Akoustis Technologies,
Inc. (NASDAQ: AKTS) (“Akoustis” or the “Company”), an
integrated device manufacturer (IDM) of patented bulk acoustic wave
(BAW) high-band RF filters for mobile and other wireless
applications, will host an investor call to provide a business
update and outlook, followed by a Q & A session this morning at
8:00 a.m. EST. The call-in numbers are 877-407-3982 (domestic) or
201-493-6780 (international). The conference call will be webcast
live on the Company’s website and will be available for playback at
the following URL: https://ir.akoustis.com/ir-calendar.
Jeff Shealy, founder and CEO of Akoustis,
commented, “The September quarter marked an important moment in our
history as a company as we successfully entered production in two
high volume commercial markets, namely, WiFi 6 and 5G small cell
network infrastructure." Mr. Shealy continued, “Despite the ongoing
COVID-19 pandemic, we achieved all of our strategic milestones for
the September quarter. We are actively delivering volume production
of our WiFi 6 tandem filter solution, ramping multiple 5G small
cell XBAW™ filter solutions and supporting numerous engagements
with our groundbreaking BAW-based WiFi 6E coexistence filters. With
our growing catalog of commercially available RF filter products
and technology aimed at large and growing markets including 5G
network infrastructure, high-band WiFi, 5G mobile devices and
advanced defense communications equipment, we expect continued
top-line growth moving forward.”
Recent Business Highlights
- Received first development order from new customer for XBAW™
filters for integration into mobile RF front end solutions
- Entered production for new tier-1 consumer focused tri-band
WiFi 6 product, which is expected to be available for purchase for
the holiday season
- Delivered multiple engineering samples to existing tier-1
enterprise WiFi 6E customer
- Announced the world’s first 6.5 GHz BAW filter for the emerging
WiFi 6E specification that covers the recently allotted
ultra-wideband 5.9 to 7.1 GHz unlicensed spectrum
- Achieved robust sampling of WiFi 6E filters to tier-1 and
tier-2 OEMs, ODMs and SoC customers
- Announced the first order for WiFi 6E 5.5 and 6.5 GHz tandem
catalog solution from enterprise-class customer
- Shipped volume order to tier-1 5G small cell network
infrastructure customer with band n77 filter solution
- Received first order from network infrastructure OEM for XBAW™
3.6 GHz CBRS filter solution
- Shipped fourth 5G small cell network infrastructure XBAW™
filter solution with tier-1 OEM with expected production ramp in
early calendar 2021
- Announced third 5G small cell network infrastructure design win
with tier-1 OEM customer
- Announced second 5G small cell network infrastructure customer
and design win expected to ramp in early calendar 2021
- Received DARPA direct to phase 2 (DP2) program to advance
design and manufacturing of XBAW™ technology
- Appointed J. Michael McGuire, former Grant Thornton CEO to the
board of directors
- Continued engagement with 5G mobile partner for evaluation in
future mobile RF products
- Further expanded Company’s product portfolio by adding 15th
design-locked RF filter solution to its product catalog
- Expanded XBAW™ patent portfolio to 33 issued and licensed
patents plus 73 patents pending as of October 19, 2020
First Fiscal Quarter Financial
Performance
For the 1st quarter ended September 30th, the
Company reported revenue of $636,000, which was an increase of 74%
as compared to the previous quarter and represented an 118%
increase in our core filter product revenue.
On a GAAP basis: Operating loss was ($10.3)
million for the September quarter, mainly driven by labor costs of
$6.3 million, depreciation of $1.0 million, and other operational
costs totaling $3.0 million. As a result, GAAP net loss per share
was ($0.31).
On a non-GAAP basis: Operating loss was ($8.3)
million, and non-GAAP net loss per share was ($0.23).
Capex spend for Q1 was $2.3 million compared to
$3.4 million in the prior quarter, mostly related to the targeted
500% capacity expansion in the Company’s NY fab. Cash used in
operating activities in Q1 was $7.9 million, compared to $4.9
million in the prior quarter. The increase of $3.0 million is
primarily due to certain fiscal year-end payments not expected to
repeat in the second quarter and increases in spend related to our
capacity expansion. The Company exited the September quarter
with $37.3 million of cash and cash equivalents, versus $44.4
million at the end of Q4.
Akoustis’ high frequency, high performance XBAW™
process and filters are experiencing growing interest as the
Company has entered production in multiple markets in calendar
2020, including 5G network infrastructure, high-band WiFi and
phased-array radar applications.
Akoustis has added 15 filters to its product
catalog including a 5.6 GHz WiFi filter, a 5.2 GHz WiFi filter, a
5.5 GHz WiFi-6E filter, a 6.5 GHz WiFi 6E filter, three small cell
5G network infrastructure filters including two Band n77 filters
and one Band n79 filter, a 3.8 GHz filter and five S-Band filters
for defense phased-array radar applications, a 3.6 GHz filter for
the CBRS 5G infrastructure market and a C-Band filter for the
unmanned aircraft systems (UAS) market. The Company is also
developing several new filters for the sub-7 GHz bands targeting 5G
mobile device, network infrastructure, WiFi CPE and defense
markets.
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Akoustis Technologies, Inc. |
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Condensed Consolidated Statements of Operations |
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(In thousands, except per share data) |
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(Unaudited) |
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For the |
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For the |
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Three |
Three |
Months |
Months |
Ended |
Ended |
September 30, |
September 30, |
2020 |
2019 |
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|
|
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|
Revenue |
$ |
636 |
|
$ |
543 |
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|
|
|
|
|
|
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Cost of
revenue |
|
1,649 |
|
|
336 |
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|
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|
|
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Gross
profit |
|
(1,013 |
) |
|
207 |
|
|
|
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Operating
expenses |
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|
|
|
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Research and development |
|
6,380 |
|
|
5,079 |
|
General and administrative expenses |
|
2,927 |
|
|
2,801 |
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Total operating expenses |
|
9,307 |
|
|
7,880 |
|
|
|
|
|
|
|
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Loss from
operations |
|
(10,320 |
) |
|
(7,673 |
) |
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|
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Other
(expense) income |
|
|
|
|
|
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Interest (expense) |
|
(1,431 |
) |
|
(994 |
) |
Rental income |
|
— |
|
|
55 |
|
Other (expense) |
|
(1 |
) |
|
(1 |
) |
Change in fair value of contingent real estate liability |
|
— |
|
|
(18 |
) |
Change in fair value of derivative liabilities |
|
(198 |
) |
|
(344 |
) |
Total other (expense) income |
|
(1,630 |
) |
|
(1,302 |
) |
Net
loss |
$ |
(11,950 |
) |
$ |
(8,975 |
) |
|
|
|
|
|
|
|
Net loss
per common share - basic and diluted |
$ |
(0.31 |
) |
$ |
(0.30 |
) |
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Weighted
average common shares outstanding - basic and diluted |
|
38,176,702 |
|
|
30,325,185 |
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Akoustis Technologies, Inc. |
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Condensed Consolidated Balance Sheets |
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(In thousands, except share data) |
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(Unaudited) |
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September 30, |
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June 30, |
|
|
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2020 |
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|
2020 |
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Assets |
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Assets: |
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Cash and cash
equivalents |
|
$ |
37,189 |
|
|
$ |
44,308 |
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Accounts
receivable, net |
|
|
346 |
|
|
|
351 |
|
Inventory,
net |
|
|
236 |
|
|
|
136 |
|
Other current
assets |
|
|
1,513 |
|
|
|
1,408 |
|
Total
current assets |
|
|
39,284 |
|
|
|
46,203 |
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Property and
equipment, net |
|
|
23,458 |
|
|
|
23,605 |
|
|
|
|
|
|
|
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Intangibles,
net |
|
|
577 |
|
|
|
544 |
|
|
|
|
|
|
|
|
|
|
Operating
lease right-of-use asset, net |
|
|
645 |
|
|
|
699 |
|
Restricted
cash |
|
|
100 |
|
|
|
100 |
|
Other
assets |
|
|
282 |
|
|
|
282 |
|
Total
Assets |
|
$ |
64,346 |
|
|
$ |
71,433 |
|
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Liabilities and Stockholders’ Equity |
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Current
Liabilities: |
|
|
|
|
|
|
|
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Accounts
payable and accrued expenses |
|
$ |
3,749 |
|
|
$ |
5,899 |
|
Deferred
revenue |
|
|
190 |
|
|
|
— |
|
Operating
lease liability - current |
|
|
241 |
|
|
|
231 |
|
Total
current liabilities |
|
|
4,180 |
|
|
|
6,130 |
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|
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Long-term
Liabilities: |
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|
|
|
|
|
|
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Convertible
notes payable, net |
|
|
22,858 |
|
|
|
21,628 |
|
Operating
lease liability - non-current |
|
|
408 |
|
|
|
472 |
|
Loans
payable |
|
|
1,598 |
|
|
|
1,591 |
|
Other
long-term liabilities |
|
|
117 |
|
|
|
117 |
|
Total
long-term liabilities |
|
|
24,981 |
|
|
|
23,808 |
|
|
|
|
|
|
|
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Total
Liabilities |
|
|
29,161 |
|
|
|
29,938 |
|
|
|
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Stockholders’ Equity |
|
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Preferred stock, par value $0.001: 5,000,000 shares authorized;
none issued and outstanding |
|
|
— |
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Common stock, $0.001 par value; 100,000,000 shares authorized;
38,582,189 and 37,990,380 shares issued and outstanding at
September 30, 2020 and June 30, 2020, respectively |
|
|
39 |
|
|
|
38 |
|
Additional
paid in capital |
|
|
150,711 |
|
|
|
145,072 |
|
Accumulated
deficit |
|
|
(115,565 |
) |
|
|
(103,615 |
) |
Total
Stockholders’ Equity |
|
|
35,185 |
|
|
|
41,495 |
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Total
Liabilities and Stockholders’ Equity |
|
$ |
64,346 |
|
|
$ |
71,433 |
|
Non-GAAP Measures
We regularly review a number of metrics,
including Non-GAAP Operating Loss and Non-GAAP Net Loss, which are
not financial measures calculated in accordance with generally
accepted accounting principles in the United States (“GAAP”).
Non-GAAP Operating Loss represents operating loss before common
stock issued for services. Non-GAAP Net Loss represents net
loss before change in fair value of contingent real estate
liability, change in fair value of derivative liabilities, debt
discount amortization and common stock issued for
services. The Company believes these non-GAAP measures provide
useful information to management, investors and financial analysts
regarding certain financial and business trends relating to the
Company’s financial condition and results of operations. We use
these non-GAAP measures to evaluate our business, measure our
performance, identify trends affecting our business, formulate
financial projections and make strategic decisions.
Non-GAAP measures should not be considered a
substitute for, or superior to, financial measures calculated in
accordance with GAAP. These non-GAAP measures exclude significant
expenses that are required by GAAP to be recorded in the Company's
financial statements and are subject to inherent limitations.
Non-GAAP Operating Loss and Non-GAAP Net Loss
for the three months ending September 30, 2020 and 2019 were as
follows:
Akoustis Technologies, Inc. |
Unaudited Reconciliations of Non-GAAP Financial
Measures |
|
|
|
|
Three Months Ended |
|
September 30, 2020 |
September 30, 2019 |
(in thousands) |
GAAP operating loss |
$
(10,320) |
$
(7,673) |
Common stock issued for
services |
2,027 |
1,703 |
Non-GAAP operating loss |
$
(8,293) |
$
(5,970) |
|
|
|
|
|
|
|
Three Months Ended |
|
September 30, 2020 |
September 30, 2019 |
(in thousands) |
GAAP net loss |
$
(11,950) |
$
(8,975) |
Change in fair value of
contingent real estate liability |
- |
18 |
Change in fair value of
derivative liabilities |
198 |
344 |
Debt discount
amortization |
1,032 |
711 |
Common stock issued for
services |
2,027 |
1,703 |
Non-GAAP net loss |
$
(8,693) |
$
(6,199) |
|
|
|
Weighted
average common shares outstanding - basic and diluted |
38,176,702 |
30,325,185 |
Non-GAAP net
loss per common share - basic and diluted |
$
(0.23) |
$
(0.20) |
About Akoustis Technologies,
Inc.
Akoustis® (http://www.akoustis.com/) is a
high-tech BAW RF filter solutions company that is pioneering
next-generation materials science and MEMS wafer manufacturing
to address the market requirements for improved RF filters -
targeting higher bandwidth, higher operating frequencies and higher
output power compared to incumbent polycrystalline BAW
technology deployed today. The Company utilizes its proprietary
XBAW™ manufacturing process to produce bulk acoustic wave RF
filters for mobile and other wireless markets, which
facilitate signal acquisition and accelerate band performance
between the antenna and digital back end. Superior performance is
driven by the significant advances of high-purity,
single-crystal and associated piezoelectric materials and the
resonator-filter process technology which drives electro-mechanical
coupling and translates to wide filter bandwidth.
Akoustis plans to service the fast growing
multi-billion-dollar RF filter market using its integrated
device manufacturer (IDM) business model. The Company owns and
operates a 120,000 sq. ft. ISO-9001:2015
certified commercial wafer-manufacturing facility located in
Canandaigua, NY, which includes a class 100 / class 1000 cleanroom
facility - tooled for 150-mm diameter wafers - for the
design, development, fabrication and packaging of RF filters, MEMS
and other semiconductor devices. Akoustis Technologies,
Inc. is headquartered in the Piedmont technology
corridor near Charlotte, North Carolina.
Forward-Looking Statements
This document includes “forward-looking
statements” within the meaning of Section 27A of the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, as
amended, that are intended to be covered by the “safe harbor”
created by those sections. These forward-looking statements
include, but are not limited to, statements about our estimates,
expectations, beliefs, intentions, plans or strategies for the
future (including our possible future results of operations,
business strategies, competitive position, potential growth
opportunities, potential market opportunities and the effects of
competition), and the assumptions underlying such statements.
Forward-looking statements include all statements that are not
historical facts and typically are identified by use of terms such
as "may," “might,” “would,” "will," "should," "could," “project,”
"expect," "plan," “strategy,” "anticipate," “attempt,” “develop,”
“help,” "believe," "estimate," "predict," “intend,” “forecast,”
“seek,” "potential," "continue," “future,” and similar words
(including the negative of any of the foregoing), although some
forward-looking statements are expressed differently.
Forward-looking statements are neither historical facts nor
assurances of future results, performance, events or circumstances.
Instead, these forward-looking statements are based on
management’s current beliefs, expectations and assumptions and are
subject to risks and uncertainties. Factors that could cause
actual results to differ materially from those currently
anticipated include, without limitation, risks relating to our
ability to obtain adequate financing and sustain our status as a
going concern; our limited operating history; the results of our
research and development activities, including uncertainties
relating to semiconductor process manufacturing; the development of
our XBAWTM technology and products presently under development and
the anticipated timing of such development; our ability to protect
our intellectual property rights that are valuable to our business,
including patent and other intellectual property rights; our
reliance on third parties to complete certain processes in
connection with the manufacture of our products; product quality
and defects; existing or increased competition; our ability to
successfully manufacture, market and sell products based on our
technologies; the ability to achieve qualification of our products
for commercial manufacturing in a timely manner and the size and
growth of the potential markets for any products so qualified; our
ability to successfully scale our New York wafer fabrication
facility and related operations while maintaining quality control
and assurance and avoiding delays in output; the rate and degree of
market acceptance of any of our products; our ability to achieve
design wins from current and future customers; contracting with
customers and other parties with greater bargaining power and
agreeing to terms and conditions that may adversely affect our
business; risks related to doing business in foreign countries; any
security breaches or other disruptions compromising our proprietary
information and exposing us to liability; our ability to raise
funding to support operations and the continued development and
qualification of our products and the technologies underlying them;
our ability to service our outstanding indebtedness represented by
our $25.0 million principal amount of senior convertible notes due
in 2023; and the impact of a pandemic or epidemic or a natural
disaster, including the COVID-19 pandemic, on our operations,
financial condition and the worldwide economy, including its impact
on our ability to access the capital markets; our ability to
maintain effective internal control over financial reporting; and
our ability to obtain and maintain the Trusted Foundry
accreditation of our New York wafer fabrication facility. These and
other risks and uncertainties are described in more detail in the
Risk Factors and Management’s Discussion and Analysis of Financial
Condition and Results of Operations sections of the Company’s most
recent Annual Report on Form 10-K and in subsequently filed
Quarterly Reports on Form 10-Q. Considering these risks,
uncertainties and assumptions, the forward-looking statements
regarding future events and circumstances discussed in this
document may not occur, and actual results could differ materially
and adversely from those anticipated or implied in the
forward-looking statements. You should not rely upon
forward-looking statements as predictions of future events. The
forward-looking statements included in this document speak only as
of the date hereof and, except as required by law, we undertake no
obligation to update publicly or privately any forward-looking
statements, whether written or oral, for any reason after the date
of this document to conform these statements to new information,
actual results or to changes in our expectations.
Contact:
COMPANY:
Tom Sepenzis
Akoustis Technologies
VP of Corporate Development & IR
(980) 689-4961
tsepenzis@akoustis.com
The Del Mar Consulting Group, Inc.
Robert B. Prag, President
(858) 794-9500
bprag@delmarconsulting.com
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