HOUSTON, Aug. 11 - Particle Drilling Technologies, Inc. (Nasdaq: PDRT) today announced financial results for the third fiscal quarter ended June 30, 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 and year to date results:
Three Months Ended Nine Months Ended
June 30, June 30,
2005 2004 2005 2004
Revenues $ --- $ --- $ --- $ ---
Gross profit --- --- --- ---
Loss from operations (1,590,884) (1,244,413) (3,695,274) (2,471,116)
Net loss (1,506,640) (1,254,643) (3,549,115) (2,488,808)
Net loss per share
- basic and diluted $ (0.06) $ (0.10) $ (0.17) $ (0.21)
The Company's interim President and Chief Executive Officer, John Schiller, commented, "Our Company achieved several milestones during the third quarter, including completing the registration process of approximately 14 million shares of our common stock and successfully moving our common stock listing to the NASDAQ SmallCap Market. We also continued to make progress toward the commercial development of the patented PID technology."
The Company successfully completed in June the second phase of a two phase test on the patented PID bit at the TerraTek Drilling Research Laboratory in Salt Lake City. In July, the Company also completed a two week test program at the GTI Catoosa facility outside of Tulsa, Oklahoma. At the Catoosa facility, Particle Drilling Technologies was able to run the PID system in an actual well, as well as test and refine the operating procedures and processes to better prepare for actual fieldwork. Overall, the Company is pleased with the PID system's drilling performance and identified areas for operational improvement. Particle Drilling Technologies intends to continue to refine the system and develop operational protocols that should allow the Company to move the system reliably into the commercial market.
The Company will hold a conference call at 10:00 a.m. Eastern time on Friday, August 12, 2005, to discuss its quarterly results and to provide an operational update. To participate in the call, dial 303-205-0033 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 http://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 August 19, 2005 and may be accessed by calling 303-590-3000 and using the pass code 11036956.
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
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
2005 2004 2005 2004
Revenues $ --- $ --- $ --- $ ---
Operating expenses:
Research and
development 731,054 152,444 1,721,457 276,865
General and
administrative 859,830 1,091,969 1,973,817 2,194,251
Total operating
expenses 1,590,884 1,244,413 3,695,274 2,471,116
Loss from
operations (1,590,884) (1,244,413) (3,695,274) (2,471,116)
Other income
(expenses)
Interest income 80,725 --- 126,102 ---
Rental income 3,880 --- 3,880 ---
Gain on debt
extinguishment --- --- 26,990 ---
Interest expense (361) (10,230) (10,813) (17,692)
Total other income
(expenses) 84,244 (10,230) 146,159 (17,692)
Net loss $(1,506,640) $(1,254,643) $(3,549,115) $(2,488,808)
Net loss per common
share, basic and
diluted $ (0.06) $ (0.10) $ (0.17) $ (0.21)
Weighted average number
of common shares
outstanding, basic
and diluted 24,312,819 12,563,072 21,385,891 11,808,867
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2005 2004
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $11,786,046 $ 20,363
Accounts receivable - related party 9,316 ---
Prepaid expenses 89,929 110,535
Total current assets 11,885,291 130,898
Property, plant & equipment, net 1,244,745 451,825
Intangibles, net 980,435 982,612
Other assets 391,089 5,250
Total assets $14,501,560 $1,570,585
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 326,829 $ 864,177
Short-term notes payable 40,000 340,304
Current portion of long-term debt 10,566 10,891
Accrued expenses 225,918 216,553
Total current liabilities 603,313 1,431,925
Long-term debt 12,187 20,201
Commitments and Contingencies
Stockholders' equity:
Common stock, $.001 par value,
100,000,000 shares authorized,
27,393,094 issued and 24,393,094
outstanding at June 30, 2005,
and 18,095,447 issued and outstanding
at September 30, 2004 27,393 18,095
Additional paid-in capital 22,781,566 3,974,148
Treasury stock at cost, 3,000,000
shares and 0 shares
at June 30, 2005 and September 30,
2004, respectively (1,500,000) ---
Deficit accumulated during the
development stage (7,422,899) (3,873,784)
Total stockholders' equity 13,886,060 118,459
Total liabilities and stockholders'
equity $14,501,560 $1,570,585
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended June 30,
2005 2004
Cash flows from operating activities:
Net loss $(3,549,115) $(2,488,808)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Gain on debt extinguishment (26,990) ---
Depreciation and amortization expense 244,598 90,427
Short-term note issued for services --- 44,000
Common stock issued for services (66,500) 968,000
Warrants issued for services 57,999 5,830
Stock-based employee compensation 177,550 50,814
Changes in operating assets and
liabilities:
Increase in accounts receivable --- (6,410)
Increase in accounts receivable
- related party (9,316) ---
(Increase) decrease in prepaid
expenses 20,606 ---
Decrease in other current assets --- 7,500
Increase (decrease) in accounts
payable (516,868) 133,250
Increase (decrease) in accrued
liabilities 9,365 (10,261)
Net cash used in operating activities (3,658,671) (1,205,658)
Cash flows from investing activities:
Payments to purchase property and
equipment (999,651) (1,983)
Proceeds from sale of property and
equipment --- 6,982
Payments to purchase intangibles (35,690) (154,192)
Payments to purchase other assets (385,839) ---
Payments issued for note receivable --- (24,447)
Payments issued for note receivable
- related party --- (56,783)
Net cash used in investing activities (1,421,180) (230,423)
Cash flows from financing activities:
Proceeds from issuance of common
stock 18,647,666 1,028,697
Purchases of treasury stock (1,500,000) ---
Proceeds from issuance of convertible
notes --- 553,500
Repayments of notes payable (302,132) (123,013)
Proceeds from borrowings under loan
agreements - related parties --- ---
Repayment of borrowings under loan
agreements - related parties --- (23,195)
Net cash provided by financing
activities 16,845,534 1,435,989
Net increase in cash and cash
equivalents 11,765,683 (92)
Cash and cash equivalents - beginning
of period 20,363 3,502
Cash and cash equivalents - end of
period $11,786,046 $ 3,410
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
