BioHiTech Global Inc (OTCMKTS:BHTG), which develops and deploys innovative and disruptive waste management technologies, has been a big runner this month. For what reasons? Several news items excited the market. This includes the launch of BHTG Smart Mode, a new technology for its Eco-Safe Digester and Revolution Series Digester lines, and the release of its second quarter 2017 results. In this article, we will provide you all the details, but first of all have a look at the recent share price action:
Business
BioHiTech Global, Inc. was founded on March 20, 2013 in Delaware. The corporate headquarters is located in Chestnut Ridge, New York. As of December 31, 2016, it had 23 full time and 2 part-time employees. On August 6, 2015, the company signed a merger agreement with Bio Hi Tech America, LLC. 6,975,000 shares were used in the transaction. After this transaction, the company adopted the business model of Bio Hi Tech America:"Development, marketing and sales of food waste disposal systems which transform food waste into nutrient-neutral water which may be disposed of via sewer systems while utilizing proprietary software to collect and transmit environmental performance data to its customers." SourceThe following are the products offered by the company:- Eco-Safe Digester: it is a simple, environmentally friendly, and cost effective solution for food waste disposal. Why is it an interesting product? According to the annual report, it is a "data-driven, network-based mechanical/biological technology which transforms food waste into nutrient-neutral water that can safely be disposed of via conventional sanitary sewer systems." It reduces greenhouse gas emissions. It is cost efficient, as there are no disposal costs and transportation charges. Also, it has large US addressable market in excess of 250,000 locations that could be used. According to the company, the system is installed in 37 states throughout the United States as well as 15 foreign countries.
- The BioHiTech BioBrain Cloud, Cirrus Mobile Application and Alto Application: It is a system that collects, accumulates empirical data, which helps the company improve the efficiency of the upstream supply chain. The piece of technology that the company is providing seems quite innovative. Have a look at the following information that we found in the annual report:"Our solution is not based only on the removal of waste, but also provides real time information and metrics to improve the efficiency of an organization. Such information has not been readily available to consumers in the past. By providing a cloud-based dashboard and mobile application, the BioHiTech Cloud gives real-time visibility to the status of the device itself and provides insight to the efficiencies of the operations of food preparation and consumption of the user. Using leading edge cloud technologies, the systems allow for deep visibility into the process on an individual, regional, or national level. " Source- Revolution Series Digester: it is a food waste disposal for lower volume food waste generators. It seems to be an interesting digester suitable for businesses, such as restaurants, coffee shops, hospitality companies, and others. According to the company, the market is also quite large; there are more than 1.5 million potential locations.
Additionally, on January 20, 2016, E.N.A Renewables, LLC, was founded. The company will be in charge of "the development and marketing throughout 11 northeast U.S. states and the District of Columbia". The company will be also used to support sub-licenses to third parties for utilizing the technology.
Recent Developments - What happened in August?Let's review the news that made the share price explode higher. On August 8, 2017, the company announced the launch of BHTG Smart Mode, a new technology for its Eco-Safe Digester and Revolution Series Digester lines of on-site food waste disposal equipment.
As we said, the company is developing an innovative system. The new technology includes, as we could read in the press release, "cloud computing, machine learning," and a connected computer to the digester. It obviously helps the company optimize the performance of the service provided. In our opinion, it was this new technology that drew the attention of the market. But, the good news did not stop there.On August 15, 2017, the company released its second quarter 2017 results. The company highlighted, in the press release, the contract signed for the acquisition of a 12 acre site planned for the company's second Resource Recovery Facility in New York, the delivery of its 100th Eco-Safe Digester unit to the Federal Bureau of Prisons, the scheduled initial production order for 100 units of its new Revolution Series Digesters among other developments. Additionally, from the financial figures, it noted the revenue in Q2 of 2017, which was $549,000, which represents a 22% increase as compared to the same period in 2016. Furthermore, the gross profit for the first half was $369,000; an 81% increase as compared to gross profit in the same period in 2016. CFO Brian C. Essman celebrated the numbers with the following words:"We expect our Revolution Series digesters to begin contributing revenue in Q4 2017 and to build progressively throughout 2018. As we move through the second half of 2017, we intend to continue to move forward with our aggressive long term growth plans to deliver substantial value for our stockholders." SourceFor those interested in checking the balance sheet of the company, here you can have a look. As we always say, we need to check the cash, the Property Plant and Equipment on hand, and the intangibles on the assets side:
Period Ending12/31/201612/31/201512/31/2014Current AssetsCash And Cash Equivalents325.98739.19540.207Short Term Investments---Net Receivables140.13316.299118.706Inventory706.017274.304192.333Other Current Assets21.86567.13647.117Total Current Assets1,193.999696.934443.063Long Term Investments--44.7Property Plant and Equipment1,077.76906.182896.928Goodwill--30.55Intangible Assets267.042365.038548.391Accumulated Amortization---Other Assets13.551.624.017Deferred Long Term Asset Charges---Total Assets2,552.3012,019.7541,942.949Source
The liability side can be seen here:Accounts Payable3,619.9483,068.577467.411Short/Current Long Term Debt2,572.2612,597.0132,458.899Other Current Liabilities98.0177.76257.235Total Current Liabilities6,290.2195,743.353,183.545Long Term Debt4,967.18219.573907.169Other Liabilities2,7531,7101,000Deferred Long Term Liability Charges---Minority Interest---Negative Goodwill---Total Liabilities14,010.4017,472.9235,090.714
ConclusionBHTG seems to be providing an innovative product that its clients are appreciating, given the large amount of revenues obtained in the last 10-Q. But, that's not all. The market seems to be also interested in the value proposition of the company and pushed up the share price recently. To sum up, we will continue monitoring the announcements made by the company, as there is a lot to like here. We will be updating our subscribers as soon as we know more. For the latest updates on BHTG, sign up below!Image courtesy of John Rothwell via FlickrDisclosure: We have no position in BHTG and have not been compensated for this article.
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