STUART, Fla., Nov. 10, 2011 (GLOBE NEWSWIRE) -- Ecosphere Technologies, Inc. (OTCBB:ESPH), a diversified water engineering, technology licensing and environmental services company, today announced financial results for the 2011 third quarter. The company recorded more than $8.2 million for the 2011 third quarter and more than $12.8 million for the 9 months ended September 30, 2011. This represents a 275% increase over 2010 third quarter revenues and an approximate 2X increase in revenues for the comparable 9 month period in 2010. More significantly, for the nine months ended September 30, 2011 the Company recorded positive cash flow from operating activities of $98,741 and the Company had more than $1 million in cash at the end of the 2011 third quarter, as compared to $46,387 on December 31, 2010.
Adrian Goldfarb, Chief Financial Officer of Ecosphere Technologies, stated, "It is my pleasure to announce that we have delivered an outstanding third quarter. Our quarterly filings continue to demonstrate that the Company is executing against its strategic plan and that we are making significant progress towards profitability. The positive cash flow in this quarter is an indication of that trend and our balance sheet continues to strengthen."
Charles Vinick, Chairman and CEO of Ecosphere Technologies, stated, "The substantial growth announced following our third quarter confirms the acceptance of our Ozonix equipment in the marketplace and underscores the benefits of our sublicense agreement with Hydrozonix, LLC. Our focus for the last 3 years has been to execute on commercializing our extensive portfolio of Intellectual Property and today's results are a validation that the strategy is working."
About Ecosphere Technologies:
Ecosphere Technologies, Inc. (OTCBB:ESPH) is a diversified water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. The Company provides environmental services and technologies for use in large-scale and sustainable applications across industries, nations and ecosystems. Ecosphere is driving clean water innovation with its patented Ozonix advanced oxidation technologies and its mobile, low maintenance water treatment systems. Ecosphere's patented Ozonix Technology is a high volume, advanced oxidation process designed to recycle water while reducing liquid chemicals used during water treatment applications. For more information, please visit www.EcosphereTech.com
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| ECOSPHERE TECHNOLOGIES, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
|
September 30, 2011 |
December 31, 2010 |
|
| Assets | (Unaudited) | |
| Current assets | ||
| Cash and cash equivalents | $ 1,037,234 | $ 46,387 |
| Accounts receivable | 1,329,015 | 703,475 |
| Inventory | 189,951 | -- |
| Prepaid expenses and other current assets | 172,978 | 46,151 |
| Total current assets | 2,729,178 | 796,013 |
| Property and equipment, net | 6,698,460 | 7,729,721 |
| Construction in progress | -- | 389,558 |
| Patents, net | 43,159 | 46,145 |
| Other noncurrent assets | 27,941 | 22,205 |
| Total assets | $ 9,498,738 | $ 8,983,642 |
| Liabilities, Redeemable Convertible Cumulative Preferred Stock and Stockholders' Deficit | ||
| Current liabilities | ||
| Accounts payable | $ 1,580,781 | $ 1,970,891 |
| Accrued expenses | 804,840 | 917,872 |
| Notes payable | -- | 50,000 |
| Related party notes payable - current portion | 1,856,350 | 2,636,093 |
| Warrant derivative liabilities | 568,000 | 610,642 |
| Financing obligations | 121,455 | 69,566 |
| Total current liabilities | 4,931,426 | 6,255,064 |
| Convertible notes payable - net of discount | 1,664,005 | 313,722 |
| Related party notes payable | 136,676 | 136,676 |
| Financing obligations | 153,141 | -- |
| Restructuring reserve | 132,617 | 181,119 |
| Total liabilities | 7,017,865 | 6,886,581 |
| Redeemable convertible cumulative preferred stock series A | ||
| 11 shares authorized; 6 shares issued and outstanding at September 30, 2011 and December 31, 2010, $25,000 per share redemption amount plus dividends in arrears | 1,152,869 | 1,135,994 |
| Redeemable convertible cumulative preferred stock series B | ||
| 484 shares authorized; 322 shares issued and outstanding at September 30, 2011 and December 31, 2010, $2,500 per share redemption amount plus dividends in arrears | 2,802,177 | 2,741,802 |
| Total redeemable convertible cumulative preferred stock | 3,955,046 | 3,877,796 |
| Commitments and contingencies | ||
| Ecosphere Technologies, Inc. stockholders' deficit | ||
| Common stock, $0.01 par value; 300,000,000 shares authorized; 144,991,335 and 137,430,786 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively | 1,449,913 | 1,374,307 |
| Common stock issuable, $0.01 par value, 352,482 and 1,347,915 issuable at September 30, 2011 and December 31, 2010, respectively | 3,524 | 13,480 |
| Additional paid-in capital | 102,557,185 | 96,778,394 |
| Accumulated deficit | (116,917,055) | (110,025,222) |
| Total Ecosphere Technologies, Inc. stockholders' deficit | (12,906,433) | (11,859,041) |
| Noncontrolling interest in consolidated subsidiary | 11,432,260 | 10,078,306 |
| Total stockholders' deficit | (1,474,173) | (1,780,735) |
| Total liabilities, redeemable convertible cumulative preferred stock, and stockholders' deficit | $ 9,498,738 | $ 8,983,642 |
| ECOSPHERE TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
|
For The Three Months Ended September 30, |
For The Nine Months Ended September 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| Revenues: | ||||
| Equipment sales and licensing | $ 5,645,052 | $ -- | $ 5,645,052 | $ -- |
| Field services | 2,562,279 | 2,188,534 | 7,157,463 | 6,427,787 |
| Total revenues | 8,207,331 | 2,188,534 | 12,802,515 | 6,427,787 |
| Cost of revenues: | ||||
| Equipment sales and licensing | 4,538,627 | -- | 4,728,466 | -- |
| Field services | 758,887 | 1,002,796 | 1,993,305 | 2,541,566 |
| Total cost of revenues | 5,297,514 | 1,002,796 | 6,721,771 | 2,541,566 |
| Gross profit | 2,909,817 | 1,185,738 | 6,080,744 | 3,886,221 |
| Operating expenses | ||||
| Selling, general and administrative | 3,033,268 | 2,747,697 | 11,069,467 | 8,635,107 |
| Asset impairment | -- | 116,000 | -- | 116,000 |
| Restructuring charge | -- | 50,000 | -- | 50,000 |
| Total operating expenses | 3,033,268 | 2,913,697 | 11,069,467 | 8,801,107 |
| Loss from operations | (123,451) | (1,727,959) | (4,988,723) | (4,914,886) |
| Other income (expense): | ||||
| Other income, net | 53 | 31 | 484 | 273 |
| Gain (loss) on conversion, net | (164) | 12,524 | (94,826) | (121,080) |
| Interest expense | (148,851) | (93,883) | (460,347) | (939,213) |
| Change in fair value of derivative instruments | 29,421 | 1,203,883 | 5,533 | (12,831,356) |
| Total other income (expense) | (119,541) | 1,122,555 | (549,156) | (13,891,376) |
| Net loss | (242,992) | (605,404) | (5,537,879) | (18,806,262) |
| Preferred stock dividends | (25,750) | (26,000) | (77,250) | (79,750) |
| Net loss applicable to common stock | (268,742) | (631,404) | (5,615,129) | (18,886,012) |
| Less: Net (income) loss applicable to non-controlling interest in consolidated subsidiary | (1,040,156) | 135,665 | (1,353,954) | (57,045) |
| Net loss applicable to Ecosphere Technologies, Inc. common stock | $ (1,308,898) | $ (495,739) | $ (6,969,083) | $ (18,943,057) |
| Net loss per common share applicable to Ecosphere Technologies, Inc. common stock | ||||
| Basic and diluted | $ (0.01) | $ (0.00) | $ (0.05) | $ (0.15) |
| Weighted average number of common shares outstanding | ||||
| Basic and diluted | 145,112,621 | 137,646,787 | 143,431,951 | 129,200,820 |
| ECOSPHERE TECHNOLOGIES, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (UNAUDITED) | ||
| For the Nine Months Ended September 30, | ||
| 2011 | 2010 | |
| Cash flow from operating activities: | ||
| Net loss applicable to Ecosphere Technologies, Inc. common stock | $ (6,969,083) | $ (18,943,057) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
| Preferred stock dividends | 77,250 | 79,750 |
| Depreciation and amortization | 1,615,951 | 1,435,955 |
| Restructuring reserve adjustment | -- | 50,000 |
| Shares issued for settlement | -- | 114,000 |
| Accretion of discount on notes payable | 191,034 | 538,712 |
| Loss on settlement of note and accrued interest for common stock | 93,732 | 19,604 |
| Non cash stock-based compensation expense | 4,635,170 | 2,518,533 |
| Asset impairment charge | -- | 116,000 |
| Non cash charge for modification of warrants | -- | 93,735 |
| (Gain) loss due to change in fair value of warrant derivative liability | (5,533) | 8,816,136 |
| Increase in fair value of embedded conversion option derivative liability | -- | 4,015,220 |
| Noncontrolling interest in consolidated subsidiary | 1,353,954 | 57,045 |
| Changes in operating assets and liabilities: | -- | -- |
| (Increase) decrease in accounts receivable | (695,540) | 3,424 |
| Decrease in inventory | 199,607 | -- |
| Decrease in prepaid expenses and other current assets | 94,225 | 75,797 |
| (Decrease) increase in accounts payable | (388,110) | 381,989 |
| (Decrease) increase in accrued expenses | (49,675) | 251,260 |
| Decrease in restructuring reserve | (48,502) | (42,852) |
| Decrease in deferred revenue | -- | (672,000) |
| Increase in other assets | (5,739) | (12,006) |
| Net cash provided by (used in) operating activities | 98,741 | (1,102,755) |
| Cash flow from investing activities: | ||
| Capital expenditures | (581,704) | (343,013) |
| Construction in process purchases | -- | (1,982,293) |
| Transfer from restricted cash | -- | 425,000 |
| Net cash used in investing activities | (581,704) | (1,900,306) |
| Cash flow from financing activities: | ||
| Proceeds from issuance of convertible notes payable and warrants | 1,575,000 | -- |
| Proceeds from officer advances | -- | 45,000 |
| Proceeds from issuance of common stock and warrants | -- | 545,000 |
| Proceeds received pursuant of warrant modifications | -- | 756,968 |
| Proceeds from equipment financing arrangements | 189,504 | 42,000 |
| Proceeds from option and warrant exercises | 673,664 | 1,123,151 |
| Repayments of notes payable and other financing arrangements | (135,526) | (166,179) |
| Repayments of related party notes payable | (828,832) | (286,259) |
| Repayments pursuant to capital lease obligations | -- | (13,080) |
| Net cash provided by financing activities | 1,473,810 | 2,046,601 |
| Net increase (decrease) in cash and cash equivalents | 990,847 | (956,460) |
| Cash and cash equivalents at beginning of period | 46,387 | 1,089,238 |
| Cash and cash equivalents at end of period | $ 1,037,234 | $ 132,778 |