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Executives

Yvonne Zappulla - IR, Grannus Financial Advisors, Inc.

Glenn Rink - President and Chief Executive Officer

Jonathan Thatcher - Chief Operating Officer

Lane Castleton - Chief Financial Officer, Vice President and Treasurer

Bjornulf White - Executive Vice President of Corporate Strategy and Business Development

Analysts

Ian Cassel - MicroCapClub

Richard Palmer - Stifel Nicolaus

Jay Harris - Axiom Capital

Dorian Prosdocimi - Prosdocimi Ltd.

Peter Okin - Stifel Nicolaus

William Volz - Invest-Sure Wealth Management

Abtech Holdings, Inc. (OTCQB:ABHD) Q1 2013 Earnings Conference Call May 14, 2013 1:00 PM ET

Operator

Thank you for waiting. Today's event is being recorded and will be available for replay. I would now like to turn the conference over to Yvonne Zappulla, please go ahead.

Yvonne Zappulla

Thank you. Good afternoon and thank you all for joining us for Abtech's first quarter 2013 financial results conference call. I'm Yvonne Zappulla of Grannus Financial Advisors, Abtech's investor relations consultant. The first quarter financial report press release was issued last evening May 13, 2013, after the market closed. The press release is available on the company's new website, on both the homepage and the investor tab at www.abtechindustries.com. A copy of this call will be available for review approximately one hour after its completion through the webcast link found on Abtech's homepage, as well as in the earnings press release.

Before we begin, I'd like to state the following. During this call, the management and representatives of Abtech Holdings Inc. may make comments that may deem to be forward-looking statements which are not purely historical and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include risks associated with the company's business involving the company's products, development and distribution, economic and competitive factors and the company's key strategic relationships and other risks detailed in the company's filings with the Securities and Exchange Commission. Abtech assumes no obligation to update any forward-looking statement information with respect to the announcements described here-in.

With us today is Glenn Rink, Founder and CEO of Abtech Holdings, Inc.; Jonathan Thatcher, the company's Chief Operating Officer; Bjornulf White, Executive Vice President of Business Development; and Lane Castleton; Abtech's Chief Financial Officer, who will review the first quarter financials before handing the call over to Glenn for an overall business update. Following these opening remarks, Glenn will be joined by Lane, Jonathan and Bjornulf for a question-and-answer period.

I'd now like to turn the call over to Lane Castleton, CFO and Treasurer of Abtech Holdings.

Lane Castleton

Thank you, Yvonne and thank you all for joining us today for this call. Abtech's first quarter report reflects the challenging conditions that slowed sales and business development during 2012 and extended into the first quarter of 2013. We are now entering a period in which we expect Abtech to begin generating meaningful revenue. We see strong evidence that we are competitive and in many cases a leading contender in some very large bid proposals that are on the table today.

While revenues during the first quarter do not reflect the progress Abtech has achieved, there were several bright spots in the quarter that provide an important foundation as we enter what we expect to be a more robust growth phase. We reported first quarter revenue of just $100,000, which unfortunately do not include one of our awarded RFP projects for $437,000. This project was approved and funded during the first quarter. Including this project, our current backlog of orders received but not yet completed which we believe will be recognized in the second quarter, stands at $563,000 and is growing. As is our project proposal pipeline which today totals close to $14 million.

The $14 million represents the total dollar amount of bids and contract proposals that have been submitted to potential customers. Glenn will be reviewing this pipeline in greater detail in a few minutes. Abtech reported a net loss attributable to controlling interest for the quarter ended March 31, 2013 of $1.2 million or $0.02 per basic share. This compares to net losses attributable to controlling interest to $2.7 million or $0.06 per basic share for the first quarter of 2012 and $1.7 million or $0.02 per basic share for the fourth quarter of 2012.

Abtech incurred a loss from operations of $1.4 million during the first quarter versus a loss from operations of $1 million during the prior year's first quarter, and a loss from operations of $1.6 million in the fourth quarter of 2012. We believe that the business model we have been developing can be highly profitable as we maintain strict cost controls. At full operating capacity, we continue to expect to achieve gross margins in excess of 50% for Smart Sponge product sales.

In the first quarter of 2013 we operated at just 3% of manufacturing capacity, and consequently our gross margin for the quarter was less than 1% due to the fixed cost of the excess capacity. Moving forward, we expect to generate revenue from many sources. In addition, the Smart Sponge product sales including design, installation and maintenance services as well as sales of equipment from other manufacturers, which will likely generate lower margins than what we can achieve with Smart Sponge product sales alone. They will be important contributors to the overall profitability of the company.

The company's operating expenses for the three months ended March 31, 2013, totaled $1.4 million, an increase of approximately $338,000 or 31% over the same period of the prior year. This increase was due to an expanded business development effort including the hiring of key new customer facing employees, consultants, significant increase in proposal and bidding work, increased targeted marketing efforts such as trade shows, the operating cost of the company's new engineering subsidiary, AEWS, and cost related to being a publicly traded company.

On a positive note, the company's operating expenses in the first quarter of 2013 were approximately $255,000 less than operating expenses in the fourth quarter of 2012, due primarily to a non-recurring charge in the fourth quarter of 2012 of approximately $307,000 for stock-based compensation expense attributable to stock options granted to certain directors of the company during that quarter. Importantly, interest expense for the three months ended March 31, 2013 decreased only $12,000 from $884,000 for the same period of the prior year and from $483,000 for the fourth quarter of 2012.

We have eliminated all of our interest bearing debt with the exception of $480,000 of short-term convertible debt which now has an interest rate of only 6%, having been reduced from the original interest rate of 12% effective January 1, 2013. In addition, the significant charges to interest expense that occurred during 2012 for the amortization of note discounts, beneficial conversion features and deferred financing costs related to the secured convertible notes sold by the company in 2011 and 2012, did not affect interest expense in the first quarter of 2013 because all of these costs have been fully amortized as of December 31, 2012.

Cash and cash equivalents at March 31, 2013 amounted to approximately $1.2 million. From December 31, 2012 to March 31, 2013, total assets declined by approximately $1.2 million, due entirely to the drawdown of cash during the quarter. The monthly cash burn during the quarter totaled approximately $434,000. We have made significant strides in improving the debt side of the company's balance sheet. Over the last 14 months we have eliminated debt totaling approximately $9 million requiring only $275,000 of cash to repay the debt of holders that opted not to convert their debt holding into the company's common stock.

Our only remaining convertible notes outstanding total $480,000 as previously mentioned. This improved debt standing provides solid ground from which we can seek financing opportunities as large contracts are won. We have been presented with several advantageous financing options that Glenn will discuss in more detail in a few moments. As of March 31, 2013, Abtech had estimated total federal and state tax loss carry-forwards in excess of $15 million. As of today, given the debt conversion that occurred last month, Abtech has approximately 67.5 million shares of common stock outstanding, an increase of 2.9 million shares from year-end.

Since December 31, 2012, the fully diluted share count actually has been reduced by approximately 631,000 shares to 91.4 million shares, as a result of the cashless exercise of warrants. If all of the outstanding options and warrants included in the fully diluted share count were exercised for cash, approximately $10 million of additional capital would be generated for the company. To further discuss our business opportunities, I would like to turn the call over to Glenn Rink, Founder and CEO of Abtech.

Glenn Rink

Thank you very much, Lane. Good morning, good afternoon or good evening depending on your geographic location. Thank you for joining us. We look forward to our discussion today. I stand here today never more confident that we are on the cusp of significant business success. It has been a long road and at times frustrating, but I can plainly see that the patience and perseverance by all of us will be rewarded.

We have laid a solid foundation from innovative technologies and comprehensive solutions to manufacturing and distribution to our business model, our employees, senior executives and advisors. No detail has been overlooked in advance of reaping the rewards of what is carefully crafted and highly tactical business development strategy. Now let's look at the business. Stormwater, our domestic opportunity and business update. As we highlighted earlier, our current backlog of $563,000 which we expect to recognize as revenue this current second quarter, represents two small RFPs comprised essentially Smart Sponge product sales. Both of these projects happened to be in the east coast and have been in the works for quite some time.

There are other opportunities like these, what I call legacy business, that could close over time. However, this is not where we expended our energy and/or focused our resources over the last several quarters. We have been focused on the larger infrastructure and turnkey projects which could be game changing for Abtech and its shareholders. As we all know, water is becoming more and more precious every day. The world is waking up to this fact. The notion of water reuse and recycling is it in its nascent stage and efficient, cost effective solutions to this problem are evolving.

Decision makers acknowledge the problem and want turnkey solutions. This is precisely what Abtech is delivering and as a result we have a tremendous competitive advantage. Abtech has a very strong core technology in our heavily patented Smart Sponge filtration media. To this we have added additional product sales or design, installation and maintenance services, at times in conjunction with key distribution partners through licensing and/or teaming agreements depending on each specific water treatment project.

This comprehensive solution approach is replicated when appropriate in all our business segments. The result is greatly enhanced addressable market, significantly enhanced fire power by way of knowhow and partners customer relationships. And ultimately, a significant larger contract size. We discussed a little more than a month ago at our year-end conference call that for the first time in the company's history we had proposals against RFPs for domestic stormwater infrastructure projects exceeding $10 million. These opportunities represent larger infrastructure, engineering and technology sales. We expect to hear the first results, likely representing several million in revenue value to Abtech by the end of this quarter, this current quarter, possibly this month.

As reported in the press, federal money is now being released for heavy infrastructure rebuilding in the eastern half of the United States. And as we know, the east coast mid-Atlantic corridor is under heavy rebuilt following the storm late last year. Many communities expect to rebuild with increased attention to stormwater controls. We are already in discussions with cities in New Jersey, New York, Pennsylvania, Connecticut and Massachusetts. And we are actively responding to the opportunity which should represent hundreds of millions of dollars of business over several years.

Stormwater is a huge focus for many of these coastal towns. There is a sense of urgency. Flood damage including public health repercussions from contaminated flood and stormwater have caused increased attention to these issues in coastal communities in the wake of hurricane sandy. Shifting our update now to the west coast. Now that the various regulatory and legal issues such as the first sever Supreme Court case pertaining to stormwater, the master stormwater permit for the Greater LA region and the LA County stormwater fee, have been resolved or received greater clarity. We are seeing movement in the initial region targeted in Southern California.

Later this month, we are scheduled to have face to face meetings with various city officials to review next steps, which in some cases could include letters of intent, engineering engagements, RFPs and complete P3 programs, also known as public private partnerships. We expect this will soon lead to our first municipality adopting design, build, operate stormwater program. We further expect this action to accelerate demand in a number of additional municipalities. Having the first municipality move forward with such a public private partnership model, we will have many cities feel better about taking their first steps.

This is a new model for them and having another city proceed first will make it easier and less risky for them to proceed. In addition, our relationship with waste management continues to proceed forward as the company expands internal training programs, such that public sector business development representatives can continue to add the stormwater offering to their portfolio.

Oil and gas. Our opportunity and business update. Over the past several months, we have completed development and validation in ten different shale plays in the United States. Developed the suite of produced water treatment systems ranging from mobile systems to the previously field tested fixed installations. Combining best of breed commercial technologies, innovative systems engineering and specialty technology such as the Smart Sponge de-oiling technology.

Importantly, we have also announced the validation and scale up of cross-linked gel frac recycle unit. Cross-linked gels is one of the two main hydraulic fracturing fluid streams which includes various agents to increase viscosity and improve the fracturing process. We recently validated its ability to remove up to 99% of key cross-link agents such as boron. This is a very very significant competitive advantage. Our active relationships grew across the oil and gas sectors including 43 E&P companies, including active proposals, discussions with 38 oilfield service providers including and finalized or in process, teaming, distribution and licensing arrangements. Five downstream relationships and five water plant relationships, which is a new opportunity set for the company.

Our working pipeline for 2013 orders grew to $6.4 million in oil and gas alone. The fully expanded program value of the projects at proposal stage represented a full opportunity set that totals $103 million of recurring annual revenue, should we win all of the proposals that are in front of us over the next couple of years. I want to repeat that. The fully expanded program value of the projects at proposal stage represent an opportunity set that totals $103 million of recurring annual revenue should we win all the proposals that are in front of us over the next couple of years. That’s really unprecedented for us.

We believe that Abtech's proven capabilities in complex water treatment combined with the broader oil and gas industries, specific expertise of our team partners will truly enable us to offer the best value to our clients, including delivery and operation of cost effective, efficient water treatment systems to operators across the country and abroad. Speaking of abroad, let's move to the international sector. Stormwater and industrial opportunities. Abtech has a large opportunity to address the complementary area of the stormwater which is landfill leachate and waste water from biogas production with an evaporative technology using Smart Sponge where indicated.

In the EU, there are approximately 2,000 target landfills and in the UK roughly 200 target biogas facilities. We expect to capture revenues from these opportunities primarily under long-term service agreements which would be based on the number of metric tons of leachate process. Revenue may also be generated in this market through equipment sales combined with annual licensing fees. As noted earlier, we have a pipeline of submitted contracts totaling approximately $3 million in this space, attributed to the evaporative technology. We anticipate decisions on these contracts will be made before the end of this quarter.

The current pipeline represents approximately 20 evaporator units. Substantial testing has now been completed and we have gone to the contract stage and ultimately expect to seek forward approval in June. When deployed, the evaporator is expected to reduce on average the customer's current treatment cost by over 40%. Given the nature of some of these engagements, project specific financing maybe required. Multiple financing options have been developed most of which would not have balance sheet implications to Abtech.

Moving on to research and development. Abtech has also begun work with a second heavy metals technology that in very preliminary stages has shown great results. We are also working with another media technology that has capability of removing and recovering dissolved [phase] hydrocarbons. Smart Sponge and this additional media deployed in tandem would allow our oil and gas customers to remove and recover over 90% of the free and dissolved phase hydrocarbons and produce water.

Regulatory, favorite area of mine. As most of you know, Smart Sponge Plus is registered with the United States EPA under a time limited registration that expires on March 31, 2013. Abtech has submitted a request to the EPA for an extension of the time limited registration to complete further third party testing required by the EPA. The third party laboratory contract to conduct the required additional study has made significant progress on a very complex and novel analytical method required to conduct the biological portion of the studies. We expect to receive a decision on our request for an extension prior to the end of the month.

Now let's discussed an even [important] area, how are we going to pay for this initial large order flow. As Lane mentioned earlier, we have a number of financing options available and we have already received term sheets for some of them. Many of our employees, board members and advisors are Abtech shareholders. We are all highly sensitive to additional dilution. Given the large size and high quality of the project contracts we are pursuing, we have a variety of financing options including lines of credit, project financing as well as Gap financing programs, expected at lower rates than we have ever been offered before.

In addition, we have been offered an equity line on unusually favorable terms and have some inquiries regarding warrant exercises that would bring in immediate capital. Of course, we have also had offers of more traditional straight equity financing from very reputable firms with strong cleantech research efforts. There is much to consider over the next several weeks, but I would like to make decisions regarding these financing alternative after we have revenue announcements of significance, not before. Rest assured though, we have some of the most talented financial minds helping to steer our company in the most advantageous and favorable direction. We will keep you posted.

With that, I would like to open the conference call up for questions. Operator, if you would assist.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from [David Shire], private investor.

Unidentified Speaker

Could you elaborate a little bit further on your oil and gas strategy and a few other questions. What's your participation and can you explain a little bit the gel fracking, and give us a little bit more detail on the bullet points in the press release that mentions being designed into the trailer systems deployed by a major, that’s of particular interest. Thanks.

Glenn Rink

Bjornulf, would you?

Bjornulf White

Sure, I would be happy to. Well, taking your questions in order. The first one you asked about our oil and gas strategy. Our overall strategy is to be a provider of innovative technologies to oil field services providers who are out in the field, working with operators. And also to be a solutions provider to those operating companies including providing treatment systems and doing in conjunction with and supported by our partners, some of whom we mentioned in our last press release. Many of whom we have not mentioned and are still developing and finalizing those relationships.

Pertaining to the gel fracking question, we have designed, tested, validated and are now scaling up a gel frac recycle unit. The gel frac recycling sub-segment of the overall water management opportunities in fracking is a new and exciting area for us and we expect to deploy our first scaled up unit very soon. And your last question pertaining to the trailer systems that we mentioned in our dialog today, trailer systems are essentially a mobile system that can be brought out into the oil field and treat water. There is a new mobile system that is being deployed and assembled real time by a major oilfield services provider. And as a result of engineering effort and technology validation over the previous month, we have been designed into that trailer system for application wherever there is de-oiling that is needed.

Unidentified Speaker

Is that trailer system already being used in the field and this is just -- Smart Sponge is being included in that? Is that kind of how that’s working? So it's just a new addition to an already existing treatment system that’s commercially used?

Bjornulf White

No, this is actually a new trailer designed by that company in their new addition that is now being constructed and the first units will be deployed soon in the field with Smart Sponge vessels and Smart Sponge have been included in that design.

Operator

Your next question comes from Ian Cassel of MicroCapClub.

Ian Cassel - MicroCapClub

I see that the operating costs are around $1.4 for the first quarter. Can you talk a little bit about how you expect to either stay the same or increase throughout the rest of the year? And also, kind of a follow on on that, what revenue level would likely breakeven the company as you look towards the rest of the year?

Glenn Rink

Thank you Ian very much for that question. Lane, would you please respond to Ian for me?

Lane Castleton

Sure. We have already incurred a pretty sizable growth in operating expenses as we have tried to strengthen our business development efforts on really multiple fronts, to try and launch these significant revenue generating activities. So I don’t anticipate for the rest of the year that our operating expenses will grow dramatically but there will probably be some additional increase in operating expenses as we continue to pursue these opportunities. And obviously those expenses are going to be tied directly to the successes that we are achieving in the field and getting new projects would only be adding the expenses to bring those to fruition. With that said, you have probably got a feel that the composition of our expected revenue stream is changing a little bit over time. Where we used to be essentially a product based company and we were selling Smart Sponge, we are now moving into an area where we will see revenues coming in from a variety of sources, many of which are service based or design based.

And so we expect that our product sales of Smart Sponge and Smart Sponge Plus will be able to achieve revenues or excuse me, gross margins still of about 50% once we get up close to our manufacturing capacity. And so, that portion of the business, we have a little bit better feel for as far as what we expect in the near future. With regard to these revenues that will involve service fees and larger contracts where we maybe subcontracting some of the work to other parties, our margins would naturally be expected to be less than 50%. So the ability for us to project what our breakeven point is really dependent on us trying to figure exactly what the composition of these revenues are going to be and what the gross margins are going to be. But when you look at our operating rate today, the level of operating expenses that we are incurring today, you really look at it as we need to generate about $1.5 million of gross margin every quarter of $500,000 of gross margin a month.

And so if we are doing all product sales and generating 50% margins, obviously that’s $1 million of revenue a month. I suspect that the actual revenue amount will need to be higher than that because we will have slightly overall gross margins. But that’s kind of what we are looking at right now as getting to that million dollar a month level, which will put us in the ballpark of a breakeven point. Does that help?

Ian Cassel - MicroCapClub

That does, thank you.

Operator

Our next question comes from Rick Palmer at Stifel Nicolaus.

Richard Palmer - Stifel Nicolaus

Glenn, a couple of quick questions. We have really hadn’t heard of whole lot about waste management lately and I was just wondering if you could just elaborate on how involved they are in the sales process with the municipalities and the outlook in that area. And then secondly, my second question, you talked about some of the health issues that the storms damage or the storms that we are having in the east coast, could you just explain a little bit about what you mean by that?

Glenn Rink

Sure, I would be happy to. Actually I am going to let Bjornulf begin it off because he has been working directly with waste management on a daily basis. So, Bjornulf, would you begin addressing Rick's question?

Bjornulf White

Sure, I would be happy to. Well, the relationship continues to move forward on the stormwater front with continuous business development efforts primarily focused in the western half of the United States. And there is continued expansion of the offering throughout their municipal sales force. But I would also like to mention that we are very excited about our growing collaboration with the waste management in oil and gas sector with whom we are working out of several different opportunities in a couple of different geographic locations of the country. And their waste to energy operations where we are planning to send spent Smart Sponge material that has been used out in the oilfield to their waste to energy facilities, starting in Texas.

The second question that you asked was about the health repercussions that we mentioned in our script. And what I can say about that is there are numerous public reports, alerts put out by local agencies and officials, some linking to CDC guidance that speaks to some of the repercussions that have been felt by populations, who in the tri-state region in particular were exposed to contaminated flood and stormwater. And that often is due to bacterial contamination in that flood or stormwater. So as a result of that there is not only increased awareness to the need to mitigate flooding and storm surges but also that there needs to be attention paid to the contaminants that actually are in that water, because they can pose a harm to populations who are exposed to it.

Operator

The next question comes from [Tom Frank], private investor.

Unidentified Speaker

A couple of question around the company's IP. First, you mentioned you have developed a new heavy metal capability. What is the process on the others you have been working on? And secondly, could you just get a bit more live on the EPA's registration for the Smart Sponge Plus. And finally, when does your first patent expire and are there plans for additional patents?

Glenn Rink

Thank you, Tom for your questions. I appreciate them. We will try to do them in the order that you asked them and I will let Jonathan begin.

Jonathan Thatcher

Sure, hi, Tom. In terms of the development of the new heavy metals technology there were a couple of things there that we were focused on, and one was the ability to use a technology that could use Smart Sponge as essentially the underlying substrate which this technology does have. The first one that we have been working with is really a combination of two medias together. With the approach of using the substrate, and this speaks a little bit to your third question, it also opens up additional patent opportunities and protections for the company in addition to some -- overcoming some performance challenges that we have encountered previously.

So that one is, as we noted, in very preliminary stages but has shown and performed very very positively and has the ability to be attached to our substrates in the future. And so it's something that we are obviously very interest in. The Smart Sponge Plus EPS registration, the company filed on May 3 its extension request. In the past the company has received, I believe two prior extensions. These have primarily been driven as this one is today and as we have discussed, by the complexities of working with the active ingredient. And the third party laboratory has made great progress on getting an analytical method documented an in place that will be acceptable to EPA. So that they can move to the biological work. Once the analytical method is in place, the biological work is relatively straight forward and easy to complete.

In terms of the -- you asked about the first patents expiring, and I will let Glenn jump in here with me a little bit on this one. But the first patent expiring was...

Glenn Rink

I will take it, Jonathan, if you just want to talk about the plans for additional patents, I will handle the first patent expiration and the amendments.

Jonathan Thatcher

Yeah. Well, obviously, as I said we were always looking for additional ways that we can expand our IP or patent portfolio. The additional heavy metal technology is another example of that. So any time we are dealing with newer technologies that is something that we include.

Glenn Rink

Thanks, Jonathan. So with regards to when did your first patent expire. So we have 17 patents and in addition to the 17 issued patents, over and above that we have 25% trade secrets that have not been released. And the trade secrets allow us so that when we are doing things in certain other countries and/or someone tried to copy the product and areas that there is no converge, we would be protected in the 25%. I wish I could say it was plan, but those were developments and improvements in a performing products over many, many years. So having that kept in mind, the first patent that is around oil -- I believe it was [mitigating] oil spills and utilizing the Smart Sponge in bags and blankets on oil spills. That patent was issued in 1996 and expires in 2016. Now, you should note also there are several patents that are amendments to that.

One such amendment is one around the chemical patent, which is the same, it's taking the same material and it creates a new chemical. And that patent was issued in 1999, so that next one would go to 2018. And then as we look at additional patents on antimicrobial, taking the base material and adding the antimicrobial. Those go into the '22, '23 -- 2023-2020. But we have a full metrics of each one and we are happy to send that to you so that you can look at each one and see. You may know this, Tom, but patents issued prior to 1995 had 17 years on them from they issued, and then later after '95, I believe it was May of '95, they changed it to 20 years from the date in file because people were dragging out the patents process much longer.

And interestingly enough, and I think Jonathan can -- it's interesting read on -- sometimes companies drag them out, sometimes agencies drag them out. We just received notification for UK, and what was the patent, Jonathan, that took nine years?

Jonathan Thatcher

It was the [Pastar] patents.

Glenn Rink

So the base material which is (inaudible), it took nine years for the European union I believe it was, to approve that patent. And we haven’t received formal notification -- we did receive notification but the formal notification should be received soon. Would you agree to that [part] we stated there, Jonathan?

Jonathan Thatcher

Yeah, both Canada and the UK accepted finally the antimicrobial patents as well.

Glenn Rink

So it took a long time. But we feel we are very strong there even though the early version which has -- that had amendments. We received calls of some folks who were thinking that they were expiring in a year. This has been so many add-ons and improvements and amendments to the key areas as we are. So I hope that answers your questions adequately.

Operator

Our next question comes from Jay Harris with Axiom Capital.

Jay Harris - Axiom Capital

I see that you have filed a S-1 on registering shares that were underlying securities and issued, I guess prior to last year. There was a private placement last year. Those of us how participated, are our shares going to be registered and if so, when do you think it's likely?

Glenn Rink

Lane, I will let you handle that because obviously there is -- yes, you can provide those details, Lane.

Lane Castleton

Sure. The private placement that took place in September of 2012 was an equity private placement. The transactions that took place in 2011 and into earlier 2012 were debt transactions on convertible debt with warrants. It's those earlier transactions that were covered in the S-1 that is currently pending with the SEC. The equity private offering that occurred in September of 2012 also has registration rights which will require the company to file another S-1 right on the heels of the current S-1 once it's declared effective. So, yes, we will be filing another S-1 as soon as the current S-1 is declared effective. And the purpose of that obviously will be to register both the shares and the warrants that were issued in the equity private offering in September of 2012.

Jay Harris - Axiom Capital

What are the remaining issues on the S-1, which in find on the SEC website.

Lane Castleton

That’s an interesting question because I am hopeful that the answer to that is none.

Jay Harris - Axiom Capital

And when would you know....?

Lane Castleton

We filed last Friday, our last amendment to the S-1. We have preliminary verbal response from the SEC that they will have no further comments. So we have filed with the SEC a request for an acceleration to have that S-1 declared effective. So hopefully, we will hear back on that this week.

Operator

We have a question from Dorian Prosdocimi at Prosdocimi Ltd.

Dorian Prosdocimi - Prosdocimi Ltd.

You have mentioned earlier that you were looking at financing options with your advisors. Can you clarify what you mean by this, or said differently, can we assume that you are looking at that offering of debt structure [sums] vis-à-vis an equity offering?

Glenn Rink

Yes, I would be happy to begin this off and then I will pass it off to Lane and Jonathan for specifics, if need be. Regarding -- first of all, thank you for joining us so late in your day, I appreciate it. And as far as the company's position, as I touched on earlier in my opening statement was that, the company, its shareholders, I mean it's employees, it's board members, are looking out for anything that can avoid dilution, any further dilution. And so debt financing is the pathway we would like to go and so we are focused on that and we have got term sheets in place. We have also got equity term sheets in place but they are not desirable for us at this point. We see other alternatives, with the size and magnitude of these projects we see all sort of options that are available to us. And so we have been finalizing detailed term sheets with the specific parties that we would be interested in working with. And we anticipate doing that, really completing that after these awards of magnitude come through. But Lane, would you like to elaborate a little bit more detail?

Lane Castleton

Yeah, I think that the debt financing options become pretty viable for us in terms of financing specific projects where there will be significant capital outlays at the beginning of the project, and we may not get paid on those for several months. And so to be able to fund those projects with debt financing makes a lot of sense and clearly that’s the path that we will be taking. We will probably need additional capital and operating capital beyond that, and that will require, possibly some type of equity transaction which we really want to delay until we are in a position, stronger position revenue wise and hopefully stronger position with regard to the price of our stock. And so we have been exploring different alternatives to bring in additional capital, but we have been hesitant to pull the trigger on anything because we really want to have some good news out there before we pursue any of those equity type transactions.

Glenn Rink

And I would like to emphasize the fact is that the debt financing terms or Gap financing options that have been put on the table will all have better terms after we get some of these initial awards. So we want to be very strategic about this and not jump towards going out for equity when we have the ability to do debt financing or Gap financing on these projects. And the magnitude of these projects are such that they are game changing. And so we believe that that will give us a lot of flexibility moving forward and since we anticipate them beginning to occur this quarter and potentially even this month, we feel that that decision on exactly the debt strategy will take place in the near-term as these developments continue to occur. I hope that was helpful to you, Dorian.

And one other things I might touch on is the projects, the $3 million worth of projects that are in contract phase in the European market. Jonathan, do you want to give a little detail on that?

Jonathan Thatcher

Sure. Those would primarily be project financing opportunities and they are for equipment installation, planning and permitting costs to a project. And because of the strength of both of the ten-year -- because of the term of the ten-year service agreements, the strength of the language in those contracts and the strength of the companies that are implementing those projects, there are least three groups willing to fund those projects or finance those project costs based on those strengths. And we would not then have a corresponding guarantee or impact to Abtech's balance sheet which obviously would be desirable place for us to be.

Dorian Prosdocimi - Prosdocimi Ltd.

Glenn, if I may just ask another quick question. Can you just confirm what the net operating loss carry-forward is at this point?

Glenn Rink

Sure. Lane, would you elaborate on that?

Lane Castleton

Yeah, I mentioned that I think earlier in the presentation that the state and federal net operating loss carry-forwards are about $50 million.

Glenn Rink

And (inaudible) is obviously going to be helpful as we move through some of these larger programs and projects. And so whether it be here in the U.S. or in the UK, we are at a very timely position of everything coming together at this point and we are very excited about that. So we will be looking strategically at using the best minds of the team and the board to make the best decisions and not just jumping on anything because, again, we want to avoid dilution at all costs.

Operator

Our next question comes from [Steven Mcgruter] at SJM Capital.

Unidentified Analyst

I wonder if you could give us a quick update on headcount and what will happen the rest of the year to the headcount according to different things that transpire?

Glenn Rink

Thank you for your questions Steven. Lane, I will let you answer that, since we are at strategically a different location, so I am going to let Lane who is in our corporate offices answer that with a most accurate count.

Lane Castleton

Yeah, our employee level right now is about 25 full time employees and those are located in three different facilities. Our headquarters here in Scottsdale, our manufacturing plant in Phoenix, and then the office of our engineering subsidiary, AEWS, in North Carolina. Kind of interestingly enough as we have gone on over the last several months, a lot of the additional work that we have needed to do in terms of putting proposals together and doing some of the initial design and planning work, we have been able to outsource that and bring in temporary help. So it hasn’t required us to hire additional employees. We will, I think, definitely plan on bringing in full time permanent employees especially in the engineering and design area as we move ahead. But we found that being able to meet temporary or sudden requirements for additional employees or additional people, we have been able to meet that more cost effectively by adding outsourced companies to help us with those labor needs or bringing in consultants on a temporary basis. So I think that as these different projects come on line and we can justify it, we will be adding additional, permanent full time employees to help bring those projects to fruition. But until those projects come on line, I think all of our needs can be better managed by using outsourced temporary labor.

Glenn Rink

And just to expand on that Steven, the outsource -- the benefit of that really is that those individuals, those consultants we bring in, are very very high end, very experienced, very capable, predictable performance. And they see the value in our company, the fit of our technology, the uniqueness of the play for them, and so they do even have an interest in getting involved on a full-time basis. So it's a really, it's a great stepping stone with some of these folks and it gives us a benefit to be able to track really great talent. Even in the way -- even in a consultive manner and the willingness to then move to full-time. So we are pleased with that. So hopefully that has answered your question.

Operator

Our next question comes from [Drew Jusmen at Management Investment Advisory]

Unidentified Analyst

I want to drill down a little bit on the $10 million east coast pipeline. You sound quite confident that you are going to win some of those awards, and I guess I want to ask what gives the confidence. Is it, is Smart Sponge mentioned specifically in some of these RFPs, is it due to the antimicrobial capabilities? And then, I think you mentioned by the end of this quarter you expect to hear the decision on those awards. So if we are sitting here in July and nothing has been, I guess, communicated to shareholders, should we be disappointed?

Glenn Rink

Well, that is a great question and I am going to answer that myself. Thank you for asking it and it's a pleasure to meet you. So that everyone knows, we have had issues in the past when we have discussed specific projects in any kind of detail. Where there has been confusion created by competitors who have gone out, tried to get the business in some form, whether it be east coast or west coast. We were not able to get the business, often offering price at half of what we were offering the technology for and the solution, even though they didn’t meet the full requirements necessary or they didn’t have the various approvals required. Or they didn’t have the technology they claimed to have. It was a great competitive test to see how that would play, as we said, both on the east and the west coast. And so we went through that process.

And so our confidence level on the specific projects that we have had in the past and the delays we have experienced on both coasts because of competitors creating confusion with their attempts to gain the business and as I said they failed. But at the same point of time it's important to note that we have learned that I do not want to delay any business opportunities any further. And so we will not speak of specifics regarding these projects because I don’t want to have -- it's not that I am trying not to be transparent, I would love to be transparent. But to have somebody step in and create confusion and drag things out and be waiting till July because someone has created confusion with a city or a specific customer, we are going to be very careful about that.

So generically, more of a higher altitude answer to your question is to say you that our technology is very unique. And whether it's described specifically in the RFP and it says Smart Sponge and similar or similar, or it describes an application for a specific problem utilizing a material that has certain capabilities, whether it be flow rates or approvals or various other attributes that make it very very unique. And so we have been tested a lot lately and is has dragged out some of our business opportunities. So feel very confident on the $10 million projects, RFPs, because of the fact that they are very unique to us, but they are not unique in the sense that they describe a problem. And we have been working for years and have spent millions and millions dollars. We just talked about $15 million in loss carry-forwards.

We spent a lot of money developing this technology so we can do the very unique things it does. So we feel because of those unique things, that it has the ability to offer that any city or municipality that’s going out to try and solve a problem, we feel that we have a very unique fit to it. Ultimately, time will tell. And I would be disappointed if we are waiting in July as, in answer to your question, my hope is by keeping my mouth closed on some of these specific projects that will create less confusion and allow them to process more quickly. So I apologize if I didn’t answer detailed as you like, but hopefully it was helpful.

Unidentified Analyst

Yeah, it was. One other question. Can you maybe give me an appearance to what the cash on the balance sheet today is and what is the cash burn rate? Is it still $300,000 to $400,000 a month?

Glenn Rink

Yeah. You know right now if you look at the quarter close, it was about $1.2 million and we are -- you can say the burn is between $300,000 and $400,000 or a little bit higher than that, I know it was in the last month -- I think the last month was $434,000, the average was $434,000. But it fluctuates and I can tell you that if you look at that as of April 30, that will give you an idea based on the burn rate where it is right now. And that I could tell you that these alternative cap rates and the cash flow coming from some of these projects will obviously take us out further. But we anticipate with these projects being announced in the very near term, that we will close on some of this debt financing or project financing, or Gap financing, as we decide which firm we are going to work with and be able to give us the capability to bring us to cash flow positive position we want to be in.

Unidentified Analyst

Okay. And last question for you, maybe you have mentioned in the past, I missed it. But any update on Monrovia. Are we going to hear news on that within the next quarter or so?

Glenn Rink

Again, without speaking about a specific city, I can tell you broadly that we did touch on the general California sort of opportunities on the west coast. And unfortunately when we have mentioned specific entities before they we have received tremendous amount of phone calls from various different parties. And I am not specifically about Monrovia, I am speaking in general terms. And now we are going to avoid speaking about specific cities or entities. From now on we will speak about revenue projects, we will describe the projects. So in answer to your question about Monrovia, I am putting it in the general category that there is movement in the California cities since (inaudible) or where three items that we at that time really did not believe based on our discussions with the various parties, were really going to slow things down. But it did cause a pause and that was the first ever supreme court case pertaining to stormwater and then there was a massive stormwater permit for the Greater LA region which was expanding the contaminants that they were going to be required to go after.

And then a proposed LA County stormwater fee which would actually raise it to almost $300 million, $270 million to be exact, that would be available for cities, towns or counties to use as the rebate program. And that was what they were proposing by increasing the parcel tax. And so that caused some confusion and pause. So let me give you an example. If you were a city or a mayor of a city and you were interested in moving forward (inaudible), there may actually be $270 million available free money or rebate money available. And so it caused cities to do it saying, before I go forward in looking at maybe doing a waste management financing or Abtech project financing to go forward on these stormwater projects, Monrovia being one of them, wouldn’t it be a wise idea to see where this possible money may be coming and if it's coming.

And so that took place in January, February and March. There was an in limbo stage where cities were waiting to find it out. I might also add that in the past, money that’s been given including through the Obama stimulus plan, where the money was given to cities to use for certain things, money didn’t necessarily get spent on it. And it got spent on other things. So this money was more in line -- the proposed money was in line with the rebate program. You had spent the money on technologies that did the following things. And if it did those following things then you would get a rebate or could potentially get a rebate. And the decision was to push that off until the next major election where it could be decided by the voters, and so it freed of the mayors and city councils to not think that they were missing on free money at this point in time.

So cities in California, in the region, we believe are moving forward now that they have greater clarity as these issues have largely been resolved. And so we are excited about that movement. But one thing we have learned over the last year is we are not able to predict cities as well as would like and so we are being very guarded about making specific representations, so that we can under promise and over deliver.

Operator

Our next question comes from [Victor Mazerati] private investor.

Unidentified Speaker

I wanted to learn more about the competitiveness of the company. First question has to do with the profitability of the waste management contract you have in there to rollout in the United States. The second question has to do with the fracking business and your ability to incorporate your technologies with larger providers or if they are keeping you out of that process and if that’s have an effect on you competitively. And the third question, is what happens if you have an EPA denial on the Smart Sponge, and the last question is the new manufacturing process. How far have you gotten along and how will that help you to meet your production if you really do ramp up? Thank you.

Glenn Rink

Thank you. We will try to -- we missed some of those questions, we might need you repeat them. But starting with -- I am going to let Bjornulf White answer the questions. I will say to you that from a competitive -- it's very interesting time for us very recently because of some projects that were out there. And competitors trying to break in and trying to get in the door after an award was issued or when a project was put for, and then actually going in and trying to cut prices half, to 50% as an example, and not being able to break through that. So that was very interesting. The other thing is that, as a city is being approached by, when we make some announcements, by various competitors trying to say they have something, a me too product which they have don’t have the patents, they don’t have the registration and other things that are important. And so it's really been -- and most importantly, years and years and years of data on the technology and its performance.

So we really feel that we have had a very strong validation of how we can withstand competitive efforts. In particularly on these smaller projects, when we get to these bigger projects it's nice to have already tested it. But Bjornulf will give more details as it relates to waste management and your other questions regarding oil and gas.

Bjornulf White

Sure. I will take on the first two questions and then probably Jonathan will be the best one to answer the second. The first one you asked was about the profitability of the waste management contract and I just want to clarify that the relationship between waste management and Abtech Industries, is a distribution and marketing relationship. And currently, right now, functions in a way that I would best describe as a joint teaming effort, where we are both working to develop the municipal business. So I don’t know that it makes sense to speak in terms of profitability and certainly is not different in collaboration with waste management then it is in anything else we do.

The second question related to fracking and whether big companies and users are trying to prevent us from being adopted. And the answer is quite the opposite. We are technology agnostic in terms of which other technologies we work in collaboration with. We essentially approve the economics and efficiency of any water treatment system in the fracking industry. So because of that, there are actually both operators and oilfield services providers that are very keen to incorporate us into their systems as much as it makes sense and is possible. So we are finding that the operators want us incorporated into the systems that are deployed and we are finding that the oilfield services providers, as evidenced by, for example the teaming relationships we have signed and the trailer design that I just mentioned earlier, incorporating Abtech's technology into it. Those oilfield services providers including the very large ones are very interested in actively incorporating us into their offerings as a tool in their toolbox as it were.

Glenn Rink

I hope that answers your question for you.

Unidentified Speaker

Well, I had the additional question about the -- you guys were going to update your manufacturing process to make it more efficient, and also what happens if the EPA denies the Smart Sponge, what kind of impact could that have on your business?

Glenn Rink

Yeah, Jonathan was going to answer that part, I apologize. Jonathan?

Jonathan Thatcher

Yeah, on the manufacturing side we do actually continue to work with some new manufacturing methods that have between five and ten times the current times or the current technology. That in the first stages of testing gone well. It is likely in the near term within the next two to four months that we will be bringing some of that technology in house and doing the remaining work to refine the process so that we get the output that we want, need for a business. So that continues to progress very positively.

With the Smart Sponge rejection, technically if the EPA was not willing to extend our time limit of the registration, we would be prohibited from selling Smart Sponge Plus in the market after May 31. That’s just sort of the factual realty of it.

Glenn Rink

Prohibited with selling it and making claims.

Jonathan Thatcher

Correct. And making claims related to coliform reduction. The business realty is that the company has worked very closely with EPA about this process and getting to the test protocols and the challenges with the active ingredient and has been engaged with them throughout this. And so there has been a great deal of collaboration and communication between both the company and the EPA and all parties are really pretty clear on the challenges that have occurred. So we have received extensions in the past and we are optimistic that we will be successful or be granted an additional extension. And in part that’s based on the very significant progress that’s been made to date. And the nearing completion of these studies so that they can be submitted.

Unidentified Speaker

Thank you. I don’t mean to belabor a point but my question really was, what is the impact on your business if, worst case scenario, they don’t provide you an extension. How does that affect your business moving forward, worst case scenario, that’s what my question is? How central is that technology compared to your engineering and all the other patents and everything else you are doing, what percentage of your business is that today? Sorry, for the tough question.

Glenn Rink

No, no, no. It's great to have the depth of these questions because it gets us, allows us to get into much greater detail on things that some people often don’t want to hear. So right now we could continue selling the technology as it is without making specific claims. What it is, is around making claims. You are not authorized or allowed to make claims. You could use the product, you could sell the product but you cannot make claims around it. We believe though that claims are absolutely critical from a standpoint of differentiating us with various different RFPs. Now some of the RFPs are vaguer in their writing style, some of them are much more specific. I don’t believe any have said it must be an EPA approved product but it is in essence when a product goes out the door, technically when you are making any kind of claims to it, it would affect it.

So what I am saying is, we would be able to sell the product, we just would not be able to make the claims that we are able to make today. So I will say to you it could impair a great part of the marketing effort but from the standpoint of selling the product, and Jonathan correct me if I am wrong, it doesn’t prohibit us from selling it, it just prohibits us from making marketing claims.

Jonathan Thatcher

Making claims around the antimicrobial effectiveness. And I will just add a little bit to that and that is, that that is a portion of the stormwater market. Those claims and that product does not touch on our oil and gas or the international opportunities that we talked about today. So it's a segment of stormwater treatment. Beyond that there is also the services business and associated equipment sales etcetera, that are a part of the business going forward.

Operator

Our next question comes from Peter Okin with Stifel Nicolaus.

Peter Okin - Stifel Nicolaus

Just a quick question. I have been following you guys for a year now you are doing $100,000 revenue for the quarter. When is this going to start to pickup? I missed the first ten minutes of your call, but when can we expect to multiple million dollars in revenue per quarter and you know really get this thing rolling. Obviously, now you need more funding, so it's just a story that seems to get delayed and delayed quarter after quarter. I am wondering if you could let us know when we could expect some good news.

Glenn Rink

Well, I am sorry that you missed the beginning of the call because that elaborated on those very details, but I am happy to go over them again because they are exciting for us. The company's has worked for a long time well before the years that you described in getting to where we are, and it's been at time quite frustrating because of the delays that seem to occur for one reason or another. However, at this particular in point in time, for the first time, if you recall a month ago for the first time we had RFPs that were written around our technology or what our technology does. And that was for the first time in all of our existence that that has occurred, and that exceed $10 million in RFPs.

At the point when we described that a month ago, we had not responded to all of those RFPs but we now have responded to all of those RFPs and they are all pending right now. A couple of them have been awarded. They are smaller projects. The bigger ones that are out there are pending and literally could be at any time right now. We are indicating with the under promise, over deliver thought behind our process and stating this, is it could happen at any time but we are simply stating that it should happen this quarter. And so we are talking about this quarter. And we have a June 3 shareholder meeting in New York City and we fully expect to have great answers by then and results but then.

It's possible if you go beyond that, but I will tell you these RFPs have magnitude the first of this size that we have responded to. And I will tell you that our RFP response, and one of them alone was greater than 100 pages. So these are projects of magnitude that are game changing for the company, and so we have great vision not only when an RFP comes out because you see what an RFP says and the scope of it and the uniqueness of it. And then you respond to it and you know when you respond to it there is a clock that starts ticking then. And that clock starts ticking and the usual response time is 30 to 45 days, sometimes it could be -- if you are buying blackboards or widgets they can respond to an RFP in days or hours. But this is a much more complicated design, operate, build solution and those can take considerably longer. And so the clock is ticking on the response to the pending RFP.

So that has never occurred us for us, at least to this level before. And the other part of our vision is to say to you that since the hurricane in November of last year, we have put more proposals together in response to cities or towns or counties that are looking to respond to their needs, and we have put more proposals together in the four five months than we have in all of the years put together for the company. So we believe we have great vision as to what's happening. We believe the dynamics are -- we are on the cusp of it, as I said. I am more confident than we have ever been because of the depth of what's happening and the tightness to each of these situations and the uniqueness of our technology and as it fits to it.

So those are the reasons why we are much more confident and comfortable and they are also the reasons why we are not rushing out to get short-term cash because of a concern that maybe we will be running out of cash before these things are going to be happening. We feel comfortable that these orders are going to come through, put us in a much stronger position to be able to go after project financing and debt financing. And if we weren’t, we would be doing an equity raise or something of that nature right now, and we are not. So...

Peter Okin - Stifel Nicolaus

Okay. Do you have an estimate for how much revenue you think you will be doing this year?

Glenn Rink

We have not put out any guidance and I think the best reason for that is, since you have been involved for a year, you know this. One of the things we have shown to be really not very good at, is predicting the timing of cities and their projects moving forward. We know those projects are engaged, we know they have a need. But for them whether it's this month, this week or before a quarter end, is not as critical to us. So we know it's sort of like as was described and discussed with one of the waste management senior executives. This whole process is sort of like a locomotive. It's slow to get going but once it starts going it becomes difficult to stop and we anticipate that project size and scope will be much much easier to predict as this locomotive is moving at a greater pace that we can really track more effectively these projects and sizes. Because we do have calculations, very clear calculations. But, again, until this locomotive begins really showing signs of movement, we are not going to hurt ourselves with representations that we can't meet. So no guidance has been put out but at this point we do have four or five analysts looking at us very carefully, and we would like to and hopeful that they will putting out guidance for us in the near-term prior to us getting to the stage of having better traction.

Operator

Our last question comes from William Volz with Invest-Sure.

William Volz - Invest-Sure Wealth Management

Three quick answering questions. One, what's happening in Australia. And in the press release you have your trailer system, is the trailer system to one of the four oil and gas companies that you signed up with or is this a fifth company. And the third question is, in the need of raising cash, what's the likelihood of converting that debt and collecting the $10 million of equity?

Glenn Rink

You are a very smart man. I am going to let Bjornulf begin by answering the first couple of questions then I will touch on the last one with Lane's assistance.

Bjornulf White

Sure. Well, with respect to Australia we have various technology that’s been under the first two orders that’s gone over to Australia and is being marketed throughout the country by the distributor that we mentioned. On the oil and gas within Australia, we are looking at various applications and in a bidding mode right now. And that’s how we are prepared to say on Australia. As far as the trailers go, that is not with one of the companies that was mentioned, that is with a fifth company.

Glenn Rink

And as was indicated, it's a significant company so we are very excited about that.

William Volz - Invest-Sure Wealth Management

(Inaudible) okay, great.

Glenn Rink

Yes. And in addition to that, your question about the warrants that are out there. You know we have had folks talk to us already and make enquires about early exercise. Some have asked about our cashless component, we have had some exercise as for cashless, and I think you may have noted in the documents, we actually reduced dilution by allowing some cashless. So the ideal situation, and I don’t want to put the cart before the horse, is that to take out some of the folks that are looking to exercise really in with some of the news announcements coming, I anticipate that will be an option that we will have on the table. And quite frankly, it would be great a combination of both letting some of the cashless and some not, and so that we could actually reduce dilution at the same time. So that might seem rather strategic and tactical or maybe more detailed than you wanted to hear, but there has absolutely been indicated an interest and indicated at the appropriate time to approach that pathway in a broader way. Lane, have I said anything that is overstating or incorrect in anyway?

Lane Castleton

I think the disclosure that I made earlier about the warrants and options that are outstanding and the capital that could be brought in if they are exercised, was not intended to mean that that was imminent and that we expected that to happen. But as you consider the fully diluted number of shares outstanding, it's important to also note that in order for some of those shares to actually become common stock, additional cash would have to come into the company. Now with that said, we also see that as a potential source of additional capital for the company that could be very important. And as Glen mentioned, there may be opportunities to accelerate the exercise of some of those warrants by offering some kind of a cashless exercise feature in conjunction with a cash exercise action on part of the warrant holders. So we don’t know if we will pursue that or not but certainly it's a potential out there for us and one of the financing options that we are considering.

Operator

At this time there are no more questions.

Glenn Rink

Okay. Thank you very much. I want to thank everyone who is still on the call, I know we went a little longer than perhaps some had expected. I do want to highlight what I did mention earlier. Going over a couple of quick housekeeping notes. We are holding our annual shareholder meeting in New York City on June 3, 2013 at 10:00 a.m. The meeting will be held at Grannus Financial Offices in New York City at 1120 Avenue of the Americas, which is the Hippodrome building at 44th and 6th avenue. All shareholders are certainly welcome. We had a large number of investors join us last year, however, since we have a limited capacity, it would be on a first come first serve basis. So please confirm your attendance as soon as possible. Also in just a couple of weeks we will be presenting at the annual Marcum Conference on May 30 in New York at the Grand Hyatt Hotel. We are scheduled to present from 2:30 p.m. eastern time to 3:00 p.m. eastern time in the [State 1] presentation hall. The event will also be webcast to those of you who cannot attend and would like to watch it.

I look forward to our next conference call when we will review our second quarter financial results in early August. In the mean time if you have any additional questions, please feel free to contact Yvonne Zappulla. Her phone number is 212-681-4108. And if there any technical questions regarding any of the things we have discussed today, fracking or otherwise, we would be happy to discuss those with you. You can Yvonne and she will forward them to the appropriate person at the company to get you the answers that you would like regarding the technology.

With that I wish you all a very good day and I thank you very much for spending this time with us. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation, you may disconnect.

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