Exhibit 99.1
| NEWS RELEASE |
| |
| |
Contacts: | J. Chris Boswell, SVP & CFO |
| Particle Drilling Technologies, Inc. |
| 713-223-3031 ext. 204 |
| | |
| | Ken Dennard, Managing Partner |
| | Jack Lascar, Partner |
| | DRG&E / 713-529-6600 |
PARTICLE DRILLING TECHNOLOGIES ANNOUNCES FIRST FISCAL QUARTER 2006 RESULTS
HOUSTON – February 1, 2006 – Particle Drilling Technologies, Inc. (NASDAQ: PDRT) today announced financial results for the first fiscal quarter ended December 31, 2005. The financial results reflect the Company’s continuing status as a development stage company generating no revenue as well as ongoing planned investment in the Particle Impact Drilling (PID) system. The following is a summary of the quarterly results:
| | Three Months Ended December 31, | |
| | 2005 | | 2004 | |
| | (Unaudited) | | (Unaudited) | |
| | | | | |
Revenues | | $ | — | | $ | — | |
Gross profit | | — | | — | |
Loss from operations | | (1,893,373 | ) | (876,193 | ) |
Net loss | | (1,784,909 | ) | (882,745 | ) |
Net loss per share - basic and diluted | | $ | (0.07 | ) | $ | (0.05 | ) |
The Company’s recently appointed President and Chief Executive Officer, Jim Terry, commented, “After just one week on the job, I can say that I am very enthusiastic about our Company’s future prospects. We continue to make progress toward the commercial development of the patented PID technology. Furthermore, we are now focused on meeting with potential clients and evaluating target areas that would be most suitable for use of the PID system with the objective of committing to a commercial trial program in the near future. Depending on the
timing of the potential customer’s drilling program, the commercial trial could begin as early as March 2006.”
The Company’s Chief Financial Officer, Chris Boswell, commented, “We are very happy to have Jim and all of his experience involved in the commercialization of the PID technology. Jim has already participated in several meetings with potential customers, many of which have dealt with Jim over the years and confirmed our belief that he is the right leader for our company.”
The Company will hold a conference call at 10:00 a.m. Eastern time on Thursday, February 2, 2006, to discuss its quarterly results and to provide an operational update. To participate in the call, dial 303-262-2131 and ask for the Particle Drilling call at least 10 minutes prior to the start time, or access it live over the Internet by logging onto the web at www.particledrilling.com, on the “Investor Relations” section of the Company’s website. To listen to the live call on the web, please visit the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.
If you cannot listen to the live webcast, an archive will be available shortly after the call for a period of 90 days on the “Investor Relations” section of the Company’s website. A telephonic replay of the conference call will be available through February 9, 2006 and may be accessed by calling 303-590-3000 and using the pass code 11052020.
Particle Drilling Technologies, Inc., headquartered in Houston, Texas, is a development stage oilfield service and technology company owning certain patents and pending patents related to the Particle Impact Drilling technology. The Company’s technology is designed to enhance the rate-of-penetration function in the drilling process, particularly in hard rock drilling environments.
Certain statements in this press release that are not historical but are forward-looking are subject to known and unknown risks and uncertainties, which may cause PDTI’s actual results in future periods to be materially different from any future performance that may be suggested in this press release. Such risks and uncertainties may include, but are not limited to, PDTI’s ability to raise equity capital, if necessary, and its ability to obtain equity financing on acceptable terms, if at all, a severe worldwide slowdown in the energy services sector, working capital constraints and other risks described in PDTI’s filings with the SEC. Further, PDTI is a development stage company that operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond PDTI’s control such as announcements by competitors and service providers.
- tables to follow –
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
| | Three Months Ended December 31, | |
| | 2005 | | 2004 | |
| | (Unaudited) | | (Unaudited) | |
| | | | | |
Revenues | | $ | — | | $ | — | |
| | | | | |
Operating expenses: | | | | | |
Research and development | | 1,180,513 | | 183,156 | |
General and administrative | | 712,860 | | 693,037 | |
| | | | | |
Total operating expenses | | 1,893,373 | | 876,193 | |
| | | | | |
Loss from operations | | (1,893,373 | ) | (876,193 | ) |
| | | | | |
Other income (expenses) | | | | | |
Interest income | | 86,041 | | — | |
Rental income - related party | | 23,282 | | — | |
Interest expense | | (859 | ) | (6,552 | ) |
| | | | | |
Total other income (expenses) | | 108,464 | | (6,552 | ) |
| | | | | |
Net loss | | $ | (1,784,909 | ) | $ | (882,745 | ) |
| | | | | |
Net loss per common share, basic and diluted | | $ | (0.07 | ) | $ | (0.05 | ) |
| | | | | |
Weighted average number of common shares outstanding, basic and diluted | | 24,296,472 | | 18,299,382 | |
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED BALANCE SHEETS
| | December 31 , | | September 30, | |
| | 2005 | | 2005 | |
| | (Unaudited) | | | |
| | | | | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 8,770,182 | | $ | 10,504,646 | |
Accounts receivable - related party | | 56,442 | | 42,330 | |
Prepaid expenses | | 200,605 | | 229,963 | |
| | | | | |
Total current assets | | 9,027,229 | | 10,776,939 | |
| | | | | |
Property, plant & equipment, net | | 1,163,976 | | 1,277,982 | |
| | | | | |
Intangibles, net | | 1,116,344 | | 1,102,403 | |
| | | | | |
Other assets | | 391,089 | | 391,089 | |
| | | | | |
Total assets | | $ | 11,698,638 | | $ | 13,548,413 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 960,208 | | $ | 1,056,733 | |
Short-term notes payable | | 62,972 | | 79,880 | |
Current portion of long-term debt | | 10,844 | | 11,597 | |
Accrued liabilities | | 286,328 | | 242,633 | |
| | | | | |
Total current liabilities | | 1,320,352 | | 1,390,843 | |
| | | | | |
Long-term debt | | 7,613 | | 9,463 | |
| | | | | |
Commitments and contingencies | | | | | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock, $.001 par value, 100,000,000 shares authorized, 27,441,472 shares issued and 24,441,472 shares outstanding at December 31, 2005 and September 30, 2005 | | 27,441 | | 27,441 | |
Additional paid-in capital | | 22,788,993 | | 22,781,518 | |
Treasury stock at cost, 3,000,000 shares at December 31, 2005 and September 30, 2005 | | (1,500,000 | ) | (1,500,000 | ) |
Deficit accumulated during the development stage | | (10,945,761 | ) | (9,160,852 | ) |
| | | | | |
Total stockholders’ equity | | 10,370,673 | | 12,148,107 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 11,698,638 | | $ | 13,548,413 | |
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | Three Months Ended December 31, | |
| | 2005 | | 2004 | |
| | (Unaudited) | | (Unaudited) | |
| | | | | |
Cash flows from operating activities: | | | | | |
Net loss | | $ | (1,784,909 | ) | $ | (882,745 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | |
Depreciation and amortization expense | | 154,571 | | 57,411 | |
Common stock issued for services | | — | | 17,500 | |
Warrants issued for services | | — | | 57,999 | |
Stock-based employee compensation | | 7,475 | | 161,800 | |
Changes in operating assets and liabilities: | | | | | |
Increase in accounts receivable - related party | | (14,112 | ) | — | |
(Increase) decrease in prepaid expenses | | 29,358 | | (83,041 | ) |
Increase (decrease) in accounts payable | | (96,525 | ) | 256,594 | |
Increase (decrease) in accrued liabilities | | 43,695 | | (18,226 | ) |
| | | | | |
Net cash used in operating activities | | (1,660,447 | ) | (432,708 | ) |
| | | | | |
Cash flows from investing activities: | | | | | |
Payments to purchase property and equipment | | (27,947 | ) | — | |
Payments to purchase intangibles | | (26,559 | ) | (6,304 | ) |
| | | | | |
Net cash used in investing activities | | (54,506 | ) | (6,304 | ) |
| | | | | |
Cash flows from financing activities: | | | | | |
Proceeds from issuance of common stock | | — | | 533,334 | |
Repayments of notes payable | | (19,511 | ) | (85,328 | ) |
| | | | | |
Net cash provided by financing activities | | (19,511 | ) | 448,006 | |
| | | | | |
Net increase in cash and cash equivalents | | (1,734,464 | ) | 8,994 | |
| | | | | |
Cash and cash equivalents - beginning of period | | 10,504,646 | | 20,363 | |
| | | | | |
Cash and cash equivalents - end of period | | $ | 8,770,182 | | $ | 29,357 | |
