Astrotech (US:ASTC)2024-09-20 12:45Product Development and Innovation - Astrotech Corporation's TRACER 1000™ has been deployed in approximately 30 locations across 14 countries in Europe and Asia as of June 30, 2024[22]. - The TRACER 1000 has received TSA approval for the Air Cargo Security Technology List, advancing it to Stage II testing for U.S. air cargo companies[22]. - AgLAB's 1000-D2™ mass spectrometer has demonstrated the ability to improve THC and CBD oil yields by over 20% during distillation field trials[30]. - Pro-Control has introduced the Pro-Control 1000-D2™ mass spectrometer aimed at improving efficiency in industrial chemical distillation processes[34]. - The BreathTest-1000™ is being developed to screen for VOC metabolites that could indicate compromised health conditions[32]. - The TRACER 1000 is the first MS-ETD certified by ECAC and approved by TSA for air cargo, capable of rapid detection of trace levels of explosive and narcotic compounds in seconds[46]. - AgLAB has launched the AgLAB-1000-D2 to assist in the distillation process for the hemp and cannabis industry, with a focus on increasing yield and potency[47]. - BreathTest-1000 is being developed to provide an inexpensive, non-invasive screening device for detecting infectious VOC metabolites in breath[48]. - Pro-Control has introduced the Pro-Control 1000-D2™ to analyze samples in real-time, aimed at increasing production and quality while reducing costs and time[49]. - The AMS Technology is designed to be smaller and easier to use compared to traditional mass spectrometers, providing higher resolution and fewer false alarms[44]. - The company continues to invest in library development for the TRACER 1000, enhancing its offerings with new narcotics detection capabilities[62]. - The TRACER 1000, developed by 1st Detect, is the world's first mass spectrometer-based explosive trace detector certified by the ECAC and approved by TSA for air cargo, aimed at reducing false positives compared to traditional technologies[323]. - AgLAB's 1000-D2 series mass spectrometers are designed to optimize THC and CBD oil yields during distillation, demonstrating significant improvements in yield[324]. - Pro-Control, Inc. was formed as a new subsidiary to utilize AMS Technology for industrial process control applications, enhancing efficiency in chemical distillation[327]. - The company holds 17 patents related to AMS Technology, which is designed to be smaller, cheaper, and more user-friendly than traditional mass spectrometers[322]. Market Potential and Strategy - The wholesale value of the U.S. cannabis crop exceeds $6 billion annually, indicating significant market potential for AgLAB's products[27]. - AgLAB is targeting a rapidly growing and fragmented CBD and hemp market, with increasing competition and potential regulatory challenges[28]. - AgLAB plans to engage additional channel partners to enhance sales in the hemp and cannabis market, leveraging existing distribution channels[52]. - The company is focusing on expanding its market presence through strategic partnerships and product development across various sectors[34]. Financial Performance - Total revenue for June 2024 was $1,664,000, compared to $750,000 in June 2023, representing a 121.87% increase[307]. - Gross profit increased to $751,000 in June 2024 from $306,000 in June 2023, marking a 145.77% rise[307]. - Operating expenses rose to $14,031,000 in June 2024, up from $11,366,000 in June 2023, reflecting a 23.38% increase[307]. - Net loss for June 2024 was $11,666,000, compared to a net loss of $9,642,000 in June 2023, indicating a 20.96% increase in losses[307]. - Cash and cash equivalents decreased to $10,442,000 in June 2024 from $14,208,000 in June 2023, a decline of 26.57%[318]. - Total current assets fell to $34,728,000 in June 2024 from $44,713,000 in June 2023, a decrease of 22.39%[303]. - Total liabilities decreased to $2,833,000 in June 2024 from $2,956,000 in June 2023, a reduction of 4.16%[303]. - Stockholders' equity decreased to $34,807,000 in June 2024 from $44,719,000 in June 2023, a decline of 22.25%[304]. - The company reported a net cash used in operating activities of $9,725,000 for the year ended June 2024, compared to $7,625,000 for the year ended June 2023, an increase of 27.51%[318]. - The company had a total comprehensive loss of $11,390,000 in June 2024, compared to a total comprehensive loss of $9,896,000 in June 2023, reflecting a 15.08% increase[307]. - Astrotech reported revenue of $1.7 million for the fiscal year ended June 30, 2024, a significant increase from $750 thousand in the previous fiscal year, representing a 126.67% growth[331]. - Research and development expenses increased to $6.8 million in fiscal year 2024 from $5.6 million in fiscal year 2023, indicating a focus on enhancing system functionality and user experience[343]. Regulatory Compliance - Each medical device requires either FDA clearance of a 510(k) premarket notification, de novo request, or PMA approval to be lawfully distributed in the U.S.[71]. - Class I devices are subject to general controls, while Class II devices require 510(k) premarket notification for commercial distribution, demonstrating substantial equivalence to a predicate device[72]. - Class III devices, which pose the greatest risks, require PMA approval, supported by extensive data from preclinical studies and human clinical trials[78]. - The FDA's 510(k) review process typically takes three to six months, but may extend longer if additional information is required[74]. - The PMA process has a review period of 180 days, but often takes significantly longer, potentially up to several years[79]. - Manufacturers must report any device malfunctions that could contribute to death or serious injury under the FDA's medical device reporting regulations[84]. - The de novo classification process allows manufacturers to request down-classification of a device from Class III to Class I or II if it presents low to moderate risk[76]. - Post-market regulations include stringent quality assurance procedures and compliance with labeling and marketing regulations[84]. - Changes to an approved device that affect safety or effectiveness require submission of a PMA supplement or a new PMA[80]. - The FDA may impose post-approval conditions, including long-term follow-up data collection from patients to ensure ongoing safety and effectiveness[79]. - The company must comply with the FDA's Quality System Regulation (QSR) for any medical devices commercialized in the U.S., which includes maintaining a device master file and complaint files[85]. - Non-compliance with FDA regulations can lead to sanctions such as fines, recalls, and potential shutdown of production[86]. - Medical devices in the European Economic Area (EEA) must meet essential requirements outlined in the Medical Devices Directive, ensuring safety and performance[87]. - Manufacturers must undergo a conformity assessment procedure to demonstrate compliance with the Medical Devices Directive, which may require intervention from a Notified Body[88]. - The new Medical Devices Regulation (Regulation 2017/745) will be applicable in May 2021, establishing a uniform regulatory framework across the EEA[91]. - The regulation strengthens rules for placing devices on the market and improves traceability through a unique identification number[91]. - The company is subject to various foreign regulations regarding product safety, marketing, and clinical trials, which may differ significantly from FDA requirements[93]. Legal and Compliance Risks - Violations of the federal Anti-Kickback Statute can result in civil penalties up to $100,000 per violation and criminal penalties including fines and imprisonment[96]. - The Health Insurance Portability and Accountability Act (HIPAA) imposes penalties for breaches of patient health information, with fines up to $63,973 per violation[105]. - The California Consumer Privacy Act (CCPA) creates new data privacy obligations and provides California residents with rights regarding their personal information[107]. - The company is subject to evolving regulations in the cannabis industry, which could impact operations and compliance costs[119]. - The company does not generate revenue from the direct sale of cannabis products but provides services to cultivators in the cannabis industry[111]. - The company maintains compliance with regulatory requirements through a program of compliance, awareness, and insurance[120]. - The company is affected by potential healthcare reforms that may limit reimbursement for medical products[109]. Employment and Financial Commitments - The company employed 30 employees as of June 30, 2024, with no collective bargaining agreements in place[120]. - The company has total operating lease commitments of $142,000, with payments due for leases expiring in April 2025[287]. - The company has finance lease commitments totaling $173,000, with payments due for leases expiring between December 2024 and May 2028[287]. - The company has no off-balance sheet arrangements as of June 30, 2024[287]. - The company has no critical audit matters reported for the current period audit of the financial statements[295]. Asset Management and Investments - Astrotech's inventory reserves were reported at $296 thousand as of June 30, 2024, down from $333 thousand in the previous year, reflecting improved inventory management[349]. - The Company reported a total fair value of available-for-sale investments of $21,474 thousand as of June 30, 2024, with unrealized losses of $1,177 thousand[370]. - The Company had no impairment of long-lived assets recorded for fiscal years ended June 30, 2024, and 2023[352]. - The Company capitalizes all direct external costs related to internal-use software once technological feasibility is established[351]. - The Company adopted ASU 2016-02, which eliminated the recognition of deferred rent on the consolidated balance sheet[357]. - The Company expects to enhance annual segment reporting disclosures based on new requirements effective after December 15, 2023[368]. - The Company recorded unrealized losses of $850 thousand on mutual funds and $327 thousand on ETFs as of June 30, 2024[370]. - The Company assesses the recoverability of long-lived assets based on future undiscounted net cash flows expected to be generated by the asset[352]. - The Company has no long-term investments as of June 30, 2024, and June 30, 2023[371]. - The Company accounts for income taxes under the liability method, establishing a valuation allowance when deferred tax assets are not likely to be realized[361]. - Total Money Market Funds decreased to $21,474,000 from $27,919,000 year-over-year, representing a decline of approximately 23.3%[374]. - Mutual Funds in Corporate & Government Debt decreased to $14,426,000 from $18,965,000, a decrease of about 23.3%[374]. - ETFs in Corporate & Government Debt increased slightly to $7,048,000 from $6,958,000, showing a growth of approximately 1.3%[374]. - Maturities from 91-360 days were reported at $1,996,000 in June 2023, with no new data for June 2024[374].