Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 001-34426

Astrotech Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware		91-1273737
State or Other Jurisdiction of Incorporation or Organization		I.R.S. Employer Identification No.

201 West 5th Street, Suite 1275, Austin, Texas		78701
Address of Principal Executive Offices		Zip Code

(512) 485-9530

Registrant’s Telephone Number, Including Area Code

Not Applicable

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

ASTC

NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of May 13, 2020, the number of shares of the registrant’s common stock outstanding was: 7,575,464.

ASTROTECH CORPORATION AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I:	FINANCIAL INFORMATION	4

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	25
ITEM 4.	CONTROLS AND PROCEDURES	25

PART II:	OTHER INFORMATION	26

ITEM 1.	LEGAL PROCEEDINGS	26
ITEM 1A.	RISK FACTORS	26
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	27
ITEM 4.	MINE SAFETY DISCLOSURES	27
ITEM 5.	OTHER INFORMATION	27
ITEM 6.	EXHIBITS	28

PART I: FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements

ASTROTECH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

	March 31, 2020			June 30, 2019
	(Unaudited)			(Note)
Assets
Current assets
Cash and cash equivalents	$	4,660		$	1,588
Restricted cash		122			—
Accounts receivable, net of allowance of $0		85			3
Inventory:
Raw materials		374			150
Work-in-process		155			181
Finished goods		64			—
Income tax receivable		429			429
Prepaid expenses and other current assets		239			371
Total current assets		6,128			2,722
Property and equipment, net		371			469
Operating leases, right-of-use assets, net		937			—
Long-term tax receivable		-			429
Other assets		72			72
Total assets	$	7,508		$	3,692
Liabilities and stockholders’ equity
Current liabilities
Accounts payable		188			160
Payroll related accruals		412			319
Accrued expenses and other liabilities		718			357
Income tax payable		2			2
Term note payable - related party		2,500			—
Lease liabilities, current		326			—
Total current liabilities		4,146			838
Lease liabilities, non-current		711			—
Other liabilities		—			146
Total liabilities		4,857			984
Commitments and contingencies (Note 12)
Stockholders’ equity
Convertible preferred stock, $0.001 par value, 2,500,000 shares authorized; 280,898 shares of Series C and 280,898 shares of Series D issued and outstanding at March 31, 2020 and June 30, 2019, respectively		—			—
Common stock, $0.001 par value, 15,000,000 shares authorized; 7,975,388 and 6,184,698 shares issued at March 31, 2020 and June 30, 2019, respectively; 7,575,742 and 5,775,171 shares outstanding at March 31, 2020 and June 30, 2019, respectively		190,599			190,571
Treasury stock, 399,916 shares at cost at March 31, 2020 and June 30, 2019, respectively		(4,129	)		(4,129	)
Additional paid-in capital		13,868			7,964
Accumulated deficit		(197,687	)		(191,698	)
Total stockholders’ equity		2,651			2,708
Total liabilities and stockholders’ equity	$	7,508		$	3,692

See accompanying notes to unaudited condensed consolidated financial statements.

ASTROTECH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
Revenue	$	118			—		$	324		$	40
Cost of revenue		111			—			307			11
Gross profit		7			—			17			29
Operating expenses:
Selling, general and administrative		1,193			1,238			3,505			3,667
Research and development		814			1,026			2,608			3,027
Total operating expenses		2,007			2,264			6,113			6,694
Loss from operations		(2,000	)		(2,264	)		(6,096	)		(6,665	)
Interest and other expense, net		(68	)		12			(123	)		15
Loss from operations before income taxes		(2,068	)		(2,252	)		(6,219	)		(6,650	)
Income tax benefit		—			858			—			858
Net loss	$	(2,068	)	$	(1,394	)	$	(6,219	)	$	(5,792	)
Weighted average common shares outstanding:
Basic and diluted		6,107			5,467			5,934			4,734
Basic and diluted net loss per common share:
Net loss	$	(0.34	)	$	(0.25	)	$	(1.05	)	$	(1.22	)
Other comprehensive loss, net of tax:
Net loss	$	(2,068	)	$	(1,394	)	$	(6,219	)	$	(5,792	)
Available-for-sale securities:
Reclassification adjustment for realized loss		—			—			—			31
Total comprehensive loss	$	(2,068	)	$	(1,394	)	$	(6,219	)	$	(5,761	)

See accompanying notes to unaudited condensed consolidated financial statements.

ASTROTECH CORPORATION

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(In thousands)

(Unaudited)

	Preferred Stock
	Class C				Class D				Common Stock
	Number of Shares Outstanding		Amount		Number of Shares Outstanding		Amount		Number of Shares Outstanding			Amount		Treasury Stock Amount			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance at June 30, 2019		281	$	—		281	$	—		5,775		$	190,571	$	(4,129	)	$	7,964		$	(191,698	)	$	—	$	2,708
Adjustment to opening retained earnings related to adoption of ASC Topic 842		—		—		—		—		—			—		—			—			230			—		230
Issuance of shares, net of offering issuance costs of $7		—		—		—		—		146			—		—			321			—			—		321
Stock-based compensation		—		—		—		—		—			—		—			78			—			—		78
Restricted stock issuance		—		—		—		—		5			26		—			—			—			—		26
Net loss		—		—		—		—		—			—		—			—			(2,068	)		—		(2,068	)
Balance at September 30, 2019		281	$	—		281	$	—		5,926		$	190,597	$	(4,129	)	$	8,363		$	(193,536	)	$	—	$	1,295
Issuance of stock, net of offering issuance costs of $19		—		—		—		—		433			1		—			951			—			—		952
Stock-based compensation		—		—		—		—		—			—		—			97			—			—		97
Cancellation of restricted stock		—		—		—		—		(11	)		—		—			(11	)		—			—		(11	)
Forfeiture of stock-based compensation		—		—		—		—		—			—		—			(3	)		—			—		(3	)
Net loss		—		—		—		—		—			—		—			—			(2,083	)		—		(2,083	)
Balance at December 31, 2019		281		—		281		—		6,348		$	190,598	$	(4,129	)	$	9,397		$	(195,619	)	$	—	$	247
Issuance of stock, net of offering issuance costs of $667		—		—		—		—		1,227			1		—			4,376			—			—		4,377
Stock-based compensation		—		—		—		—		—			—		—			95			—			—		95
Net loss		—		—		—		—		—			—		—			—			(2,068	)		—		(2,068	)
Balance at March 31, 2020		281		—		281		—		7,575		$	190,599	$	(4,129	)	$	13,868		$	(197,687	)	$	—	$	2,651

	Preferred Stock
	Class C				Class D				Common Stock
	Number of Shares Outstanding		Amount		Number of Shares Outstanding		Amount		Number of Shares Outstanding			Amount			Treasury Stock Amount			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balance at June 30, 2018		—	$	—		—	$	—		4,097		$	190,570		$	(4,128	)	$	1,745		$	(184,164	)	$	(31	)	$	3,992
Net change in available-for-sale debt and marketable equity securities		—		—		—		—		—			—			—			—			—			31			31
Stock-based compensation		—		—		—		—		—			—			—			44			—			—			44
Cancellation of restricted stock		—		—		—		—		(5	)		(14	)		—			—			—			—			(14	)
Forfeiture of stock options		—		—		—		—		—			—			—			(3	)		—			—			(3	)
Exercise of stock options		—		—		—		—		3			—			—			7			—			—			7
Share repurchases		—		—		—		—		—			—			(1	)		—			—			—			(1	)
Restricted stock issuance		—		—		—		—		—			9			—			—			—			—			9
Net loss		—		—		—		—		—			—			—			—			(2,238	)		—			(2,238	)
Balance at September 30, 2018		—	$	—		—	$	—		4,095		$	190,565		$	(4,129	)	$	1,793		$	(186,402	)	$	—		$	1,827
Issuance of stock, net of offering issuance costs of $73		—		—		—		—		1,277			1			—			2,920			—			—			2,921
Stock-based compensation		—		—		—		—		—			—			—			45			—			—			45
Forfeiture of stock options		—		—		—		—		—			—			—			(1	)		—			—			(1	)
Restricted stock issuance		—		—		—		—		199			18			—			—			—			—			18
Net loss		—		—		—		—		—			—			—			—			(2,160	)		—			(2,160	)
Balance at December 31, 2018		—	$	—		—	$	—		5,571		$	190,584		$	(4,129	)	$	4,757		$	(188,562	)	$

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