Astrotech (ASTC) - 2019 Q4 - Annual Report

Financial Performance - Astrotech reported a net loss of $3.6 million for the fiscal year ended June 30, 2019, compared to a net loss of $6.1 million in the previous year, indicating a reduction in losses [140]. - The company reported a net loss of $7.5 million for the fiscal year 2019, compared to a net loss of $13.3 million for the fiscal year 2018 [175]. - Total revenue increased by $41 thousand, or 48%, to $127 thousand for the fiscal year ended June 30, 2019, compared to $86 thousand for the fiscal year ended June 30, 2018 [159]. - Cost of revenue increased by $54 thousand, or 150%, for the fiscal year ended June 30, 2019, leading to a gross profit decrease of $13 thousand, or 29% [160]. - Operating expenses decreased by $4.9 million, or 37%, for the fiscal year ended June 30, 2019, driven by reductions in selling, general and administrative expenses and research and development expenses [161]. - Income tax benefit increased by $858 thousand for the year ended June 30, 2019, due to the Alternative Minimum Tax credit from the Tax Cuts and Jobs Act [164]. Research and Development - Research and development expenses decreased from $6.1 million in fiscal year 2018 to $3.6 million in fiscal year 2019, primarily due to reduced compensation and related expenses [140]. - The company may have to delay or reduce research and development programs if additional funding is not secured in a timely manner [178]. Assets and Cash Flow - Total assets decreased to $3.7 million as of June 30, 2019, from $5.1 million as of June 30, 2018 [165]. - Current assets decreased by $1.6 million as of June 30, 2019, primarily due to funding normal operating activities [165]. - Net cash used in operating activities was $8.5 million for the year ended June 30, 2019, a decrease from $10.8 million in the previous year [171]. - Net cash used in operating activities was $8.5 million for fiscal year 2019, down from $10.8 million in fiscal year 2018 [175]. - Net cash provided by investing activities was $3.6 million for the year ended June 30, 2019, down from $9.2 million in the previous year [172]. - Cash provided by financing activities was $5.9 million for the year ended June 30, 2019, compared to cash used in financing activities of $7 thousand in the previous year [173]. - As of June 30, 2019, the company had cash and cash equivalents of $1.6 million and working capital of approximately $1.9 million [175]. Financing Activities - The company raised approximately $3.0 million by selling 866,950 Series B Preferred Shares and 409,645 Common Shares at a price of $2.35 per share [175]. - In April 2019, the company sold 280,898 Series C and Series D Preferred Shares for aggregate gross proceeds of approximately $2.0 million at a price of $3.56 per share [177]. - The company has sold 214,202 shares of common stock under an ATM Sales Agreement, receiving net proceeds of $1,042,243 at a weighted-average sale price of $5.02 per share [177]. - The company is evaluating various potential sources for additional liquidity, including debt and equity financing, mergers, or strategic partnerships [175]. - Future capital requirements will depend on factors such as market expansion, research and development progress, and potential strategic acquisitions [179]. Technology and Products - The TRACER 1000, developed by 1st Detect, is the world's first certified mass spectrometer-based explosives trace detector, designed to replace outdated technology and improve detection capabilities [124]. - The TRACER 1000 has passed ECAC certification for both passenger and cargo screening, with significant interest from prospective customers leading to successful demos and field trials [127]. - The AG-LAB-1000 series developed by Agriculture Technology Corporation is designed for real-time detection of pesticides and cannabinoids in agricultural products, addressing increasing regulatory needs [129]. - Astral Images Corporation's technology focuses on film restoration and enhancement, utilizing AI to improve resolution and color gamut for ultra-high definition viewing [130]. Impairment and Expenditures - An impairment charge of $1.6 million was recorded for Astral assets due to limited market development and minimal revenues from contracts [148]. - The company has minimized expenditures and headcount at Astral, focusing on strategic initiatives to realize its value [131]. Revenue Recognition - Astrotech's revenue recognition methodologies were updated in fiscal year 2019 to comply with FASB ASC Topic 606, establishing a five-step process for recognizing revenue [138]. - The company anticipates collecting all unreserved receivables within one year, with no allowance for doubtful accounts deemed necessary as of June 30, 2019 [144]. Off-Balance Sheet Arrangements - As of June 30, 2019, the company did not have any off-balance sheet arrangements [180]. - As of June 30, 2019, the Company had no credit facilities [174].