Ecosphere Recognizes $28 Million Gain From Recent Transaction With FNF
STUART, Fla., June 3, 2013 (GLOBE NEWSWIRE) -- Ecosphere Technologies, Inc. (OTCQB:ESPH), a water engineering, technology licensing and innovative U.S. manufacturing company, today announced the positive financial implications that result from the Company selling 12% of its ownership interest in Ecosphere Energy Services ("EES") to Fidelity National Financial, Inc. ("FNF"), an existing EES member, on May 24, 2013 for $6 million.
Ecosphere also announced that the Company and EES have entered into a Master Manufacturing Agreement, which provides for Ecosphere to be the exclusive manufacturer of all Ozonix® water treatment equipment and products for a two-year period.
"The accounting triggered by the sale of our controlling interest in EES results in the recognition of a $28 million gain," stated David Brooks, Chief Financial Officer for Ecosphere Technologies. "Our balance sheet will now reflect the fair value of our remaining investment in EES and quantitatively illustrates the successful execution of our business plan of inventing, commercializing, licensing and selling our patented technologies. The stockholder deficiency reported in our first quarter balance sheet has now become positive stockholders' equity in excess of $17 million and the second quarter of 2013 will be the most profitable quarter in the Company's history, thanks to the realization of the value created in EES."Effective May 24, 2013, the Company will begin to account for its investment in EES using the equity method of accounting. The Company has also released an unaudited pro forma balance sheet in a Form 8-K, filed with the United States Securities and Exchange Commission, to reflect the Company's condensed balance sheet as of March 31, 2013, as if the FNF transaction and corresponding deconsolidation and equity method accounting occurred on March 31, 2013. The Company's filings are not incorporated in this press release. For more information, please visit: http://ir.stockpr.com/ecospheretech/sec-filings . Brooks continued, "It is important for our shareholders to understand that our business model involves multiple revenue streams, including manufacturing revenue, licensing fees and profit distributions from our subsidiaries. In 2012, EES unaudited revenues and net income were approximately $11.7 and $3.8 million, respectively. Moving forward, Ecosphere will recognize approximately 39% of EES net earnings and 100% of all profits generated from Ozonix® equipment sales and licensing revenue for industries outside of the energy field-of-use including, but not limited to, agriculture, environmental, industrial, marine, mining and municipal wastewater treatment applications."
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