UTEK Corporation (NYSE Amex: UTK) today announced financial
results for the three and nine months ended September 30, 2009.
Third Quarter Summary
The Company has continued to progress in becoming the leading
provider of IP licensing and innovation services for the Global
2000 marketplace. During the month of October, we achieved record
traffic on our leading pharmalicensing.com platform and launched
another healthcare related site – medicaldevicelicensing.com. Our
goal is to continue to invest in the Company’s growing set of
online platforms, which we feel drive global efficiencies,
currently unmet, in IP licensing.
The Company attained improvement in cash burn and cost
containment, and we feel we are well positioned for growth in 2010,
specifically within our burgeoning online licensing and partnering
business. Our strategic innovation consulting group is still
experiencing the effects of the current global economic
downturn. In the third quarter, the market for professional
services appeared to have stabilized; nevertheless, the quarterly
and year-to-date revenues remain well below 2008 levels.
2009 Highlights
- Obtained a $1.75 million loan to
assist in funding the next stage of growth for our online licensing
platforms
- Secured a new $450,000 line of
credit
- Cash equity monetization of
$682,000 for the first nine months of 2009
- Continued focus on managing
working capital
- New Vice President of Marketing
hired to more effectively brand and market the Company's global
suite of IP licensing and innovation services
- Launched
medicaldevicelicensing.com, an online healthcare licensing
platform
Three Months Ended September 30, 2009 Operating
Results
For the quarter ended September 30, 2009, income from operations
(revenue) was $2.3 million as compared to $7.1 million for the
quarter ended September 30, 2008. Net (loss) income from operations
for the quarter ended September 30, 2009 was ($1.0 million) as
compared to ($5.9 million) for the quarter ended September 30,
2008. None of our income from operations (revenue) was received in
the form of unregistered shares of common stock for the quarter
ended September 30, 2009 as compared to 11% for the third quarter
of 2008.
The net decrease in net assets from operations (including net
income (loss) from operations and realized and unrealized gains and
losses on investments) was ($2.4 million) or ($0.21) per weighted
average diluted share outstanding for the quarter ended September
30, 2009, as compared to ($12.7 million) or ($1.25) per weighted
average diluted share outstanding for the quarter ended September
30, 2008.
Weighted average diluted shares outstanding were 11,561,091 and
10,176,742 for the quarters ended September 30, 2009 and 2008,
respectively.
Nine Months Ended September 30, 2009 Operating
Results
For the nine months ended September 30, 2009, income from
operations (revenue) was $7.8 million as compared to $15.7 million
for the nine months ended September 30, 2008. Net (loss) income
from operations for the nine months ended September 30, 2009 was
($9.3 million) as compared to ($8.1 million) for the nine months
ended September 30, 2008. None of our income from operations
(revenue) was received in the form of unregistered shares of common
stock for the nine months ended September 30, 2009 as compared to
30% for the nine months ended September 30, 2008.
The net decrease in net assets from operations (including net
income (loss) from operations and realized and unrealized gains and
losses on investments) was ($14.6 million) or ($1.30) per weighted
average diluted share outstanding for the nine months ended
September 30, 2009, as compared to ($22.4 million) or ($2.32) per
weighted average diluted share outstanding for the nine months
ended September 30, 2008.
Weighted average diluted shares outstanding were 11,257,663 and
9,653,725 for the nine months ended September 30, 2009 and 2008,
respectively.
Recent Developments
On October 1, 2009, the Company filed a notification on Form
N-54C with the SEC withdrawing our election to be regulated as a
business development company under the Investment Company Act of
1940. As such, the Company has been reporting as an operating
company as of October 1, 2009.
At this time, the Company has determined, based on its current
business focus and the fact that the equity interests it holds has
constituted a declining amount of its assets over the last couple
of years, that the Company is not currently required to be
regulated as a business development company under the 1940 Act. In
this regard, the Company’s current business focus is to provide
consulting and technology transfer services to companies in
exchange for cash (and not equity interests). Thus, because of the
Company’s current business focus of providing consulting and
technology transfer services to companies in exchange for cash (and
not equity interests), the Company is operating, and intends to
continue to operate, as an operating company rather than an
investment company.
On October 22, 2009, we entered into a Note and Warrant Purchase
Agreement, pursuant to which we borrowed $1,750,000. Interest
is payable at an annual rate of 8% on a quarterly basis, in
arrears, beginning April 15, 2010. The entire principal amount
outstanding and all accrued interest is payable in full no later
than October 22, 2012. We plan to use the proceeds to fund our next
stage of growth and drive further adoption of our online licensing
platforms.
Financial Position Information
The following tables contain comparative selected financial data
as of September 30, 2009 and December 31, 2008 and for the three
and nine month periods ended September 30, 2009 and 2008.
UTEK Corporation
Consolidated Statements of
Assets and Liabilities
September 30,
2009
(Unaudited)
December 31,
2008
(Restated)
ASSETS Investments Non-affiliate investments (cost:
2009 - $6,568,222; 2008 - $36,994,463) $ 2,323,000 $ 5,603,440
Affiliate investments (cost: 2009 - $5,209,036; 2008 - $38,559,629)
504,289 3,477,200 Control investments (cost: 2009 - $5,832,731;
2008 - $10,637,748) 4,760,000 2,987,500 U.S. Treasuries and
certificates of deposit (cost: 2009 - $490,000; 2008 - $291,581)
490,000 291,581
Total investments 8,077,289 12,359,721 Cash and cash
equivalents 1,119,159 3,922,297 Accounts receivable, net of
allowance for bad debt 1,585,053 2,290,363 Prepaid expenses and
other assets 426,128 750,502 Fixed assets, net 454,804 653,208
Goodwill 15,025,602 15,246,143 Intangible assets, net
8,809,287 10,663,975
TOTAL ASSETS 35,497,322
45,886,209 LIABILITIES Accounts
payable 540,221 575,988 Accrued expenses 1,164,256 995,652 Accrued
severance payable 876,400 1,651,814 Deferred revenue 2,369,024
2,849,270 Notes payable and other debt 890,974 839,765 Deferred tax
liability
1,564,856
1,773,441 TOTAL LIABILITIES
7,405,731 8,685,930
NET ASSETS $ 28,091,591
$ 37,200,279 Commitments
and Contingencies Composition of net assets: Preferred stock, $.01
par value, 1,000,000 shares authorized; none issued and outstanding
-
-
Common stock, $.01 par value,
29,000,000 shares authorized; 12,287,077 and 12,134,959 shares
issued; 11,627,927 and 10,879,900 shares outstanding at September
30, 2009 and December 31, 2008, respectively
$
116,279
$
108,800
Additional paid-in capital 80,049,227 75,067,857 Accumulated income
Accumulated net operating
income
14,122,644 23,463,295
Net realized loss on investments,
net of related income taxes
(57,335,929
)
(7,744,736
)
Net unrealized depreciation of
investments, net of related deferred income
(7,629,082 ) (51,921,150 )
Foreign currency translation
adjustment
(1,231,548 )
(1,773,787 )
Net assets
$ 28,091,591 $
37,200,279 Net asset value per share
$ 2.42 $
3.42
UTEK Corporation
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended September
30
Nine Months Ended September 30
2009 2008
(Restated)
2009 2008
(Restated)
Income from operations: Innovation consulting services $
1,580,009 $ 5,139,683 $ 5,300,331 $ 7,719,310 Sale of technology
rights - 750,000 - 4,684,680 Subscription and other services
759,072 1,033,792 2,404,729 2,995,214 Investment and other income,
net
2,100 134,931
59,604
254,386 2,341,181
7,058,406 7,764,664
15,653,590
Expenses: Direct costs of innovation consulting services
1,345,991 4,567,812 4,967,243 6,885,694 Acquisition of technology
rights - 300,000 - 1,780,000 Salaries and wages 533,942 1,140,570
4,768,390 5,157,422 Professional fees 229,700 275,967 649,723
834,229 Sales and marketing 293,040 602,236 1,067,116 1,836,020
General and administrative 620,721 1,079,050 2,286,193 2,712,690
Depreciation and amortization 384,686 392,210 1,206,777 663,104
Impairment loss
- -
2,368,458 -
3,408,080
8,357,845 17,313,900
19,869,159 Loss before
income taxes (1,066,899 ) (1,299,439 ) (9,549,236 ) (4,215,569 )
Provision for income tax (benefit) expense
(36,000 ) 4,574,954
(208,585 )
3,853,627
Net loss from
operations
(1,030,899
)
(5,874,393
)
(9,340,651
)
(8,069,196
)
Net realized and unrealized gains (losses): Net
realized loss on investments, net of related income tax benefit
(12,156,063 ) (275,303 ) (49,591,193 ) (3,752,177 )
Change in unrealized appreciation (depreciation) of investments,
net of related deferred tax expense (benefit)
10,768,155
(6,541,649 )
44,292,068 (10,589,276
) Net decrease in net assets from operations
$ (2,418,807 )
$ (12,691,345 )
($14,639,776 ) $
(22,410,649 ) Net decrease in net
assets from operations per share: Basic $ (0.21 ) $ (1.25 ) $ (1.30
) $ (2.32 ) Diluted $ (0.21 ) $ (1.25 ) $ (1.30 ) $ (2.32 )
Weighted average shares: Basic 11,561,091 10,176,742 11,257,663
9,653,725 Diluted 11,561,091 10,176,742 11,257,663 9,653,725
Conference Call at 4:30 p.m. EST on Monday, November 9,
2009
UTEK will hold a live conference call on Monday, November 9,
2009 at 4:30 p.m. EST to discuss its third quarter 2009 results.
All interested parties are invited to attend the conference
call.
Conference call dial-in numbers:
Investors and analysts can participate in the call by dialing: US
& Canada: 877-554-2421 UK: 0-800-917-4860 Other International
Callers: 706-679-7207 Please reference conference ID# 40154044
About UTEK Corporation
UTEK® is a leading global IP licensing and innovation services
company. UTEK’s services enable its clients to enhance their
innovation capabilities, rapidly source externally developed
technologies, create value from their intellectual property and
gain foresight into marketplace and technology developments that
could affect their business. For more information about UTEK,
please visit its website at www.utekcorp.com.
Forward-Looking Statements
Certain matters discussed in this press release are
“forward-looking statements." These forward-looking statements can
generally be identified as such because the context of the
statement will include words, such as UTEK "expects," "should,"
"believes," "anticipates" or words of similar import. Such
forward-looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ
materially from those currently anticipated. Certain factors could
cause results and conditions to differ materially from those
projected in these forward-looking statements, and some of these
factors are discussed below. These factors are not exhaustive. New
factors, risks and uncertainties may emerge from time to time that
may affect the forward-looking statements made herein. These
forward-looking statements are only made as of the date of this
press release and UTEK does not undertake any obligation to
publicly update such forward-looking statements to reflect
subsequent events or circumstances. This press release is available
on the Company’s website at www.utekcorp.com.
Important factors that could cause actual results to differ
materially from those indicated in forward-looking statements,
include: the audit and review by UTEK’s registered independent
public accounting firm of the results and findings of UTEK, the
impact, if any, of such results or findings on the financial
statements of UTEK; UTEK’s inability to timely file reports with
the SEC; risks of litigation arising out of or related to any of
the matters described in this press release; and risks,
uncertainties and changes in financial condition. Please refer to
UTEK's filings with the SEC for other important risks that could
cause actual results to differ materially from those indicated in
any forward-looking statements. Further information relating to
factors that could cause actual results to differ from those
anticipated is included but not limited to information under the
heading “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company’s Form 10-Q for
the quarter ended September 30, 2009, and under the heading
“Business” and particularly under the subheading, “Business Risk
Factors” in the Company’s Form 10-K/A for the year ended
December 31, 2008. The Company disclaims any intention or
obligation to update or revise forward-looking statements, whether
as a result of new information, future events or otherwise.
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