allotment.

Earnings Conference Call

Management will host a conference call at 4:30 p.m. ET on Thursday, November 19, 2020 to review financial results and provide an update on corporate developments. Following management's formal remarks, there will be a question and answer session.

Participants are asked to pre-register for the call via the following link: https://dpregister.com/sreg/10150010/dd340fff34

Please note that registered participants will receive their dial-in number upon registration and will dial directly into the call without delay. Those without Internet access or who are unable to pre-register may dial in by calling 1-866-652-5200 (domestic) or 1-412-317-6060 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the BioHiTech Global call.

The conference call will be available through a live webcast found here: https://services.choruscall.com/links/bhtg201116.html

It will also be broadcast live through the Company's website with the following link: http://investors.biohitechglobal.com/events-and-webcasts

A webcast replay of the call can be accessed through the above links and will be available approximately one hour after the end of the call through February 19, 2021. The call replay can also be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using access code 10150010. The telephonic replay of the call will be available through November 30, 2020.

About BioHiTech GlobalBioHiTech Global, Inc. (NASDAQ: BHTG), is a technology services company focused on providing cost-effective solutions that improve environmental outcomes. Our technologies for waste management 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. When used individually or in combination, our solutions lower the carbon footprint associated with waste transportation and can reduce or virtually eliminate landfill usage. In addition, we distribute a patented technology that achieves high-level disinfection of spaces such as classrooms, hotel or hospital rooms and other enclosed areas to combat the spread of viruses and bacteria without the use of harsh chemicals. Our unique solutions enable businesses, educational institutions and municipalities of all sizes to solve everyday problems in a smarter and more cost-effective way while reducing their impact on the environment. For more information, please visit www.biohitech.com.

Forward Looking StatementsStatements 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. 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 GalterioExecutive Vice PresidentDirect: 845.367.0603rgalterio@biohitech.comwww.biohitech.comInvestors: ir@biohitech.com

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Revenue

HEBioT (related party) $ 625 $ 609,905 $ 1,383,656 $ 886,947

Rental, service and maintenance 423,996 489,555 1,251,122 1,426,193

Equipment sales 293,876 62,565 616,992 137,799

Management advisory and other fees 24,380 264,750 124,380 761,750(related party)

Total revenue 742,877 1,426,775 3,376,150 3,212,689

Operating expenses

HEBioT processing 945,810 786,680 2,778,514 1,309,176

Rental, service and maintenance 139,665 176,651 552,195 508,164

Equipment sales 171,002 17,776 317,406 56,502

Selling, general and administrative 1,924,293 1,449,545 5,740,158 5,450,282

Impairment expense 917,420 - 917,420 -

Depreciation and amortization 562,143 611,368 1,747,109 1,350,780

Total operating expenses 4,660,333 3,042,020 12,052,802 8,674,904

Loss from operations (3,917,456) (1,615,245) (8,676,652) (5,462,215)

Other (income) expenses

Gain on sale of affiliate investment - (562,617) - (562,617)

Interest (income) (108) (46,180) (17,730) (46,180)

Interest expense 1,023,165 979,202 3,060,775 2,281,071

Expense incurred in warrant valuation - 49,160 - 49,160and conversions

Total other (income) expenses 1,023,057 419,565 3,043,045 1,721,434

Net loss (4,940,513) (2,034,810) (11,719,697) (7,183,649)

Net loss attributable to non-controlling (1,647,782) (728,337) (3,190,788) (1,859,069)interests

Net loss attributable to Parent (3,292,731) (1,306,473) (8,528,909) (5,324,580)

Other comprehensive income

Foreign currency translation adjustment 71,067 (32,676) 40,931 (37,873)

Comprehensive loss $ (3,221,664) $ (1,339,149) $ (8,487,978) $ (5,362,453)

Net loss attributable to Parent $ (3,292,731) $ (1,306,473) $ (8,528,909) $ (5,324,580)

Preferred stock dividends (205,115) (255,847) (587,428) (548,075)

Deemed dividend on down round (21,738) (405,324) (21,738) (405,324)feature

Net loss - common shareholders (3,519,584) (1,967,644) (9,138,075) (6,277,979)

Net loss per common share - basic and $ (0.16) $ (0.13) $ (0.49) $ (0.41)diluted

Weighted average number of common 22,044,540 15,649,174 18,787,566 15,134,301shares outstanding - basic and diluted

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

September 30, December 31, 2020 2019

(Unaudited)

Assets

Current Assets

Cash $ 4,950,112 $ 1,847,526

Restricted cash 1,287,138 1,133,581

Accounts receivable, net of allowance for doubtful accounts of $194,066 and$170,038as of September 30, 2020 and December 31, 2019, respectively (related entity 3,311,519 2,155,921$2,227,224 and $1,370,867 as of September 30, 2020 and December 31, 2019,respectively)

Inventory 627,261 467,784

Prepaid expenses and other current assets 240,939 126,357

Total Current Assets 10,416,969 5,731,169

Restricted cash 2,646,448 2,555,845

Equipment on operating leases, net 1,417,260 1,724,998

HEBioT facility, equipment, fixtures and vehicles, net 36,338,727 37,421,333

Operating lease right of use assets 1,285,292 945,047

License and capitalized MBT facility development costs 8,018,853 8,049,929

Goodwill 58,000 58,000

Other assets 33,749 53,726

Total Assets $ 60,215,298 $ 56,540,047

Continued on following page.

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets, continued:

September 30, December 31, 2020 2019

(Unaudited)

Liabilities and Stockholders' Equity

Current Liabilities:

Line of credit, net of financing costs of $2,050 and $20,152 as of September30, 2020 $ 1,497,950 $ 1,479,848and December 31, 2019, respectively

Advances from related parties 935,000 210,000

Accounts payable (related entity $2,021,940 and $2,531,034 as of September 30,2020 6,363,168 4,688,339and December 31, 2019, respectively)

Accrued interest payable 627,112 1,148,570

Accrued expenses and liabilities 2,075,576 1,926,965

Deferred revenue 95,331 89,736

Customer deposits 753,046 44,792

Note payable - 100,000

Senior Secured Note, net of financing costs of $75,767 and unamortizeddiscounts of 4,408,514 -$515,719 as of September 30, 2020

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 261,787 4,605

Total Current Liabilities 19,877,484 11,082,855

Junior note due to related party, net of unamortized discounts of $78,596 and$95,043 965,881 949,434as of September 30, 2020 and December 31, 2019, respectively

Accrued interest (related party) 1,729,605 1,510,193

WV EDA Senior Secured Bonds payable, net of current portion, and financingcosts of 28,448,484 29,817,426$1,691,516 and $1,792,574 as of September 30, 2020 and December 31, 2019,respectively

Payroll Protection Program Loan, net of current portion 163,839 -

Senior Secured Note, net of current portion, net of financing costs of$113,268, and - 4,160,490unamortized discounts of $726,242, as of December 31, 2019

Note Payable 100,000 -

Non-current lease liabilities 1,231,144 915,170

Long-term debt, net of current portion 4,936 8,201

Total Liabilities 52,521,373 48,443,769

Series A redeemable convertible preferred stock, 333,401 shares designated andissued,and 125,312 and 145,312 outstanding as of September 30, 2020 and December 31, 626,553 726,5532019,respectively

Commitments and Contingencies

Stockholders' Equity

Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 3,209,210 and3,179,120 designated as of September 30, 2020 and December 31, 2019;1,936,214 and 1,922,603 issued as of September 30, 2020 and December 31, 2019;848,292 and 856,181 outstanding as of September 30, 2020 and December 31, 2019:

Series B Convertible preferred stock, 1,111,200 shares designated: 428,333shares - -issued, no shares outstanding as of September 30, 2020 and December 31, 2019

Series C Convertible preferred stock, 1,000,000 shares designated, 427,500shares 3,050,142 3,050,142issued and outstanding as of September 30, 2020 and December 31, 2019

Series D Convertible preferred stock, 20,000 shares designated: 18,850 sharesissued; 17,350 and 18,850 outstanding as of September 30, 2020 and December 31, 1,365,696 1,505,2622019

Series E Convertible preferred stock, 714,519 shares designated: 714,519 shares 698,330 698,330issued, 264,519 outstanding as of September 30, 2020 and December 31, 2019

Series F Convertible preferred stock, 30,090 shares designated, and 13,611shares 1,507,408 -issued and outstanding as of September 30, 2020

Common stock, $0.0001 par value, 50,000,000 shares authorized, 23,354,130 and17,300,899 shares issued and outstanding as of September 30, 2020 and 2,334 1,730December 31,2019, respectively

Additional paid in capital 59,775,963 49,597,059

Accumulated deficit (61,403,226) (52,785,242)

Accumulated other comprehensive (loss) (84,069) (43,138)

Stockholders' equity attributable to Parent 4,912,578 2,024,143

Stockholders' equity attributable to non-controlling interests 2,154,794 5,345,582

Total Stockholders' Equity 7,067,372 7,369,725

Total Liabilities and Stockholders' Equity $ 60,215,298 $ 56,540,047

BioHiTech Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,

2020 2019

Cash flows from operating activities:

Net loss $ (11,719,697) (7,183,649)

Adjustments to reconcile net loss to net cash used in operations:

Depreciation and amortization 1,747,109 1,350,780

Impairment expense 917,420 -

Amortization of operating lease right of use assets 72,402 -

Provision for bad debts 126,119 45,000

Share based employee compensation 1,537,915 741,188

Interest resulting from amortization of financing costs and discounts 419,715 333,782

Share based vendor compensation 297,835 -

Gain on sale of affiliate investment - (562,617)

Loss resulting from write-off of proposed MBT site - 346,654

Warrant modifications - 49,160

Changes in operating assets and liabilities (909,507) (1,137,810)

Net cash used in operating activities (7,510,689) (6,017,512)

Cash flow from investing activities:

Purchases of construction in-progress, equipment, fixtures and vehicles (207,173) (4,619,883)

Proceeds from sale of investment in affiliate - 2,250,000

Refund of deposit 5,000 -

MBT facility development costs incurred (62,949) (59,013)

MBT facility development costs refunded - 66,000

Net cash used in investing activities (265,122) (2,362,896)

Cash flows from financing activities:

Proceeds from common stock issuance, net of offering costs 8,437,480 3,035,557

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 - 1,772,500

Affiliate investment in subsidiary - 1,400,000

Deferred financing costs incurred - (62,151)

Repayments of long-term debt (3,544) (6,846)

Related party advances, net 725,000 210,000

Net cash provided by financing activities 11,140,686 6,349,060

Effect of exchange rate on cash (restricted and unrestricted) (18,129) 12,721

Net change in cash (restricted and unrestricted) 3,346,746 (2,018,627)

Cash - beginning of period (restricted and unrestricted) 5,536,952 9,126,380

Cash - end of period (restricted and unrestricted) $ 8,883,698 7,107,753

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SOURCE BioHiTech Global, Inc.