Akoustis Technologies(AKTS) - 2021 Q4 - Annual Report

PART I Business Akoustis Technologies designs and manufactures RF filter solutions for wireless and defense applications using proprietary XBAW™ technology, operating an integrated manufacturing model - The company focuses on developing and manufacturing RF filter solutions for 5G, WiFi, and defense applications using its proprietary XBAW™ technology[17] - Akoustis operates a 120,000-square foot wafer-manufacturing facility in Canandaigua, New York, to produce its high-performance RF filter circuits[19] - As of August 19, 2021, the company's IP portfolio included 52 issued patents and 82 pending patent applications covering its XBAW™ RF filter technology[20] - The company has incurred cumulative losses of approximately $147.8 million from its inception in May 2014 through June 30, 2021, primarily due to R&D and commercialization costs[34] - Key competitors in the RF filter market include Broadcom Corporation, Murata, Qorvo, Inc., Skyworks Solutions Inc., Taiyo Yuden, and Qualcomm[68] Risk Factors The company faces significant risks including a limited operating history, persistent losses, intense competition, supply chain dependencies, and the need for substantial additional funding - The company has a limited operating history and has incurred net losses of approximately $148 million since inception, with an expectation of continued negative cash flow[89][91] - The COVID-19 pandemic poses risks to manufacturing operations, supply chain, and sales activities, potentially delaying product launches and impacting financial results[95][96][98] - The company faces intense competition from established semiconductor manufacturers with greater resources, and its success depends on keeping pace with rapid technological changes[99][122] - A substantial portion of revenue is expected to come from a small number of large customers, making the company dependent on their success and purchasing decisions[136][137] - The company's ability to protect its intellectual property is critical; as of August 19, 2021, it had 82 pending patent applications which may not result in issued patents that fully protect its technology[153] Unresolved Staff Comments The company reports that it has no unresolved staff comments - None[225] Properties The company operates from a leased headquarters in Huntersville, NC, and owns a 120,000 sq. ft. MEMS fabrication facility in Canandaigua, NY - The company leases its 22,000 sq. ft. headquarters in Huntersville, NC, and owns a 120,000 sq. ft. fabrication facility in Canandaigua, NY[226] Legal Proceedings The company is not currently aware of any material pending legal proceedings to which it is a party or that are contemplated by any governmental authority - The company is not aware of any material pending legal proceedings[227] Mine Safety Disclosures This section is not applicable to the company - Not applicable[227] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq, with 51.3 million shares outstanding as of August 20, 2021, and no history or plans for cash dividends - As of August 20, 2021, there were 51,310,014 shares of Common Stock outstanding[230] - The company has never paid cash dividends and does not intend to in the foreseeable future[231] Equity Compensation Plan Information as of June 30, 2021 | Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders - options | 2,497,577 | $6.49 | 2,570,911 | | Equity compensation plans approved by security holders – restricted stock units | 1,747,608 | $0.00 | - | | Total | 4,245,185 | | 2,570,911 | Selected Financial Data This section is not applicable as the company is a smaller reporting company - Not applicable[236] Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue increased to $6.6 million in FY2021, but net loss widened to $44.2 million due to increased operating costs, while cash improved to $88.3 million from financing activities Results of Operations (Fiscal Year Ended June 30) | Metric | 2021 (in millions) | 2020 (in millions) | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6.6 | $1.8 | +$4.8 | +267% | | Cost of Revenue | $10.6 | $2.4 | +$8.2 | +342% | | Gross Profit (Loss) | ($4.0) | ($0.6) | -$3.4 | -567% | | R&D Expenses | $24.1 | $20.5 | +$3.6 | +17% | | G&A Expenses | $13.3 | $10.9 | +$2.4 | +22% | | Net Loss | ($44.2) | ($36.1) | -$8.1 | -22% | - The company raised approximately $62.7 million in gross proceeds through its ATM Program and $21.5 million through a Registered Direct Offering during fiscal year 2021[260][261] - Cash and cash equivalents increased by $44.0 million to $88.3 million as of June 30, 2021, primarily due to financing activities[259] - Cash used in operating activities increased to $29.4 million in FY2021 from $21.3 million in FY2020, due to higher operating expenses from ramping up development and commercialization[265] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company is a smaller reporting company - Not applicable[267] Financial Statements and Supplemental Data This section presents the company's audited consolidated financial statements for FY2021 and FY2020, with an unqualified opinion from Marcum LLP - The independent auditor, Marcum LLP, provided an unqualified opinion on the consolidated financial statements[273][277] Consolidated Balance Sheet Highlights (as of June 30) | Metric | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $88,322 | $44,308 | | Total Current Assets | $93,196 | $46,203 | | Total Assets | $124,994 | $71,433 | | Total Current Liabilities | $7,265 | $6,130 | | Total Liabilities | $7,584 | $29,938 | | Total Stockholders' Equity | $117,410 | $41,495 | Consolidated Statement of Operations Highlights (Year Ended June 30) | Metric | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Revenue | $6,618 | $1,790 | | Gross profit (loss) | ($4,033) | ($624) | | Loss from operations | ($41,394) | ($32,038) | | Net loss | ($44,156) | ($36,140) | | Net loss per common share | ($1.02) | ($1.07) | Consolidated Statement of Cash Flows Highlights (Year Ended June 30) | Metric | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($29,364) | ($21,305) | | Net Cash Used in Investing Activities | ($12,491) | ($9,891) | | Net Cash Provided by Financing Activities | $85,769 | $45,450 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[411] Controls and Procedures Management concluded that both disclosure controls and internal control over financial reporting were effective as of June 30, 2021, with no material changes reported - Management concluded that as of June 30, 2021, the company's disclosure controls and procedures were effective[413] - Management concluded that the company's internal control over financial reporting was effective as of June 30, 2021[415] Other Information The company reports no other information - None[416] PART III Directors, Executive Officers and Corporate Governance The information required for this item is incorporated by reference from the company's Proxy Statement on Schedule 14A for its 2021 annual meeting of stockholders - Information is incorporated by reference to the company's 2021 Proxy Statement[418] Executive Compensation The information required for this item is incorporated by reference from the company's Proxy Statement on Schedule 14A for its 2021 annual meeting of stockholders - Information is incorporated by reference to the company's 2021 Proxy Statement[419] Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters The information required for this item is incorporated by reference from the company's Proxy Statement on Schedule 14A for its 2021 annual meeting of stockholders - Information is incorporated by reference to the company's 2021 Proxy Statement[420] Certain Relationships and Related Transactions, and Director Independence The information required for this item is incorporated by reference from the company's Proxy Statement on Schedule 14A for its 2021 annual meeting of stockholders - Information is incorporated by reference to the company's 2021 Proxy Statement[420] Principal Accountant Fees and Services The information required for this item is incorporated by reference from the company's Proxy Statement on Schedule 14A for its 2021 annual meeting of stockholders - Information is incorporated by reference to the company's 2021 Proxy Statement[421] PART IV Exhibits and Financial Statement Schedules This section lists the consolidated financial statements and provides an index of all exhibits filed with the report, with financial statement schedules omitted - This section lists the financial statements and exhibits filed with the Form 10-K[423][428] - All financial statement schedules have been omitted because they are not applicable or the information is already present in the financial statements or notes[425]