Company Quick10K Filing
Astrotech
Price1.88 EPS-1
Shares6 P/E-2
MCap11 P/FCF-2
Net Debt-2 EBIT-7
TEV10 TEV/EBIT-1
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-12-31 Filed 2021-02-16
10-Q 2020-09-30 Filed 2020-11-13
S-1 2020-07-06 Public Filing
10-K 2020-06-30 Filed 2020-09-08
10-Q 2020-03-31 Filed 2020-05-14
10-Q 2019-12-31 Filed 2020-02-14
10-Q 2019-09-30 Filed 2019-11-14
10-K 2019-06-30 Filed 2019-09-30
10-Q 2019-03-31 Filed 2019-05-13
10-Q 2018-12-31 Filed 2019-02-12
10-Q 2018-09-30 Filed 2018-11-14
10-K 2018-06-30 Filed 2018-09-25
10-Q 2018-03-31 Filed 2018-05-15
10-Q 2017-12-31 Filed 2018-02-12
10-Q 2017-09-30 Filed 2017-11-09
10-K 2017-06-30 Filed 2017-09-18
10-Q 2017-03-31 Filed 2017-05-09
10-Q 2016-12-31 Filed 2017-02-13
10-Q 2016-09-30 Filed 2016-11-14
10-K 2016-06-30 Filed 2016-09-29
10-Q 2016-03-31 Filed 2016-05-11
10-Q 2015-12-31 Filed 2016-02-10
10-Q 2015-09-30 Filed 2015-11-12
10-K 2015-06-30 Filed 2015-09-22
10-Q 2015-03-31 Filed 2015-05-11
10-Q 2014-12-31 Filed 2015-02-17
10-Q 2014-09-30 Filed 2014-11-14
10-K 2014-06-30 Filed 2014-09-30
10-Q 2014-03-31 Filed 2014-05-14
10-Q 2013-12-31 Filed 2014-02-14
10-Q 2013-09-30 Filed 2013-11-14
10-K 2013-06-30 Filed 2013-10-15
10-Q 2013-03-31 Filed 2013-05-15
10-Q 2012-12-31 Filed 2013-02-14
10-Q 2012-09-30 Filed 2012-11-14
10-K 2012-06-30 Filed 2012-09-28
10-Q 2012-03-31 Filed 2012-05-07
10-Q 2011-12-31 Filed 2012-02-03
10-Q 2011-09-30 Filed 2011-11-14
10-K 2011-06-30 Filed 2011-09-20
10-Q 2011-03-31 Filed 2011-05-02
10-Q 2010-12-31 Filed 2011-02-04
10-Q 2010-09-30 Filed 2010-11-05
10-K 2010-06-30 Filed 2010-08-30
10-Q 2010-03-31 Filed 2010-05-17
10-Q 2009-12-31 Filed 2010-02-01
8-K 2021-02-11 Enter Agreement, Sale of Shares, Other Events, Exhibits
8-K 2020-12-31 Earnings, Exhibits
8-K 2020-12-30 Officers
8-K 2020-12-17 Enter Agreement, Exhibits
8-K 2020-10-29
8-K 2020-10-28
8-K 2020-10-21
8-K 2020-10-19
8-K 2020-09-30
8-K 2020-09-11
8-K 2020-09-09
8-K 2020-08-24
8-K 2020-07-01
8-K 2020-06-30
8-K 2020-05-21
8-K 2020-04-20
8-K 2020-03-31
8-K 2020-03-27
8-K 2020-03-25
8-K 2020-02-18
8-K 2020-02-13
8-K 2019-12-31
8-K 2019-09-30
8-K 2019-09-27
8-K 2019-09-05
8-K 2019-06-30
8-K 2019-05-14
8-K 2019-04-17
8-K 2019-03-31
8-K 2018-12-31
8-K 2018-12-07
8-K 2018-11-09
8-K 2018-10-09
8-K 2018-10-02
8-K 2018-09-30
8-K 2018-09-24
8-K 2018-08-06
8-K 2018-06-27
8-K 2018-03-31
8-K 2018-02-22
8-K 2018-02-08
8-K 2018-02-07

ASTC 10Q Quarterly Report

Part I: Financial Information
Item 1. Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part Ii: Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosure
Item 5. Other Information
Item 6. Exhibits
EX-31.1 astc-ex311_8.htm
EX-31.2 astc-ex312_6.htm
EX-32.1 astc-ex321_7.htm

Astrotech Earnings 2020-12-31

Balance SheetIncome StatementCash Flow
554433221102012201420172020
Assets, Equity
2518114-3-102012201420172020
Rev, G Profit, Net Income
553617-2-21-402012201420172020
Ops, Inv, Fin

10-Q 1 astc-10q_20201231.htm 10-Q astc-10q_20201231.htm

  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 001-34426

 

Astrotech Corporation

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

91-1273737

State or Other Jurisdiction of

Incorporation or Organization

 

I.R.S. Employer Identification No.

 

 

 

2028 E. Ben White Blvd., Suite 240-9530, Austin, Texas

 

78741

Address of Principal Executive Offices

 

Zip Code

 

(512) 485-9530

Registrant’s Telephone Number, Including Area Code

Not Applicable

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value per share

 

ASTC

 

NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 ☐

  

Accelerated filer

 

 

Non-accelerated filer

 

 

  

Smaller reporting company

 

 

Emerging growth company

 

 ☐

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐    No 

As of February 12, 2021, the number of shares of the registrant’s common stock outstanding was: 19,731,600.

 

 

 


 

ASTROTECH CORPORATION AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

 

 

 

2


 

 

PART I: FINANCIAL INFORMATION

ITEM 1.   Condensed Consolidated Financial Statements

ASTROTECH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

 

 

December 31,

2020

 

 

June 30,

2020

 

 

 

(Unaudited)

 

 

(Note)

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,121

 

 

$

3,349

 

Restricted cash

 

 

542

 

 

 

 

Accounts receivable

 

 

95

 

 

 

101

 

Inventory:

 

 

 

 

 

 

 

 

Raw materials

 

 

173

 

 

 

416

 

Work-in-process

 

 

221

 

 

 

38

 

Finished goods

 

 

194

 

 

 

222

 

Income tax receivable

 

 

 

 

 

429

 

Prepaid expenses and other current assets

 

 

76

 

 

 

117

 

Total current assets

 

 

23,422

 

 

 

4,672

 

Property and equipment, net

 

 

85

 

 

 

99

 

Assets held for disposal

 

 

 

 

 

237

 

Operating leases, right-of-use assets, net

 

 

72

 

 

 

851

 

Other assets

 

 

 

 

 

71

 

Total assets

 

$

23,579

 

 

$

5,930

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

228

 

 

 

239

 

Payroll related accruals

 

 

434

 

 

 

433

 

Accrued expenses and other liabilities

 

 

939

 

 

 

627

 

Income tax payable

 

 

2

 

 

 

2

 

Term note payable - related party

 

 

2,500

 

 

 

2,500

 

Term note payable

 

 

421

 

 

 

210

 

Lease liabilities

 

 

82

 

 

 

339

 

Total current liabilities

 

 

4,606

 

 

 

4,350

 

Term note payable, net of current portion

 

 

121

 

 

 

332

 

Lease liabilities, net of current portion

 

 

42

 

 

 

623

 

Total liabilities

 

 

4,769

 

 

 

5,305

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Convertible preferred stock, $0.001 par value, 2,500,000 shares authorized; 280,898 shares of Series D issued and outstanding at December 31, 2020 and June 30, 2020

 

 

 

 

 

 

Common stock, $0.001 par value, 50,000,000 shares authorized; 18,941,345 and 8,250,286 shares issued at December 31, 2020 and June 30, 2020, respectively; 18,541,429 and 7,850,362 shares outstanding at December 31, 2020 and June 30, 2020, respectively

 

 

190,610

 

 

 

190,599

 

Treasury stock, 399,916 shares at cost at December 31, 2020 and June 30, 2020

 

 

(4,129

)

 

 

(4,129

)

Additional paid-in capital

 

 

35,841

 

 

 

13,934

 

Accumulated deficit

 

 

(203,512

)

 

 

(199,779

)

Total stockholders’ equity

 

 

18,810

 

 

 

625

 

Total liabilities and stockholders’ equity

 

$

23,579

 

 

$

5,930

 

Note: The balance sheet at June 30, 2020, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by the United States generally accepted accounting principles for complete financial statements.

.

See accompanying notes to unaudited condensed consolidated financial statements.

3


 

ASTROTECH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

December 31,

 

 

Six Months Ended

December 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

$

130

 

 

$

205

 

 

$

270

 

 

$

206

 

Cost of revenue

 

 

128

 

 

 

196

 

 

 

241

 

 

 

196

 

Gross profit

 

 

2

 

 

 

9

 

 

 

29

 

 

 

10

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

803

 

 

 

1,110

 

 

 

1,729

 

 

 

2,312

 

Research and development

 

 

758

 

 

 

939

 

 

 

1,367

 

 

 

1,794

 

Disposal of corporate lease

 

 

 

 

 

 

 

 

544

 

 

 

 

Total operating expenses

 

 

1,561

 

 

 

2,049

 

 

 

3,640

 

 

 

4,106

 

Loss from operations

 

 

(1,559

)

 

 

(2,040

)

 

 

(3,611

)

 

 

(4,096

)

Interest and other expense, net

 

 

(63

)

 

 

(43

)

 

 

(122

)

 

 

(55

)

Loss from operations before income taxes

 

 

(1,622

)

 

 

(2,083

)

 

 

(3,733

)

 

 

(4,151

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,622

)

 

$

(2,083

)

 

$

(3,733

)

 

$

(4,151

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

15,864

 

 

 

5,947

 

 

 

11,769

 

 

 

5,769

 

Basic and diluted net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(0.10

)

 

$

(0.35

)

 

$

(0.32

)

 

$

(0.72

)

Total comprehensive loss

 

$

(1,622

)

 

$

(2,083

)

 

$

(3,733

)

 

$

(4,151

)

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

4


 

 

 

ASTROTECH CORPORATION

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(In thousands)

(Unaudited)

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series D

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

Shares

Outstanding

 

 

Amount

 

 

Number of

Shares

Outstanding

 

 

Amount

 

 

Treasury

Stock

Amount

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Equity

 

Balance at June 30, 2020

 

 

 

281

 

 

$

 

 

 

7,850

 

 

$

190,599

 

 

$

(4,129

)

 

$

13,934

 

 

$

(199,779

)

 

$

625

 

Stock offering costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

(2

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

49

 

 

 

 

 

 

49

 

Restricted stock cancellation

 

 

 

 

 

 

 

 

 

(6

)

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,111

)

 

 

(2,111

)

Balance at September 30, 2020

 

 

 

281

 

 

$

 

 

 

7,844

 

 

$

190,599

 

 

$

(4,129

)

 

$

13,976

 

 

$

(201,890

)

 

$

(1,444

)

Issuance of stock, net of offering costs

 

 

 

 

 

 

 

 

 

10,714

 

 

 

11

 

 

 

 

 

 

21,819

 

 

 

 

 

 

21,830

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47

 

 

 

 

 

 

47

 

Restricted stock cancellation

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,622

)

 

 

(1,622

)

Balance at December 31, 2020

 

 

 

281

 

 

$

 

 

 

18,541

 

 

$

190,610

 

 

$

(4,129

)

 

$

35,841

 

 

$

(203,512

)

 

$

18,810

 

 

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series C

 

 

Series D

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

Shares

Outstanding

 

 

Amount

 

 

Number of

Shares

Outstanding

 

 

Amount

 

 

Number of

Shares

Outstanding

 

 

Amount

 

 

Treasury

Stock

Amount

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Equity

 

Balance at June 30, 2019

 

 

281

 

 

$

 

 

 

281

 

 

$

 

 

 

5,775

 

 

$

190,571

 

 

$

(4,129

)

 

$

7,964

 

 

$

(191,698

)

 

$

2,708

 

Adjustment to opening retained earnings related to adoption of ASC Topic 842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

230

 

 

 

230

 

Issuance of shares, net of offering issuance costs of $7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

146

 

 

 

 

 

 

 

 

 

321

 

 

 

 

 

 

321

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

78

 

 

 

 

 

 

78

 

Restricted stock issuance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

26

 

 

 

 

 

 

 

 

 

 

 

 

26

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,068

)

 

 

(2,068

)

Balance at September 30, 2019

 

 

281

 

 

$

 

 

 

281

 

 

$

 

 

 

5,926

 

 

$

190,597

 

 

$

(4,129

)

 

$

8,363

 

 

$

(193,536

)

 

$

1,295

 

Issuance of stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

433

 

 

 

1

 

 

 

 

 

 

951

 

 

 

 

 

 

952

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

97

 

 

 

 

 

 

97

 

Restricted stock cancellation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11

)

 

 

 

 

 

 

 

 

(11

)

 

 

 

 

 

(11

)

Forfeiture of stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

(3

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,083

)

 

 

(2,083

)

Balance at December 31, 2019

 

 

281

 

 

$

 

 

 

281

 

 

$

 

 

 

6,348

 

 

$

190,598

 

 

$

(4,129

)

 

$

9,397

 

 

$

(195,619

)

 

$

247

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

5


 

 

ASTROTECH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six Months Ended

December 31,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(3,733

)

 

$

(4,151

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation, net of forfeitures

 

 

90

 

 

 

187

 

Depreciation and amortization

 

 

141

 

 

 

289

 

Loss on disposal of assets

 

 

173

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

6

 

 

 

(210

)

Inventory

 

 

88

 

 

 

57

 

Income tax receivable

 

 

429

 

 

 

215

 

Accounts payable

 

 

(11

)

 

 

(7

)

Other assets and liabilities

 

 

319

 

 

 

264

 

Net cash used in operating activities

 

 

(2,498

)

 

 

(3,356

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(16

)

 

 

 

Net cash used in investing activities

 

 

(16

)

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from term note payable - related party

 

 

 

 

 

1,500

 

Proceeds from issuance of stock, net of offering issuance costs

 

 

21,828

 

 

 

1,272

 

Net cash provided by financing activities

 

 

21,828

 

 

 

2,772

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

$

19,314

 

 

 

(584

)

Cash and cash equivalents at beginning of period

 

 

3,349

 

 

 

1,588

 

Cash and cash equivalents at end of period

 

$

22,663

 

 

$

1,004

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash and cash equivalents and restricted cash at end of period:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,121

 

 

$

393

 

Restricted cash

 

$

542

 

 

$

611

 

Total

 

$

22,663

 

 

$

1,004

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

 

 

$

 

Income taxes paid

 

$

 

 

$

 

Impact to retained earnings from adoption of ASC Topic 842

 

$

 

 

$

230

 

Operating right-of-use assets and associated liabilities

 

$

 

 

$

1,608

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

6


 

ASTROTECH CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(1) General Information

Description of the Company – Astrotech Corporation (Nasdaq: ASTC) (“Astrotech,” “the Company,” “we,” “us,” or “our”), a Delaware corporation organized in 1984, is a science and technology development and commercialization company that launches, manages, and builds scalable companies based on innovative technology in order to maximize shareholder value.

 

Basis of Presentation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2020 are not necessarily indicative of the results that may be expected for the year ending June 30, 2021. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020.

 

Our Business Units

 

Astrotech Technologies, Inc.

 

Astrotech Technologies, Inc. (“ATI”) owns and licenses the Astrotech Mass Spectrometer Technology™ (the “AMS Technology”), the platform mass spectrometry technology originally developed by 1st Detect Corporation (“1st Detect”). The intellectual property includes 32 patents granted with two additional patents in process along with extensive trade secrets. With a number of diverse market opportunities for the core technology, ATI is structured to license the intellectual property for different fields of use. ATI currently licenses the AMS Technology to three wholly-owned subsidiaries of Astrotech, including to 1st Detect for use in the security and detection market, to AgLAB Inc. (“AgLAB”) for use in the agriculture market, and to BreathTech Corporation (“BreathTech”) for use in breath analysis.

 

1st Detect Corporation

 

1st Detect, a licensee of ATI for the security and detection market, has developed the TRACER 1000™, the world’s first mass spectrometer (“MS”) based explosives trace detector (“ETD”) certified by the European Civil Aviation Conference (“ECAC”), designed to replace the ETDs used at airports, cargo facilities, secured facilities, and borders worldwide. The Company believes that ETD customers are unsatisfied with the currently deployed ETD technology, which is driven by ion mobility spectrometry (“IMS”). The Company believes that IMS-based ETDs are fraught with false positives, as they often misidentify personal care products and other common household chemicals as explosives, causing unnecessary delays, frustration, and significant wasted security resources. In addition, there are hundreds of different types of explosives, but IMS-based ETDs have a very limited threat detection library reserved only for those several explosives of largest concern. Adding additional compounds to the detection library of an IMS-based ETD fundamentally reduces the instrument’s performance, further increasing the likelihood of false alarms. In contrast, adding additional compounds does not degrade the TRACER 1000’s detection capabilities, as it has a virtually unlimited and expandable threat library.

 

In order to sell the TRACER 1000 to airport and cargo security customers in the European Union, ECAC certification is required. Certain other countries also accept ECAC certification. After receiving ECAC certification for the TRACER 1000 on February 21, 2019, the Company is now marketing to and taking orders from airports and cargo facilities outside of the U.S. that accept ECAC certification.

 

On June 26, 2019, the Company announced the official launch of the TRACER 1000, and on November 22, 2019, also announced the first commercial sale of TRACER 1000 units to a global shipping and logistics company. 

 

In the United States, the Company is working with the Transportation Security Administration (“TSA”) towards Air Cargo certification. On March 27, 2018, the Company announced that the TRACER 1000 was accepted into TSA’s Air Cargo Screening Technology Qualification Test (“ACSQT”) and, on April 4, 2018, the Company announced that the TRACER 1000 was beginning testing with TSA for passenger screening at airports. On November 14, 2019, the Company announced that the TRACER 1000 had been selected by the TSA’s Innovation Task Force (“ITF”) to conduct live checkpoint screening at Miami International Airport. With similar protocols as ECAC testing, the Company has received valuable feedback from all programs. Following ECAC certification and the Company's early traction within the cargo market, testing for cargo security continued with the TSA. With the COVID-19 pandemic, all testing within the TSA was put on hold; however, cargo non-detection testing resumed this summer, and the Company subsequently announced on September 9, 2020 that the TRACER 1000 passed the non-detection testing portion of the TSA’s ACSQT. TSA cargo detection testing resumed this fall and continues to move forward. This is the next and final step to be listed on the Air Cargo Screening Technology List (“ACSTL”) as an “approved” device and,

7


 

if approved, thereby approved for cargo sales in the United States. Given the deterioration in air traffic caused by the pandemic, TSA certification testing for passenger checkpoint security has been put on indefinite hold. 

 

Finally, on October 28, 2020, the Company announced that it had surpassed $1.0 million in purchase orders for the TRACER 1000 and an additional $1.0 million in future service and support commitments, also announcing DHL (Deutsche Post AG) as its largest flagship customer.

 

AgLAB Inc.

 

AgLAB is a licensee of ATI and has developed the AgLAB-1000™ series of mass spectrometers for use in the agriculture industry for both process control and the detection of trace amounts of solvents and pesticides. The AgLAB product line is a derivative of the Company’s core AMS Technology.

 

BreathTech Corporation

 

BreathTech is developing the BreathTest-1000, a breath analysis tool to screen for volatile organic compound (“VOC”) metabolites found in a person’s breath that could indicate they may have an infection, including COVID-19 or pneumonia.

 

Development of the BreathTest-1000 follows the Company’s results in pre-clinical trials for the BreathDetect-1000™, a rapid self-serve breathalyzer that is designed to detect bacterial infections in the respiratory tract, including pneumonia. The pre-clinical trials were conducted in collaboration with UT Health San Antonio in 2017.