Akoustis Technologies(AKTS) - 2024 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, liquidity, revenue recognition, and other financial details for the periods ended December 31, 2023 and 2022 Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands): | Metric | December 31, 2023 | June 30, 2023 | | :-------------------------------- | :------------------ | :------------ | | Cash and cash equivalents | $12,875 | $43,104 | | Total current assets | $26,018 | $59,845 | | Total Assets | $111,883 | $148,917 | | Total Liabilities | $58,114 | $62,678 | | Total Stockholders' Equity | $53,769 | $86,239 | Condensed Consolidated Statements of Operations This section outlines the company's revenues, expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations (in thousands, except per share data): | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Revenue | $7,017 | $5,865 | $14,019 | $11,432 | | Gross profit (loss) | $681 | $591 | $(403) | $(295) | | Total operating expenses | $15,705 | $13,483 | $36,276 | $30,563 | | Net Loss | $(15,711) | $(11,156) | $(35,840) | $(30,247) | | Net loss per common share - basic and diluted | $(0.21) | $(0.19) | $(0.49) | $(0.53) | Condensed Consolidated Statements of Changes in Stockholders' Equity This section details changes in the company's equity, reflecting net loss and other equity adjustments over time Changes in Stockholders' Equity (in thousands): | Metric | Balance, Sep 30, 2023 | Net Loss (3 months) | Balance, Dec 31, 2023 | | :-------------------- | :-------------------- | :------------------ | :-------------------- | | Total Equity | $67,792 | $(15,711) | $53,769 | | Metric | Balance, June 30, 2023 | Net Loss (6 months) | Balance, Dec 31, 2023 | | :-------------------- | :--------------------- | :------------------ | :-------------------- | | Total Equity | $86,239 | $(35,840) | $53,769 | Condensed Consolidated Statements of Cash Flows This section reports cash inflows and outflows from operating, investing, and financing activities for the period Condensed Consolidated Statements of Cash Flows (in thousands): | Metric | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | | :---------------------------------- | :---------------------------- | :---------------------------- | | Net Cash Used in Operating Activities | $(24,447) | $(26,220) | | Net Cash Used in Investing Activities | $(5,834) | $(7,985) | | Net Cash Provided by Financing Activities | $52 | $289 | | Net Increase (Decrease) in Cash and Cash Equivalents | $(30,229) | $(33,916) | | Cash and Cash Equivalents - End of Period | $12,875 | $46,569 | Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1. Organization This note describes the company's business, its core products, proprietary technology, and subsidiaries - Akoustis Technologies, Inc. develops, designs, and manufactures innovative radio frequency (RF) filter products for the wireless industry, including smartphones, cellular infrastructure, Wi-Fi CPE, and military/defense applications[12] - The company utilizes its proprietary XBAW® technology, based on novel, high purity acoustic piezoelectric materials and a unique microelectromechanical system (MEMS) wafer semiconductor process[12] - Through its wholly-owned subsidiary RFM Integrated Device, Inc. (RFMi), the company sells complementary surface acoustic wave (SAW) resonators, RF filters, crystal resonators/oscillators, and ceramic products. It also offers back-end semiconductor supply chain services through Grinding & Dicing Services, Inc. (GDSI), acquired in January 2023[12] Note 2. Liquidity This note discusses the company's cash position, working capital, historical losses, and future capital requirements Liquidity Metrics (in millions): | Metric | December 31, 2023 | | :-------------------- | :------------------ | | Cash and cash equivalents | $12.9 | | Working capital | $11.7 | - The company has incurred losses and negative cash flow from operations since inception, primarily funded by equity and debt securities sales, contract research, government grants, and customer revenue[15] - In November 2023, significant expense reductions and cost-saving measures were undertaken to reduce operating cash flow burn, leading to decreased operating expenditures, R&D, and headcount costs[15] - The company requires significant additional capital to sustain its business until profitability, actively exploring public/private equity offerings, debt financings, and collaborations. A public offering in January 2024 raised $10.4 million in net proceeds[16] Note 3. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules for interim financial information, with all necessary adjustments included for fair presentation[19] - The company adopted ASU 2016-13, "Financial Instruments-Credit Losses (Topic 326)," in the first quarter of fiscal 2024, requiring a current lifetime expected credit loss methodology for accounts receivable[23] - The adoption of ASU 2016-13 resulted in a cumulative-effect adjustment to retained earnings of $201 thousand[25] Note 4. Revenue Recognition from Contracts with Customers This note details the company's revenue streams, recognition policies, and geographic revenue breakdown - The company's primary revenue streams are fabrication services (Non-Recurring Engineering and backend packaging) and product sales (RF filters and amps)[26] - Revenue recognition for fabrication services is either over time or at a point in time, while product sales revenue is recognized when title passes at shipment or upon customer receipt[27][28] Revenue by Geographic Region (in thousands) - Three Months Ended December 31, 2023: | Region | Fabrication Services Revenue | Product Sales Revenue | Total Revenue with Customers | | :------- | :--------------------------- | :-------------------- | :--------------------------- | | Americas | $3,151 | $166 | $3,317 | | Asia | $134 | $2,628 | $2,762 | | Europe | $139 | $259 | $389 | | Total | $3,298 | $3,719 | $7,017 | - As of December 31, 2023, the company had $1.7 million in revenue expected from partially unsatisfied performance obligations related to contracts with an original expected duration of greater than one year[37] Note 5. Inventory This note provides a breakdown of the company's inventory, including raw materials, work in process, and finished goods Inventory, net of reserves (in thousands): | Category | December 31, 2023 | June 30, 2023 | | :--------------- | :------------------ | :------------ | | Raw Materials | $1,736 | $1,574 | | Work in Process | $1,289 | $3,741 | | Finished Goods | $2,451 | $2,233 | | Total Inventory | $5,476 | $7,548 | Note 6. Property and Equipment, net This note details the company's property and equipment, net of accumulated depreciation, and related expenses Property and equipment, net (in thousands): | Category | December 31, 2023 | June 30, 2023 | | :-------------------------------- | :------------------ | :------------ | | Total | $87,631 | $84,335 | | Less: Accumulated Depreciation | $(31,433) | $(26,509) | | Total Property and equipment, net | $56,198 | $57,826 | Depreciation Expense (in thousands): | Period | December 31, 2023 | December 31, 2022 | | :-------------------- | :------------------ | :------------------ | | Three Months Ended | $2,600 | $2,300 | | Six Months Ended | $4,900 | $4,400 | - As of December 31, 2023, equipment with a net book value of $7.4 million had not been placed in service and was therefore not depreciated during the period[42] Note 7. Business Acquisition This note describes the acquisition of Grinding & Dicing Services, Inc. (GDSI) and its strategic rationale - On January 1, 2023, the company acquired Grinding & Dicing Services, Inc. (GDSI) to support a strategy to reshore operations to the United States, improve rapid prototype and development cycle time, and provide prototype cost savings[43] - Total consideration for the GDSI acquisition included $13.9 million in cash, approximately $1.7 million in common stock, and a secured promissory note in the original principal amount of $4.0 million[44] Note 8. Goodwill This note discusses the company's goodwill, impairment testing, and potential future impairment risks - A quantitative goodwill impairment test was performed during the second quarter ended December 31, 2023, triggered by continuing declines in the company's stock price (from $3.20 on July 3, 2023, to $0.48 on October 30, 2023)[47] - Based on the impairment analyses, no goodwill impairment was found as the fair values of the reporting units exceeded their respective carrying values[47] - However, for the RF Filter reporting unit, the fair value exceeded its carrying value by less than 10%, indicating a risk of future impairment[47] Note 9. Accounts Payable and Accrued Expenses This note provides a detailed breakdown of the company's accounts payable and various accrued expenses Accounts Payable and Accrued Expenses (in thousands): | Category | December 31, 2023 | June 30, 2023 | | :-------------------------------- | :------------------ | :------------ | | Accounts payable | $3,187 | $3,979 | | Accrued salaries and benefits | $2,534 | $4,781 | | Accrued goods received not invoiced | $1,250 | $3,700 | | Accrued professional fees | $6,279 | $2,248 | | Other accrued expenses | $498 | $2,319 | | Totals | $13,748 | $17,027 | Note 10. Notes Payable This note details the company's convertible senior notes and other promissory notes, including interest and compensation expenses Convertible Senior Notes due 2027 (in thousands): | Metric | Maturity Date | Stated Interest Rate | Conversion Price | Face Value | Remaining Debt (Discount) | Fair Value of Embedded Derivatives | | :-------------------------- | :------------ | :------------------- | :--------------- | :--------- | :------------------------ | :--------------------------------- | | 6.0% convertible senior notes | 06/15/2027 | 6.00% | $4.71 | $44,000 | $(2,421) | $74 | - The company issued a secured promissory note with an original principal amount of $4.0 million in connection with the GDSI acquisition. This note does not bear interest and is subject to partial prepayment and full payment on the third anniversary of the closing date[53] Interest and Compensation Expense (in thousands): | Expense Type | Three Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2023 | | :-------------------------- | :------------------------------ | :---------------------------- | | Contractual Interest (Convertible Notes) | $660 | $1,320 | | Debt Discount Amortization (Convertible Notes) | $158 | $312 | | Compensation Expense (Promissory Note) | $333 | $667 | Note 11. Concentrations This note identifies significant customer and vendor concentrations impacting the company's revenue and purchases Customer Concentration as a Percentage of Revenue: | Customer | Three Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2023 | | :------- | :------------------------------ | :---------------------------- | | Customer 4 | 17% | 21% | | Customer 5 | 13% | — | Vendor Concentration as a Percentage of Purchases: | Vendor | Three Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2023 | | :----- | :------------------------------ | :---------------------------- | | Vendor 1 | 20% | 18% | Note 12. Equity This note covers equity-related events, including public offerings, stock-based compensation, and Nasdaq compliance - On January 29, 2024, the company closed an underwritten public offering of 23,000,000 shares of common stock at $0.50 per share, generating approximately $10.4 million in net proceeds[58][88] Stock-based Compensation Expense (in thousands): | Category | Three Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2023 | | :-------------------------- | :------------------------------ | :---------------------------- | | Research and Development | $119 | $652 | | General and Administrative | $135 | $1,423 | | Cost of Revenue | $62 | $124 | | Total | $316 | $2,199 | Unrecognized Stock-based Compensation Expense (in thousands) as of December 31, 2023: | Category | Unrecognized Expense | Weighted-average years to be recognized | | :------------------- | :------------------- | :-------------------------------------- | | Options | $974 | 1.73 Years | | Restricted stock units | $7,519 | 1.99 Years | - On October 24, 2023, the company received a Nasdaq notification for non-compliance with the minimum $1.00 bid price requirement, with an initial compliance period until April 22, 2024[64] Note 13. Leases This note provides details on the company's operating lease expenses, balance sheet information, and future payment commitments Operating Lease Expense (in thousands): | Period | December 31, 2023 | December 31, 2022 | | :-------------------- | :------------------ | :------------------ | | Three Months Ended | $149 | $106 | | Six Months Ended | $304 | $201 | Lease Balance Sheet Information (in thousands): | Metric | December 31, 2023 | June 30, 2023 | | :-------------------------- | :------------------ | :------------ | | Operating lease assets | $1,158 | $1,374 | | Current operating lease liabilities | $478 | $439 | | Long-term operating lease liabilities | $729 | $976 | | Weighted Average Remaining Lease Term | 2.54 Years | 2.97 Years | | Weighted Average Discount Rate | 12.88% | 12.77% | Minimum Future Lease Payments (undiscounted cash flows, in thousands): | Year Ending June 30 | Amount | | :------------------ | :----- | | 2024 | $299 | | 2025 | $606 | | 2026 | $374 | | 2027 | $66 | | Thereafter | $79 | | Total lease payments | $1,424 | | Less imputed interest | $(217) | | Total | $1,207 | Note 14. Commitments and Contingencies This note outlines the company's ongoing legal proceedings, including patent infringement lawsuits, and their potential financial impact - The company is a defendant in a lawsuit filed by Qorvo, Inc. (Delaware Proceeding) on October 4, 2021, alleging patent infringement, false advertising, false patent marking, unfair competition, misappropriation of trade secrets, racketeering activities, and civil conspiracy. A trial date is scheduled for May 6, 2024[69][71] - The company filed a motion for partial summary judgment on February 1, 2024, regarding Qorvo's non-patent claims and certain patent claims[70] - The company is also a plaintiff in a lawsuit against Qorvo (Texas Case), filed on April 20, 2023, alleging infringement of a Cornell University licensed patent. Qorvo's motion to strike Akoustis' infringement contentions was denied on January 10, 2024[72][73] - Resolution of these matters is prolonged and costly, with uncertain outcomes that could materially adversely affect the company's business, financial condition, and results of operations[74] Note 15. Segment Information This note presents financial performance data broken down by the company's operating segments: Fabrication Services and RF Filters - The company operates in two segments: Fabrication Services (engineering review and backend packaging) and RF Filters (filter product sales)[77] Segment Performance (in thousands) - Six Months Ended December 31, 2023: | Metric | Fabrication Services | RF Filters | Total | | :-------------------------- | :------------------- | :--------- | :------ | | Revenue | $5,960 | $8,059 | $14,019 | | Cost of revenue | $3,800 | $10,622 | $14,422 | | Gross margin (loss) | $2,160 | $(2,563) | $(403) | | Income (Loss) from Operations | $(41) | $(36,638) | $(36,679) | Note 16. Loss Per Share This note explains the calculation of basic and diluted net loss per common share and lists common stock equivalents - Basic and diluted net loss per common share are computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding. Common stock equivalents are excluded in periods of net loss as their inclusion would be anti-dilutive[80] Common Stock Equivalents as of December 31, 2023: | Category | Number of Equivalents | | :---------------- | :-------------------- | | Convertible Notes | 9,341,825 | | Options | 3,214,687 | | Total | 12,556,512 | Note 17. Fair Value Measurement This note details the fair value measurement of derivative liabilities, including key assumptions and valuation models Fair Value of Derivative Liabilities (in thousands): | Metric | December 31, 2023 | June 30, 2023 | | :-------------------------- | :------------------ | :------------ | | Derivative liabilities | $74 | $2,080 | | Total fair value | $74 | $2,080 | - The fair value of embedded derivatives in convertible notes is classified as Level 3 and estimated using a lattice model framework with unobservable inputs, including probability/timing of future change of control events, stock price volatility, and discount rate[86] Key Assumptions for Level 3 Fair Value Measurement: | Assumption | December 31, 2023 | June 30, 2023 | | :---------------------- | :------------------ | :------------ | | Stock Price | $0.83 | $3.18 | | Volatility of stock price | 80% | 70% | | Risk free interest rate | 3.97% | 4.32% | | Debt yield | 40.5% | 40.6% | | Remaining term (years) | 3.5 | 4.0 | Note 18. Subsequent Events This note discloses significant events occurring after the balance sheet date, such as recent public offerings - On January 29, 2024, the company completed an underwritten public offering of 23,000,000 shares of its common stock at $0.50 per share, including the full exercise of the underwriters' over-allotment option. This offering resulted in approximately $10.4 million in net proceeds[88] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the company's financial condition and results of operations, including an overview of its business, the current business environment, critical accounting policies, detailed analysis of financial results for the three and six months ended December 31, 2023, and a discussion of liquidity and capital resources Overview This section provides a high-level description of the company's business, technology, and operating model - Akoustis is an emerging commercial product company focused on developing, designing, and manufacturing innovative RF filter solutions for 5G, Wi-Fi, and defense applications, leveraging its proprietary XBAW® technology[94] - The company operates an Integrated Device Manufacturing (IDM) business model for its XBAW filters and a fabless business for complementary SAW products through its RFMi subsidiary. It also offers back-end semiconductor services via GDSI[94][97] - As of February 2, 2024, Akoustis' intellectual property portfolio includes 103 patents and 86 pending patent applications, covering its XBAW RF filter technology from raw materials to system architectures[98] Business Environment and Current Trends This section discusses external factors impacting the company, including semiconductor shortages, inflation, and strategic initiatives - The global semiconductor industry is experiencing supply shortages and difficulties meeting demand, leading to increased lead-times and higher costs, which are expected to persist through calendar year 2024[104] - Inflationary pressures, rising interest rates, and recession fears have negatively impacted revenue, operating margins, and net income, with some customers reducing or deferring orders[105] - The company is pursuing opportunities under the CHIPS and Science Act of 2022 to expand its domestic manufacturing footprint, with a final application expected in calendar year 2024[106] - Recent developments include a purchase order from a Tier-2 5G mobile and Wi-Fi AP RF front-end module customer, a multi-year DARPA COFFEE program contract, a new development order from a commercial SATCOM company, and XBAW® filters designed into a new tri-band Wi-Fi 6E consumer access point platform[107][108][109][110] Critical Accounting Policies This section highlights key accounting policies, particularly goodwill impairment testing and valuation methodologies - The company performed an interim goodwill impairment test during the second quarter ended December 31, 2023, due to a significant decline in its stock price[113] - The fair value of reporting units was determined using an equal weighting of the income approach (discounted cash flow) and a market-based approach (guideline public company method), with discount rates ranging from 21.0% to 23.5%[114] - No goodwill impairment was identified, but the RF Filter reporting unit's fair value exceeded its carrying value by less than 10%, indicating a potential risk of future impairment[115] Results of Operations This section analyzes the company's financial performance, including revenue, expenses, and net loss for various periods Three Months Ended December 31, 2023 and 2022 This section provides a comparative analysis of financial results for the three-month periods ended December 31, 2023 and 2022 Financial Performance (in millions) - Three Months Ended December 31: | Metric | 2023 | 2022 | Change ($) | Change (%) | | :-------------------------- | :--- | :--- | :--------- | :--------- | | Revenue | $7.0 | $5.9 | $1.1 | 20% | | Cost of Revenue | $6.3 | $5.3 | $1.0 | 18.9% | | R&D Expenses | $6.4 | $7.6 | $(1.2) | (16.1%) | | G&A Expenses | $9.3 | $5.8 | $3.5 | 60.3% | | Other (Expense)/Income | $(0.7) | $1.7 | $(2.4) | (141.2%) | | Net Loss | $(15.7) | $(11.2) | $(4.5) | 40.8% | - The increase in revenue was primarily driven by a $1.4 million (74%) increase in fabrication service revenue, including services from GDSI[117] - The increase in G&A expenses was mainly due to a $3.5 million increase in general expenses, such as professional fees and intangible amortization, partially offset by a $0.4 million decrease in employee compensation[120] Six months ended December 31, 2023 and 2022 This section provides a comparative analysis of financial results for the six-month periods ended December 31, 2023 and 2022 Financial Performance (in millions) - Six Months Ended December 31: | Metric | 2023 | 2022 | Change ($) | Change (%) | | :-------------------------- | :--- | :--- | :--------- | :--------- | | Revenue | $14.0 | $11.4 | $2.6 | 22.8% | | Cost of Revenue | $14.4 | $11.7 | $2.7 | 23.1% | | R&D Expenses | $16.8 | $17.7 | $(0.9) | (5.5%) | | G&A Expenses | $19.5 | $12.8 | $6.7 | 52.3% | | Other (Expense)/Income | $0.8 | $0.6 | $0.2 | 33.3% | | Net Loss | $(35.8) | $(30.2) | $(5.6) | 18.5% | - The increase in revenue was primarily due to a $3.1 million (111%) increase in fabrication revenue, including sales of GDSI services[123] - The $6.7 million increase in G&A expenses was largely driven by a $5.7 million (88.9%) increase in general expenses, including professional fees and intangible amortization[125] Liquidity and Capital Resources This section discusses the company's ability to meet its short-term and long-term financial obligations and funding strategies Liquidity and Capital Resources Overview This section summarizes the company's primary liquidity needs, historical funding, and recent capital-raising efforts - The company's liquidity requirements primarily fund R&D, G&A expenses, working capital, business acquisitions, and interest/principal payments on convertible and promissory notes[128] - Akoustis has incurred losses and negative cash flow from operations since inception and requires significant additional capital to achieve and maintain profitability[129][130] - Cost-saving measures were implemented in November 2023 to reduce operating cash flow burn, and a public offering in January 2024 raised $10.4 million in net proceeds[129][130] Balance Sheet and Working Capital This section analyzes key balance sheet items and working capital trends, highlighting changes in assets, liabilities, and equity Balance Sheet Highlights (in millions): | Metric | December 31, 2023 | June 30, 2023 | Change ($) | Change (%) | | :-------------------------- | :------------------ | :------------ | :--------- | :--------- | | Cash and cash equivalents | $12.9 | $43.1 | $(30.2) | (70.1%) | | Total current assets | $26.0 | $59.8 | $(33.8) | (56.5%) | | Total assets | $111.9 | $148.9 | $(37.0) | (24.8%) | | Total current liabilities | $14.3 | $17.6 | $(3.3) | (18.8%) | | Total long-term liabilities | $43.8 | $45.1 | $(1.3) | (2.9%) | | Stockholders' equity | $53.8 | $86.2 | $(32.4) | (37.7%) | - The decrease in stockholders' equity was primarily due to a net loss of $35.8 million for the six months ended December 31, 2023, partially offset by a $3.6 million increase in additional paid-in capital[135] Cash Flow Analysis This section examines cash flows from operating, investing, and financing activities and their impact on overall liquidity Cash Flow Activities (in millions) - Six Months Ended December 31: | Activity | 2023 | 2022 | Change ($) | | :-------------------------- | :--- | :--- | :--------- | | Operating activities used cash | $(24.4) | $(26.2) | $1.8 | | Investing activities used cash | $(5.8) | $(8.0) | $2.2 | | Financing activities provided cash | $0.052 | $0.289 | $(0.2) | - The decrease in cash used in operating activities was primarily attributable to reductions in other current assets[136] - The decrease in cash used in investing activities was primarily due to a $2.2 million decrease in purchases of capital equipment[137] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section is not applicable to smaller reporting companies - This section is not applicable to smaller reporting companies[138] ITEM 4. CONTROLS AND PROCEDURES This section details management's evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Management's Evaluation of Disclosure Controls and Procedures This section reports on management's assessment of the effectiveness of the company's disclosure controls and procedures - As of December 31, 2023, management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[140] Changes in Internal Control over Financial Reporting This section discloses any material changes in the company's internal control over financial reporting during the period - During the quarter ended December 31, 2023, there were no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[141] PART II — OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS This section incorporates by reference the details of ongoing material legal proceedings, specifically patent infringement and trade secret misappropriation lawsuits with Qorvo Inc., as described in Note 14 of the financial statements - The company is involved in various lawsuits and legal proceedings that arise in the ordinary course of business, with material matters described in "Note 14. – Commitments and Contingencies."[143][144] ITEM 1A. RISK FACTORS This section outlines significant risks, including ongoing intellectual property litigation with Qorvo, the potential for Nasdaq delisting due to non-compliance with the minimum bid price requirement, and the critical need to raise substantial additional capital given the company's history of operating losses and current financial challenges - The company is subject to claims of infringement, misappropriation, or misuse of third-party intellectual property, which are expensive to litigate and could result in loss of IP rights or severe business disruption[146][147] - Ongoing litigation with Qorvo, Inc. includes being a defendant in the Delaware Proceeding (patent infringement, trade secrets) and a plaintiff in the Texas Case (patent infringement against Qorvo). These cases are prolonged, costly, and have uncertain outcomes[149][150][151] - The company received a Nasdaq notification on October 24, 2023, for non-compliance with the minimum $1.00 bid price requirement, with a deadline of April 22, 2024, to regain compliance. Failure to comply could lead to delisting, adversely affecting capital raising ability and stock liquidity[155][156] - Akoustis has a history of operating losses and negative cash flows, requiring significant additional capital to continue operations. Inability to raise funds on favorable terms could force delays, reductions, or elimination of R&D and manufacturing activities, or lead to business failure[158][159][160] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The company did not engage in any unregistered sales of equity securities during the reporting period, beyond those previously disclosed - The company did not sell any unregistered securities during the period covered by this report, other than any sales previously reported in its Current Reports on Form 8-K[161] ITEM 3. DEFAULTS UPON SENIOR SECURITIES This section is not applicable to the company - Not applicable[162] ITEM 4. MINE SAFETY DISCLOSURES This section is not applicable to the company - Not applicable[162] ITEM 5. OTHER INFORMATION There is no other information to report in this section - None[162] ITEM 6. EXHIBITS This section provides an index of all exhibits filed or furnished as part of this report, including corporate governance documents, certifications, and interactive data files EXHIBIT INDEX This section lists all documents filed or furnished as exhibits to the report, including corporate governance and certifications - The exhibit index includes various corporate documents such as Articles of Conversion, Certificates of Incorporation, and Amended and Restated Bylaws[164] - Certifications from the Principal Executive Officer and Principal Financial Officer (Rule 13(a)-14(a)/15(d)-14(a) and Section 1350) are filed/furnished[164] - Interactive Data Files (Inline XBRL) of Financial Statements and Notes are included[164] SIGNATURES The report is officially signed by the registrant, Akoustis Technologies, Inc., through its Chief Financial Officer - The report is signed by Kenneth E. Boller, Chief Financial Officer (Principal Financial and Accounting Officer) of Akoustis Technologies, Inc., on February 13, 2024[165][166]