BioHiTech Global (OTC:BHTG) - a cleantech startup I've been following since its reverse-merger IPO - is out with some good news today for those tracking progress at the company. According to a release posted to its website, BioHiTech has renewed its distribution partnership with global "sustainable solutions provider" Avangard Innovative. Avangard Innovative, for those unfamiliar, is "one of the largest recyclers in North America and Latin America" and "offers full-service recycling solutions at all levels of the process". Avangard Innovative works with a deep roster of enterprises spanning from mid-range in size to Fortune 500 companies. Yes, I'd say that's a meaningful distributor to have on the depth chart if you're BioHiTech.
According to this same press release, today's (3/10/2016) 12-month renewal also comes with the issuance of an "immediate purchase order for machines needed to fulfill demand". The purchase order, from what I gather, will go to backfill demand from one of Avangard Innovative's Mexican clients. As far as I'm aware this is BioHiTech's lone international exposure, bringing it entry to an important market and providing a pathway, via Avangard Innovative, to further southern movement in the America's.
While BioHiTech does carry inventory, this renewal and purchase order news being known by management (that's my speculation) might have been the primary motivation behind a recent $2.5 million raise executed successfully by the company. Again, while BioHiTech does in fact carry inventory - to my knowledge and current modeling - it doesn't carry enough to backfilland service increased demand from any large customer orders. BioHiTech also has something of a delay it has to deal with in terms of taking delivery on digesters once ordered. Put another way, if BioHiTech is anticipating increased demand from existing or new customers - it has to anticipate this and act on it with something of far advance in that the turns on delivery of inventory from initial order do take time. I'm not saying for certain that this was the reason BioHiTech came to market for a nice fundraise,that it is aware of or anticipating an increase of near-term demand, but it makes sense.
In any case, today's news is productive to the overall bull case at BioHiTech and I think provides a meaningful look into the slowly but consistently growing interest in the company's digesters. I think that Avangard Innovative being Houston-based might be more helpful this particular week than during others as well. This weekend kicks off Austin, Texas-based South by Southwest (or SXSW) - a globally recognized music, film, and technology interactive. I know I'll be having conversations at SXSW about what new tech/data/analytics names I'm following and BioHiTech is a name that will come up often for me. My guess is with the size of Avangard Innovative's client book that it too will have some questions popup as clients come to Texas for the interactive (of course this is speculation). Don't let this last estimation factor too much into investment decisions.
I'll update the BioHiTech story as new developments take place. Good luck everybody.