Superconductor Technologies Inc. (STI) (Nasdaq: SCON) reported
financial results for the three and six months ended June 29, 2019.
Jeff Quiram, STI’s president and CEO, stated, “In the second
quarter, we received initial orders for our Conductus® high
performance magnet wire from several customers, including the
Institute for Plasma Research, India, (IPR), which we’ve previously
announced, and a startup company that is planning to disrupt the
fusion market with a low-cost, high-density fusion system. We are
encouraged by the traction we are gaining expanding our customer
base to multiple companies. This growth is in part driven by the
increasing number of companies entering the fusion system
market.
“In the second quarter, we also identified and implemented
process improvements to prepare for our ramp to high-volume
manufacturing. Subsequent to quarter end, we started delivering
initial quantities of our wire against existing orders. Many
industry experts believe high performance magnet wire will enable
next generation Tokamak devices, addressing a significant existing
barrier to future commercialization. To that end, our expectation
is to ship 10s of kilometers of wire later this year as we ramp
toward supporting our superconducting magnet customers' need for
1000s of kilometers of wire starting in the next few years.
“As we prepare for the second half of 2019, in conjunction with
project partners TECO Westinghouse Motor Company, Massachusetts
Institute of Technology, and the University of North Texas, we
anticipate beginning in the fourth quarter Phase 2 of our
Department of Energy project, which is focused on the deployment of
components for Next Generation Electrical Machines. This effort has
significant synergies with our commercial goal of ramping capacity
of best in class 2G HTS wire for superconducting magnet
applications.”
Second Quarter Financial SummarySTI did not
record net revenues in the second quarter of 2019, compared to
$793,000 in the second quarter of 2018, which came from work done
in the first budget period of the company’s ongoing Department of
Energy (DOE) Next Generation Electrical Machine project. STI has
not yet started the second budget period of the DOE project.
Net loss for the second quarter 2019 was $2.6 million, or a loss
of $0.57 per share, compared to a net loss of $1.5 million, or a
loss of $1.24 per share for the second quarter of 2018.
STI did not record total net revenues for the six-month period
ending June 29, 2019, compared to $1.0 million for the six-month
period ending June 30, 2018. The net loss for the first half of
2019 was $4.9 million, or $1.25 per share, compared to $3.7
million, or $3.17 per share in the first half of 2018.
Please note: share and per share data for both periods are
adjusted for the 1-for-10 reverse stock split effective on July 24,
2018.
As of June 29, 2019, STI had $2.5 million in cash and cash
equivalents.
On May 23, 2019, STI generated gross proceeds of approximately
$1.7 million from a public offering.
Investor Conference CallSTI will host a
conference call and simultaneous webcast today, August 13th, at
11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time to discuss its
results. To listen to the call live, please dial 1-866-548-4713 at
least 10 minutes before the start of the conference. International
participants may dial 1-323-794-2093. The conference ID is
2516200. The call will be webcast and can be accessed from
the “Investor Relations” section of the company’s website. A
telephone replay will be available until midnight ET on August 20th
by dialing 1-844-512-2921 or 1-412-317-6671, and entering pass code
2516200. A replay will also be available at the web address
above.
About Superconductor Technologies Inc.
(STI)Superconductor Technologies Inc. is a global leader
in superconducting innovation. Its Conductus® superconducting wire
platform offers high performance, cost-effective and scalable
superconducting wire. With 100 times the current carrying capacity
of conventional copper and aluminum, superconducting wire offers
zero resistance with extreme high current density. This provides a
significant benefit for electric power transmission and also
enables much smaller or more powerful magnets for motors,
generators, energy storage and medical equipment. Since 1987, STI
has led innovation in HTS materials, developing more than 100
patents as well as proprietary trade secrets and manufacturing
expertise. For more than 20 years STI utilized its unique HTS
manufacturing process for solutions to maximize capacity
utilization and coverage for Tier 1 telecommunications operators.
Headquartered in Austin, TX, Superconductor Technologies Inc.'s
common stock is listed on the NASDAQ Capital Market under the
ticker symbol “SCON.” For more information about STI, please visit
http://www.suptech.com.
Safe Harbor
Statement Statements in this press release
regarding our business that are not historical facts are
"forward-looking statements" that involve risks and
uncertainties. Forward-looking statements are not guarantees
of future performance and are inherently subject to uncertainties
and other factors, which could cause actual results to differ
materially from the forward-looking statements. These factors and
uncertainties include, but are not limited to: our limited cash and
a history of losses; our need to materially grow our revenues from
commercial operations and/or to raise additional capital (which
financing may not be available on acceptable terms or at all) in
the very near future, before cash reserves are depleted (which
reserves are expected to be sufficient into the third quarter of
2019), to implement our current business plan and maintain our
viability; the performance and use of our equipment to produce wire
in accordance with our timetable; overcoming technical challenges
in attaining milestones to develop and manufacture commercial
lengths of our HTS wire; the possibility of delays in customer
evaluation and acceptance of our HTS wire; the limited number of
potential customers and customer pressures on the selling prices of
our products; the limited number of suppliers for some of our
components and our HTS wire; there being no significant backlog
from quarter to quarter; our market being characterized by rapidly
advancing technology; the impact of competitive products,
technologies and pricing; manufacturing capacity constraints and
difficulties; the impact of any financing activity on the level of
our stock price; the dilutive impact of any issuances of securities
to raise capital; the steps required to maintain the listing of our
common stock with a U.S. national securities exchange and the
impact on the liquidity and trading price of our common stock if we
fail to maintain such listing; the cost and uncertainty from
compliance with environmental regulations; and local, regional, and
national and international economic conditions and events and the
impact they may have on us and our customers.
Forward-looking statements can be affected by many other
factors, including, those described in the "Business" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of STI's Annual Report on Form 10-K
for the year ended December 31, 2018, and in STI's other public
filings. These documents are available online at STI's website,
www.suptech.com, or through the SEC's website, www.sec.gov.
Forward-looking statements are based on information presently
available to senior management, and STI has not assumed any duty to
update any forward-looking statements.
Investor Relations ContactMoriah Shilton or
Kirsten Chapman LHA
+1-415-433-3777
invest@suptech.com
SUPERCONDUCTOR TECHNOLOGIES
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three
Months Ended |
|
Six Months Ended |
|
June 29,
2019 |
|
June 30, 2018 |
|
June 29, 2019 |
|
June 30, 2018 |
|
|
|
|
|
|
|
|
Government contract revenues |
$ |
- |
|
|
$ |
793,000 |
|
|
$ |
- |
|
|
$ |
1,039,000 |
|
Total revenues |
|
- |
|
|
|
793,000 |
|
|
|
- |
|
|
|
1,039,000 |
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of commercial product revenues |
|
876,000 |
|
|
|
368,000 |
|
|
|
1,746,000 |
|
|
|
1,007,000 |
|
Cost of government contract revenues |
|
10,000 |
|
|
|
551,000 |
|
|
|
17,000 |
|
|
|
734,000 |
|
Research and development |
|
628,000 |
|
|
|
413,000 |
|
|
|
1,253,000 |
|
|
|
990,000 |
|
Selling, general and administrative |
|
1,094,000 |
|
|
|
1,006,000 |
|
|
|
1,955,000 |
|
|
|
2,047,000 |
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
2,608,000 |
|
|
|
2,338,000 |
|
|
|
4,971,000 |
|
|
|
4,778,000 |
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(2,608,000 |
) |
|
|
(1,545,000 |
) |
|
|
|
|
(3,739,000 |
) |
|
|
|
|
|
|
|
|
Other Income and Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to fair value of warrant derivatives |
|
- |
|
|
|
16,000 |
|
|
|
- |
|
|
|
49,000 |
|
Adjustment to warrant exercise price |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(24,000 |
) |
Other income |
|
17,000 |
|
|
|
7,000 |
|
|
|
45,000 |
|
|
|
14,000 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(2,591,000 |
) |
|
$ |
(1,522,000 |
) |
|
$ |
(4,926,000 |
) |
|
$ |
(3,700,000 |
) |
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share |
$ |
(0.57 |
) |
|
$ |
(1.24 |
) |
|
$ |
(1.25 |
) |
|
$ |
(3.17 |
) |
|
|
|
|
|
|
|
|
Basic and diluted weighted average number of common shares
outstanding |
|
4,510,832 |
|
|
|
1,228,270 |
|
|
|
3,926,287 |
|
|
|
1,165,546 |
|
|
SUPERCONDUCTOR TECHNOLOGIES
INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
June 29, |
|
December 31, |
|
|
2019 |
|
|
|
2018 |
|
|
(Unaudited) |
|
(See Note) |
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
2,468,000 |
|
|
$ |
5,616,000 |
|
Inventories, net |
|
202,000 |
|
|
|
173,000 |
|
Prepaid expenses and other current assets |
|
215,000 |
|
|
|
61,000 |
|
Total Current Assets |
|
2,885,000 |
|
|
|
5,850,000 |
|
|
|
|
|
Property and equipment, net of accumulated
depreciation of |
|
|
|
$12,620,000 and $12,172,000, respectively |
|
561,000 |
|
|
|
1,009,000 |
|
Patents, licenses and purchased technology, net of
accumulated amortization |
|
|
|
of $1,048,000 and $1,026,000, respectively |
|
664,000 |
|
|
|
686,000 |
|
Operating lease assets |
|
445,000 |
|
|
|
- |
|
Other assets |
|
69,000 |
|
|
|
69,000 |
|
Total Assets |
$ |
4,624,000 |
|
|
$ |
7,614,000 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Accounts payable |
$ |
319,000 |
|
|
$ |
313,000 |
|
Accrued expenses |
|
565,000 |
|
|
|
539,000 |
|
Current operating lease liabilities |
|
439,000 |
|
|
|
- |
|
Total Current Liabilities |
|
1,323,000 |
|
|
|
852,000 |
|
Long term operating lease liabilities |
|
6,000 |
|
|
|
- |
|
Other long term liabilities |
|
8,000 |
|
|
|
17,000 |
|
Total Liabilities |
|
1,337,000 |
|
|
|
869,000 |
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
Preferred stock, $.001 par value, 2,000,000 shares
authorized, |
|
|
|
328,925 and 330,787 shares issued and outstanding,
respectively |
|
- |
|
|
|
- |
|
Common stock, $.001 par value, 250,000,000 shares
authorized, |
|
|
|
5,502,609 and 3,270,609 shares issued and outstanding,
respectively |
|
6,000 |
|
|
|
3,000 |
|
Capital in excess of par value |
|
327,951,000 |
|
|
|
326,486,000 |
|
Accumulated deficit |
|
(324,670,000 |
) |
|
|
(319,744,000 |
) |
Total Stockholders' Equity |
|
3,287,000 |
|
|
|
6,745,000 |
|
Total Liabilities and Stockholders' Equity |
$ |
4,624,000 |
|
|
$ |
7,614,000 |
|
Note – December 31, 2018 balances were derived
from audited financial statements.
SUPERCONDUCTOR TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
Six Months Ended |
|
June 29, 2019 |
|
June 30, 2018 |
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(4,926,000 |
) |
|
$ |
(3,700,000 |
) |
Adjustments to reconcile net loss to net cash used in |
|
|
|
operating activities: |
|
|
|
Depreciation and amortization |
|
469,000 |
|
|
|
551,000 |
|
Stock-based compensation expense |
|
47,000 |
|
|
|
30,000 |
|
Adjustments to fair value of warrant derivatives |
|
- |
|
|
|
(49,000 |
) |
Adjustment to warrant exercise price |
|
- |
|
|
|
24,000 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
- |
|
|
|
(406,000 |
) |
Inventories |
|
(29,000 |
) |
|
|
(50,000 |
) |
Prepaid expenses and other current assets |
|
(153,000 |
) |
|
|
(126,000 |
) |
Patents and licenses |
|
- |
|
|
|
(1,000 |
) |
Accounts payable, accrued expenses and other current
liabilities |
|
(23,000 |
) |
|
|
19,000 |
|
Net cash used in operating activities |
|
(4,569,000 |
) |
|
|
(3,708,000 |
) |
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
Purchases of property and equipment |
|
- |
|
|
|
(5,000 |
) |
Net cash used in investing activities |
|
- |
|
|
|
(5,000 |
) |
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
Net proceeds from the sale of common stock |
|
1,421,000 |
|
|
|
1,700,000 |
|
Net cash provided by financing activities |
|
1,421,000 |
|
|
|
1,700,000 |
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(3,148,000 |
) |
|
|
(2,013,000 |
) |
Cash and cash equivalents at beginning of period |
|
5,616,000 |
|
|
|
3,056,000 |
|
Cash and cash equivalents at end of period |
$ |
2,468,000 |
|
|
$ |
1,043,000 |
|
|
|
|
|
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