Last updated on April 19, 2014 at 18:42 EDT

Raser Technologies, Inc. Announces Third Quarter Financial Results

November 13, 2008

Raser Technologies, Inc. (NYSE Arca: RZ) an environmentally focused technology licensing and development Company, today announced financial results for the third quarter ended September 30, 2008 and provided an update on its progress in executing its strategic business plan.

Financial Results

Revenue for the third quarter was $30,000, compared to $49,887 for the third quarter of 2007. Revenues for the 2008 period were generated from a waste heat recovery study we completed for a customer.

Total operating expenses were $6.7 million, including $0.9 million of non-cash compensation expense, in the third quarter of 2008 compared to $3.6 million in the same period for the prior year. The operating expense increase was due primarily to the ramp up of Raser’s geothermal business activities. The Company’s net loss applicable to common stockholders was $7.4 million, or $(0.13) per basic and fully diluted share, in the third quarter of 2008 compared to a net loss of $3.4 million, or $(0.06) per basic and fully diluted share, in the third quarter of 2007.

Revenue for the first nine months ended September 30, 2008 was $166,423, compared to $202,212 in the year-ago period. Total operating expenses for the nine months were $18.8 million, including $2.6 million of non-cash compensation expense, compared to $12.0 million in the same period for the prior year. The Company’s net loss applicable to common stockholders was $20.2 million, or $(0.36) per basic and fully diluted share, compared to a net loss of $11.2 million, or $(0.21) per basic and fully diluted share, in the third quarter of 2007.

Raser’s cash position at the end of the second quarter of 2008 was $5.5 million compared to $5.9 million at December 31, 2007.

Third Quarter and Subsequent Highlights:

Raser completed major construction on its first geothermal power plant in Utah and hosted a ribbon cutting ceremony to announce the completion of major construction on November 6th. In addition, Raser continued development of its other geothermal projects and held a groundbreaking ceremony for the first commercial geothermal power plant to be built in New Mexico, in Hidalgo County. The plant is expected to come on-line in early 2009 and should generate approximately 10 megawatts (MW) of geothermal electricity.

The Company made progress in its efforts to monetize its geothermal assets and execute its business strategy, including:

 -- Completed major construction in record time frame of its 10 MW Thermo geothermal power plant near Beaver, Utah, including: -- Installed all of the first 50 geothermal generating units -- Held a ribbon cutting ceremony to mark the completion of construction of Thermo 1, the first commercial geothermal power plant to be built in Utah in more than 20 years. Senator Orrin Hatch, along with other national, state and county government officials, helped inaugurate Raser's geothermal project in a ribbon cutting ceremony and press conference that was held on November 6, 2008. -- Commissioning will take place over the next 4-6 weeks and will begin delivering power to the City of Anaheim by year end.  -- Completed financing for the Thermo plant: -- Raser received $51 million of project financing and tax equity capital under a definitive agreement. Under this arrangement, Merrill Lynch initially provided both the debt funding and the tax equity capital. The tax equity is provided in exchange for most of the tax benefits provided by the renewable energy project. The 18-year loan is non-recourse to Raser and carries an effective interest rate of approximately 9.5%. -- Prudential Capital Group, an institutional investment division of Prudential Financial, Inc., purchased the permanent debt financing of Thermo from Merrill Lynch.  -- Raser expanded its geothermal resources: -- Raser was chosen to develop, in conjunction with Indonesia Power, over 100,000 acres of geothermal resources - enough to build an estimated 300 MW of geothermal power in West Java, Indonesia's most populated island. The 412 square kilometer concession surrounds the Tangkuban Perahu volcano, approximately 15 miles north of Bandung, the capitol of the West Java Province. Bandung has over 2 million people and is the largest city in the West Java Province which has over 35 million residents. -- Raser announced that it has obtained 17 new lease agreements covering approximately 32,700 acres of geothermal, surface and other rights in Central Utah. The signing of these long-term leases increased Raser's holdings in Utah alone to over 150,000 acres.  -- Raser continued to make progress in the commercialization efforts of its Symetron family of technologies: -- Raser announced that it expects to see the PHEV full-size SUV demonstration vehicle to be unveiled in early 2009. -- Wilson successfully completed field, durability and stress testing of Raser's alternator design and is preparing their game plan to begin commercial production and sales during 2009. -- Hyundai Heavy Industries (HHI) is working with Raser to incorporate Symetron enhanced generators, motors and drives into future geothermal plants. Revenue to Raser under its agreement with HHI is anticipated by the 3rd quarter, 2009. Potential parasitic load reduction is also expected to increase geothermal plant revenue from additional electricity sales. 

Martin F. Petersen, Raser’s Chief Financial Officer, commented, “During the third quarter, Raser secured the debt and tax equity financing and subsequently completed major construction of our initial power plant in Beaver County, Utah. We also welcomed Prudential to our financing consortium for our Thermo project. We believe this shows that there continues to be strong interest in our renewable energy projects. Raser is in a unique position in the emerging geothermal industry. With strong financial and strategic partners, vast geothermal assets, modular power generating units and increasing demand for green power, we believe we can turn the promise of geothermal power into the realization of clean, renewable, and profitable energy.”

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(TM) technology developed internally by its Transportation and Industrial Technology segment. Raser’s Transportation and Industrial Technology segment focuses on extended-range plug-in-hybrid vehicle solutions and using Raser’s award-winning Symetron(TM) technology to improve the torque density and efficiency of the electric motors and drive systems used in electric and hybrid-electric vehicle powertrains and industrial applications. Further information on Raser may be found at: www.rasertech.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contain 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 preliminary drilling results; our beliefs about the potential for geothermal power generation on our leased properties and its qualification for certain federal tax credits; our beliefs about our ability to exploit the available geothermal resources; our beliefs about the expected timing relating to the developments of our geothermal power projects; our beliefs about our ability to obtain adequate development funding; our beliefs about our ability to fund the required escrow accounts; our beliefs about our ability to utilize our technology and other available technologies to produce electric power from the available resources; and our beliefs about the geothermal market in general. 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 quarterly report on Form 10-Q for the quarter ended September 30, 2008, 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) Condensed Consolidated Balance Sheets (Unaudited)  September 30, December 31, 2008          2007 ------------- -------------  Assets Current assets: Cash and cash equivalents                $  5,507,579  $  5,912,210 Restricted cash                                75,704        75,000 Accounts receivable                             5,879        12,200 Unbilled receivable                                --       192,157 Note receivable and accrued interest, net                                          143,629       506,273 Restricted short-term marketable securities (held to maturity)              4,444,782            -- Other current assets                          474,418       725,648 ------------- -------------  Total current assets                     10,651,991     7,423,488 Restricted cash                               9,715,701            -- Restricted long-term marketable securities (held to maturity)                           4,311,090            -- Land                                          1,812,358            -- Proved property, unproved property and prepaid delay rentals                        6,369,278     6,153,688 Geothermal well field development            34,868,438     4,750,525 Power project construction-in-progress       49,244,524       603,814 Equipment, net                                  638,713       680,188 Intangible assets, net                        1,431,505       515,037 Deferred financing costs, net                11,050,303            -- Power project development deposits           10,602,090     3,562,500 Other assets                                  1,093,851        95,213 ------------- -------------  Total assets                           $141,789,842  $ 23,784,453 ============= =============   Liabilities and Stockholders' (Deficit) Equity Current liabilities: Accounts payable and accrued expenses    $ 39,312,431  $  4,246,783 Short-term portion of long-term notes       3,245,402            -- Note payable                                  933,333            -- Deferred revenue                              200,000            -- ------------- -------------  Total current liabilities                  43,691,166     4,246,783 Asset retirement obligation                      60,893        86,193 Long-term 7.00% senior secured note (non- recourse)                                   25,304,950            -- Long-term 8.00% convertible senior notes     55,000,000            -- ------------- -------------  Total liabilities                       124,057,009     4,332,976 ------------- ------------- Minority interest                             4,901,070            -- ------------- ------------- Contingencies and commitments, (see Notes C, J, K and L) Stockholders' (deficit) 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, 59,011,107 and 55,923,705 shares issued and outstanding, respectively                590,111       559,237 Additional paid in capital                 83,693,741    70,114,893 Accumulated deficit                       (30,972,177)  (30,972,177) Accumulated deficit after re-entry into development stage                        (40,479,912)  (20,250,476) ------------- -------------  Total stockholders' equity                 12,831,763    19,451,477 ------------- -------------  Total liabilities and stockholders' equity                                $141,789,842  $ 23,784,453 ============= ============= 

 RASER TECHNOLOGIES, INC. AND SUBSIDIARIES (a development stage enterprise) Condensed Consolidated Statements of Operations (Unaudited)  Three months ended          Six months ended September 30,              September 30, ------------------------- --------------------------- 2008         2007         2008          2007  Revenue          $    30,000  $    49,887  $    166,423  $    202,212 ------------ ------------ ------------- -------------  Operating expense Cost of sales           --       49,887        74,112       543,679 General and administra- tive             2,447,878    1,920,526     7,562,902     7,353,982 Power project development     3,232,729      708,010     8,012,210     1,572,271 Research and development       970,925      939,839     3,134,138     2,521,610 ------------ ------------ ------------- -------------  Total operating expenses      6,651,532    3,618,262    18,783,362    11,991,542 ------------ ------------ ------------- -------------  Operating loss    (6,621,532)  (3,568,375)  (18,616,939)  (11,789,330) Interest income             94,030      195,856       265,306       597,385 Interest expense        (1,077,695)          --    (2,180,976)           -- Other                   --           --        75,775       (31,159) ------------ ------------ ------------- -------------  Loss before income taxes     (7,605,197)  (3,372,519)  (20,456,834)  (11,223,104) Income tax benefit (expense)              --           --            --            -- Minority interest          227,398           --       227,398            --  Net loss applicable to common stockholders    $(7,377,799) $(3,372,519) $(20,229,436) $(11,223,104) ============ ============ ============= =============  Loss per common share-basic and diluted         $     (0.13) $     (0.06) $      (0.36) $      (0.21) ============ ============ ============= =============  Weighted average common shares-- basic and diluted          57,785,000   55,086,000    56,646,000    53,641,000 ============ ============ ============= =============