Raser Technologies Announces Fourth Quarter and Full-Year Financial Results
Raser Technologies, Inc. (NYSE Arca: RZ) an environmentally focused technology licensing and development company, today announced financial results for the fourth quarter and full-year period ended December 31, 2007.
Financial Results
Revenue for the fourth quarter was $117,860, up from $44,717 in the fourth quarter of 2006. Revenue increased over the prior-year period as a result of completing the second performance milestone of the Company’s ARINC subcontract for the U.S. Army. Raser’s work on this subcontract began during October 2006 and is accounted for on a percentage of completion basis.
Total operating expenses were $4.8 million in the fourth quarter of 2007, including $0.9 million of non-cash equity compensation expense, compared to $4.7 million, including $2.4 million in non-cash equity expense, in the same period of the prior year. Raser’s net loss for the fourth quarter of 2007 was $4.5 million, or $0.08 loss per basic and fully diluted share, compared to a net loss for the fourth quarter of 2006 of $4.5 million, or $0.09 loss per basic and fully diluted share.
For the year ended December 31, 2007, Raser reported $320,072 in revenue as a result of progress towards completion of the ARINC subcontract compared to revenue of $122,732 for last year. Total operating expenses for the year were $16.8 million, including $4.8 million of non-cash equity expense, down from $19.4 million, including $10.6 million in non-cash equity expense, in 2006. The reported net loss for the year was $15.7 million, or $0.29 loss per basic and fully diluted share, compared to a net loss of $18.5 million, or $0.36 loss per basic and fully diluted share, in the same period last year.
The Company’s cash position as of December 31, 2007 was $5.9 million compared to $3.4 million as of December 31, 2006. Cash used in investing activities during the year was $6.7 million and the Company used $7.9 million in operating activities during the year. The majority of cash used for investing activities was for geothermal resource acquisitions and well-field development.
Highlights for 2007 and Subsequent Events:
The Company made progress in developing its geothermal assets. These activities include:
Entering into a commitment letter with Merrill Lynch setting forth general terms relating to the structuring and financing of up to 155 MW of geothermal power plants Raser intends to develop. The commitment letter includes a financing commitment to provide non-recourse project financing for the construction of a 10.5 MW geothermal power plant in Nevada. The plant, using PureCycle® geothermal technology from UTC Power, a United Technologies Corp. company, is designed to produce electrical power with zero emissions. The funding of the commitment for the Nevada plant remains subject to certain conditions. If Merrill Lynch elects to provide or arrange a financing commitment with respect to any additional projects, such financing commitment will be subject to satisfactory due diligence, the execution of a separate commitment letter relating to such project and certain other conditions.
Continued progress in developing its geothermal properties by recently initiating two additional projects, bringing Raser’s total current projects under development to seven, representing 70 -75 megawatts (MW) of power projects initiated since April, 2007.
Geothermal power projects under development now include three projects in Nevada, two in Utah, one in Oregon and one in New Mexico.
Initiated and completed drilling on a geothermal production well in Southern Utah. Preliminary results show promising water temperatures suitable for geothermal production.
Increased portfolio of geothermal interests to over 200,000 acres by signing additional leases during the year. Raser currently has 980 acres under geothermal lease agreements in Oregon in addition to the 78,000 acres of International Paper property on which Raser holds an exclusive geothermal option in Oregon and Washington, more than 100,000 acres of property in Utah, more than 32,000 acres plus additional rights to other resources in Nevada, 2,500 acres in New Mexico and 640 acres plus additional rights in California.
Completed the purchase of the geothermal assets of GeoLectric Power Company NM, LLC, which included the geothermal rights to the known and well-studied Lightning Dock geothermal resource in southwestern New Mexico.
Received certifications as Qualifying Facilities from the Federal Energy Regulatory Commission (FERC) for two additional proposed geothermal power production facilities.
Martin Petersen, Raser’s Chief Financial Officer commented, “We completed an exciting year during which we significantly expanded our portfolio of potential geothermal resources, including the strategic acquisition of Lightning Dock, began well field development on two projects and signed an important commitment letter setting forth general terms for the structuring and financing of several of the geothermal power plants we intend to develop. Our strategy is to rapidly deploy clean, renewable power plants utilizing the binary-cycle technology that allows for the generation of power from lower temperature geothermal resources compared to conventional technology. We made tremendous progress in achieving our goals during the year, setting the stage for a productive and exciting 2008. Demand for clean, renewable electric power continues to expand and we believe we have a significant competitive advantage to meet that demand with our rapid deployment strategy and modular approach.”
In Raser’s Transportation and Industrial Technology business segment completed additional, significant agreements relating to its Symetron™ family of technologies, including:
Signed agreements with a global automobile manufacturer and with FEV Engine Technology, Inc., to produce an advanced series plug-in-hybrid electric (PHEV) demonstration vehicle, incorporating Symetron™ electric motor and power electronic drive powertrain technology. The full-size demonstration SUV is targeted to achieve more than 100 mpg for the typical American driver while dramatically reducing harmful fuel emissions.
Signed a memorandum of understanding with Tecstar, LP and Wheel to Wheel, LLC, outlining their intent to work together with Raser to manufacture for fleet orders series PHEVs for utility, government, and other fleets.
Completed an agreement with Pacific Gas and Electric Company, California’s largest utility and a leader in green vehicles and energy field, for the purchase and demonstration of two series PHEV utility fleet vehicles. The vehicles are designed to achieve over 100 miles per gallon (mpg) in typical daily driving and designed to have an integrated 100 KW generator on board.
Signed a business cooperation agreement with Hyundai Heavy Industries Co., Ltd. (HHI) of South Korea, one of the world’s largest manufacturing companies and a leader in the engineering and manufacturing of AC electric motors, generators and power electronic motor drives, under which HHI will manufacture ultra-high efficiency AC induction motors, generators and drives incorporating Symetron™ technology. Raser will assist in introducing the motors, generators and drives and HHI to certain markets and applications.
Signed a license agreement with Wilson Auto Electric Ltd. Of Canada, in which Wilson will have the right to incorporate Raser’s Symetron™ technology into truck and automotive alternators.
“We are excited about the significant relationships and agreements that we completed this past year,” Said Patrick Schwartz, President of Raser Technologies. “We look forward to completing the initial PHEV full-size demonstration SUVs and demonstrating to the market our unique technology.”
About Raser Technologies
Raser (NYSE Arca: RZ) is a publicly-traded, environmentally focused technology licensing and development company operating in two business segments. Raser’s Power Systems segment is seeking to develop clean, renewable geothermal electric power plants and bottom-cycling operations, incorporating licensed heat transfer technology and Raser’s Symetron™ technology developed internally by its Transportation and Industrial Technology segment. Raser’s Transportation and Industrial Technology segment focuses on using Raser’s Symetron™ technology to improve the efficiency of electric motors and other applications. Further information on Raser may be found at: www.rasertech.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding: our beliefs about the potential for geothermal power generation on our leased properties; our belief about our ability to exploit the available geothermal resources; our beliefs about the strength and enforceability of our agreements; our beliefs about the geothermal market generally; our beliefs about our ability to utilize our technology and other available technologies to produce electric power from the available resources; our beliefs about our ability to secure, on acceptable terms, the equipment and services required to complete our power projects; our ability to attract tax equity or other financial partners for the power projects we intend to develop; our beliefs about our ability to successfully conclude contract negotiations on acceptable terms; our beliefs about the performance and market applicability of our products; our beliefs about the status and enforceability of our intellectual property; our beliefs about the strength of our existing and potential business relations in the motor industry; our beliefs about the performance capabilities of our technology; our ability to commercially license our technology; our ability to hire employees sufficient to accelerate engineering and testing; and our ability to successfully complete testing and verification of our SymetronTM technologies. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, without limitation, the competitive environment and our ability to compete in the industry; our ability to adapt our technology and third-party technology for the intended applications; our ability to secure necessary permits; the strength of our intellectual property; our ability to attract, train and retain key personnel; and such other risks as identified in our annual report on Form 10-K for the year ended December 31, 2007, as filed with the Securities and Exchange Commission, and all subsequent filings.
All forward-looking statements in this press release are based on information available to us as of the date hereof, and we undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.
RASER TECHNOLOGIES, INC. AND SUBSIDIARIES
(a development stage enterprise)
Consolidated Balance Sheets
December 31, 2007
December 31, 2006
Assets
Current assets:
Cash and cash equivalents
$
5,912,210
$
3,351,568
Restricted cash
75,000
400,000
Accounts receivable
12,200
84,900
Unbilled receivable
192,157
—
Note receivable and accrued interest
506,273
5,952,074
Other current assets
725,648
165,229
Total current assets
7,423,488
9,953,771
Unproved property and prepaid delay rentals
6,153,688
198,350
Geothermal well field development
4,750,525
—
Equipment, net
680,188
681,029
Power project equipment, net
603,814
—
Intangible assets, net
515,037
560,387
Power project development deposits
3,562,500
—
Other assets
95,213
11,910
Total assets
$
23,784,453
$
11,405,447
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
3,623,359
$
439,413
Accrued liabilities
709,617
231,400
Unearned revenues
—
24,433
Total current liabilities
4,332,976
695,246
Contingencies and commitments, (see Notes 5, 9, 10, 11)
Stockholders’ equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized; no shares issued and outstanding
—
—
Common stock, $.01 par value, 250,000,000 shares authorized, 55,923,705 and 51,389,295 shares issued and outstanding, respectively
559,237
513,893
Additional paid in capital
70,114,893
45,669,956
Accumulated deficit
(30,972,177
)
(30,972,177
)
Accumulated deficit after re-entry into development stage
(20,250,476
)
(4,501,471
)
Total stockholders’ equity
19,451,477
10,710,201
Total liabilities and stockholders’ equity
$
23,784,453
$
11,405,447
RASER TECHNOLOGIES, INC. AND SUBSIDIARIES
(a development stage enterprise)
Consolidated Statements of Operations
Year Ended December 31,
Three Month Period EndedDecember 31,
2007
2006
2007
2006
Revenue
$
320,072
$
122,732
$
117,860
$
44,717
Operating expense
Cost of sales
$
627,207
$
438,278
$
83,528
$
44,717
General and adminis-trative
$
10,135,307
$
15,050,080
$
2,781,325
$
3,667,491
Power project development
$
2,637,315
—
$
1,065,044
Research and development
$
3,390,688
$
3,893,540
$
869,078
$
942,459
Totaloperating expenses
$
16,790,517
$
19,381,898
$
4,798,975
$
4,654,667
Operating loss
($16,470,445
)
($19,259,166
)
($4,681,115
)
($4,609,950
)
Interestincome
$
752,599
$
874,831
$
155,214
$
204,569
Gain on mark-to-market of derivative associated with Series C preferred stock
—
—
Loss on the sale of securities
—
($8,512
)
Series B warrant registration costs
($31,159
)
($96,089
)
$
0
($96,089
)
Loss before income taxes
($15,749,005
)
($18,488,936
)
($4,525,901
)
($4,501,470
)
Income tax benefit (expense)
—
—
Net loss
($15,749,005
)
($18,488,936
)
($4,525,901
)
($4,501,470
)
Preferredstockdividends
—
—
Deemeddividend related to warrants issued with preferred stock and beneficial conversion feature on preferred stock
—
—
Net loss applicable to common stockholders
($15,749,005
)
($18,488,936
)
($4,525,901
)
($4,501,470
)
Loss percommon share-basic and diluted
($0.29
)
($0.36
)
($0.08
)
($0.09
)
Weighted averagecommon shares-basic and diluted
54,197,000
50,745,000
55,846,000
51,146,000