TORONTO — (Marketwire) — 04/01/13 — Totally Green Inc. (PINKSHEETS: TLGN) (“TG” or the “Company”), an innovator in organic food waste processing and diversion, reported results for the quarter and year ended December 31, 2012.
Total revenue was $346,236 for the year ended December 31, 2012, compared to $815,325 for year ended December 31, 2011. The decline in revenue is a result of the shift from a “Unit Sales” model to a “Service as a Solution” model, in which the Company–s revenue is based on monthly service fees and not sales. ORCA service fees were $19,600 for the fourth quarter, compared to $7,200 in the third quarter.
Net loss was $4,566,373 for the year. Of this loss, $410,000 related to transaction closing costs related to the new investment of $5,000,000 in the Company and $1,839,601 relating to the write-down of assets from discontinued operations and marketing rights associated with non-core markets. The balance of $2,316,772 is loss associated with other operating and ongoing expenses of the Company.
Cash and cash equivalents totaled $733,411 at December 31, 2012 and total liabilities for the company were $208,557.
During the year, the Company completed a transaction to secure a $5 million equity investment and a $15 million equipment finance line to support the growth of the business under its previously announced Service as a Solution model. In conjunction with the transaction, the Company has made changes to its management team and board of directors. The equity injection was used to pay down the Company–s previous line of credit, cover transaction costs and provide working capital to support the expansion of the business.
The equity infusion and managerial changes were driven by a refocusing of the strategy of the Company. Going forward, TG will only offer the ORCA and its waste disposal services for a recurring monthly fee on a contracted basis. This Service as a Solution model is sold under long term agreements and includes the supply of our proprietary organisms, maintenance and any repairs required to keep the ORCA operational and ensure it is processing food waste at its prescribed capacity.
We installed 2 units during the quarter as we made modifications to the look and functionality of the equipment. During the quarter we signed 11 new customers to trials and will begin installs once we receive the units during Q1 of 2013.
The Company has continued to focus on the Toronto market as we refine our processes to serve customers under the Service as a Solution model before expanding across North America. The initial results have been promising as we have installed 9 trial units since August. The majority of these unit installations are not yet generating revenue as customers are still under the free service period offered to allow them to experience the benefits of our service. We are already receiving monthly service fees on 6 units that were installed in the second and third quarters of 2012. We believe these results are promising given TG had 37 units in service throughout the United States prior to the change in business model.
“Since the acquisition, we–ve made great strides by putting the infrastructure in place that is required to expand the business model into other cities,” said Shawn Dym, CEO of Totally Green. “We have been getting a positive response in the marketplace, and strong commitments from customers for trial placements, and we continue to build on this momentum. ORCA service fees were up 172% over last quarter. This is on a small base, but unit and service fee growth will be determinants of our future success.”
“Our placement of ORCA machines slowed in the fourth quarter as a result of aesthetic and mechanical improvements we–ve implemented which slowed production. We feel these improvements will make customers more receptive to our machines, and will extend the useful life. We–re confident that these changes have positioned us to grow more aggressively in the coming years”
“We continue to be pleased with our new operating model, and still plan to expand our service model into other major centers in North America in 2013, with initial expansion happening in the first half of the year.”
Totally Green, Inc. develops and markets the company–s ORCA Green Machine. The ORCA (Organic Refuse Conversion Alternative) machine allows for rapid composting of most organic material in institutional and commercial end-user applications, after which the liquid compost is disposed of through the ordinary sewer system. The machine creates meaningful cost savings for customers while diverting food waste from landfills and reducing methane gas production. For more information, please visit .
This press release contains “forward-looking statements.” Forward-looking statements are statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, or performance, underlying (expressed or implied) assumptions and other statements that are other than historical facts. These forward-looking statements are only predictions. No assurances can be given that such predictions will prove correct. Actual events or results may differ materially. Forward-looking statements should be read in light of the cautionary statements and risks that include, but are not limited to, the risks associated with a small company, our comparatively limited financial resources, the uncertainty of market trends, the competition faced from other current and future technologies and the uncertainties of competitive pressures we face. These or other risks could cause actual results to differ materially from the future results indicated or implied in such forward-looking statements. We undertake no obligation to update or revise such statements.
Shawn Dym
Chief Executive Officer
Totally Green, Inc.
Tel 416-221-9066