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, today announced first fiscal quarter results
for the period ended September 30, 2023. Revenue was up 26%
year-over-year to $7.0 million, in line with the Company’s
guidance.
Based on hundreds of active customers, robust
activity in the sales and design win pipelines, and the
semiconductor services business, as well as new product
introductions in Wi-Fi 6E and Wi-Fi 7 and 5G infrastructure the
Company expects, as previously guided, to report the December
quarter to be flat. Looking ahead, the Company expects return to
record revenue in the March quarter of up 18 to 25% in the $8.3 to
$8.8 million range.
Over the past several months we have undertaken
significant expense reductions and cost saving measures that we
estimate will reduce our operating cash flow burn rate below $8
million for the December quarter. Given the top-line projections,
the Chips ITC refund, and a full quarter of cost savings, we
currently expect operating cash burn to be below $6 million in the
March quarter with operating cashflow breakeven less than one year
away.
Jeff Shealy, founder and CEO of Akoustis,
stated, “Maintaining strategic focus, Akoustis persists in driving
advancements within the Wi-Fi AP, 5G Infrastructure, and Automotive
sectors. Our sales growth is being driven by multiple factors
including Wi-Fi 7 design wins with Tier-1 and Tier-2 consumer
equipment manufacturers, XBAW® foundry orders in the 5G mobile and
defense markets, and the introduction of Akoustis’ latest
single-crystal piezoelectric nanomaterials and XP3F technology to
extend XBAW® to frequencies up to 18 GHz.” Mr. Shealy
continued, “While the Company continues to drive robust pipeline
activity especially in the Wi-Fi space, we have undertaken
significant internal expense reductions and cost saving measures
that we estimate will reduce our operating expenses annually up to
$14 million and in turn extend our cash runway to operating
cashflow breakeven.”
Recent Business
Highlights
- Received two Wi-Fi 7 4x4 MU-MIMO
filter design wins from Tier-1 & 2 consumer Wi-Fi OEMs with
expected production ramp in March quarter of calendar 2024
- Received a Wi-Fi 6E 2x2 MU-MIMO filter
design win from Tier-2 Wi-Fi OEM with expected production ramp in
March quarter of calendar 2024
- Secured a design win for XBAW® RF
filters from Tier-2 network infrastructure OEM for mMIMO base
station with expected production ramp in second quarter of calendar
year 2024
- Signed multi-million-dollar DARPA
phase II COFFEE contract to advance development of high-frequency
XBAW® and XP3F technology
- Deployed new, advanced, single-crystal
AIScN XBAW® technology and started sampling new filter with Tier-1
Wi-Fi 7 enterprise customer
- Started production ramp with
international engineering and technology company supplying timing
products for an electric water metering application
- Introduced new Wi-Fi 6E/Wi-Fi 7 BAW
filter and began sampling to multiple customers
- Shipped two new BAW filters using
XBAW® foundry process to 5G mobile and Wi-Fi RF front-end
customer
- Accepted new foundry purchase order
for final iteration of three XBAW® designs for Tier-2 5G mobile and
Wi-Fi RF front-end customer for release in first half calendar year
2024
- Received new purchase order as a
foundry supplier supporting new DARPA contract for timing control
applications in September quarter and expect additional shipments
throughout fiscal year 2024.
- The Company’s XBAW® patent portfolio
grew to 105 issued and licensed patents, plus 107 patents pending
as of October 31, 2023
Akoustis will host an investor call to provide a
business update and outlook, followed by a Q & A session, this
morning at 8:00 am ET. The call-in numbers are 877-407-3982
(domestic) and 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.
Akoustis maintains its momentum with robust
demand and an expanding sales pipeline for its XBAW® filter
products, in addition to its new XBAW®/SAW resonator and oscillator
products, and semiconductor back-end services. The company
continues to secure new Wi-Fi design wins in its target markets
including Wi-Fi, 5G Infrastructure, and Automotive, many of which
are slated to ramp into production in the coming months.
First Fiscal Quarter Financial
Performance
Akoustis Technologies,
Inc.Condensed Consolidated Balance Sheets (In
thousands, except share data) (Unaudited)
|
|
September 30, |
|
|
June 30, |
|
|
|
2023 |
|
|
2023 |
|
Assets |
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
25,787 |
|
|
$ |
43,104 |
|
Accounts receivable, net |
|
|
3,942 |
|
|
|
4,753 |
|
Inventory |
|
|
6,182 |
|
|
|
7,548 |
|
Other current assets |
|
|
2,672 |
|
|
|
4,440 |
|
Total current assets |
|
|
38,583 |
|
|
|
59,845 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
58,140 |
|
|
|
57,826 |
|
Goodwill |
|
|
14,559 |
|
|
|
14,559 |
|
Intangibles, net |
|
|
14,531 |
|
|
|
15,241 |
|
Operating lease right-of-use asset, net |
|
|
1,261 |
|
|
|
1,374 |
|
Other assets |
|
|
73 |
|
|
|
72 |
|
Total Assets |
|
$ |
127,147 |
|
|
$ |
148,917 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
15,124 |
|
|
$ |
17,027 |
|
Deferred revenue |
|
|
312 |
|
|
|
105 |
|
Operating lease liability |
|
|
460 |
|
|
|
439 |
|
Total current liabilities |
|
|
15,896 |
|
|
|
17,571 |
|
|
|
|
|
|
|
|
|
|
Long-term Liabilities: |
|
|
|
|
|
|
|
|
Convertible notes payable, net |
|
|
41,488 |
|
|
|
43,347 |
|
Operating lease liability |
|
|
854 |
|
|
|
976 |
|
Promissory note payable |
|
|
1,000 |
|
|
|
667 |
|
Other long-term liabilities |
|
|
117 |
|
|
|
117 |
|
Total long-term liabilities |
|
|
43,459 |
|
|
|
45,107 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
59,355 |
|
|
|
62,678 |
|
Commitments and Contingencies (Note 14) |
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Preferred stock, par value $0.001: 5,000,000 shares authorized;
none issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par value; 125,000,000 shares authorized
(175,000,000 as of 11/2/23); 72,463,465, and 72,154,647 shares
issued and outstanding at September 30, 2023 and June 30, 2023,
respectively |
|
|
72 |
|
|
|
72 |
|
Additional paid in capital |
|
|
358,405 |
|
|
|
356,522 |
|
Accumulated deficit |
|
|
(290,685 |
) |
|
|
(270,355 |
) |
Total Stockholders’ Equity |
|
|
67,792 |
|
|
|
86,239 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
127,147 |
|
|
$ |
148,917 |
|
Akoustis Technologies,
Inc.Condensed Consolidated Statements of
Operations(In thousands, except per share
data)(Unaudited)
|
|
For the Three Months Ended September 30,
2023 |
|
|
For the Three Months Ended September 30,
2022 |
|
Revenue |
|
$ |
7,002 |
|
|
$ |
5,566 |
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
|
8,086 |
|
|
|
6,453 |
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) |
|
|
(1,084 |
) |
|
|
(887 |
) |
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
10,346 |
|
|
|
10,097 |
|
General and administrative expenses |
|
|
10,224 |
|
|
|
6,982 |
|
Total operating
expenses |
|
|
20,570 |
|
|
|
17,079 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(21,654 |
) |
|
|
(17,966 |
) |
|
|
|
|
|
|
|
|
|
Other (expense)
income |
|
|
|
|
|
|
|
|
Interest (expense) income |
|
|
(485 |
) |
|
|
(743 |
) |
Other (expense) income |
|
|
(3 |
) |
|
|
(14 |
) |
Change in fair value of contingent consideration |
|
|
— |
|
|
|
(446 |
) |
Change in fair value of derivative liabilities |
|
|
2,014 |
|
|
|
21 |
|
Total other (expense) income |
|
|
1,526 |
|
|
|
(1,182 |
) |
Net loss before income
taxes |
|
$ |
(20,128 |
) |
|
$ |
(19,148 |
) |
|
|
|
|
|
|
|
|
|
Income Taxes |
|
|
1 |
|
|
|
(57 |
) |
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(20,129 |
) |
|
$ |
(19,091 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common
share - basic and diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.33 |
) |
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic and diluted |
|
|
72,306,689 |
|
|
|
57,154,393 |
|
The following 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. Please see reconciliations to comparable GAAP measures
below and descriptions of these non-GAAP measures under “non-GAAP
measures.”
Non-GAAP operating loss and non-GAAP net loss
for the quarters ended September 30, 2023, and 2022 were as
follows:
|
|
|
|
|
|
|
Akoustis Technologies, Inc. |
|
Unaudited Reconciliations of Non-GAAP Financial
Measures |
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2023 |
September 30, 2022 |
|
(in
thousands) |
|
GAAP operating loss |
$
(21,654) |
$
(17,966) |
|
Amortization of acquisition-related intangible assets |
348 |
348 |
|
Recognition of acquisition-related promissory note |
333 |
- |
|
Gain on sale of fixed assets |
65 |
1 |
|
Common stock issued for services |
1,884 |
2,349 |
|
Non-GAAP operating loss |
$
(19,025) |
$
(15,269) |
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted |
72,306,689 |
57,154,393 |
|
Non-GAAP operating loss per common share - basic and diluted |
$
(0.26) |
$
(0.27) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2023 |
September 30, 2022 |
|
(in
thousands) |
|
GAAP net loss |
$
(20,129) |
$
(19,091) |
|
Change in fair value of contingent consideration |
- |
446 |
|
Change in fair value of derivative liabilities |
(2,014) |
(21) |
|
Amortization of acquisition-related intangible assets |
348 |
348 |
|
Recognition of acquisition-related promissory note |
333 |
- |
|
Debt discount amortization |
155 |
143 |
|
Gain on sale of fixed assets |
65 |
1 |
|
Tax
adjustments related to acquisitions |
- |
- |
|
Common stock issued for services |
1,884 |
2,349 |
|
Non-GAAP net loss |
$
(19,358) |
$
(15,825) |
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted |
72,306,689 |
57,154,393 |
|
Non-GAAP net loss per common share - basic and diluted |
$
(0.27) |
$
(0.28) |
|
|
|
|
|
|
|
|
|
|
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, amortization of acquisition-related
intangible assets, recognition of acquisition-related promissory
note, and gain or loss on the sale of fixed assets. Non-GAAP
net loss represents net loss before change in fair value of
contingent consideration, change in fair value of derivative
liabilities, debt discount amortization, gain on extinguishment of
debt, gain or loss on disposal of fixed assets, recognition of
acquisition-related promissory note, amortization of
acquisition-related intangible assets, tax adjustments related to
acquisitions 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.
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 legacy polycrystalline BAW
technology. The Company utilizes its proprietary and patented 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 poly-crystal,
single-crystal and other high purity piezoelectric materials and
the resonator-filter process technology which enables optimal
trade-offs between critical power, frequency and bandwidth
performance specifications.
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 125,000 sq. ft. ISO-9001:2015
registered 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, each
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,
profitability, business strategies, competitive position, potential
growth opportunities, potential market opportunities and the
effects of competition), the anticipated benefits of the
acquisition of Grinding and Dicing Services, Inc., future cash flow
and forecasts of breakeven point and expectations regarding funding
under the CHIPS and Science Act, 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,” “think,” “estimate,”
“predict,” “intend,” “forecast,” “seek,” “potential,” “possible,”
“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 inability to obtain adequate
financing and sustain our status as a going concern; our limited
operating history; our inability to generate revenues or achieve
profitability; the results of our research and development
activities; our inability to achieve acceptance of our products in
the market; the possibility that the anticipated benefits from
business acquisitions (including the acquisition of Grinding and
Dicing Services, Inc.) will not be realized in full or at all or
may take longer to realize than expected; the possibility that
costs or difficulties related to the integration of acquired
businesses’ operations will be greater than expected and the
possibility of disruptions to our business during integration
efforts and strain on management time and resources; the
impact of a pandemic or epidemic or a natural disaster, including
the COVID-19 pandemic, the Russian-Ukrainian conflict and other
sources of volatility on our operations, financial condition and
the worldwide economy, including its impact on our ability to
access the capital markets; increases in prices for raw materials,
labor, and fuel caused by rising inflation; general economic
conditions, including upturns and downturns in the industry;
shortages in supplies needed to manufacture our products, or needed
by our customers to manufacture devices incorporating our products;
our limited number of patents; failure to obtain, maintain, and
enforce our intellectual property rights; claims of infringement,
misappropriation or misuse of third party intellectual property,
including the lawsuit filed by Qorvo, Inc. in October 2021, that,
regardless of merit, could result in significant expense and
negatively impact our business results; our inability to attract
and retain qualified personnel; 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; our ability to meet the
required specifications of customers and achieve qualification of
our products for commercial manufacturing in a timely manner; our
inability 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,
including China; any security breaches, cyber-attacks or other
disruptions compromising our proprietary information and exposing
us to liability; our failure to innovate or adapt to new or
emerging technologies, including in relation to our competitors;
our failure to comply with regulatory requirements; results of any
arbitration or litigation that may arise; stock volatility and
illiquidity; dilution caused by any future issuance of common stock
or securities that are convertible into or exercisable for common
stock; our failure to implement our business plans or strategies;
and our ability to maintain effective internal control over
financial reporting. 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:
Kenneth Boller
Akoustis Technologies
Chief Financial Officer
(704) 274-3598
kboller@akoustis.com
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