Astrotech (US:ASTC)2026-02-13 13:25Product Development and Innovation - Astrotech's TRACER 1000™ is the world's first mass spectrometry-based explosives trace detector certified by ECAC and approved by TSA for air cargo, currently deployed in approximately 35 locations across 16 countries[92][93]. - The TRACER 1000 has been approved for the Air Cargo Security Technology List, advancing it to Stage II testing with TSA, which includes field trials to ensure readiness for certification[94]. - AgLAB's 1000-D2™ mass spectrometer has demonstrated the ability to improve THC and CBD oil yields by approximately 15% to 30% during distillation processes[106]. - Pro-Control has introduced the Pro-Control Maximum Value Processing and Pro-Control 1000-D2™ mass spectrometer to enhance efficiency in industrial chemical distillation processes[112]. - EN-SCAN, a new subsidiary, is focused on environmental testing instruments for real-time air, water, and soil analysis, utilizing proprietary ATi Gas Chromatograph and AMS Technology[113]. - The TRACER 1000 Narcotic Trace Detector was launched to address the global drug crisis by screening for synthetic opiates and novel psychoactive substances[98]. Market Opportunities - In fiscal year 2023, the U.S. federal government budgeted over 6,000 ETD units for checkpoint and baggage screening, indicating a significant market opportunity for the TRACER 1000[95]. - AgLAB is targeting the rapidly growing CBD and hemp market, which is expected to expand due to increasing acceptance of medicinal cannabis and regulatory changes[103][104]. - Astrotech has secured a $429,000 purchase order for TRACER 1000 ETDs from a TSA-approved contractor, marking its first TSA-approved sale[99]. Financial Performance - Total revenue for the three months ended December 31, 2025, decreased by $113 thousand to $148 thousand compared to $261 thousand in the same period in 2024, primarily due to lower instrument and grant revenue[116]. - Gross profit for the three months ended December 31, 2025, was $8 thousand, resulting in a gross margin of 5%, a decline of 54% from 59% in the same period in 2024[117]. - Operating expenses decreased by $567 thousand, or 12.7%, during the three months ended December 31, 2025, compared to the same period in 2024[118]. - Research and development expenses decreased by $605 thousand, or 24.8%, during the three months ended December 31, 2025, compared to the same period in 2024[119]. - Total revenue for the six months ended December 31, 2025, increased by $150 thousand to $445 thousand compared to $295 thousand in the same period in 2024, driven by a $220 thousand increase in grant revenue[120]. - Gross profit for the six months ended December 31, 2025, was $196 thousand, with a gross margin of 44%, down from 56% in the same period in 2024[121]. - Cash used in operating activities increased by approximately $749 thousand to $7,479 thousand for the six months ended December 31, 2025, compared to $6,730 thousand in 2024[124]. - Cash provided by investing activities increased by approximately $8 million, primarily from $8.4 million of proceeds from short investments[127]. - As of December 31, 2025, cash and cash equivalents were approximately $3.1 million, down from $3.2 million as of December 30, 2024[125]. - The Company expects its effective tax rate for the full fiscal year 2026 to remain at 0% due to cumulative losses and expected future losses[132]. Research and Future Directions - The company is exploring advancements from BreathTech's research to apply in other business units, although commercialization in breath analysis may require significant investment and time[110].