Superconductor Technologies Inc. (STI) (Nasdaq: SCON) reported
financial results for the three and nine months ended September 28,
2019.
Jeff Quiram, STI’s president and CEO, stated, “In the third
quarter, we started delivering initial quantities of our Conductus®
high performance magnet wire to several customers but we remain
challenged to meet current customer commitments. We remain focused
on completing our current customer demand before we can begin to
transition to full production.
“Late in the third quarter we reengaged our efforts on our
Department of Energy (DOE) project. In conjunction with project
partners TECO Westinghouse Motor Company, Massachusetts Institute
of Technology, and the University of North Texas, we are focused on
the deployment of components for Next Generation Electrical
Machines. The objectives have significant synergies with our
commercial goal of ramping capacity of best in class 2G HTS wire
for superconducting magnet applications.
“Finally, early in the fourth quarter, we strengthened our IP
portfolio as the U.S. Patent and Trademark Office in October
granted STI a patent that further protects its unique techniques to
maximize current carrying performance in superconducting magnet
applications. This patented process is important for the industry
as high-performance magnet wire is a key component to the
successful future commercialization of fusion,” Quiram
concluded.
Strategic AlternativesAs announced on October
29, 2019, STI’s management and Board are exploring strategic
alternatives for the company, which may include, among others, a
strategic investment financing that would enable the company to
pursue its current business plan to commercialize the Conductus
wire platform; a business combination such as a merger with another
party; or a sale of STI. The company’s timetable for the conclusion
of this review and its decisions related to any potential strategic
alternatives are subject to the company’s cash limitations noted
below.
Third Quarter Financial SummarySTI’s third
quarter 2019 net revenues were $157,000, compared to $517,000 in
the third quarter of 2018. For both periods, revenue was from work
done in the company’s ongoing Department of Energy NGEM project.
Net loss for the third quarter 2019 was $2.4 million, or a loss of
$0.43 per share, compared to a net loss of $2.2 million, or a loss
of $0.88 per share for the third quarter of 2018.
STI net revenues for the nine-month period ending September 28,
2019 were $157,000, compared to $1.6 million for the nine-month
period ending September 29, 2018. The net loss for the nine-month
period ending September 28, 2019, was $7.3 million, or $1.63 per
share, compared to $5.7 million, or $3.66 per share for the
nine-month period ending September 29, 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 September 28, 2019, STI had $275,000 in cash and cash
equivalents. On October 10, 2019, STI generated gross proceeds of
approximately $3.0 million from a public offering. This offering
did not raise sufficient proceeds for STI to execute on its planned
business operations over the next 12-months. STI’s current forecast
is that its existing cash and cash equivalents resources will be
sufficient to fund its business operations only into the first
quarter of 2020.
Investor Conference CallSTI will host a
conference call and simultaneous webcast today, November 12th, 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 1233333.
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 November 19th by dialing
1-844-512-2921 or 1-412-317-6671 and entering pass code 1233333. 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
capital may not be available on acceptable terms or at all) in the
very near future, before cash reserves are depleted, 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 |
|
Nine Months Ended |
|
|
September 28, 2019 |
|
September 29, 2018 |
|
September 28, 2019 |
|
September 29, 2018 |
|
|
|
|
|
|
|
|
|
|
Government contract revenues |
$ |
157,000 |
|
|
$ |
517,000 |
|
|
$ |
157,000 |
|
|
$ |
1,556,000 |
|
|
Total revenues |
|
157,000 |
|
|
|
517,000 |
|
|
|
157,000 |
|
|
|
1,556,000 |
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of commercial product revenues |
|
943,000 |
|
|
|
604,000 |
|
|
|
2,688,000 |
|
|
|
1,611,000 |
|
|
Cost of government contract revenues |
|
10,000 |
|
|
|
395,000 |
|
|
|
27,000 |
|
|
|
1,129,000 |
|
|
Research and development |
|
622,000 |
|
|
|
665,000 |
|
|
|
1,875,000 |
|
|
|
1,655,000 |
|
|
Selling, general and administrative |
|
966,000 |
|
|
|
1,041,000 |
|
|
|
2,922,000 |
|
|
|
3,088,000 |
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
2,541,000 |
|
|
|
2,705,000 |
|
|
|
7,512,000 |
|
|
|
7,483,000 |
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(2,384,000 |
) |
|
|
(2,188,000 |
) |
|
|
(7,355,000 |
) |
|
|
(5,927,000 |
) |
|
|
|
|
|
|
|
|
|
|
Other income and expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to fair value of warrant derivatives |
|
- |
|
|
|
3,000 |
|
|
|
- |
|
|
|
52,000 |
|
|
Adjustment to warrant exercise price |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(24,000 |
) |
|
Other income |
|
9,000 |
|
|
|
16,000 |
|
|
|
54,000 |
|
|
|
30,000 |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(2,375,000 |
) |
|
$ |
(2,169,000 |
) |
|
$ |
(7,301,000 |
) |
|
$ |
(5,869,000 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
common share |
$ |
(0.43 |
) |
|
$ |
(0.88 |
) |
|
$ |
(1.64 |
) |
|
$ |
(3.66 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average number of common shares outstanding |
|
5,501,576 |
|
|
|
2,469,371 |
|
|
|
4,455,258 |
|
|
|
1,601,752 |
|
|
SUPERCONDUCTOR TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
September 28, |
|
December 31, |
|
|
2019 |
|
|
|
2018 |
|
|
(Unaudited) |
|
(See Note) |
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
275,000 |
|
|
$ |
5,616,000 |
|
Accounts Receivable Net |
|
157,000 |
|
|
|
Inventory |
|
147,000 |
|
|
|
173,000 |
|
Prepaid expenses and other current assets |
|
147,000 |
|
|
|
61,000 |
|
Total Current Assets |
|
726,000 |
|
|
|
5,850,000 |
|
|
|
|
|
Property and equipment, net of accumulated depreciation of |
|
|
|
$12,843,000 and $12,172,000, respectively |
|
338,000 |
|
|
|
1,009,000 |
|
Patents, licenses and purchased technology, net of accumulated
amortization |
|
|
|
of $1,060,000 and $1,026,000, respectively |
|
652,000 |
|
|
|
686,000 |
|
Operating lease assets |
|
297,000 |
|
|
|
- |
|
Other assets |
|
69,000 |
|
|
|
69,000 |
|
Total Assets |
$ |
2,082,000 |
|
|
$ |
7,614,000 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Accounts payable |
$ |
349,000 |
|
|
$ |
313,000 |
|
Accrued expenses |
|
493,000 |
|
|
|
539,000 |
|
Current operating lease liabilities |
|
291,000 |
|
|
|
- |
|
Total Current Liabilities |
|
1,133,000 |
|
|
|
852,000 |
|
Long term operating lease liabilities |
|
6,000 |
|
|
|
- |
|
Other long term liabilities |
|
8,000 |
|
|
|
17,000 |
|
Total Liabilities |
|
1,147,000 |
|
|
|
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 |
|
327,974,000 |
|
|
|
326,486,000 |
|
Accumulated deficit |
|
(327,045,000 |
) |
|
|
(319,744,000 |
) |
Total Stockholders' Equity |
|
935,000 |
|
|
|
6,745,000 |
|
Total Liabilities and Stockholders' Equity |
$ |
2,082,000 |
|
|
$ |
7,614,000 |
|
Note – December 31, 2018 balances were derived
from audited financial statements.
SUPERCONDUCTOR TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
Nine Months Ended |
|
September 28, 2019 |
|
September 29, 2018 |
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net loss |
$ |
(7,301,000 |
) |
|
$ |
(5,869,000 |
) |
|
Adjustments to reconcile net loss to net cash used in |
|
|
|
|
operating activities: |
|
|
|
|
Depreciation and amortization |
|
704,000 |
|
|
|
781,000 |
|
|
Stock-based compensation expense |
|
70,000 |
|
|
|
44,000 |
|
|
Adjustments to fair value of warrant derivatives |
|
- |
|
|
|
(52,000 |
) |
|
Adjustment to warrant exercise price |
|
- |
|
|
|
24,000 |
|
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
(157,000 |
) |
|
|
43,000 |
|
|
Inventories |
|
26,000 |
|
|
|
(47,000 |
) |
|
Prepaid expenses and other current assets |
|
(86,000 |
) |
|
|
(44,000 |
) |
|
Patents and licenses |
|
- |
|
|
|
(1,000 |
) |
|
Accounts payable, accrued expenses and other current
liabilities |
|
(18,000 |
) |
|
|
160,000 |
|
|
Net cash used in operating activities |
|
(6,762,000 |
) |
|
|
(4,961,000 |
) |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property and equipment |
|
- |
|
|
|
(189,000 |
) |
|
Net cash used in investing activities |
|
- |
|
|
|
(189,000 |
) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Net proceeds from the sale of common stock |
|
1,421,000 |
|
|
|
9,680,000 |
|
|
Net cash provided by financing activities |
|
1,421,000 |
|
|
|
9,680,000 |
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
(5,341,000 |
) |
|
|
4,530,000 |
|
|
Cash and cash equivalents at beginning of period |
|
5,616,000 |
|
|
|
3,056,000 |
|
|
Cash and cash equivalents at end of period |
$ |
275,000 |
|
|
$ |
7,586,000 |
|
|
|
|
|
|
|
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