Amprius Technologies(AMPX) - 2023 Q2 - Quarterly Report

Part I - Financial Information Item 1. Financial Statements (Unaudited) The company presents unaudited condensed consolidated financial statements showing a wider net loss and increased cash usage Condensed Consolidated Balance Sheets The balance sheet reflects a slight asset increase, higher liabilities, and a decrease in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $65,010 | $69,696 | | Total current assets | $70,700 | $75,173 | | Total assets | $86,637 | $83,171 | | Liabilities & Equity | | | | Total current liabilities | $12,006 | $6,917 | | Total liabilities | $19,947 | $10,138 | | Total stockholders' equity | $66,690 | $73,033 | Condensed Consolidated Statements of Operations The statements show a significant increase in net loss despite higher Q2 revenue due to rising operational costs Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,632 | $691 | $2,311 | $2,801 | | Gross Loss | $(3,032) | $(1,364) | $(6,549) | $(2,465) | | Loss from Operations | $(10,083) | $(4,161) | $(19,834) | $(7,071) | | Net Loss | $(9,448) | $(4,154) | $(18,550) | $(7,032) | | Net Loss Per Share | $(0.11) | $(0.06) | $(0.22) | $(0.11) | Condensed Consolidated Statements of Cash Flows Cash flow statements indicate a substantial increase in cash used for operations and investing activities Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(12,075) | $(5,492) | | Net cash used in investing activities | $(2,868) | $(194) | | Net cash provided by (used in) financing activities | $10,257 | $(227) | | Net decrease in cash | $(4,686) | $(5,913) | Notes to Condensed Consolidated Financial Statements The notes detail the company's liquidity, revenue obligations, lease agreements, and equity structure - The company believes its cash and cash equivalents of $65.0 million as of June 30, 2023, are sufficient to fund operations and capital expenditures for at least the next twelve months[30] - On June 2, 2023, the company and the U.S. Department of Energy mutually agreed to end negotiations for a $50.0 million cost-sharing grant[31] - As of June 30, 2023, the company had approximately $10.4 million in remaining performance obligations, with $7.8 million expected to be recognized as revenue within one year[57] - The company entered into a lease for a GWh-scale manufacturing facility in Brighton, Colorado, which is contingent on the successful re-zoning of the site[82] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses revenue fluctuations, widening net losses, and strategic manufacturing expansion initiatives - The company is expanding its Fremont facility and designing a GWh-scale manufacturing facility in Brighton, Colorado, with an initial 500 MWh phase expected to be operational in 2025[107][108][143] - Capital equipment expenditures for the GWh facility are estimated to be between $120.0 million and $150.0 million to achieve 1.0 GWh per year of capacity[110][143] - Selling, general and administrative expenses increased by 171% in Q2 2023 YoY, primarily due to costs associated with being a public company, including professional fees, personnel costs, and insurance[135] - The company has a Committed Equity Financing agreement with BRPC II for up to $200 million, with approximately $189.4 million remaining available as of June 30, 2023[103][139] Results of Operations Comparison (in thousands) | Metric | Q2 2023 | Q2 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $1,632 | $691 | 136% | | Gross Loss | $(3,032) | $(1,364) | 122% | | Net Loss | $(9,448) | $(4,154) | 127% | Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rates, customer credit, and inflation, with limited current impact - The company is exposed to interest rate risk on its $65.0 million of cash and cash equivalents, with a hypothetical 100 basis point change affecting interest income by about $0.7 million annually[160] - Credit risk is concentrated with customers, which mainly consist of U.S. government agencies and large public entities, limiting overall credit risk[161][47] - The company does not believe inflation had a material impact on its operating results and cash flows for the three and six months ended June 30, 2023[162] Controls and Procedures Management concludes that disclosure controls were ineffective due to unremediated material weaknesses - Management concluded that disclosure controls and procedures were not effective as of June 30, 2023, due to unremediated material weaknesses[163] - The material weaknesses relate to (i) inadequate controls over the financial reporting and close process, and (ii) lack of segregation of duties[164] - Remediation efforts are in progress, including increasing the size of the accounting team, enhancing the monthly close process, and engaging an external specialist for risk assessment[164][165] Part II - Other Information Legal Proceedings The company reports no material legal proceedings that would adversely affect its business operations - As of the report date, the company is not a party to any litigation or legal proceedings likely to have a material adverse effect on its business[169] Risk Factors The company identifies significant risks in operations, manufacturing scale-up, competition, and finance - Key operational risks include potential battery performance failures, challenges in developing a high-volume manufacturing line, and not meeting manufacturing cost targets[171][172] - The establishment of the GWh manufacturing facility is subject to significant risks, including re-zoning approval, construction delays, and cost overruns[172][185] - The company has a history of financial losses, expects to incur continuing losses, and has identified material weaknesses in its internal control over financial reporting[173][251] - A significant portion of business depends on sales to the public sector, and the company relies heavily on its intellectual property portfolio, which faces infringement risks[173] - Ownership risks include potential stock price drops from sales of substantial amounts of common stock and the possibility that outstanding warrants may expire worthless[173][345][352] Unregistered Sales of Equity Securities and Use of Proceeds This section is noted as not applicable within the report - The report indicates this section is not applicable[359] Defaults Upon Senior Securities This section is noted as not applicable within the report - The report indicates this section is not applicable[359] Mine Safety Disclosures This section is noted as not applicable within the report - The report indicates this section is not applicable[359] Other Information This section is noted as not applicable within the report - The report indicates this section is not applicable[359] Exhibits This section lists all exhibits filed with the report, including key agreements and officer certifications - Lists various agreements and certifications filed as exhibits, including the Agreement and Plan of Merger with Amprius, Inc., the Certificate of Incorporation, and certifications by the CEO and CFO[361]