EXHIBIT 99.1
IONATRON reports SECOND QUARTER 2004 FINANCIAL RESULTS
TUCSON, AZ, AUGUST 11, 2004 - Ionatron, Inc., a next generation
controlled energy technology company (OTCBB: IOTN.OB), today reported financial
results for the three and six months ended June 30, 2004.
Second Quarter 2004 Results
Revenue for the second quarter of 2004 was $1.8 million, of which over $1
million was recorded in June, and was derived from work on new and existing
contracts with agencies of the U.S. Government. Ionatron is presently working on
contracts with Department of Defense (DoD) and other Government agencies and has
a backlog of approximately $10,560,000 as of June 30, 2004. These contracts are
expected to be completed during the second half of 2004. This backlog does not
include the recent announcement by the Company of the $12.6 million that is in
the DoD 2005 budget bill to develop a Transportable Laser Induced Plasma Channel
(LIPC) Demonstration System for the U.S. Navy. There was no revenue for the
second quarter of 2003.
Net loss for the second quarter of 2004 was $1.3 million, or $0.02 per share
compared to prior-year net loss of $1.1 million or $0.02 per share.
At June 30, 2004, the Company had $6.6 million in cash, cash equivalents and
marketable securities as compared to $103,000 in cash, cash equivalents at
December 31, 2003.
Thomas Dearmin, co-founder and CEO of Ionatron, commented, "Since our merger we
have achieved significant progress during this past quarter in acquiring new
contracts for our Transportable LIPC Demonstration System. We're pleased to see
the high level of contract awards and we remain encouraged by the pipeline of
potential contracts. In addition to our solid backlog, we are gratified by the
growing support for funding by the DoD of our directed energy weapon technology.
This support is demonstrated by the $12.6 million funding line item in the
recently announced DoD 2005 budget bill. We believe there is increasing
recognition by our customers that our LIPC technology is representative of a
transformative military initiative that has the potential to address the complex
array of defense and national security issues that confront the U.S.
Government."
Recent accomplishments include:
o The signing of an agreement with Mason Technologies Inc., the operator of
the Mississippi Army Ammunitions Plant at the Stennis Space Center located
on the Gulf Coast in Mississippi. It is anticipated that the Company will
complete its move to the facility during the first half of 2005. Ionatron
is working with the Department of the Army ARMS program to secure the
approximately $2 million required to prepare the decommissioned ammo plant
for Ionatron's specific production requirements.
o The announcement that $12.6 million is in the DoD 2005 budget bill to
develop a Transportable (LIPC) Demonstration System for the U.S. Navy
(USN). Ionatron will develop the next generation LIPC system for USN
applications, building on advances achieved in performing other LIPC based
Government development contracts and performance on an existing initial $9
million U.S. Government contract for a LIPC transportable demonstrator
Ionatron is building for another Government customer.
o The successful completion of three program reviews by Government auditors.
The three largest contracts that Ionatron is currently working on were
reviewed by Government contract and program individuals over the past
month. The reviews determined Ionatron is on schedule or ahead of schedule
on all three programs.
Year-to-Date 2004 Results
Revenue for the six months ended June 30, 2004 was $2.1 million, of which over
$1 million was recorded as June revenue, and was primarily due to new contracts
and continued work on existing contracts. There was no revenue for the six
months ended June 30, 2003.
Net loss for the six months ended June 30, 2004 was $2.2 million or $0.04 per
diluted share, of which approximately $1million was related to one time charges
associated with the Company's merger expenses, as compared to a net loss of $2.0
million or $0.04 per diluted share in the comparable period in 2003.
Conference Call
As previously announced, Ionatron will host a conference call today, August 11,
2004, at 11:00 a.m. EDT. Shareholders and other interested parties can
participate in the conference call by dialing 800-599-9829 or for
international/local participants by dialing 617-847-8703 and enter participant
pass code #57265726, a few minutes before 11:00 a.m. on August 11, 2004. The
call will also be broadcast live on the Internet at www.streetevents.com and
www.fulldisclosure.com. A replay of the conference call will be available two
hours after the completion of the conference call from August 11, 2004 until
August 18, 2004 by dialing 888-286-8010 (domestic) or 617-801-6888
(international) and enter the participant pass code #94379968. The call will
also be archived for 90 days at www.streetevents.com and www.fulldisclosure.com.
ABOUT IONATRON INC.
Ionatron develops and markets Directed Energy Weapon technology
products initially for sale to the U.S. Government. The goal of the Company is
to produce products that incorporate our technology initially for specific U.S.
Government customer applications and platforms. Ionatron and the U.S. Government
have entered into several contracts for products and services as well as
Cooperative Research and Development Agreements for joint research on LIPC based
directed energy weapons. We expect to offer U.S. Government approved versions of
our products for commercial security applications in the future. During 2003 and
2002, the Company engaged in research and development and business development
activities. Ionatron has demonstrated its laser guided man-made lightning
directed energy technology in the laboratory and now has government contracts
for effects testing, compact laser source development and the delivery of a
system on a mobile platform for field demonstration and testing. We are a new
technology company working under contracts with agencies of the U.S. Government
concerned with national security that has developed and demonstrated in our
laboratory a novel internally developed directed energy weapon technology called
LIPC, our technology controls and directs electrical energy down a laser created
plasma channel to a specific target. Our business strategy is to continue
long-term development of the technology for multiple national security and
defense applications, as well as to in parallel develop, applications in other
commercial sectors. Many short-term military applications have been already
demonstrated to our customers. Our immediate plan is to manufacture
transportable demonstrators for those applications for various U.S. Government
organizations, in order to demonstrate the field utility of the technology.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995:
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Certain statements contained in this News Release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve a number of known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the company to be materially different from any
futures results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, but are not limited to: the risks of uncertainty of patent
protection; the risks of uncertainty of strategic alliances; the risk and
uncertainty of management tenure; the impact of third-party suppliers'
manufacturing constraints or difficulties; management's ability to achieve
business performance objectives, market acceptance of, and demand for, the
Company's products, and resulting revenues; development of technology and
manufacturing capabilities; impact of competitive products and pricing;
litigation and other risks detailed in the company's filings with the Securities
and Exchange Commission. The words "looking forward," "believe," "demonstrate,"
"intend," "expect," "estimate," "anticipate," "likely" and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
the statement was made. Ionatron undertakes no obligation to update any
forward-looking statements contained in this news release.
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IONATRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS
ENDED JUNE 30,
-----------------------------
2004 2003
------------ ------------
REVENUE $ 1,833,572 $ --
COST OF REVENUE 1,726,753 --
------------ ------------
GROSS PROFIT 106,819 --
OPERATING EXPENSES:
General and administrative 1,199,390 743,365
Selling and marketing 119,566 98,538
Research and development 120,133 162,116
------------ ------------
TOTAL OPERATING EXPENSES 1,439,089 1,004,019
------------ ------------
OPERATING LOSS (1,332,270) (1,004,019)
OTHER (EXPENSE) INCOME
Interest expense (43,184) (47,546)
Interest income 21,221 --
------------ ------------
TOTAL OTHER (21,963) (47,546)
------------ ------------
NET LOSS $ (1,354,233) $ (1,051,565)
============ ============0
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.02) $ (0.02)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING - BASIC AND DILUTED 69,060,586 48,452,249
============ ============
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IONATRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS
ENDED JUNE 30,
-----------------------------
2004 2003
------------ ------------
REVENUE $ 2,106,014 $ --
COST OF REVENUE 1,981,753 --
------------ ------------
GROSS PROFIT 124,261 --
OPERATING EXPENSES:
General and administrative 1,764,939 1,213,217
Selling and marketing 232,072 166,261
Research and development 300,898 583,591
------------ ------------
TOTAL OPERATING EXPENSES 2,297,909 1,963,069
------------ ------------
OPERATING LOSS (2,173,648) (1,963,069)
OTHER (EXPENSE) INCOME
Interest expense (117,700) (81,357)
Interest income 21,221 --
------------ ------------
TOTAL OTHER (96,479) (81,357)
NET LOSS $ (2,270,127) $ (2,044,426)
============ ============
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.04) $ (0.04)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING - BASIC AND DILUTED 60,138,283 48,452,249
============ ============
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IONATRON, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2004 2003
----------- -----------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,639,403 $ 103,392
Accounts receivable 686,930 73,027
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,091,324 31,427
Inventory 22,861 21,000
Receivables from stockholder 2,713 107,482
Prepaid expenses 90,544 47,905
----------- -----------
TOTAL CURRENT ASSETS 8,533,775 384,233
PROPERTY AND EQUIPMENT, NET 1,079,760 1,141,887
----------- -----------
TOTAL ASSETS $ 9,613,535 $ 1,526,120
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current portion of capital lease obligation $ 2,363 $ --
Note payable to stockholder 2,800,000 4,300,000
Accounts payable 599,506 330,696
Accrued expenses 342,042 365,208
----------- -----------
TOTAL CURRENT LIABILITIES 3,743,911 4,995,904
CAPITAL LEASE OBLIGATION 4,718 --
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stock, 1,000,000 shares authorized and unissued -- --
Common stock, $.001 par value, 100,000,000 shares authorized;
69,561,690 shares issued and outstanding at June 30, 2004 and
48,452,249 shares issued and outstanding at December 31, 2003 69,561 48,452
Additional paid-in capital 8,065,472 471,548
Accumulated deficit (2,270,127) (3,989,784)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 5,864,906 (3,469,784)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 9,613,535 $ 1,526,120
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CONTACT: Investor Relations, Kevin McGrath
Cameron Associates, 212.245.4577
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