Straight Path Communications Inc. (“SPCI”) (NYSE MKT: STRP), a
communications asset company, announced today operating results for
its second quarter of fiscal 2017, the three months ended January
31, 2017. Straight Path holds an extensive portfolio of 39 GHz and
LMDS wireless spectrum licenses with deep coverage across the
entire United States, is developing next generation wireless
technology, and owns an intellectual property portfolio focused on
communications over computer networks.
Q2 Fiscal Year 2017 Highlights
(In millions of USD)
Fiscal 2017 – Q2
Fiscal 2016 – Q2 Fiscal 2017
– Q1 Total Revenues $0.2
$0.1 $0.2
Total Costs and Expenses
$3.8 $2.7 $4.4
Civil Penalty
- FCC Consent Decree $15.0 $0
$0
Stockholder Settlement $7.2
$0 $0
Loss from Operations
-$25.8 -$2.6 -$4.3
Net
Loss attributable to SPCI -$25.4
-$2.0 -$4.1
Some items in the table may not foot
correctly due to rounding
- Total Revenues of $0.2 million
unchanged from the prior fiscal quarter and compared to $0.1
million in second quarter fiscal 2016.
- Loss from Operations of $25.8 million
compared to Loss from Operations of $4.3 million in the prior
fiscal quarter and $2.6 million in second quarter 2016. The current
quarter’s loss includes the full accrual of $15.0 million for a
Civil Penalty relating to the FCC Consent Decree, $7.2 million
relating to settlement of a putative Class Action litigation, $129
thousand of R&D expenses and $2.0 million in non-cash
compensation related to the issuance and vesting of equity
grants.
- Net Loss attributable to SPCI of $25.4
million compared to $4.1 million in the prior fiscal quarter and
$2.0 million in second quarter fiscal 2016.
- Cash and cash equivalents of $7.8
million at January 31, 2017, down by $1.7 million from the prior
quarter close.
- The Company secured a loan for $17.5
million in February 2017.
Management Comments
Davidi Jonas, Chief Executive Officer of Straight Path
commented, “I am proud to announce that Straight
Path continues to deliver on its strategic objectives and
adhere to its mission. We have resolved some serious challenges,
and are able to pursue continued progress in several key areas of
our business:
- We are pleased to have achieved a
comprehensive settlement with the FCC, allowing us to move forward
as the largest holder of 39 GHz spectrum in the United States, with
about 95 percent of the total licenses commercially available at
this time, as well as a significant holder of 28 GHz in major
markets, including New York and San Francisco.
- Following the quarter close, we secured
$17.5 million in financing from a syndicate led by affiliates of a
long-term shareholder. $15 million of these funds will be paid to
the FCC, and $2.5 million will be used for general operations.
- With the FCC investigation behind us
and our near-term obligations to the FCC covered by the recent
financing, we are able to continue our focus on exploring strategic
alternatives for the Company in order to maximize value for our
stockholders.
- We are also pleased by our recent entry
into a memorandum of understanding to settle the putative class
action litigation against the Company.
- Our Gigabit Mobility Lab in Plano,
Texas continues to refine our recently demonstrated
prototype 39 GHz Gigarray® 5G transceiver.”
Mr. Jonas added, “We continue attempts at resolution and/or
furthering the progress of our IP enforcement actions.”
Mr. Jonas concluded, “We are energized by our recent progress,
and enthusiastic about the role our spectrum can play in the 5G
ecosystem. As we look to the future, we hope to continue
to deliver on our strategic objectives and generate increased
value for our stockholders.”
Investor Conference Call
Straight Path will host a conference call this afternoon,
Friday, March 10th at 4:15pm ET to provide a business update. To
participate, please call 1-855-327-6837 from the U.S. or
+1-631-891-4304 internationally and request to join the Straight
Path Communications Inc. earnings call. The conference call will
also be available via a listen-only webcast by accessing the
Investors section of Straight Path Communications’ website,
www.straightpath.com/investors. A replay of the conference call
will also be available approximately two hours after completion of
the live conference call at www.straightpath.com/investors. A
telephonic replay of the call will be available until March 17,
2017. To access the replay, please dial: 1-844-512-2921 from the
U.S. or +1-412-317-6671 internationally. Participants must use the
following code to access the replay of the call: 10002576.
About Straight Path Communications Inc. (STRP)
Straight Path Communications Inc. (NYSE MKT: STRP) holds an
extensive portfolio of 39 GHz and 28 GHz wireless spectrum licenses
through its Straight Path Spectrum subsidiary. Straight Path is
developing next generation wireless technology through its Straight
Path Ventures subsidiary. Straight Path holds, licenses, and
conducts other business related to certain patents through its
Straight Path IP Group subsidiary. Additional information is
available on Straight Path’s website: www.straightpath.com.
Safe Harbor
In this press release, all statements that are not purely about
historical facts, including, but not limited to, those in which we
use the words "believe," "anticipate," "expect," "plan," "intend,"
"estimate, "target" and similar expressions, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. While these forward-looking statements
represent our current judgment of what may happen in the future,
actual results may differ materially from the results expressed or
implied by these statements due to numerous important factors,
including, but not limited to, those described in our Annual Report
on Form 10-K for the fiscal year ended July 31, 2016 and our other
periodic filings with the SEC (under the headings "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations"). We are under no obligation, and
expressly disclaim any obligation, to update the forward-looking
statements in this press release, whether as a result of new
information, future events or otherwise.
STRAIGHT PATH COMMUNICATIONS
INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, except per share
data)
January 31, January 31, July 31,
2017 2017 2016 (Actual) (Pro
forma (Unaudited) - Note 12) (Unaudited)
Assets Current assets: Cash and cash equivalents $ 7,837 $
10,337 $ 11,361 Restricted cash - 15,000 - Trade accounts
receivable, net of allowance for doubtful accounts of $7 and $0,
respectively 40 40 40 Inventory 643 643 - Prepaid expenses and
other current assets 919 919
1,627
Total current assets
9,439 26,939 13,028 Intangible assets 365 365 365 Other assets
111 111 104 Total assets
$ 9,915 $ 27,415 $ 13,497
Liabilities and Equity (Deficiency) Current liabilities:
Trade accounts payable $ 1,016 $ 1,016 $ 684 Accrued expenses 368
368 1,042 Loan payable, net of debt discount - 13,460
-
FCC consent decree payable 15,000 15,000 - Deferred revenue 197 197
73 Income taxes payable 221 221
225 Total current liabilities 16,802 30,262 2,024 Settlement
payable - stockholders 7,200 7,200 - Deferred revenue - long-term
portion 80 80 92 Total
liabilities 24,082 37,542 2,116
Commitments and contingencies Equity (Deficiency) Straight
Path Communications Inc. stockholders' equity: Preferred stock,
$0.01 par value; 3,000 shares authorized; no shares issued and
outstanding - - - Class A common stock, $0.01 par value; 2,000
shares authorized;787 shares issued and outstanding 8 8 8 Class B
common stock, $0.01 par value; 40,000 shares authorized; 11,741 and
11,431 shares issued, 11,701 and 11,391 shares outstanding as of
January 31, 2017 and July 31, 2016 117 117 114 Additional paid-in
capital 26,073 30,113 21,589 Accumulated deficit (37,781 ) (37,781
) (8,225 ) Treasury stock, 40 shares at cost (428 )
(428 ) (428 ) Total Straight Path Communications Inc.
stockholders' equity (deficiency) (12,011 ) (7,971 ) 13,058
Noncontrolling interests (2,156 ) (2,156 )
(1,677 ) Total equity (deficiency) (14,167 ) (10,127
) 11,381 Total liabilities and equity (deficiency) $
9,915 $ 27,415 $ 13,497
STRAIGHT PATH COMMUNICATIONS INC. CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) (In Thousands, except per
share amounts) Three Months Ended Six Months
Ended January 31, January 31, 2017
2016
2017 2016 Revenues
$ 165
$ 112
$ 324 $ 1,815
Costs and expenses: Direct cost of revenues
26 13
67 795 Research and development
129 374
289
374 Selling, general and administrative (related party of $205, $0,
$205, and $0)
3,596 2,346
7,831 3,958 Total costs and
expenses
3,751 2,733
8,187 5,127 Loss from operations
before item listed below
(3,586 )
(2,621
)
(7,863 ) (3,312 ) Civil penalty – FCC decree
(15,000 ) -
(15,000 ) - Stockholder
settlement
(7,200 ) -
(7,200 ) - Loss from operations
(25,786 ) (2,621 )
(30,063 ) (3,312 ) Other income:
Interest income
6 10
13 20 Other income
- 390
22
390 Total other income
6
400
35 410 Loss
before income taxes
(25,780 ) (2,221 )
(30,028
) (2,902 ) Provision for income taxes
-
-
(7 ) (6 ) Net
loss
(25,780 ) (2,221 )
(30,035 )
(2,908 ) Net loss attributable to noncontrolling interests
355 195
479
250 Net loss attributable to Straight Path
Communications Inc.
$ (25,425 ) $ (2,026 )
$ (29,556 ) $ (2,658 ) Loss per share
attributable to Straight Path Communications Inc. stockholders:
Basic and diluted
$ (2.10 ) $ (0.17 )
$
(2.45 ) $ (0.23 ) Weighted-average number of
shares used in calculation of loss per share: Basic and diluted
12,132 11,854
12,075 11,832
STRAIGHT
PATH COMMUNICATIONS INC. CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) (In Thousands) Six
Months Ended January 31, 2017 2016
Operating activities: Net loss
$ (30,035 ) $
(2,908 ) Adjustments to reconcile net loss to net cash used in
operating activities: Common stock issued for compensation
4,286 1,586 Stock-based compensation
193 - Allowance
for doubtful accounts
7 - Changes in assets and liabilities:
Trade accounts receivable, net
(7 ) 34 Inventory
- - Prepaid expenses – related to IP settlements and
licensing
- 783 Prepaid expenses and other current assets
65 1 Prepaid expenses – development agreement
- (700
) Other assets 1 8 Trade accounts payable
324 (114 ) Accrued
expenses
(674 ) (359 ) FCC consent decree payable
15,000 - Deferred revenue
112 (1,546 ) Income taxes
payable
(4 ) - Settlement payable - stockholders
7,200 - Net cash used in
operating activities
(3,532 ) (3,215 )
Investing activities: Purchases of property and equipment
- (56 ) Net cash used in investing activities
- (56 ) Financing activities: Common
stock issued upon exercise of stock options
8
1 Net cash provided by financing activities
8 1 Net decrease in cash and
cash equivalents
(3,524 ) (3,270 ) Cash and cash
equivalents at beginning of period
11,361
18,620 Cash and cash equivalents at end of period
$ 7,837 $ 15,350 Supplemental
schedule of noncash activities Reclassification of prepaid
marketing to inventory
$ 643 $ - Unpaid
deferred loan costs
$ 8 $ -
Supplemental cash flow information Cash paid during the period for
income taxes
$ 7 $ 3
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version on businesswire.com: http://www.businesswire.com/news/home/20170310005067/en/
Straight Path Communications Inc.Yonatan Cantor,
804-433-1523yonatan.cantor@straightpath.com
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