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Enerpulse Technologies Announces Second Quarter Highlights and Results

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SOURCE Enerpulse Technologies, Inc.

ALBUQUERQUE, N.M., Aug. 15, 2014 /PRNewswire/ -- 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 gross 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 existing 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.

 

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










 


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


$

-

 

 

  

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