BioHiTech Global Inc., which makes products that convert food waste into grey water, went public in a reverse merger with a registered shell company and says it may borrow or sell stock to raise capital.
There was no private placement associated with the transaction, but a filing with the Securities and Exchange Commission said the newly public company plans to raise cash in the future because it has “very limited funds and such funds are not adequate to develop (its) current business plan.”
The filing also stated that the company is planning to “raise additional funds through loans and additional sales of its common stock.”
BioHiTech, founded in 2007, licenses and distributes the Eco-Safe Digester, which merges food waste with water to break it down before introducing it into sewer systems, its website says. The company says its product may reduce greenhouse gas emissions by reducing food waste in landfills and eliminate the associated transportation costs.
The Chestnut Ridge, N.Y.-based company said it believes its product can help clients make food purchase decisions, cut back on disposal fees and shape employee behavior.
The Eco-Safe Digester can decompose 2,400 pounds of waste within 24 hours using a mix of microorganisms, heat and water, according to BioHiTech. Customers include the U.S. Bureau of Prisons, Marriott International Inc. (MAR) and General Electric Co. (GE), the company says.
BioHiTech sees its core customer base as government entities, healthcare facilities, grocery stores and hospitality interests.
The Eco-Safe Digester is manufactured in South Korea by a BioHiTech shareholder. The list price for each of the three Eco-Safe models is under $50,000, with service contracts ranging from $2,300 to $5,450 per year.
According to a merger filing, the company’s customers typically recoup their investment within three years. BioHiTech says it has machines running in 37 states in the U.S., as well as 300 units installed in 11 other countries including Israel, the U.K. and Canada. Following the merger, Frank Celli continues as CEO and Robert Joyce is the COO. Celli is also the largest shareholder with a 17.2% stake in the company.
Other major shareholders include Conundrum Capital Partners LLC, with 11.2%, and Penn Venture Partners LP, with 8.6%. Conundrum is controlled by director Robert Graham. Penn Venture is controlled by director James Chambers.
Graham and Chambers are joined on the board by Douglas Van Oort and Harriet Hentges. Chambers and Van Oort worked together at Quest Diagnostics Inc. (DGX) and Corning Life Sciences Inc.