SOURCE: New Generation Biofuels Holdings, Inc.

New Generation Biofuels Holdings, Inc.

April 15, 2011 16:51 ET

New Generation Biofuels Reports Fourth Quarter and Full Year 2010 Financial Results

COLUMBIA, MD--(Marketwire - Apr 15, 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 fourth quarter and year ended December 31, 2010.

Fourth Quarter and Full Year 2010 Financial Results

New Generation Biofuels reported revenues of $9,095 and a net loss of $4.5 million for the three months ended December 31, 2010, compared to net revenues of $101,890 and a net loss of $4.1 million for the three months ended December 31, 2009. Biofuel production decreased to 8,000 gallons in the fourth quarter of 2010 compared to 88,000 gallons the fourth quarter of 2009. Total operating expenses decreased by approximately $1.3 million for the three months ended December 31, 2010, compared to the same period in 2009. This decrease was driven by a decrease in cost of product revenue of approximately $0.7 million and a decrease in general and administrative expenses of approximately $0.6 million (resulting primarily from decreases in compensation expense of $0.2 million, terminal site lease and services expenses of $0.3 million and $0.1 million business travel expenses). Total Loss from Operations decreased by approximately $1.2 million for fourth quarter of 2010 compared to the prior year's fourth quarter.

For the full year 2010, the Company had net revenues of $15,446 and a net loss of $11.6 million, and for the full year 2009 had net revenues of $178,938 and a net loss of $14.4 million. Approximately 21,000 gallons of biofuel were produced in 2010 compared to 209,000 gallons in 2009. Total operating expenses decreased by approximately $1.8 million for the full year 2010 compared to 2009. This decrease was the result of decreases in cost of product revenue of approximately $0.7 million and in research and development expenses of approximately $0.1 million coupled with a decrease in G&A expenses of approximately $1.0 million. The overall decreases in expenses reflect the Company's efforts to properly fund its operating and development actives which resulted in limited fuel production and several management changes. Loss from Operations decreased by approximately $1.6 million for the full year 2010 compared to 2009.

As of December 31, 2010, the Company had cash on hand of approximately $0.2 million. Net cash used in operating activities was $4.6 million for the full year ended December 31, 2010, compared to $6.9 million in last year's comparable period.

"2010 was a challenging year for New Generation Biofuels. The difficulties in not closing a Strategic Joint Venture transaction, coupled with senior management departures, resulted in a decline in market value and difficulty in funding our operations and ultimately our departure from NASDAQ," said John E. Mack, Chairman of New Generation. "We have recently appointed David H. Goebel, Jr., our Chief Operating Officer, as Principal Executive Officer. Dave has many years of fuels and chemicals experience including senior management positions with ExxonMobil and is well equipped to lead our efforts as we head into the second quarter of 2011. In addition to addressing our capital needs, our operational focus will be the development and commercialization of a fuel product utilizing pyrolysis oil as the feedstock. Over the past year, our internal research and development efforts have produced several new provisional patent filings including two for this alternative use feedstock. We have had great success with pyrolysis oil solutions at the bench level and we are moving towards third party validation testing, product scale up and field testing. We believe that the successful development of a pyrolysis-based product will allow us to offer biofuel that is renewable, emission reducing and economically viable with or without government incentives. We also believe this will give us a unique position within the alternative fuel industry."

About the Company

The Company is a clean energy company deploying novel technologies to produce cleaner, 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. 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. Additional information about New Generation Biofuels 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 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

                                                 December 31,  December 31,
                                                     2010          2009
                                                 ------------  -----------
ASSETS

Current assets:
  Cash and cash equivalents                      $    149,909  $   567,647
  Restricted cash                                      14,706            -
  Accounts receivable                                       -       63,900
  Other receivables                                     9,095       41,406
  Inventories                                               -       11,708
  Debt issuance costs, net                             25,000            -
  Prepaid expenses and other current assets           904,254      237,635
                                                 ------------  -----------
    Total current assets                            1,102,964      922,296

Property, plant and equipment, net                  1,189,620    1,120,911
License agreement, net                              5,034,545    5,650,988
Other assets, net                                     370,906      346,073
                                                 ------------  -----------
    Total assets                                 $  7,698,035  $ 8,040,268
                                                 ============  ===========

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
  Accounts payable and accrued expenses          $  1,647,449  $ 1,472,519
  Loan payable                                              -       50,000
  Convertible notes payable
  (net of unamortized debt discount of $11,141
   and $-)                                            518,859            -
  License agreement payable, current portion
  (net of unamortized debt discount of $291,844
   and $375,467)                                      708,156      624,533
  Accrued dividends on preferred stock              1,083,666    1,078,003
  Derivative liabilities                               12,692      110,874
                                                 ------------  -----------
    Total current liabilities                       3,970,822    3,335,929

License agreement payable
(net of unamortized debt discount of $331,995
 and $622,274)                                      2,668,005    3,377,726
Deferred rent                                         149,069      324,409
                                                 ------------  -----------
    Total liabilities                               6,787,896    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 December 31, 2010 and 2009                -            -
  Series A Cumulative Convertible Preferred
   Stock; $0.001 par value; $100.00 stated
   value; 300,000 shares authorized, 0 and
   18,400 shares issued and outstanding as of
   December 31, 2010 and 2009, respectively;
   aggregate liquidation preference of $-                   -      710,970
  Series B Cumulative Convertible Preferred
   Stock; $0.001 par value; $100.00 stated
   value; 250,000 shares authorized, 45,785
   shares issued and outstanding as of December
   31, 2010 and 2009, respectively; aggregate
   liquidation preference of $5,662,200             3,094,872    3,094,872
  Common stock; $0.001 par value; 100,000,000
   shares authorized; 82,083,896 and 31,711,578
   shares issued and outstanding as of December
   31, 2010 and 2009, respectively                     82,083       31,712
  Additional paid-in-capital                       60,380,709   47,593,489
  Accumulated deficit                             (62,647,525) (50,428,839)
                                                 ------------  -----------
    Total stockholders' equity                        910,139    1,002,204
                                                 ------------  -----------
  Total liabilities and stockholders' equity     $  7,698,035  $ 8,040,268
                                                 ============  ===========



                    NEW GENERATION BIOFUEL HOLDINGS, INC.
                    Consolidated Statements of Operations

                                               For the Year   For the Year
                                                  Ended          Ended
                                                 December       December
                                                 31, 2010       31, 2009
                                              -------------  -------------
Revenues:
  Product                                     $       6,351  $     137,532
  Alternative fuel tax credit                         9,095         41,406
                                              -------------  -------------
    Total revenue                                    15,446        178,938
                                              -------------  -------------
Operating expenses:
  Cost of product revenue (including
   depreciation and amortization of $722,432
   and $685,806, respectively)                    1,604,961      2,311,576
  Research and development                          340,559        475,013
  General and administrative                      8,791,536      9,751,064
                                              -------------  -------------
    Total operating expenses                     10,737,056     12,537,653
                                              -------------  -------------

Loss from operations                            (10,721,610)   (12,358,715)
  Other income and (expenses):
Interest income                                         676          3,458
Interest expense                                   (790,342)      (537,661)
Gain on extinguishment of trade payables, net     1,330,895              -
Gain on extinguishment of loan payable               50,000              -
Loss on extinguishment of convertible debt          (33,949)             -
Induced conversion loss                          (1,198,090)             -
Loss on conversion of debt                         (475,347)             -
Gain on extinguishment of license agreement
 payable                                            154,000        241,500
Gain (loss) on net change in fair value of
 derivative liabilities                              82,800     (1,745,383)
                                              -------------  -------------
    Total other income (expenses), net             (879,357)    (2,038,086)
                                              -------------  -------------

Net loss                                        (11,600,967)   (14,396,801)

Deemed dividend as a result of warrant
 modification                                      (123,722)             -
Dividends to preferred stockholders                (493,997)    (4,691,379)
                                              -------------  -------------

Net loss attributable to common stockholders  $ (12,218,686) $ (19,088,180)
                                              =============  =============

Basic and diluted net loss per share          $       (0.26) $       (0.73)
                                              =============  =============

Weighted average number of shares outstanding    46,454,471     26,236,636
                                              =============  =============




                  NEW GENERATION BIOFUELS HOLDINGS, INC.
                  Consolidated Statements of Cash Flows

                                              For the Year   For the Year
                                                  Ended          Ended
                                              December 31,   December 31,
                                                  2010           2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                      $ (11,600,967) $ (14,396,801)
Adjustments to reconcile net loss to net cash
 used in operating activities:
  Bad debt expense                                    5,609          7,208
  Inventory write-downs                              11,708              -
  Amortization of prepaid consulting fee          1,041,589        662,323
  Amortization of debt issuance costs               120,665              -
  Depreciation and amortization expense              85,012         68,251
  Loss on disposal of property and equipment              -         70,974
  Amortization of license agreement                 616,443        616,472
  Amortization of patents                            33,215         23,700
  Amortization of debt discount on license
   agreement payable                                373,902        537,661
  Amortization of debt premium on convertible
   notes                                             (4,367)             -
  Amortization of debt discount on
   convertible notes                                170,228              -
  Compensation expense associated with stock
   options and restricted stock to employees      2,324,668      3,293,318
  Stock options issued to non-employees for
   services                                          17,603         35,684
  Non-cash severance expense                        270,000              -
  Warrants issued in connection with debt
   modifications                                     77,117              -
  Gain (loss) on change in fair value of
   derivative liabilities                           (82,800)     1,745,383
  Gain on extinguishment of trade payables,
   net                                           (1,330,895)             -
  Gain on extinguishment of loan payable            (50,000)             -
  Loss on extinguishment of convertible debt         33,949              -
  Loss on conversion of debt                        475,347              -
  Induced conversion loss                         1,198,090              -
  Gain on extinguishment of license agreement
   payable                                         (154,000)      (241,500)
  Changes in operating assets and
   liabilities:
  Accounts receivable                                58,291        (40,957)
  Other receivables                                  32,311        (41,406)
  Inventories                                             -        (11,708)
  Prepaid expenses and other current assets          77,792         29,073
  Other assets                                         (534)       176,971
  Accounts payable and accrued expenses           1,697,176        211,941
  Deferred rent                                    (112,182)       324,409
   Net cash used in operating activities         (4,615,030)    (6,929,004)

CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in restricted cash                     (14,706)             -
Purchases of property and equipment                (153,721)      (881,190)
Capitalized patent costs                            (57,514)      (161,744)
  Net cash used in investing activities            (225,941)    (1,042,934)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for license agreement payable             (120,000)             -
Proceeds from the issuance of convertible
 notes                                            1,075,000              -
Debt issuance costs                                 (70,000)
Proceeds from issuance of common stock, net       3,451,768      7,063,339
Proceeds from exercise of warrants                   86,465              -
  Net cash provided by financing activities       4,423,233      7,063,339
Decrease in cash and cash equivalents              (417,738)      (908,599)
Cash and cash equivalents - beginning of year       567,647      1,476,246
Cash and cash equivalents - end of year       $     149,909  $     567,647

Supplemental Disclosure of Non-Cash Operating
 and Financing Activities
Accrued dividends on preferred stock          $     493,997  $     686,218
Issuance of restricted stock to non-employees
 for prepaid consulting services              $   1,786,000  $     137,900
Issuance of warrants to non-employees for
 prepaid consulting services                  $           -  $     595,793
Issuance of common stock for payment of
 accounts payable and accrued expenses        $     208,676  $      25,000
Common stock issued for payment of license
 agreement payable                            $     726,000  $     758,500
Anti-dilution obligation associated with
 issuance of common stock                     $      40,000  $     102,500
Common stock warrant liability                $           -  $   2,214,371
Reclassification of warrant liability in
 connection with waiver of anti-dilution
 provision                                    $           -  $   4,053,043
Reclassification of warrant liability in
 connection with anti-dilution triggering
 event                                        $           -  $     158,451
Cumulative effect of reclassification of
 warrants (ASC Topic 815)                     $           -  $     260,115
Issuance of common stock settlement of
 anti-dilution obligation                     $      58,449  $           -
Issuance of warrants with convertible debt    $     149,949  $           -
Issuance of warrants for debt issuance costs  $      38,165  $           -
Issuance of common stock for debt issuance
 cost                                         $      37,500  $           -
Deemed dividend related to beneficial
 conversion feature on Series B Preferred
 Stock                                        $           -  $   4,005,161
Conversion of Series A preferred stock to
 common stock                                 $     710,970  $     309,117
Conversion of Series B preferred stock to
 common stock                                 $           -  $   1,928,557


Accrued preferred stock dividends converted
 into shares of common stock                  $     488,334  $     373,585
Debt discount as a result of beneficial
 conversion feature associated with
 convertible debt modification                $      69,474  $           -
Issuance of warrants in connection with debt
 modification                                 $      77,117  $           -
Warrants issued for payment of accounts
 payable and accrued expenses                 $           -  $      99,732
Deemed dividend to as result of warrant
 modification                                 $     123,722  $           -
Common stock issued in connection with the
 settlement of convertible debt               $     500,000  $           -
Common stock issued in connection with the
 settlement of accrued interest               $      30,833  $           -
Conversion of debt to common stock            $       4,653  $           -
Issuance of common stock for separation
 agreements                                   $     270,000  $           -
Embedded conversion feature on convertible
 debt                                         $      46,875  $           -
Common stock warrants reclassified to equity
 from common stock warrant liability on June
 3, 2010                                      $      43,808  $           -

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