ASTROTECH Corp
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 14, 2025
ASTC$4.23+6.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001437749-24-034674
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001437749-25-003833
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 61 previous paragraphs and 72 current paragraphs.
45 unchanged; 15 reworded; 8 added; 1 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
On January 14, 2025, our wholly owned subsidiary, 1st Detect Corporation, issued a press release announcing that it has been awarded research and development contract 70RSAT24CB0000015 with the U.S. Department of Homeland Security (“DHS”) to research, develop and mature the TRACER 1000 for DHS next generation explosives trace detection.
Current report
On January 23, 2025, we announced that 1 st Detect received a purchase order for its TRACER 1000™ explosive trace detectors (ETDs) from Intuitive Research and Technology Corporation a TSA contractor. The purchase order is valued at $429 thousand and should be recognized as revenue during fiscal year 2025.
Current report
In October 2020, we entered into a Joint Development Agreement with The Cleveland Clinic Foundation (“CCF JDA”) to develop a rapid breath test for coronavirus infection or related indicators using BreathTech’s license for the AMS Technology and collection of data through a clinical study. Amendments to the CCF JDA extended the expiration date to April 30, 2025.
Current report
In conjunction with the CCF JDA, BreathTech entered into an Investigator-Initiated Study Agreement with The Cleveland Clinic Foundation (“CCF IISA”), effective March 31, 2021, to expand the application of breath analysis by collecting and studying the gaseous portion of exhaled breath for markers of lung and systemic diseases. The pilot study concluded and the CCF IISA terminated in accordance with its terms on February 7, 2025. We believe additional studies will be required to continue exploration of technologies which may provide non-invasive methods of monitoring and studying lung and systemic diseases
Current report
Six months ended December 31, 2024, compared to six months ended December 31, 2023:
Current report
Cost of Revenue– Gross profit is comprised of revenue less cost of revenue. Our costs of revenue include materials, overhead, warranty expenses, shipping, and labor. Cost of revenue decreased by $694 thousand during six months ended December 31, 2024, compared to the six months ended December 31, 2023, because of the decrease in device sales. Gross margin increased by 10% in the during six months ended December 31, 2024, compared to the six months ended December 31, 2023. The device sales in fiscal year 2025 had a higher margin compared to the device sales in fiscal year 2024. In addition, grant revenue had a minimal cost of revenue and lower costs of revenue due to a sales mix. These factors resulted in an increase in gross margin.
Current report
Income Taxes
Current report
There is a $1 thousand provision for state minimum tax expense during the six months ended December 31, 2024. There was $2 thousand provision for state minimum tax expense during the six months ended December 31, 2023.
Removed paragraphs (1)
Previous report
Income Taxes–*** ***Income tax expense had minimal change during the first quarter of fiscal year 2025, compared to the first quarter of fiscal year 2024.
Reworded paragraphs (15)
Previous wording
Since the Tracer 1000 was certified by the European Civil Aviation Conference (“ECAC”) in 2019, our customers have deployed our devices in approximately 30 locations across 14 countries throughout Europe and Asia. We are commercializing the Astrotech Mass Spectrometer Technology™ platform (“AMS Technology”) through application specific, wholly-owned subsidiaries.
Current wording
We are commercializing the Astrotech Mass Spectrometer Technology™ platform (“AMS Technology”) through application specific, wholly owned subsidiaries.
Previous wording
ATI owns and licenses the AMS Technology, the platform MS technology originally developed by 1st Detect. The AMS Technology has been designed to be inexpensive, smaller, and easier to use when compared to traditional mass spectrometers. Unlike other technologies, the AMS Technology works under ultra-high vacuum, which eliminates competing molecules, yielding higher resolution and fewer false alarms. The intellectual property includes 17 patents granted along with extensive trade secrets. With a number of diverse market opportunities for the core technology, ATI is structured to license the intellectual property for different fields of use. ATI currently licenses the AMS Technology to four wholly-owned subsidiaries of Astrotech on an exclusive basis, including to 1st Detect for use in security and detection applications, to AgLAB for use in the agriculture application, to BreathTech for use in breath analysis applications, and to Pro-Control for use in production applications.
Current wording
ATI owns and licenses the AMS Technology, the platform MS technology originally developed by 1st Detect. The AMS Technology has been designed to be inexpensive, smaller, and easier to use when compared to traditional mass spectrometers. Unlike other technologies, the AMS Technology works under ultra-high vacuum, which eliminates competing molecules, yielding higher resolution and fewer false alarms. The intellectual property includes 16 patents granted along with extensive trade secrets. With several diverse market opportunities for the core technology, ATI is structured to license the intellectual property for different fields of use. ATI currently licenses the AMS Technology to four wholly owned subsidiaries of Astrotech on an exclusive basis, including to 1st Detect for use in security and detection applications, to AgLAB for use in the agriculture application, to BreathTech for use in breath analysis applications, and to Pro-Control for use in production applications.
Previous wording
In order to sell the TRACER 1000 to airport and cargo security customers in the European Union and certain other countries, we obtained ECAC certification. The Company is currently selling the TRACER 1000 to customers who accept ECAC certification. As of September 30, 2024, the Company has deployed the TRACER 1000 in approximately 30 locations in 14 countries throughout Europe and Asia.
Current wording
We obtained European Civil Aviation Conference (“ECAC”) certification in 2019 which allows us to sell the TRACER 1000 to airport and cargo security customers in the European Union and certain other countries. The Company is currently selling the TRACER 1000 to customers who accept ECAC certification. As of December 31, 2024, the Company has deployed the TRACER 1000 in approximately 30 locations in 14 countries throughout Europe and Asia.
Previous wording
BreathTech, an exclusive licensee of ATI for use in breath analysis applications, is developing the BreathTest-1000™, a breath analysis tool to screen for VOC metabolites found in a person’s breath that could indicate they may have compromised condition including but not limited to a bacterial or viral infection. The Company believes that new tools to quickly identify the presence of a VOC metabolite could play an important role in detecting and containing airborne diseases.
Current wording
BreathTech, an exclusive licensee of ATI for use in breath analysis applications, is developing the BreathTest-1000™, a breath analysis tool to screen for VOC metabolites found in a person’s breath that could indicate they may have compromised condition including but not limited to a bacterial or viral infection.
Previous wording
In June 2022, the Company expanded its existing study that initially focused on COVID-19 with Cleveland Clinic to use the BreathTest-1000 to screen for a variety of diseases spanning the entire body. The project focused on detecting bloodstream infections and respiratory infections. While the Joint Development Agreement with Cleveland Clinic remains active, we believe the work to commercialize this application of the AMS Technology will require many years and significant investment due to regulatory requirements and have determined to deploy capital instead to our other business units. We are also exploring how the advancements and knowledge derived from our research on the BreathTech use case can be applied in our other existing and potential new business units.
Current wording
While the CCF JDA remains active, we believe the work to commercialize this application of the AMS Technology will require many years and significant investment due to regulatory requirements and have determined to deploy capital instead to our other subsidiaries. We are also exploring how the advancements and knowledge derived from our research on the BreathTech use case can be applied in our other existing and potential new business units.
Previous wording
Revenue – Total revenue decreased by $391 thousand during the first quarter of fiscal year 2025, compared to the first quarter of fiscal year 2024. In the first quarter of fiscal year 2025 revenue was related to ongoing consumable and recurring maintenance services of the TRACER 1000. In the first quarter of fiscal year 2024, revenue was related to the sales of our TRACER 1000 along with ongoing consumable and recurring maintenance services of the TRACER 1000. The decrease in revenue is the result of not selling devices during the first quarter of fiscal year 2025.
Current wording
Revenue – Total revenue decreased by $854 thousand during the second quarter of fiscal year 2025, compared to the second quarter of fiscal year 2024. In the second quarter of fiscal year 2025 revenue was related to sales of our TRACER 1000, a government grant and ongoing consumable and recurring maintenance services of the TRACER 1000. In the second quarter of fiscal year 2024, revenue was related to the sales of our TRACER 1000 along with ongoing consumable and recurring maintenance services of the TRACER 1000. The decrease in revenue is the result of selling fewer devices during the second quarter of fiscal year 2025 than sold in the second quarter of fiscal year 2024.
Previous wording
Cost of Revenue– Gross profit is comprised of revenue less cost of revenue. Our costs of revenue include labor, materials, overhead, shipping, and warranty expenses. Cost of revenue decreased by $217 thousand during the first quarter of fiscal year 2025, compared to the first quarter of fiscal year 2024, because of the decrease in device sales. Gross margin decreased by 17% in the first quarter of fiscal year 2025, compared to the first quarter of fiscal year 2024. The decrease in device sales resulted in a decrease in gross margin.
Current wording
Cost of Revenue– Gross profit is comprised of revenue less cost of revenue. Our costs of revenue include materials, overhead, warranty expenses, shipping, and labor. Cost of revenue decreased by $477 thousand during the second quarter of fiscal year 2025, compared to the second quarter of fiscal year 2024, because of the decrease in device sales. Gross margin increased by 11% in the second quarter of fiscal year 2025, compared to the second quarter of fiscal year 2024. The device sales in fiscal year 2025 had a higher margin compared to the device sales in fiscal year 2024 which resulted in an increase in gross margin. In addition, grant revenue had a minimal cost of revenue and lower costs of revenue due to a sales mix. These factors resulted in an increase in gross margin.
Previous wording
Operating Expenses – Operating expenses increased $119 thousand, or 3.4%, during the first quarter of fiscal year 2025, compared to the first quarter of fiscal year 2024. Significant changes to operating expenses include the following:
Current wording
Operating Expenses – Operating expenses increased $876 thousand, or 24.3%, during the second quarter of fiscal year 2025, compared to the second quarter of fiscal year 2024. Significant changes to operating expenses include the following:
Previous wording
Other Income and Expense, net– Other income and expense, net decreased $73 thousand during the first quarter of fiscal year 2025, compared to the first quarter of fiscal year 2024, due to less investments earning interest income.
Current wording
Other Income and Expense, net– Other income and expense, net decreased $115 thousand during the second quarter of fiscal year 2025, compared to the second quarter of fiscal year 2024, due to less investments earning interest income.
Previous wording
As of September 30, 2024, we held cash and cash equivalents of $6.5 million, and our working capital was approximately $29.5 million. As of June 30, 2024, we had cash and cash equivalents of $10.4 million, and our working capital was approximately $32.2 million. Cash and cash equivalents decreased $3.9 million as of September 30, 2024, compared to June 30, 2024, due to funding our continuing operating expenses.
Current wording
As of December 31, 2024, we held cash and cash equivalents of $3.2 million, and our working capital was approximately $25.5 million. As of June 30, 2024, we had cash and cash equivalents of $10.4 million, and our working capital was approximately $32.2 million. Cash and cash equivalents decreased $7.2 million as of December 31, 2024, compared to June 30, 2024, due to funding our continuing operating expenses.
Previous wording
Cash used in operating activities increased $636 thousand for the three months ended September 30, 2024, compared to the** **three months ended September 30, 2023, due to operating expenses, and increases in executive officers bonuses and other liabilities.
Current wording
Cash used in operating activities increased $1.9 million for the six months ended December 31, 2024, compared to the** **six months ended December 31, 2023, due to increased use of cash to fund operating losses and working capital.
Previous wording
Cash used in investing activities decreased $2.2 million for the three months ended September 30, 2024, compared to the** **three months ended September 30, 2023, due primarily to not purchasing short-term time deposit investments. The Company also acquired equipment in the three months ended September 30, 2024 of $0.2 million.
Current wording
Cash used in investing activities increased $2.3 million for the six months ended December 31, 2024, compared to the** **six months ended December 31, 2023, due primarily to not selling short-term time deposit investments.
Previous wording
Cash used in financing activities remained the same for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
Current wording
Cash used in financing activities was slightly lower for the six months ended December 31, 2024, compared to the six months ended December 31, 2023.
Previous wording
The Company’s effective tax rate is 0% for income tax for the three months ended September 30, 2024 and the Company expects that its effective tax rate for the full fiscal year 2025 will be 0%. Based on the weight of available evidence, including net cumulative losses and expected future losses, the Company has determined that it is more likely than not that its U.S. federal and state deferred tax assets will not be realized and therefore a full valuation allowance has been provided on the U.S. federal and state net deferred tax assets.
Current wording
The Company’s effective tax rate is 0% for income tax for the six months ended December 31, 2024, and the Company expects that its effective tax rate for the full fiscal year 2025 will be 0%. Based on the weight of available evidence, including net cumulative losses and expected future losses, the Company has determined that it is more likely than not that its U.S. federal and state deferred tax assets will not be realized and therefore a full valuation allowance has been provided on the U.S. federal and state net deferred tax assets.
Previous wording
In general, if the Company experiences a greater than 50 percentage point aggregate change in ownership over a three-year period (a Section 382 ownership change), utilization of its pre-change net operating loss (NOL) carryforwards is subject to an annual limitation under Section 382 of the Internal Revenue Code. Generally, U.S. state laws have laws similar to Internal Revenue Code Section 382. The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforward before utilization.
Current wording
In general, if the Company experiences a greater than 50 percentage point aggregate change in ownership over a three-year period (a Section 382 ownership change), utilization of its pre-change net operating loss (NOL) carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code. Generally, U.S. state laws have laws similar to Internal Revenue Code Section 382. The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforward before utilization.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Selected consolidated financial data for the six months ended December 31, 2024, and 2023 is as follows:
Current report — wording carried from elsewhere
Revenue – Total revenue decreased by $1.2 million during the six months ended December 31, 2024, compared to the six months ended December 31, 2023. In the six months ended December 31, 2024, revenue was related to sales of our TRACER 1000, a government grant and ongoing consumable and recurring maintenance services of the TRACER 1000. In the six months ended December 31, 2023, revenue was related to the sales of our TRACER 1000 along with ongoing consumable and recurring maintenance services of the TRACER 1000. The decrease in revenue is the result of selling fewer devices during fiscal year 2025 compared to fiscal year 2024.
Current report — wording carried from elsewhere
Operating Expenses – Operating expenses increased $1 million, or 14.0%, during the six months ended December 31, 2024, compared to the six months ended December 31, 2023. Significant changes to operating expenses include the following:
Current report — wording carried from elsewhere
Other Income and Expense, net– Other income and expense, net decreased $188 thousand during the six months ended December 31, 2024, compared to the six months ended December 31, 2023, due to less investments earning interest income.