Superconductor Technologies Inc. (STI) (Nasdaq: SCON) reported
financial results for the quarter and year ended December 31, 2019.
“In March of 2020, we announced we had entered into a definitive
merger agreement with Allied Integral United, Inc., also known as
Clearday,” stated Jeff Quiram, STI’s President and Chief Executive
Officer. “We believe the Clearday transaction has the potential to
monetize our cryogenic cooler technology for shareholders. As we
complete the sales of equipment and selected intellectual property
primarily related to our superconducting wire initiative, we shift
our complete focus to successfully finalizing the merger with
Clearday.”
Merger with CleardayOn March 3, 2020, STI
announced it had entered into a definitive merger agreement with
Allied Integral United, Inc. (“Clearday”), a privately-held company
dedicated to delivering next generation longevity care and wellness
services, whereby a wholly-owned subsidiary of STI will merge with
and into Clearday in a stock-for-stock transaction with
Clearday.
Fourth Quarter and Full Year Financial
SummaryRevenues in the fourth quarter 2019 were $388,000,
$383,000 of which came from the company’s DOE NGEM project,
compared to no net revenues in the fourth quarter of 2018. Net loss
for the fourth quarter 2019 was $1.9 million, or a loss of $0.12
per basic and diluted share, compared to a net loss of $2.3
million, or a loss of $0.70 per basic and diluted share, in the
fourth quarter of 2018.
For the year ending Dec. 31, 2019, total revenues were $545,000,
compared to $1.6 million for the year ended Dec. 31, 2018. The net
loss for the year 2019 was $9.2 million, or $1.23 per basic and
diluted share, compared to $8.1 million, or $4.03 per basic and
diluted share, for the year 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 Dec. 31, 2019, STI had $713,000 in cash and cash
equivalents.
In March of 2020, STI announced it will receive, in aggregate,
approximately $1.1 million for sales of various production,
R&D, and testing equipment and selected intellectual property
related primarily to the company’s superconducting wire initiative.
The proceeds from this series of transactions is expected to be
sufficient, together with STI’s other capital resources, for the
company to complete the proposed merger with Clearday.
Important Additional Information Will be Filed with the
SECIn connection with the proposed transaction between STI
and Clearday, the parties intend to file relevant materials with
the SEC, including a STI registration statement on Form S-4 that
will contain a combined proxy statement/prospectus/information
statement. INVESTORS AND STOCKHOLDERS OF STI AND CLEARDAY ARE URGED
TO READ THESE MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT CLEARDAY, THE PROPOSED MERGER AND RELATED MATTERS. Investors
and shareholders will be able to obtain free copies of the proxy
statement/prospectus/information statement and other documents
filed by STI with the SEC (when they become available) through the
website maintained by the SEC at www.sec.gov. In addition,
investors and shareholders will be able to obtain free copies of
the proxy statement/prospectus/information statement and other
documents filed by STI with the SEC by written request to:
Superconductor Technologies Inc. 15511 W State HWY 71, Ste 110-105,
Austin, TX 78738, Attention: Corporate Secretary. Investors and
stockholders are urged to read the proxy
statement/prospectus/information statement and the other relevant
materials when they become available before making any voting or
investment decision with respect to the proposed transaction.
The information in the websites of STI and Clearday is not
incorporated into this press release and will not be incorporated
into such SEC filed documents.
No Offer or SolicitationThis communication
shall not constitute an offer to sell, the solicitation of an offer
to sell or an offer to buy or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Participants in the SolicitationSTI and its
directors and executive officers, and Clearday, and its directors
and executive officers, may be deemed to be participants in the
solicitation of proxies from the stockholders of STI in connection
with the proposed merger. Information regarding the special
interests of these directors and executive officers in the proposed
merger will be included in the proxy
statement/prospectus/information statement referred to above.
Additional information about STI’s directors and executive officers
is included in STI’s definitive proxy statement, filed with the SEC
on April 26, 2019. These documents are available free of charge at
the SEC website (www.sec.gov) and from the Corporate Secretary of
STI at the address above.
Forward-Looking StatementsAny statements in
this press release that are not statements of historical fact
constitute forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements include, but are not limited to, statements
regarding the proposed merger and other contemplated transactions
(including statements relating to satisfaction of the conditions to
and consummation of the proposed merger, the expected ownership of
the combined company and opportunities relating to or resulting
from the merger), and statements regarding the nature, potential
approval and commercial success of Clearday and its product line,
the effects of having shares of capital stock traded on the Nasdaq
Capital Market, Clearday’s and the post-merger combined company’s
financial resources and cash expenditures. Forward-looking
statements are usually identified by the use of words such as
“believes,” “anticipates,” “expects,” “intends,” “plans,” “ideal,”
“may,” “potential,” “will,” “could” and similar expressions. Actual
results may differ materially from those indicated by
forward-looking statements as a result of various important factors
and risks. These factors, risks and uncertainties include, but are
not limited to: risks relating to the completion of the merger,
including the need for stockholder approval and the satisfaction of
closing conditions; risks related to STI’s ability to correctly
estimate and manage its operating expenses and its expenses
associated with the proposed merger pending closing; the cash
balances of the combined company following the closing of the
merger; the ability of STI to remain listed on the Nasdaq Capital
Market; the risk that as a result of adjustments to the exchange
ratio, STI shareholders or Clearday stockholders could own more or
less of the combined company than is currently anticipated;
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the proposed
merger; the success and timing of regulatory submissions;
regulatory requirements or developments; changes in capital
resource requirements; and other factors discussed in the “Risk
Factors” section of STI’s most recent annual report, subsequent
quarterly reports and in other filings STI makes with the SEC from
time to time. Risks and uncertainties related to Clearday that may
cause actual results to differ materially from those expressed or
implied in any forward-looking statement include, but are not
limited to: Clearday’s plans to develop and commercialize its
future daily care centers and other non-residential daily care
services; Clearday’s commercialization, marketing and
implementation capabilities and strategy; developments and
projections relating to Clearday’s competitors and its industry;
the impact of government laws and regulations; and Clearday’s
estimates regarding future revenue, expenses and capital
requirements. In addition, the forward-looking statements included
in this press release represent STI and Clearday’s views as of the
date hereof. STI and Clearday anticipate that subsequent events and
developments will cause their respective views to change. However,
while STI and Clearday may elect to update these forward-looking
statements at some point in the future, STI and Clearday
specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing STI’s or Clearday’s views as of any date subsequent to
the date hereof.
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.
Investor Relations ContactMoriah Shilton or
Kirsten Chapman LHA
+1-415-433-3777
invest@suptech.com
– Tables to Follow –
SUPERCONDUCTOR TECHNOLOGIES
INCCONSOLIDATED BALANCE SHEETS
|
|
|
December 31,2019 |
|
December 31, 2018 |
|
ASSETS |
|
|
|
|
| Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
713,000 |
|
$ |
5,616,000 |
|
|
Accounts receivable, net |
|
344,000 |
|
|
— |
|
|
Inventory, net |
|
263,000 |
|
|
173,000 |
|
|
Prepaid expenses and other current assets |
|
76,000 |
|
|
61,000 |
|
|
|
|
|
|
|
|
|
|
Total Current Assets |
|
1,396,000 |
|
|
5,850,000 |
|
|
Property and equipment, net of accumulated depreciation of
$12,948,000 and $12,172,000, respectively |
|
233,000 |
|
|
1,009,000 |
|
|
Patents, licenses and purchased technology, net of accumulated
amortization of $1,071,000 and $1,026,000, respectively |
|
641,000 |
|
|
686,000 |
|
|
Operating lease assets |
|
152,000 |
|
|
— |
|
|
Other assets |
|
60,000 |
|
|
69,000 |
|
|
|
|
|
|
|
|
Total Assets |
$ |
2,482,000 |
|
$ |
7,614,000 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
| Current Liabilities: |
|
|
|
Accounts payable |
$ |
527,000 |
|
$ |
313,000 |
|
|
Accrued expenses |
|
292,000 |
|
|
539,000 |
|
|
Current lease liabilities |
|
148,000 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
967,000 |
|
|
852,000 |
|
|
Long term lease liabilities |
|
4,000 |
|
|
— |
|
|
Other long term liabilities |
|
8,000 |
|
|
17,000 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
979,000 |
|
|
869,000 |
|
|
|
|
|
|
|
|
|
| Stockholders’ Equity: |
|
|
|
Preferred stock, $.001 par value, 2,000,000 shares authorized,
328,925 and 330,787 issued and outstanding, respectively |
|
— |
|
|
— |
|
|
Common stock, $.001 par value, 250,000,000 shares authorized,
17,731,893 and 3,270,609 shares issued and outstanding,
respectively |
|
18,000 |
|
|
3,000 |
|
|
Capital in excess of par value |
|
330,458,000 |
|
|
326,486,000 |
|
|
Accumulated deficit |
|
(328,973,000 |
) |
|
(319,744,000 |
) |
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity |
|
1,503,000 |
|
|
6,745,000 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity |
$ |
2,482,000 |
|
$ |
7,614,000 |
|
|
|
|
|
|
|
|
|
SUPERCONDUCTOR TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2019 |
|
December 31, 2018 |
|
December 31, 2019 |
|
December 31, 2018 |
|
|
unaudited |
|
unaudited |
|
audited |
| |
|
|
|
|
|
|
|
| Commercial product revenues |
$ |
5,000 |
|
|
$ |
— |
|
|
$ |
5,000 |
|
|
$ |
— |
|
| Government contract revenues |
|
383,000 |
|
|
|
— |
|
|
|
540,000 |
|
|
|
1,556,000 |
|
| Total revenues |
|
388,000 |
|
|
|
— |
|
|
|
545,000 |
|
|
|
1,556,000 |
|
| |
|
|
|
|
|
|
|
| Costs and expenses: |
|
|
|
|
|
|
|
| Cost of commercial product
revenues |
|
571,000 |
|
|
|
634,000 |
|
|
|
3,259,000 |
|
|
|
2,245,000 |
|
| Cost of government
contract revenues |
|
276,000 |
|
|
|
81,000 |
|
|
|
303,000 |
|
|
|
1,210,000 |
|
| Research and
development |
|
478,000 |
|
|
|
697,000 |
|
|
|
2,353,000 |
|
|
|
2,352,000 |
|
| Selling, general and
administrative |
|
996,000 |
|
|
|
884,000 |
|
|
|
3,918,000 |
|
|
|
3,972,000 |
|
| Total costs and
expenses |
|
2,321,000 |
|
|
|
2,296,000 |
|
|
|
9,833,000 |
|
|
|
9,779,000 |
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
(1,933,000 |
) |
|
|
(2,296,000 |
) |
|
|
(9,288,000 |
) |
|
|
(8,223,000 |
) |
|
|
|
|
|
|
|
|
|
| Other Income and Expense |
|
|
|
|
|
|
|
| Adjustments to fair value
of warrant derivatives |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52,000 |
|
| Adjustment to warrant
exercise price |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(24,000 |
) |
| Other income |
|
5,000 |
|
|
|
34,000 |
|
|
|
59,000 |
|
|
|
64,000 |
|
| Net loss |
$ |
(1,928,000 |
) |
|
$ |
(2,262,000 |
) |
|
$ |
(9,229,000 |
) |
|
$ |
(8,131,000 |
) |
|
|
|
|
|
|
|
|
|
| Basic and diluted loss per
common share |
$ |
(0.12 |
) |
|
$ |
(0.70 |
) |
|
$ |
(1.23 |
) |
|
$ |
(4.03 |
) |
|
|
|
|
|
|
|
|
|
| Weighted average number of
common |
|
|
|
|
|
|
|
| shares issued and
outstanding |
|
16,225,832 |
|
|
|
3,230,975 |
|
|
|
7,486,584 |
|
|
|
2,016,869 |
|
SUPERCONDUCTOR TECHNOLOGIES
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
Years Ended December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
| CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
| Net loss |
$ |
(9,229,000 |
) |
$ |
(8,131,000 |
) |
$ |
(9,527,000 |
) |
| Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization |
|
820,000 |
|
|
1,015,000 |
|
|
1,885,000 |
|
|
Stock-based compensation expense |
|
87,000 |
|
|
84,000 |
|
|
341,000 |
|
|
Adjustments to fair value of warrant derivatives |
|
— |
|
|
(52,000 |
) |
|
(99,000 |
) |
|
Adjustments to warrant exercise price |
|
— |
|
|
24,000 |
|
|
— |
|
| Changes in assets and
liabilities: |
|
|
|
|
Accounts receivable |
|
(343,000 |
) |
|
151,000 |
|
|
(143,000 |
) |
|
Inventory . |
|
(90,000 |
) |
|
(70,000 |
) |
|
(34,000 |
) |
|
Prepaid expenses and other current assets |
|
(16,000 |
) |
|
22,000 |
|
|
26,000 |
|
|
Patents and licenses |
|
— |
|
|
14,000 |
|
|
212,000 |
|
|
Other assets |
|
9,000 |
|
|
— |
|
|
27,000 |
|
|
Accounts payable, accrued expenses and other liabilities |
|
(41,000 |
) |
|
12,000 |
|
|
(132,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
(8,803,000 |
) |
|
(6,931,000 |
) |
|
(7,444,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
Purchase of property and equipment |
|
- |
|
|
(189,000 |
) |
|
(152,000 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
- |
|
|
(189,000 |
) |
|
(152,000 |
) |
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
| Net proceeds from sale of common,
prefunded warrants and preferred stock |
|
3,801,000 |
|
|
9,680,000 |
|
|
— |
|
| Net proceeds from exercise of
warrants |
|
99,000 |
|
|
— |
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
3,900,000 |
|
|
9,680,000 |
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net increase (decrease) in cash
and cash equivalents |
|
(4,903,000 |
) |
|
2,560,000 |
|
|
(7,396,000 |
) |
| Cash and cash equivalents at
beginning of year |
|
5,616,000 |
|
|
3,056,000 |
|
|
10,452,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents at end
of year |
$ |
713,000 |
|
$ |
5,616,000 |
|
$ |
3,056,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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