Recently, MTI Micro received an additional $0.8 million bridge loan commitment from an existing and a new investor bringing the total bridge loan amount to $3.5 million, of which $3.08 million has been drawn to date. In addition, the US Department of Energy (DOE) awarded MTI Micro a $2.4 million grant to help accelerate micro fuel cell deployment in portable electronics.
Financial Highlights Of First Quarter 2009:
Recent Developments:
May 05, 2009: MTI Micro announced a developers program aimed at engineers and product designers at qualified OEMs. The developer program includes access to MTI Micro´s expert engineering support team and a developers´ kit which contains a Mobion Fuel Cell system, a monitoring software CD, a compact methanol cartridge, a user´s operation manual and a design guideline booklet. This developer program allows the OEMs to explore the opportunities to develop a greener and longer run-time power source alternative to batteries.
April 21, 2009: MTI Micro announced a collaboration agreement with a top-tier power tool manufacturer in the industrial market segment. This collaboration agreement opens the door to further expand the Mobion technology for various applications as an independent power source.
April 16, 2009: MTI Micro was awarded a $2.4 million grant by the DOE with the intent of developing and deploying fuel cells technology while laying the foundation for a green energy economy. MTI Micro was the only micro fuel cells manufacturer to receive an award in this program. This program will help MTI Micro to further develop manufacturing processes for Mobion® fuel cell systems, reduce overall costs and help accelerate fuel cell use to power portable electronic devices in the consumer market.
March 27, 2009: MTI Micro announced a collaboration agreement with a leading US based OEM of portable chargers. With the US based OEM global market channels and impressive reputation in the portable charger business, it brings MTI Micro closer to its planned commercialization process. This agreement is in addition to the company’s current OEM partners with Samsung, NeoSolar and with a global Japanese camera manufacturer, as well as a letter of intent from Duracell.
First Quarter Financial Results:
Revenue for the three months ended March 31, 2009 decreased 31.8% to $1.5 million compared to revenue of $2.2 million for the same period in 2008. First quarter revenue in 2009 was solely from MTI Instruments, as compared to $2.0 million in product revenue from MTI Instruments and $173,000 in funded Research and Development (R&D) revenue from MTI Micro in the first quarter of 2008. The revenue decrease in MTI Instruments was primarily the result of a $503,000 decrease in general dimensional gauging sales due to significantly lower sales to Japanese and a domestic OEM. Otherwise, semiconductor / solar sales increased $123,000 and aviation sales remained comparable to that of the first three months of last year. Funded R&D revenue of $173,000 in the 2008 period represented reimbursement from the DOE. MTI Micro’s final billing occurred in December 2008.
The decrease in net loss for the first quarter of 2009 compared to 2008 includes the effects of positive and negative revenue and expense changes. These changes include decreases in funded R&D revenue, cost savings in R&D spending, decreases in Selling, General and Administrative expenses, and a decrease in gain on derivatives. Gross margin%ages on product sales for the three months ended March 31, 2009 remained consistent with the comparable period in 2008.
Cash flows: For the three months ended March 31, 2009, cash used in operations decreased by 53.3% to $1.4 million compared to $3.0 million in 2008, while no cash was used for capital expenditures in 2009 compared to $102,000 in 2008. Net borrowings on related party loans was $500,000 for the quarter ended March 31, 2009.
Both MTI Micro and MTI Instruments have had successful achievements in both technical improvements and business development. We believe MTI Micro has reached a stage where the Mobion platform can accommodate the commercialization of the micro fuel cell system in various applications in diverse industries. MTI Instruments has made strides in the solar industry, especially in Europe, said Peng Lim, chief executive officer of MTI. At MTI Instruments, we plan to further expand our product offerings to different continents and at MTI Micro we continue to develop and partner with additional OEMs to achieve our goal of making Mobion a standard power source for portable electronic devices.
