September 26, 2020, compared to a net loss of $4.32 per common share in the three months ended September 28, 2019. For the nine months ended September 26, 2020 our net loss totaled
$2.4 million compared to a net loss of $7.3 million for the nine months ended September 28, 2019. The net loss available to common stockholders totaled $0.97 per common share in the nine months ended September 26, 2020, compared
to $16.39 per common share in the nine months ended September 28, 2019. The per share loss in 2020 is lower due our ceased HTS wire operations, our cost reduction plan and the increased number of common shares outstanding at September 26,
2020 compared to September 28, 2019.
Liquidity and Capital Resources
Cash Flow Analysis
September 26, 2020, we had working capital of $1.6 million, including $1.8 million in cash and cash equivalents, compared to working capital of $0.4 million at December 31, 2019, which included $0.7 million in cash and
cash equivalents. We currently invest our excess cash in short-term, investment-grade, money-market instruments with maturities of three months or less.
Cash and cash equivalents increased by $1.1 million from $0.7 million, at December 31, 2019 to $1.8 million at
September 26, 2020.
Cash used in operations totaled $2.7 million in the first nine months of 2020. We used $2.4 million to
fund the cash portion of our net loss with $0.3 used in our working capital.
We had a gain of $510,000 from the sale of most of our wire
manufacturing equipment in the quarter ended March 28, 2020, with no additional sales in the three and nine months ended September 26, 2020.
We determined that certain of our patents were impaired in the quarter ended March 28, 2020 and wrote-down $134,000, with no additional
write-down in the three and nine months ended September 26, 2020.
We also determined that certain of our inventory was obsolete in
the quarter ended March 28, 2020 and wrote-down $190,000, with no additional write-down in the three and nine months ended September 26, 2020.
In the three and nine months ended September 26, 2020, 828 and 978,584, respectively, of warrants were exercised, providing us with
proceeds of $0.0 million and $2.5 million, respectively.
Contractual Obligations and Commercial Commitments
We leased all of our properties. All of our leases expired or were terminated in March 2020. We continue to rent certain properties month to
month. All of our operations were located in Austin, Texas.
We have not had other material changes outside of the ordinary course of
business in our contractual obligations as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
We made no
investments for fixed assets in the three and nine months ended September 26, 2020 and we do not expect to make capital expenditures during the remainder of 2020.
For the nine months
ended September 26, 2020, we incurred a net loss of $2.4 million and had negative cash flows from operations of $2.7 million. In the full 2019 year, we incurred a net loss of $9.2 million and had negative cash flows from
operations of $8.8 million.
On October 29, 2019, we announced that we had commenced a process to explore strategic alternatives
focused on maximizing shareholder value. Strategic alternatives to consider would include, among others, a strategic investment financing which would allow the company to pursue its current business plan to continue to commercialize the Conductus
wire platform, a business combination such as a merger with another party, or a sale of the company.
On February 26, 2020, STI, AIU
Special Merger Company, Inc., a Delaware corporation and wholly-owned subsidiary of STI (Merger Sub), and Clearday, entered into the Merger Agreement, pursuant to which, among other matters, and subject to the satisfaction or waiver of
the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Clearday, with Clearday continuing as a wholly-owned subsidiary of STI, and STI would amend its certificate to effect a reverse stock split of its shares of common
stock, par value $0.001 per share (STI Common Stock) and change its name to Clearday, Inc. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes and
has been approved by the boards of directors of STI and Clearday, respectively. There is no assurance the Merger will be completed. See Our Future Business in Note 1 to the Notes to Financial Statements in this Report for additional
material information and updates regarding the status of the Merger and the rights and obligations in the Merger Agreement.