SOURCE: New Generation Biofuels Holdings, Inc.

New Generation Biofuels Holdings, Inc.

May 13, 2011 17:44 ET

New Generation Biofuels Reports First Quarter 2011 Financial Results

COLUMBIA, MD--(Marketwire - May 13, 2011) - 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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