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MTI Reports Heavy Losses In 2008; May Have To Delay Commercialization Plans

April 02, 2009 by Jeff Shepard

Media reports state that Mechanical Technology Inc.’s auditor expressed doubts about the company’s ability to continue operating. The company mentioned the auditor’s report in a filing with the Securities and Exchange Commission.

The company reported a net loss of $12.5 million for the year, compared with a net loss of $9.6 million in 2007. Product revenue was down for the year, $6.2 million compared with $9 million in 2007.

"Our auditors have included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of Dec. 31, 2008, indicating that our recurring losses from operations, net capital deficiency, and current liquidity position raise substantial doubt about our ability to continue as a going concern," MTI said in its report filed with the SEC.

Mechanical Technology had 57 employees as of March 23. Twenty five of those employees work at MTI MicroFuel Cell Systems, which is developing power packs for portable electronic devices such as cell phones and PDAs. The remaining employees work at MTI Instruments. The MTI Instruments division is the company’s profit-generator. MTI Instruments designs test instruments.

Mechanical Technology said it has invested $33 million in research and development at MTI Micro during the past three years. The company said that it has not generated any product revenue from its portable power business and has no commercial products in that business as of yet.

The company says that it has enough money to fund operations into April but, short of securing more financing, it will have to delay commercialization plans. "If we are unable to raise adequate funds, we may have to liquidate some or all of our assets or delay, reduce the scope or eliminate some or all of our research and development programs, or discontinue or portable power source business."