Investor Webcast and Business Update Set for May 21, 1 pm EDT
DEERFIELD BEACH, FL--(Marketwired - May 13, 2015) - PEN Inc. (OTCQB: PENC) (PEN) yesterday reported the financial results for the quarter that ended March 31, 2015.
Scott Rickert, PEN's President, Chairman and CEO, said, "PEN is performing in line with my strategic expectations. Our two core businesses, eyeglass cleaning and related businesses, and nanotechnology contract research, under dynamic leadership at the respective businesses are "right sizing" costs and have plans to significantly enhance their businesses. I could not be more pleased with their progress.
"The development of the HALO™ surface fortifier and protector is occurring at a pace we can support at this stage of our growth as a company. As we secure more capital, the roll-out of the HALO product will ramp up. We are currently exploring a capital raise with International FCStone as our placement agent. It is anticipated that such a capital raise will be closed and funded before the end of the second quarter. Once funds are received, the rollout of the HALO product will accelerate.
"As noted in our May 12, 2015 press release, HALO surface fortifier and protector is a world-class product that will transform PEN from a small but innovative nanotechnology products company into a sizable global business."
Results for quarters ended March 31, 2015 and 2014
For the three months ended March 31, 2015, sales from PEN's Product segment decreased by $334,097 or 12.1% as compared to the three months ended March 31, 2014, which was primarily attributable to several factors. In 2013, we experienced delays in the production of anti-fog cloths which resulted in higher than normal sales in the first half of 2014. Due to the overstocking of the anti-fog cloths at a major customer in the first half of 2014, we experienced reduced sales in the 2015 period.
For the three months ended March 31, 2015, revenues from our research and development segment amounted to $630,427. We did not recognize revenues for this segment until after August 27, 2014 (the date of Combination).
For the three months ended March 31, 2015, gross profit amounted to $1,152,638 as compared to $1,321,270 for the three months ended March 31, 2014, a decrease of $168,632 or 12.8%. For the three months ended March 31, 2015 and 2014, gross margins were 37.6% and 47.7%, respectively. For the three months ended March 31, 2015, the decrease in gross margins from the Product segment as compared to the comparable 2014 period was primarily attributable to higher sales of our higher margin anti-fog and protective coating products in the 2014 period as compared to 2015 period.
For the three months ended March 31, 2015, net loss amounted to $185,392 as compared to net income of $231,455 for the three months ended March 31, 2014, a change of $416,847 or 180.1%.
Financial Condition
As of March 31, 2015, PEN held cash and cash equivalents of $173,733 as compared to $464,735 at December 31, 2014. Additionally, as of March 31, 2015, PEN had working capital of $252,282 compared to $86,636 at December 31, 2014, an increase of $165,646.
| PEN INC. AND SUBSIDIARIES | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| March 31, | December 31, | ||||||||
| 2015 | 2014 | ||||||||
| (Unaudited) | |||||||||
| ASSETS | |||||||||
| CURRENT ASSETS: | |||||||||
| Cash | $ | 173,733 | $ | 464,735 | |||||
| Accounts receivable, net | 1,295,092 | 1,032,995 | |||||||
| Accounts receivable - related party | 11,045 | 38,246 | |||||||
| Inventory | 1,372,683 | 1,557,100 | |||||||
| Prepaid expenses and other current assets | 246,976 | 200,079 | |||||||
| Total Current Assets | 3,099,529 | 3,293,155 | |||||||
| OTHER ASSETS: | |||||||||
| Property, plant and equipment, net | 830,417 | 850,847 | |||||||
| Intangible assets, net | 226,516 | 239,338 | |||||||
| Other assets | 40,090 | 41,841 | |||||||
| Total Other Assets | 1,097,023 | 1,132,026 | |||||||
| TOTAL ASSETS | $ | 4,196,552 | $ | 4,425,181 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| CURRENT LIABILITIES: | |||||||||
| Bank revolving line of credit | $ | 627,282 | $ | 773,344 | |||||
| Current portion of note payable | 27,543 | - | |||||||
| Convertible notes payable, net | - | 13,333 | |||||||
| Accounts payable | 1,343,246 | 1,426,465 | |||||||
| Accrued expenses | 819,123 | 964,587 | |||||||
| Deferred revenue | 30,053 | 28,790 | |||||||
| Total Current Liabilities | 2,847,247 | 3,206,519 | |||||||
| LONG-TERM LIABILITIES: | |||||||||
| Note payable, net of current portion | 137,715 | - | |||||||
| Total Long-term Liabilities | 137,715 | - | |||||||
| Total Liabilities | 2,984,962 | 3,206,519 | |||||||
| Commitments and Contingencies (See Note 13) | |||||||||
| STOCKHOLDERS' EQUITY: | |||||||||
| Preferred stock, $.0001 par value, 20,000,000 shares authorized; No shares issued and outstanding | - | - | |||||||
| Class A common stock: $.0001 par value, 1,300,000,000 shares authorized; 237,042,916 and 234,744,655 issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 23,704 | 23,474 | |||||||
| Class B common stock: $.0001 par value, 400,000,000 shares authorized; 251,017,063 and 251,017,063 issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 25,102 | 25,102 | |||||||
| Class Z common stock: $.0001 par value, 100,000,000 shares authorized; 47,273,470 and 47,273,470 issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 4,727 | 4,727 | |||||||
| Additional paid-in capital | 4,818,368 | 4,640,278 | |||||||
| Accumulated deficit | (3,660,311 | ) | (3,474,919 | ) | |||||
| Total Stockholders' Equity | 1,211,590 | 1,218,662 | |||||||
| Total Liabilities and Stockholders' Equity | $ | 4,196,552 | $ | 4,425,181 | |||||
| See 10Q for accompanying notes to consolidated financial statements. | |||||||||
| PEN INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| For the Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2015 | 2014 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| REVENUES: | ||||||||||
| Products (including related party sales of $44,827 and $82,685 for the three months ended March 31, 2015 and 2014, respectively) | $ | 2,437,314 | $ | 2,771,411 | ||||||
| Research and development services | 630,427 | - | ||||||||
| Total Revenues | 3,067,741 | 2,771,411 | ||||||||
| COST OF REVENUES: | ||||||||||
| Products | 1,406,719 | 1,450,141 | ||||||||
| Research and development services | 508,384 | - | ||||||||
| Total Cost of Revenues | 1,915,103 | 1,450,141 | ||||||||
| GROSS PROFIT | 1,152,638 | 1,321,270 | ||||||||
| OPERATING EXPENSES: | ||||||||||
| Selling and marketing expenses | 82,209 | 73,517 | ||||||||
| Salaries, wages and contract labor | 587,830 | 433,352 | ||||||||
| Research and development | 195,202 | 150,735 | ||||||||
| Professional fees | 180,552 | 171,472 | ||||||||
| General and administrative expenses | 266,395 | 166,505 | ||||||||
| Total Operating Expenses | 1,312,188 | 995,581 | ||||||||
| (LOSS) INCOME FROM OPERATIONS | (159,550 | ) | 325,689 | |||||||
| OTHER INCOME (EXPENSES): | ||||||||||
| Interest income | - | - | ||||||||
| Interest expenses | (27,729 | ) | (7,333 | ) | ||||||
| Other income, net | 6,831 | 13 | ||||||||
| Total Other Income/(Expense) | (20,898 | ) | (7,320 | ) | ||||||
| (Loss) Income before income taxes | (180,448 | ) | 318,369 | |||||||
| Income tax benefit (expense) | (4,944 | ) | (47,608 | ) | ||||||
| NET (LOSS) INCOME | (185,392 | ) | 270,761 | |||||||
| Net income attributable to former non-controlling interest | - | (39,306 | ) | |||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO PEN INC. | $ | (185,392 | ) | $ | 231,455 | |||||
| NET (LOSS) INCOME PER COMMON SHARE: | ||||||||||
| Basic | $ | (0.00 | ) | $ | 0.00 | |||||
| Diluted | $ | (0.00 | ) | $ | 0.00 | |||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||
| Basic | 534,216,610 | 325,641,762 | ||||||||
| Diluted | 534,216,610 | 325,641,762 | ||||||||
| See 10Q for accompanying notes to consolidated financial statements. | ||||||||||
The entire Form 10Q and related financial statements are available at www.sec.gov or the company's website, www.pen-technology.com.
Investor webcast and business update: Thursday, May 21, 1 pm EDT
PEN will host an investor webcast Thursday, May 21, 1 pm EDT to discuss first quarter results, provide a business update and take questions from investors. Participants can register for the event at: http://w.on24.com/r.htm?e=996591&s=1&k=3F7EB4B88D7AF6C218FB112CF508E3EA.
Questions for the event may be submitted in advance to Lynn Lilly at [email protected].
About PEN Inc. (OTCQB: PENC)
PEN Inc. (PENC) is a global leader in developing, commercializing and marketing enhanced-performance products enabled by nanotechnology. The company focuses on innovative and advanced product solutions in safety, health and sustainability. For more information about PEN, visit www.pen-technology.com.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties concerning our business, products, and financial results. Actual results may differ materially from the results predicted. More information about potential risk factors that could affect our business, products, and financial results are included in our annual report on Form 10-K for the fiscal year ended December 31, 2014, and in reports subsequently filed by us with the Securities and Exchange Commission ("SEC"). All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval System (EDGAR) at www.sec.gov or from our website listed above. We hereby disclaim any obligation to publicly update the information provided above, including forward-looking statements, to reflect subsequent events or circumstances.
Contact Information:
Lynn Lilly
Director of Communication
PEN Inc.
Email contact
(844)2PEN INC x705