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| 8-K - FORM 8-K - Enerpulse Technologies, Inc. | v386983_8k.htm |
Exhibit 99.1
News Release
FOR IMMEDIATE RELEASE
August 14, 2014
Enerpulse Technologies Announces Second Quarter Highlights and Results
Albuquerque, N.M. – Enerpulse Technologies, Inc. (OTCQX: ENPT) developer and manufacturer of ultra-high performance, low emissions ignition products through the application of its proprietary Nano-Plasma Assisted Combustion (n-PAC™) technology announced today its financial results for the second quarter ended June 30, 2014.
Second Quarter Highlights
| · | Commenced trading on the OTCQX after the successful completion of an initial public offering of its common shares, receiving $4.0 million in proceeds |
| · | Launched its new Pulstar with PlasmaCore Spark Plug- product line, providing the aftermarket with the next generation of its popular upgrade to conventional spark plugs |
| · | Al Unser Jr., two time winner of the Indianapolis 500, joined the company as its Pulstar®Spark Plug’s Performance Expert |
Corporate Update for Second Quarter Ended June 30, 2014:
“The second quarter marked a pivotal time for Enerpulse Technologies,” commented Joe Gonnella, Chief Executive Officer of Enerpulse Technologies, "We successfully completed our IPO and began trading on the OTCQX; and, we’re thrilled to announce that, not only did Al Unser Jr join the Enerpulse team as our Performance Expert, he also returned to the winner's circle on June 8th at the legendary Indianapolis Motor Speedway in the Indy Legends Pro-Am Race, running with Pulstar Spark Plugs.”
Mr. Gonnella continued, “We were also very busy with introducing the next generation of Pulstar Spark Plugs to our growing legion of aftermarket customers by launching a comprehensive marketing plan to promote aftermarket growth. This is a key milestone in generating increased aftermarket revenue and part of our continued plan to generate greater shareholder value in the longer term.”
We are energized and focused on continuing to execute on our strategic business plan and making the transition from the R&D stage to profitability; and, we continue to be very excited about the opportunities in front of us."
Results for Second Quarter Ended June 30, 2014:
For the second quarter ended June 30, 2014, the Company reported revenue of $93,000, a decrease of 17.7% compared to $113,000 for the second quarter of 2013. The decrease in revenue was the direct result of a number of one-time factors, including the lifting of old Pulstar product in the company’s exsiting distribution network to make room for new Pulstar with PlasmaCore products and new product launch delays due to the longer than anticipated timing of the company’s public offering and funding.
Q2 2014 gross profit was slightly lower at $10,200, compared to $10,700 for Q2 2013, while gross profit margin was slightly higher at 11% in Q2 2014, compared to 9.5% for the second quarter of 2013.
Our selling, general and administrative expenses increased by 41.4% from $756,000 for the three months ended June 30, 2013 to $1,068,000 for the three months ended June 30, 2014, primarily as a result of the re-pricing and accelerated vesting of outstanding stock options to purchase approximately 676,000 shares of our common stock previously granted to officers, directors, employees and consultants, which resulted in additional stock-based compensation of approximately $32,000, as well as approximately $293,000 associated with accelerating the unvested stock-based awards granted prior to that date.
Cash and cash equivalents totaled $1,900,000 at June 30, 2014, up from $282,000 on December 31, 2013. The increase is due to the successful completion of the company’s public offering in May 2014 and receipt of the associated proceeds.
FORWARD LOOKING STATEMENTS:
This press release contains statements that are forward looking as that term is defined by the United States Private Securities Litigation Reform Act of 1995. These statements include statements regarding profitability, shareholder value, future growth and the expected impact of our products on the marketplace. These statements are based on management's current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ significantly from those described in the forward looking statements. Factors that may cause such a difference include the following: 1) we have limited capital and a history of losses, limiting our ability to respond to unexpected delays in product introduction or in generating revenue; 2) product development is subject to various risks and uncertainties, including engineering challenges as well as the potential need to adjust the features of a product to address market demand, which could delay an introduction on a timely basis; 3) the success of our new products depends on a number of factors including market acceptance and our ability to manage the risks associated with new product introduction and developing and marketing new versions of the product; and 4) other factors, including those set forth under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013, and in other documents we have filed with the SEC.
About ENERPULSE (OTCQX: ENPT)
Enerpulse Technologies, Inc. is a publicly traded company headquartered in Albuquerque, N.M. Founded in 2004; the company develops and manufactures ultra-high performance, low emissions ignition products through the application of Nano-Plasma Assisted Combustion (n-PAC™). For more information, visit www.enerpulse.com.
For further IR information, contact:
Julie Silber, SVP of Investor Relations
KCSA Strategic Communications
212-896-1225
jsilber@kcsa.com
For further PR information, contact:
Gary McCoy, Public Relations Director
The Marx Group
847-622-7228
gmccoy@themarxgrp.com
ENERPULSE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 1,879,583 | $ | 281,607 | ||||
| Accounts receivable, net | 55,234 | 92,960 | ||||||
| Inventory, net | 323,554 | 299,383 | ||||||
| Other current assets | - | 3,085 | ||||||
| Total current assets | 2,258,371 | 677,035 | ||||||
| Intangible assets, net of accumulated amortization of $111,017 (2014) and $96,287 (2013) | 414,434 | 387,947 | ||||||
| Property and equipment, net | 171,161 | 150,586 | ||||||
| Other assets | 8,848 | 162,896 | ||||||
| Total assets | $ | 2,852,814 | $ | 1,378,464 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 308,718 | $ | 450,646 | ||||
| Accrued expenses | 164,300 | 253,013 | ||||||
| Current portion of capital lease obligations | 13,805 | 7,377 | ||||||
| Total current liabilities | 486,823 | 711,036 | ||||||
| Long-Term Liabilities | ||||||||
| Capital lease obligations, net of current portion | 18,946 | 8,672 | ||||||
| Notes payable | 166,271 | 166,271 | ||||||
| Warrants liability | 860,786 | - | ||||||
| 1,046,003 | 174,943 | |||||||
| Total liabilities | 1,532,826 | 885,979 | ||||||
| Commitments and Contingencies | ||||||||
| Puttable Common Stock, 131,287 shares outstanding, $0.001 par value | 300,000 | 393,780 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock, 10,000,000 shares authorized; no shares issued and outstanding; $0.001 par value | - | - | ||||||
| Common stock, 100,000,000 shares authorized; 13,732,381 and 8,732,381 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively; $0.001 par value | 13,733 | 8,733 | ||||||
| Additional paid-in capital | 26,744,063 | 23,659,588 | ||||||
| Note receivable, related party | (203,083 | ) | (202,072 | ) | ||||
| Accumulated deficit | (25,534,725 | ) | (23,367,544 | ) | ||||
| Total stockholders' equity | 1,019,988 | 98,705 | ||||||
| Total liabilities and stockholders' equity | $ | 2,852,814 | $ | 1,378,464 | ||||
See notes to accompanying unaudited consolidated financial statements.
ENERPULSE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Sales | $ | 93,365 | $ | 113,094 | $ | 190,529 | $ | 275,998 | ||||||||
| Cost of sales | 83,150 | 102,424 | 173,994 | 206,485 | ||||||||||||
| Gross profit | 10,215 | 10,670 | 16,535 | 69,513 | ||||||||||||
| Selling, general and administrative expenses | 1,068,931 | 756,216 | 1,767,407 | 1,502,060 | ||||||||||||
| Loss from operations | (1,058,716 | ) | (745,546 | ) | (1,750,872 | ) | (1,432,547 | ) | ||||||||
| Other expense | (406,199 | ) | (6,771 | ) | (416,309 | ) | (12,064 | ) | ||||||||
| Net loss | $ | (1,464,915 | ) | $ | (752,317 | ) | $ | (2,167,181 | ) | $ | (1,444,611 | ) | ||||
| Net loss per common share (basic and diluted) | $ | (0.13 | ) | $ | (0.10 | ) | $ | (0.22 | ) | $ | (0.19 | ) | ||||
| Net loss per puttable common share (basic and diluted) | $ | (0.13 | ) | $ | - | $ | (0.22 | ) | $ | - | ||||||
| Weighted average number of shares outstanding (basic and diluted) - common | 10,930,183 | 7,646,781 | 9,837,353 | 7,422,094 | ||||||||||||
| Weighted average number of shares outstanding (basic and | ||||||||||||||||
| diluted) - puttable common | 131,287 | - | 131,287 | - | ||||||||||||
ENERPULSE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six Months Ended June 30, | ||||||||
| 2014 | 2013 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | (2,167,181 | ) | $ | (1,444,611 | ) | ||
| Adjustments to reconcile net loss to net cash used in | ||||||||
| operating activities: | ||||||||
| Stock-based compensation | 399,192 | 10,000 | ||||||
| Amortization | 14,730 | 11,851 | ||||||
| Depreciation | 25,542 | 40,933 | ||||||
| Amortization of warrants on notes payable | 52,005 | - | ||||||
| Loss on modification of derivative liabilities | 31,356 | - | ||||||
| Fair value adjustments of derivative instruments | 322,733 | - | ||||||
| Interest on note receivable, related party | (1,011 | ) | - | |||||
| Provision for doubtful accounts | 2,210 | - | ||||||
| Changes in operating assets and liabilities: | - | |||||||
| Accounts receivable | 35,516 | 28,336 | ||||||
| Inventory | (24,171 | ) | (37,150 | ) | ||||
| Accounts payable | (141,928 | ) | (108,022 | ) | ||||
| Accrued expenses | (436 | ) | (225,405 | ) | ||||
| Other | 3,085 | 107,026 | ||||||
| Net cash used in operating activities | (1,448,358 | ) | (1,617,042 | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Purchase of property and equipment | (24,522 | ) | (1,861 | ) | ||||
| Purchase of intangible assets | (41,217 | ) | (47,323 | ) | ||||
| Net cash used in investing activities | (65,739 | ) | (49,184 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from issuance of common stock and related warrants, net of offering costs | 3,116,966 | 1,010,000 | ||||||
| Proceeds from notes payable | 230,000 | - | ||||||
| Payments on capital lease and notes payable | (234,893 | ) | (90,845 | ) | ||||
| Net cash provided by financing activities | 3,112,073 | 919,155 | ||||||
| Net increase (decrease) in cash and cash equivalents | 1,597,976 | (747,071 | ) | |||||
| Cash and cash equivalents at beginning of year | 281,607 | 1,116,870 | ||||||
| Cash and cash equivalents at end of year | $ | 1,879,583 | $ | 369,799 | ||||
| Supplement cash flow information: | ||||||||
| Cash paid for interest | $ | 11,294 | $ | 12,064 | ||||
| Noncash investing and financing activities: | ||||||||
| Warrants issued related to offering costs | $ | 119,570 | $ | - | ||||
| Adjustment resulting from change in value of puttable common stock | $ | 93,780 | $ | - | ||||
| Equipment acquired under capital lease | $ | 21,595 | $ | - | ||||
See notes to accompanying unaudited consolidated financial statements.