Advent(US:ADN)2023-11-13 16:00PART I—FINANCIAL INFORMATION Item 1. Unaudited Condensed Consolidated Financial Statements The company reported significant asset and revenue declines, wider losses, and a going concern warning due to insufficient cash and funding uncertainty - Management concluded substantial doubt exists regarding the Company's ability to continue as a going concern for one year, citing insufficient cash ($3.7 million) and funding uncertainty5152 Condensed Consolidated Balance Sheets Total assets significantly decreased due to sharp reductions in cash and goodwill impairment, while total liabilities slightly decreased Condensed Consolidated Balance Sheet Highlights (in USD thousands) | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,661 | $32,869 | | Total current assets | $23,518 | $49,500 | | Goodwill | $0 | $5,742 | | Intangibles, net | $1,789 | $6,062 | | Total assets | $55,397 | $89,588 | | Liabilities & Equity | | | | Total current liabilities | $12,815 | $13,666 | | Total liabilities | $22,815 | $25,440 | | Total stockholders' equity | $32,582 | $64,148 | Condensed Consolidated Statements of Operations Revenue declined significantly, leading to a wider gross loss and a substantial increase in net loss, exacerbated by impairment charges Consolidated Statements of Operations Summary (in USD thousands) | Metric | Q3 2023 (Unaudited) | Q3 2022 (Unaudited) | 9 Months 2023 (Unaudited) | 9 Months 2022 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,264 | $2,399 | $3,353 | $5,880 | | Gross loss | $(1,192) | $60 | $(2,492) | $(246) | | Impairment losses | $0 | $0 | $(9,763) | $0 | | Operating loss | $(11,657) | $(11,092) | $(44,641) | $(35,343) | | Net loss | $(11,846) | $(11,468) | $(45,665) | $(26,712) | | Basic loss per share | $(0.20) | $(0.22) | $(0.83) | $(0.52) | Condensed Consolidated Statements of Cash Flows Operating cash flow showed a significant burn, with increased cash used in investing activities, partially offset by financing activities Cash Flow Summary (Nine Months Ended Sep 30, in USD thousands) | Cash Flow Activity | 2023 (Unaudited) | 2022 (Unaudited) | | :--- | :--- | :--- | | Net Cash used in Operating Activities | $(26,338) | $(32,166) | | Net Cash used in Investing Activities | $(6,345) | $(3,985) | | Net Cash provided by (used in) Financing Activities | $5,488 | $(41) | | Net decrease in cash | $(27,195) | $(36,192) | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail significant accounting policies, including goodwill and intangible asset impairments, and capital-raising agreements - In Q2 2023, impairment testing resulted in a full impairment of goodwill ($5.7 million) and additional impairment charges on intangible assets totaling $3.7 million9799100 - The company established two financing facilities: a $50 million equity purchase agreement with Lincoln Park Capital and a $50 million At The Market (ATM) offering agreement; $5.5 million net proceeds raised from Lincoln Park as of September 30, 2023129137138 - The company is involved in an arbitration proceeding with F.E.R. fischer Edelstahlrohre GmbH, asserting a claim of approximately €4.5 million related to the 2021 acquisition of Serenergy and FES170 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses significant revenue decline, key business developments, and capital-raising efforts, reiterating going concern risk - The EU ratified the Green HiPo project, making up to €782.1 million in funding available over six years for HT-PEM fuel cells and electrolysers in Greece18952 - Recent strategic collaborations include projects with Airbus for aviation fuel cells, Hyundai for Ion Pair™ MEA, and Siemens for maritime fuel cell solutions190202208 - The company secured a new $2.2 million contract with the U.S. Department of Defense to optimize its Honey Badger 50™ portable fuel cell system216 Reconciliation of Net Loss to Adjusted EBITDA (in USD millions) | Metric | Q3 2023 (Unaudited) | Q3 2022 (Unaudited) | 9 Months 2023 (Unaudited) | 9 Months 2022 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(11.85) | $(11.47) | $(45.67) | $(26.71) | | EBITDA | $(10.79) | $(10.96) | $(41.67) | $(24.85) | | Net change in warrant liability | $0.13 | $0.91 | $(0.36) | $(7.25) | | Impairment losses | $0.00 | $0.00 | $9.76 | $0.00 | | Adjusted EBITDA | $(10.66) | $(10.05) | $(32.27) | $(32.10) | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces limited interest rate and inflation risk but is exposed to unhedged foreign exchange risk from international operations - The company's primary market risks are related to foreign exchange fluctuations (EUR, DKK, PHP), with no current hedging activities308 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal control over financial reporting - As of September 30, 2023, the company's management concluded that its disclosure controls and procedures were effective309 PART II—OTHER INFORMATION Item 1. Legal Proceedings The company reports one material legal proceeding: an arbitration claim of approximately €4.5 million related to a 2021 acquisition - The company is facing an arbitration claim for approximately €4.5 million from F.E.R. fischer Edelstahlrohre GmbH concerning the 2021 acquisition of Serenergy and FES312 Item 1A. Risk Factors The company highlights significant risk regarding non-compliance with Nasdaq's minimum bid price requirement, potentially leading to delisting - The company received a Nasdaq notice on May 24, 2023, for failing to meet the $1.00 minimum bid price, with a compliance deadline of November 20, 2023314 - Failure to regain compliance and delisting from Nasdaq would adversely affect stock liquidity, capital raising, and investor confidence317 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported for the period Item 5. Other Information No other information was reported under this item Item 6. Exhibits The report lists several exhibits filed, including financing agreements and officer certifications