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Akoustis Reports Sixth Consecutive Quarter of Record

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Customer Activity Remains Robust with Expanding Pipelines in 5G Mobile, Wi-Fi CPE, 5G Infrastructure, Automotive, Timing Control, Semiconductor Back-End-Services, and Other MarketsCompleted Acquisition of Grinding & Dicing Services, Inc. (“GDSI”), Adding Back-End Services Business to Portfolio During the March QuarterAkoustis Began Shipping into the 5G Mobile Market in Q3 FY23, Ramping the Largest Market by Potential Revenue and Unit VolumeSubmitted Application for the Department of Defense Portion of the CHIPs ActCompany to Host Investor Update Call Today at 8:00 am ET

Charlotte, N.C., May 08, 2023 (GLOBE NEWSWIRE) — 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, announced today a 160% year-over-year increase in quarterly revenue to a record $7.4 million for the fiscal quarter ended March 31, 2023.

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 5G mobile, 5G network infrastructure, Wi-Fi 6E and Wi-Fi 7, and the defense market, the Company expects to report another quarter of record revenue in the current June quarter with a sequential increase of 10%-20%, despite the ongoing macroeconomic challenges facing the consumer electronics industry.

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 +01 201-493-6780 (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.

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Jeff Shealy, founder and CEO of Akoustis, stated, “Despite the persistent macro challenges, Akoustis was able to deliver its sixth consecutive quarter of record revenue. Our sales growth was driven by multiple factors including 5G mobile shipments to our first tier-1 customer, continued execution in our Wi-Fi business punctuated by the notable entry into the US cable carrier market, our first Wi-Fi 7 design win, and the positive integration of GDSI following its acquisition in January. Additionally, we made inroads in our other areas including defense, timing control, automotive and other markets.”

Akoustis continues to experience strong demand and a growing sales funnel for its Wi-Fi, 5G mobile, and 5G infrastructure products, as well as its new XBAW®/SAW resonator and oscillator products, and semiconductor back-end services. During the June quarter, the Company plans to ship samples of its new 5.6 GHz/6.6 GHz Wi-Fi 6E/7 XBAW® filter products to multiple customers. Akoustis continues to add new Wi-Fi design wins, many of which are expected to ramp into production in calendar 2023.

Recent Business Highlights

Started shipping 5G mobile XBAW® filters, incorporating our production released WLP technology, to our tier-1 RF component company customer to support production rampReceived order for second filter from first tier-1 5G mobile customer for expected CY24 product rampDelivered second of two 5G mobile filters to second tier-1 customer for down-selectionDelivered second iteration of initial XBAW® filter to third tier-1 mobile customerStarted production ramp with tier-1 US-based cable carrier company supporting Wi-Fi 6ESecured first Wi-Fi 7 design win from enterprise-class customerReceived order for new Wi-Fi 6E/Wi-Fi 7 XBAW® filters from new second-tier customerIntroduced new automotive C-V2X filter and began sampling to multiple customersQualified the first of two XBAW® resonators for our first timing control customerCompleted the acquisition of GDSI, a diverse, premium semiconductor back-end services business on January 1, 2023Continued DARPA direct-to-phase II (DP2) contract to advance design and manufacturing of XBAW® technology for filters and other sensorsThe Company’s XBAW® patent portfolio grew to 89 issued and licensed patents, plus 124 patents pending as of April 28, 2023

Akoustis is actively delivering volume production of its Wi-Fi 6 and 6E tandem filter solutions, shipping multiple 5G small cell XBAW® filter solutions, is delivering initial designs of its new 5G mobile filter solutions to multiple customers, and has entered the market with its new Wi-Fi 7 coexistence XBAW® filter solutions.

Given its healthy sales funnel activity, as well as ongoing interaction with customers regarding expected ramps in 5G mobile, Wi-Fi 6E and Wi-Fi 7 in calendar 2023, the Company has essentially completed its production capacity expansion increase at its New York fab to approximately 0.5 billion filters per year.

Third Fiscal Quarter Financial Performance

Akoustis Technologies, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)

  March 31,  June 30,   2023  2022 Assets      Assets:      Cash and cash equivalents $52,749  $80,485 Accounts receivable  4,247   3,793 Inventory  7,558   4,094 Other current assets  3,665   3,359 Total current assets  68,219   91,731          Property and equipment, net  57,313   51,157 Goodwill  14,530   8,051 Intangibles, net  15,889   8,994 Operating lease right-of-use asset, net  1,483   1,126 Other assets  71   279 Total Assets $157,505  $161,338          Liabilities and Stockholders’ Equity        Current Liabilities:        Accounts payable and accrued expenses $11,270  $11,204 Contingent consideration  8   855 Deferred revenue  114   286 Operating lease liability  415   313 Total current liabilities  11,807   12,658          Long-term Liabilities:        Convertible notes payable, net  43,696   43,731 Promissory notes payable  333   — Contingent consideration  —   591 Operating lease liability  1,092   811 Other long-term liabilities  117   117 Total long-term liabilities  45,239   45,250          Total Liabilities  57,046   57,908          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; 71,625,149, and 57,079,347 shares issued and outstanding on March 31, 2023, and June 30, 2022, respectively  72   57 Additional paid in capital  352,977   310,171 Accumulated deficit  (252,590)  (206,798)Total Stockholders’ Equity  100,459   103,430 Total Liabilities and Stockholders’ Equity $157,505  $161,338  

 

                        

Akoustis Technologies, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

  For the
Three Months
Ended
March 31,
2023  For the
Three Months
Ended
March 31,
2022  For the
Nine Months
Ended
March 31,
2023  For the
Nine Months
Ended
March 31,
2022 Revenue $7,356  $4,607  $18,788  $10,146                  Cost of revenue  8,472   5,370   20,200   12,821                  Gross profit (loss)  (1,116)  (763)  (1,412)  (2,675)                 Operating expenses                Research and development  7,349   8,314   25,079   25,481 General and administrative expenses  8,817   5,721   21,650   14,742 Total operating expenses  16,166   14,035   46,729   40,223                  Loss from operations  (17,282)  (14,798)  (48,141)  (42,898)                 Other (expense) income                Interest (expense) income  (510)  25   (1,955)  88 Other (expense) income  (1)  —   (10)  — Change in fair value of contingent consideration  268   (180)  1,438   (180)Change in fair value of derivative liabilities  (383)  —   456   — Total other (expense) income  (626)  (155)  (71)  (92)Net loss before income taxes $(17,908) $(14,953) $(48,212) $(42,990)                 Income Tax (expense) benefit  2,364   (128)  2,420     (70)                 Net Loss $(15,545) $(14,825) $(45,792) $(42,920)                 Net loss (income) attributable to noncontrolling interest  —   139   —   121 Net loss attributable to common stockholders $(15,545) $(14,686) $(45,792) $(42,799)                 Net loss per common share – basic and diluted $(0.23) $(0.27) $(0.75) $(0.81)                 Weighted average common shares outstanding – basic and diluted  68,195,181   55,217,220   60,925,124   53,177,679 

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 March 31, 2023, and 2022 were as follows:

 Three Months Ended March 31,
2023March 31,
2022(in thousands)GAAP operating loss $        (17,282) $       (14,798)Amortization of acquisition-related intangible assets                        659                        537 Recognition of acquisition-related promissory note                         333                            –   Gain on sale of fixed assets                      (121)                          (9)Common stock issued for services                    3,211                     2,506 Non-GAAP operating loss $       (13,200) $       (11,764)   Weighted average common shares outstanding – basic and diluted          68,195,181           55,217,220 Non-GAAP operating loss per common share – basic and diluted $            (0.19) $           (0.21)       Three Months Ended March 31,
2023March 31,
2022(in thousands)GAAP net loss $   (15,545) $   (14,825)Change in fair value of contingent consideration                      (268)                       180 Change in fair value of derivative liabilities                        383                            –   Amortization of acquisition-related intangible assets                        659                        537 Recognition of acquisition-related promissory note                        333                            –   Debt discount amortization                        131                            –   Gain on sale of fixed assets                      (121)                          (9)Tax adjustments related to acquisitions                   (2,420)                           –   Common stock issued for services                    3,211                     2,506 Non-GAAP net loss $       (13,637) $       (11,611)   Weighted average common shares outstanding – basic and diluted          68,195,181           55,217,220 Non-GAAP net loss per common share – basic and diluted $            (0.20) $           (0.21)    Nine Months Ended March 31,
2023March 31,
2022(in thousands)GAAP operating loss $       (48,140) $       (42,897)Amortization of acquisition-related intangible assets                    1,354                        537 Recognition of acquisition-related promissory note                        333                            –   Gain on sale of fixed assets                      (105)                      (204)Common stock issued for services                    7,455                     7,754    Non-GAAP operating loss $       (39,103) $       (34,810)   Weighted average common shares outstanding – basic and diluted          60,925,124           53,177,679 Non-GAAP operating loss per common share – basic and diluted $            (0.64) $           (0.65)       Nine Months Ended March 31,
2023March 31,
2022(in thousands)GAAP net loss $   (45,792) $   (42,920)Change in fair value of contingent consideration                   (1,438)                       180 Change in fair value of derivative liabilities                      (456)                           –   Amortization of acquisition-related intangible assets                    1,354                        537 Recognition of acquisition-related promissory note                        333                            –   Tax adjustments related to acquisitions                   (2,420)                           –   Gain on sale of fixed assets                      (105)                      (204)Debt discount amortization                        421                            –   Common stock issued for services                    7,455                     7,754    Non-GAAP net loss $       (40,648) $       (34,653)   Weighted average common shares outstanding – basic and diluted          60,925,124           53,177,679 Non-GAAP net loss per common share – basic and diluted $            (0.67) $           (0.65)

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 120,000 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.

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