SOURCE: PEN Inc.

Products enabled by nanotechnology

April 13, 2015 08:30 ET

PEN Inc. Announces 2014 Financial Results

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

  • Contact Information:
    Lynn Lilly
    Director of Communication
    PEN Inc.
    Email contact 
    (844)2PEN INC x705