DEERFIELD BEACH, FL--(Marketwired - April 13, 2015) - PEN Inc. (OTCQB: PENC) (PEN) filed on Friday, April 10, 2015, its Form 10K for the year ending December 31, 2014.
Commenting on PEN's financial and operating results for the year, Scott Rickert, Chairman, President and CEO, said:
"2014 was a great year as we successfully combined two outstanding nanotechnology companies -- Nanofilm and Applied Nanotech -- to form a dynamic growth company -- PEN. We reported revenue of approximately $10 million, and remember that only included Applied Nanotech for approximately four months. More importantly, on an adjusted basis for non-cash charges, we posted positive results. We enter 2015 with expectation of increasing sales of our historic products and exciting growth opportunities for our new products. In addition, we have built a management team with seasoned executives that have all worked with larger companies, setting the stage for sustainable growth."
This is the first such filing for PEN, the successor to Applied Nanotech Holdings, Inc (OTCBB: APNT). PEN results from the combination of NanoHoldings Inc. (private company) and Applied Nanotech Holdings; in that combination NanoHoldings is considered the acquiring company from an accounting perspective. Even though PEN is the successor to Applied Nanotech Holdings, the financial history is of NanoHoldings with the inclusion of Applied Nanotech Holdings from the date of combination, August 27, 2014.
Full Year Results
For the year ending December 31, 2014, revenue was $9,950,477, an increase of $875,129 from the similar period in 2013 of $9,075,348 for a 9.6% increase. The increase of $875,129 consists of $102,000 from the Product segment and $772,909 from the Research and Development segment for the period from August 27, 2014 to December 31, 2014.
Gross profit was $4.3 million in 2014 as compared to $3.4 million in 2013. Gross margin in 2014 was 43.2%, compared to 37.8% in 2013, an increase of more than 5 percentage points.
Operating loss increased $2.1 million from $179,928 in 2013 to $2.3 million in 2014. Net loss was $2.3 million, compared to $0.2 million in 2013. Net loss per basic and diluted share was $(0.01) compared to $(0.00) in 2013. A significant part of the loss in 2014 is from a non-cash impairment loss adjusting the value of the intangible assets acquired in the Combination. PEN is required to evaluate the carrying value of its assets on at least an annual basis under specific accounting rules. The charge does not reflect any revision of our assessment of the value of the intellectual property acquired in the combination as far as future product development, but results from an analysis of the present value of the cash flow of current products. Non-GAAP adjusted net loss, computed by adding back to net loss the non-cash impairment loss, results in a loss of $383,692, compared to $218,320 in 2013. Non-GAAP adjusted loss per basic and diluted share was $(0.00) compared to $(0.00) in 2013. The calculations for non-GAAP adjusted net loss and loss per share are shown in a table following the financial statements.
Financial Condition
As of December 31, 2014, PEN held cash and cash equivalents of $464,735, compared to $100,367 at December 31, 2013. In 2014, the Company generated $547,647 in cash flow from operations, compared to cash used in operations of $214,079 in 2013.
| PEN INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| December 31, | December 31, | |||||||||
| 2014 | 2013 | |||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS: | ||||||||||
| Cash | $ | 464,735 | $ | 100,367 | ||||||
| Accounts receivable, net | 1,032,995 | 1,524,303 | ||||||||
| Accounts receivable - related party | 38,246 | 17,224 | ||||||||
| Inventory | 1,557,100 | 1,484,456 | ||||||||
| Prepaid expenses and other current assets | 200,079 | 107,718 | ||||||||
| Total Current Assets | 3,293,155 | 3,234,068 | ||||||||
| OTHER ASSETS: | ||||||||||
| Property, plant and equipment, net | 850,847 | 672,704 | ||||||||
| Intangible assets, net | 239,338 | - | ||||||||
| Other assets | 41,841 | 73,504 | ||||||||
| Total Other Assets | 1,132,026 | 746,208 | ||||||||
| TOTAL ASSETS | $ | 4,425,181 | $ | 3,980,276 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Bank revolving line of credit | $ | 773,344 | $ | 199,919 | ||||||
| Current portion of bank term loan | - | 60,000 | ||||||||
| Convertible notes payable, net | 13,333 | - | ||||||||
| Accounts payable | 1,426,465 | 721,860 | ||||||||
| Accrued expenses | 964,587 | 344,271 | ||||||||
| Deferred revenue | 28,790 | - | ||||||||
| Total Current Liabilities | 3,206,519 | 1,326,050 | ||||||||
| LONG-TERM LIABILITIES: | ||||||||||
| Bank term loan, net of current portion | - | 515,000 | ||||||||
| Other long-term liabilities | - | 127,914 | ||||||||
| Total Long-term Liabilities | - | 642,914 | ||||||||
| Total Liabilities | 3,206,519 | 1,968,964 | ||||||||
| 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; 234,744,655 and 27,670,187 issued and outstanding at December 31, 2014 and 2013, respectively | 23,474 | 2,767 | ||||||||
| Class B common stock: $.0001 par value, 400,000,000 shares authorized; 251,017,063 and 250,698,105 issued and outstanding at December 31, 2014 and 2013, respectively | 25,102 | 25,070 | ||||||||
| Class Z common stock: $.0001 par value, 100,000,000 shares authorized; 47,273,470 and 47,273,470 issued and outstanding at December 31, 2014 and 2013, respectively | 4,727 | 4,727 | ||||||||
| Additional paid-in capital | 4,640,278 | 3,083,413 | ||||||||
| Accumulated deficit | (3,474,919 | ) | (1,104,665 | ) | ||||||
| Total Stockholders' Equity | 1,218,662 | 2,011,312 | ||||||||
| Total Liabilities and Stockholders' Equity | $ | 4,425,181 | $ | 3,980,276 | ||||||
| See 10K for accompanying notes to consolidated financial statements. | ||||||||||
| PEN INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| For the Years Ended | ||||||||||
| December 31, | ||||||||||
| 2014 | 2013 | |||||||||
| REVENUES: | ||||||||||
| Products (including related party sales of $198,858 and $209,170 for the year ended December 31, 2014 and 2013, respectively) | $ | 9,177,568 | $ | 9,075,348 | ||||||
| Research and development services | 772,909 | - | ||||||||
| Total Revenues | 9,950,477 | 9,075,348 | ||||||||
| COST OF REVENUES: | ||||||||||
| Products | 5,014,296 | 5,644,017 | ||||||||
| Research and development services | 635,820 | - | ||||||||
| Total Cost of Revenues | 5,650,116 | 5,644,017 | ||||||||
| GROSS PROFIT | 4,300,361 | 3,431,331 | ||||||||
| OPERATING EXPENSES: | ||||||||||
| Selling and marketing expenses | 235,234 | 284,236 | ||||||||
| Salaries, wages and contract labor | 2,003,996 | 1,247,484 | ||||||||
| Research and development | 607,049 | 878,364 | ||||||||
| Professional fees | 814,518 | 453,319 | ||||||||
| General and administrative expenses | 996,238 | 747,856 | ||||||||
| Impairment loss | 1,933,144 | - | ||||||||
| Total Operating Expenses | 6,590,179 | 3,611,259 | ||||||||
| LOSS FROM OPERATIONS | (2,289,818 | ) | (179,928 | ) | ||||||
| OTHER INCOME (EXPENSES): | ||||||||||
| Interest income | - | 40 | ||||||||
| Interest expenses | (28,967 | ) | (80,326 | ) | ||||||
| Other income, net | 86,132 | 41,894 | ||||||||
| Total Other Income/(Expense) | 57,165 | (38,392 | ) | |||||||
| Loss before income taxes | (2,232,653 | ) | (218,320 | ) | ||||||
| Income tax benefit (expense) | (84,183 | ) | - | |||||||
| NET LOSS | (2,316,836 | ) | (218,320 | ) | ||||||
| Net (income) loss attributable to former non-controlling interest | (53,418 | ) | 31,694 | |||||||
| NET LOSS ATTRIBUTABLE TO PEN, INC. | $ | (2,370,254 | ) | $ | (186,626 | ) | ||||
| NET LOSS PER COMMON SHARE: | ||||||||||
| Basic | $ | (0.01 | ) | $ | (0.00 | ) | ||||
| Diluted | $ | (0.01 | ) | $ | (0.00 | ) | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||
| Basic | 396,641,386 | 325,641,762 | ||||||||
| Diluted | 396,641,386 | 325,641,762 | ||||||||
| See 10K for accompanying notes to consolidated financial statements. | | |||||||||
The entire Form 10K and related financial statements are available at www.sec.gov, or the company's website, www.pen-technology.com.
Use of Non-GAAP Financial Measures
The Company has included in this press release certain non-GAAP financial measures. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of the Company and when planning and forecasting future periods. Readers are cautioned not to view non-GAAP financial measures on a stand-alone basis or as a substitute for GAAP measures, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP measures with non-GAAP measures also included herein.
| Reconciliation of Non-GAAP Adjusted Net Loss and EPS | ||||||||
| For the Years Ending December 31 |
||||||||
| 2014 | 2013 | |||||||
| Net (loss) | $ | (2,316,836 | ) | $ | (218,320 | ) | ||
| Add: impairment loss of intangible assets | $ | 1,933,144 | $ | - | ||||
| Non-GAAP adjusted net loss | $ | (383,692 | ) | $ | (218,320 | ) | ||
| Weighted average shares - diluted | 396,641,386 | 325,641,762 | ||||||
| Non-GAAP adjusted diluted EPS | $ | (0.00 | ) | $ | (0.00 | ) | ||
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
