Amprius Technologies(AMPX) - 2023 Q4 - Annual Report

Part I Business Amprius develops and manufactures ultra-high energy density lithium-ion batteries for aviation and EV markets, scaling to GWh-scale Overview and Corporate Background - Amprius develops and commercially produces ultra-high energy density lithium-ion batteries featuring a disruptive silicon anode technology, which offers superior performance over conventional graphite batteries[17] - The company's primary markets are aviation applications like Unmanned Aerial Systems (UAS) and High-Altitude Pseudo Satellites (HAPS), with over 100 customers including AALTO Airbus, AeroVironment, and the U.S. Army[18] - Amprius offers two product platforms: SiMaxx (silicon nanowire) and SiCore (developed with Berzelius). The company is expanding its Fremont facility's capacity tenfold to 2 MWh and building a new GWh-scale facility in Brighton, Colorado[19] - As of December 31, 2023, the company held $45.8 million in cash and expects to fund operations for at least the next twelve months through cash on hand, cash flows, and proceeds from its At Market Issuance Sales Agreement[23] Industry Background and Market Opportunity Electrification drives demand for advanced batteries in aviation and EVs, creating significant market opportunities - The shift to electrification in transportation is driven by a focus on sustainable energy, creating demand for advanced battery technologies in aviation (UAS, eVTOL) and ground vehicles (EVs)[24] Total Addressable Market (TAM) Forecasts | Market Segment | TAM by 2030/2033 | Source Year | | :--- | :--- | :--- | | Unmanned Aerial Systems (UAS) Batteries | ~$27.0 billion | 2030 | | Electric Air Mobility Batteries | ~$6.0 billion | 2030 | | Global EV Battery Market | $509.0 billion | 2033 | Our Solution and Competitive Strengths Amprius's silicon anode technology provides superior battery performance with high energy density and fast charging, protected by robust IP - Amprius replaces traditional graphite anodes with a highly engineered silicon material that has a lithium storage capacity nearly 10 times greater than graphite, significantly enhancing battery performance[34] Performance Metrics vs. Graphite Anode Batteries | Performance Metric | Graphite Anode Cells | Amprius SiMaxx Cells | | :--- | :--- | :--- | | Specific Energy (Wh/kg) | ~215-285 | 320-500 | | Energy Density (Wh/L) | ~530-715 | 805-1,300 | | Charging Time to 80% | 30 minutes | <6 minutes | | Cycle Life | 500-1,000 cycles | 200-1,200 cycles | - In March 2023, prototype SiMaxx cells were verified to deliver energy density greater than 504 Wh/kg and 1,321 Wh/L. In August 2023, the company unveiled a new cell with 400 Wh/kg energy density and 10C continuous discharge capability[38] - The company's technology is protected by a robust intellectual property portfolio, including over 80 issued patents and pending applications, developed over more than 10 years[42] Our Products and Customers Amprius offers SiMaxx and SiCore battery platforms for aviation, with an EV-capable cell under development for future markets - The SiMaxx product platform includes High Energy cells (up to 500 Wh/kg) for applications like HAPS, High Power cells (400 Wh/kg, 10C discharge) for eVTOLs, and Balanced Energy/Power cells for UAS[44][46][48] - The SiCore product platform, developed with Berzelius, offers high energy density (up to 400 Wh/kg) and long cycle life (up to 1,200 cycles). It is available in various form factors and serves as a capacity bridge while SiMaxx production scales[49] - Amprius is developing an EV-capable cell and was awarded a contract from the U.S. Advanced Battery Consortium (USABC) to develop a low-cost, fast-charge battery meeting 2025 EV targets, including >400 Wh/kg specific energy and 1,000 cycles[53] Manufacturing, Supply, and Growth Strategy Amprius is scaling SiMaxx anode fabrication and building a GWh-scale facility in Colorado to meet demand and expand markets - SiMaxx anodes are fabricated using a proprietary Chemical Vapor Deposition (CVD) process. The company is working with centrotherm to develop high-volume anode fabrication tools[58][59] - The company is building a GWh-scale manufacturing facility in a 774,000 sq. ft. leased space in Brighton, Colorado. The initial phase is expected to have up to 500 MWh capacity[65][66] - Key growth strategies include completing the large-scale manufacturing facility, leveraging toll manufacturing for SiCore batteries, reducing costs through scale, extending its first-mover advantage in aviation, and expanding into new markets like EVs[66][67][68] - Capital equipment expenditures for the initial 500 MWh capacity in Colorado are estimated to be between $75.0 million and $100.0 million, excluding facility construction and build-out costs[68] Competition and Human Capital Amprius competes with traditional and silicon composite anode manufacturers, supported by a dedicated team of 88 personnel - Competitors include traditional graphite anode manufacturers (CATL, Panasonic, Samsung SDI) and companies developing silicon composite anodes (Enevate, Enovix, Sila Nanotechnologies)[77][78] - As of December 31, 2023, Amprius had 88 personnel (80 full-time employees, 4 temporary employees, and 4 contractors), with 45 full-time employees in manufacturing and 19 in R&D[86][87] Risk Factors The company faces significant risks in technology, manufacturing, market, capital, IP, regulatory compliance, and internal controls - Technology & Manufacturing Risks: The company may not succeed in developing high-volume manufacturing lines that meet quality and cost targets, and its reliance on third parties for SiCore batteries and complex equipment for SiMaxx production introduces significant operational risks[90][91][96] - Business & Financial Risks: The company is an early-stage company with a history of losses and will require additional capital for growth. The battery market is intensely competitive, and future sales depend on the growth of new markets like electric aviation, which may develop slower than expected[91][92] - Regulatory & IP Risks: The business relies heavily on its intellectual property portfolio and is subject to complex regulations, including environmental laws, export controls, and anti-corruption laws. Failure to comply could result in significant penalties[92] - Internal Control Risks: The company has previously identified and has not yet fully remediated material weaknesses in its internal control over financial reporting, which could affect its ability to report financial results accurately and on time[92][170][171] Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - None[273] Cybersecurity Amprius manages cybersecurity with board oversight, periodic risk assessments, and employee training, having experienced past threats - The Board of Directors, led by the Audit Committee, oversees enterprise risk management, including cybersecurity threats. Management provides quarterly cybersecurity reports to the board[277] - The President of Amprius Lab and the Chief Technology Officer are responsible for developing and implementing the information security program. The company engages third-party vendors for simulations and requires all employees to complete regular cybersecurity training[278] - The company has experienced past threats, including a ransomware incident in December 2021, but states that such risks have not materially affected the company to date[190][279] Properties Amprius leases facilities in Fremont, CA for HQ and manufacturing, and in Brighton, CO for its future GWh-scale production Leased Properties as of December 31, 2023 | Location | Size (sq. ft.) | Use | Lease Expiration | | :--- | :--- | :--- | :--- | | Fremont, CA | ~51,000 | HQ, R&D, Manufacturing | June 2027 | | Brighton, CO | ~774,000 | Future GWh-scale Facility | May 2039 | Legal Proceedings The company is not currently a party to any litigation expected to materially affect its business - Amprius is not currently a party to any legal proceedings that are likely to have a material adverse effect on the business[281] Mine Safety Disclosures This item is not applicable to the company - None[282] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common stock and warrants trade on NYSE; no dividends are anticipated as earnings are retained for operations - Common stock and public warrants are listed on the NYSE under symbols "AMPX" and "AMPX.W" since September 15, 2022[285] - The company has never declared or paid dividends and does not intend to do so in the foreseeable future, retaining all funds for business operations[287] Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue increased 105% to $9.1 million, but net loss widened to $36.8 million due to higher costs, with $45.8 million cash on hand Results of Operations Results of Operations (in thousands) | | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $9,053 | $4,409 | $4,644 | 105% | | Cost of revenue | $23,729 | $10,063 | $13,666 | 136% | | Gross loss | $(14,676) | $(5,654) | $(9,022) | 160% | | R&D | $3,677 | $2,027 | $1,650 | 81% | | SG&A | $20,356 | $10,360 | $9,996 | 96% | | Net loss | $(36,776) | $(17,332) | $(19,444) | 112% | - Revenue increased by $4.6 million (105%) in 2023, driven by a $2.6 million increase in battery sales and a $2.0 million increase in non-recurring development service revenue[324] - Cost of revenues rose by $13.7 million (136%), primarily due to a $10.3 million increase in production costs, including nonrecurring fees for the planned GWh-scale facility in Brighton, Colorado[325] - Selling, general and administrative expenses grew by $10.0 million (96%), mainly due to increased professional fees ($5.2M), personnel costs ($3.0M), and corporate insurance ($1.2M) following the transition to a public company[329] Liquidity and Capital Resources - As of December 31, 2023, the company had $45.8 million in cash and cash equivalents. Management believes this, along with operating cash flows and proceeds from the At Market Financing, is sufficient to fund operations for at least the next twelve months[332] - The company has an At Market Issuance Sales Agreement to sell up to $100.0 million of common stock. As of March 18, 2024, aggregate proceeds were approximately $6.9 million[333] - Capital expenditures for the initial 500 MWh phase of the Brighton, Colorado facility are estimated to be between $75.0 million and $100.0 million, excluding construction and build-out costs[337] - In June 2023, the company and the U.S. Department of Energy mutually agreed to discontinue negotiations for a $50.0 million cost-sharing grant[335] Summary of Cash Flows (in thousands) | | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(25,553) | $(13,882) | | Net cash used in investing activities | $(17,550) | $(1,481) | | Net cash provided by financing activities | $19,168 | $73,626 | Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," Amprius is not required to provide this information - The company is not required to provide this information as it qualifies as a "smaller reporting company"[357] Financial Statements and Supplementary Data This section contains the company's audited consolidated financial statements for fiscal years 2023 and 2022 Key Balance Sheet Data (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $45,761 | $69,696 | | Total current assets | $50,522 | $75,173 | | Property, plant and equipment, net | $21,760 | $4,236 | | Total assets | $107,736 | $83,171 | | Total current liabilities | $13,457 | $6,917 | | Total liabilities | $47,936 | $10,138 | | Total stockholders' equity | $59,800 | $73,033 | Key Statement of Operations Data (in thousands) | | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | | :--- | :--- | :--- | | Revenue | $9,053 | $4,409 | | Gross loss | $(14,676) | $(5,654) | | Loss from operations | $(38,709) | $(18,041) | | Net loss | $(36,776) | $(17,332) | | Net loss per share (basic and diluted) | $(0.43) | $(0.24) | Changes in and Disagreements With Accountants on Accounting and Financial Disclosures The company reports no changes in or disagreements with its accountants on accounting and financial disclosures - None[515] Controls and Procedures Management concluded disclosure controls were ineffective due to unremediated material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of December 31, 2023, due to unremediated material weaknesses in internal control over financial reporting[516] - The material weaknesses pertain to (i) inadequate design and maintenance of internal controls over financial reporting and close activities, and (ii) inadequate segregation of duties, attributed to inadequate controls over new application systems[517] - A remediation plan is underway to enhance application system controls, improve transaction review processes, and engage external specialists to assist with monitoring and implementing controls[519] Other Information This section discloses the adoption of Rule 10b5-1 stock trading plans by several company executives during 2023 - Discloses the adoption of Rule 10b5-1 trading plans by CTO Dr. Constantin Ionel Stefan (Dec 2023), CEO Dr. Kang Sun (Sep 2023), and President of Amprius Lab Jonathan Bornstein (May 2023)[524][525] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - None[525] Part III Directors, Executive Officers and Corporate Governance Information for this item is incorporated by reference from the 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[527] Executive Compensation Information for this item is incorporated by reference from the 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[528] Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters Information for this item is incorporated by reference from the 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[529] Certain Relationships and Related Transactions, and Director Independence Information for this item is incorporated by reference from the 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[530] Principal Accountant Fees and Services Information for this item is incorporated by reference from the 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[531] Part IV Exhibit and Financial Statement Schedules This section lists the documents filed as part of the Annual Report on Form 10-K, including financial statements and exhibits - This section provides an index to the consolidated financial statements and a list of all exhibits filed with the Form 10-K[533][534] Form 10-K Summary This item is not applicable to the company - None[538]