Akoustis Technologies, Inc. Provides Shareholder Update
Chairman and CEO Jeffrey Shealy Identifies Akoustis' Target Markets, Demand for Its Technologies and Pipeline of Design-Clientele
CHARLOTTE, NC -- (Marketwired) -- 10/01/15 -- Akoustis Technologies (OTCQB: AKTS) ("Akoustis" or the "Company"), a manufacturer of innovative Bulk ONE™ single crystal piezoelectric RF filters for mobile wireless, today provided an update to investors of record on or before September 30th, 2015. A copy of letter written by Mr. Jeffrey Shealy, Chairman and CEO is included below.
Valued Akoustis Shareholder,
As we close the second quarter of our 2016 fiscal year, I would like to take the opportunity to update you on a series of our operational milestones and efforts with the investment public. I would also like to provide you with an update on our fast-developing market and our vision for Akoustis over the next three quarters.
Since the closing of our financing in May of this year, we have continued our close collaboration with capital markets, developed and delivered a set of redesigned investor marketing materials, presented at our first investor conference, and engaged with leading semiconductor industry analysts to elevate our public profile and highlight the value of our technologies. Initial feedback from these efforts is positive and our team is targeting additional investor outreach through direct contact, participation at future investor conferences and non-deal roadshows. We have also endeavored to continue with a flow of news to investors detailing our achievement of milestones with our design clients, acquisition of additional IP to further develop our technologies and citing industry periodicals that highlight our research and development.
The industry is bullish on 4G/LTE growth and the need for high band filter solutions and their emerging applications outside of traditional mobile wireless to include WiFi, GPS and military. We find that incumbent high band filter suppliers limit supply of filters to major customers -- leaving a void in supply to the rest of the market. This void is not only seen in volumes, but performance. Most low band front end module ("FEM") manufacturers are seeking high performance filters for both mid band and high band frequencies. Beyond supply constraints, the technical feedback we receive from our targeted customers is that current filter technologies drive significant power losses (meaning such components are "lossy") while signals are transmitted and received from the mobile device. Understanding the vast convergence of signals in the mobile device, these "lossy" RF filters are producing significant phone heat and draining precious battery life. As a result, RF filter is the performance differentiator in the transmit/receive function and arguably attracts the most visibility in wireless devices and the RF front end ("RFFE"). In the RFFE, RF switches and power amplifiers ("PA"s) are adequate and are market commodities, but RF filters represent the greatest need for technology upgrade as they are associated with phone heat and battery depletion. What piques our future customers' interest is how our technologies improve resonator-filter technology Figure of Merit (FOM), which is the accepted performance standard in our industry. From an investor perspective, this FOM data helps us differentiate our technologies from those of our competitors. Considering our high barriers to entry, this will create a strong value proposition for our target customers and lead to rapid market adoption.
We intend to quickly mature our market position as a pure play supplier of high band RF filters. Our focus is to address the limitation of key telecommunications components, while enabling module manufacturers access to compete for existing and emerging high band RF modules. We will offer our clients a flexible engagement model with the ability to either design their own RF Filters, or Akoustis will provide an RF Filter tailor-fit to their specification.
As our current shareholders recognize, our funding comes from the investment public and R&D grants and awards. We received National Science Foundation Small Business Innovative Research (SBIR) Phase 1 and Phase 1b grants in Q1 of this year and have recently submitted our Phase 2 SBIR proposal and commercialization plan which positions Akoustis for $1.25M in follow-on research and development funding starting in early 2016.
To further solidify our current IP portfolio, we filed three foreign filings and signed an agreement with UCSB for exclusive rights to Nobel Laureate Prof. Shuji Nakamura's patents for single crystal materials. We are continually researching advanced technologies that complement our own and open new doors for our product lines.
To manage our engagements and technology development, we have expanded our management team by hiring a CFO, VP of Business Development, Chief Materials Scientist, Chief Device Scientist and other key engineering staff. This team is actively evaluating the first set of wafers we received from our manufacturing partner which produced functional single crystal resonators. Our team's work and their first technical paper were accepted for publication at an upcoming conference focused on radio wireless technology. To support the design of our resonators into RF filters, we established a robust modeling capability to develop the design libraries necessary to commercialize our products.
Our plan for production requires that we have a rapid prototype capability to meet client development timelines, as well as the manufacturing scale to service the ever-expanding consumer electronics market. To date, we have selected a manufacturing partner to develop and lock wafer processes by mid-2016 and qualify our processes for production by the end of 2016. In parallel, we plan to establish a quick-turn New Product Introduction ("NPI") line to address key IP development, rapid cycle time requirements for clients, high mix/low volume requirements, and to provide a dedicated capability to support process transfer to one or more high volume manufacturing partners.
Our sales efforts with design clients have validated our business model and produced key component requirements. Our engagements will continue to provide valuable performance validation before process lock and subsequent technology qualification. Although they cannot be disclosed at this time, we are speaking to the 'who's-who' of consumer electronics, including 10-plus Tier 1 manufacturers of FEMs, cellular transceivers and mobile handsets. As presented in the Liolios conference in San Francisco on September 9th, our clearly defined 4-phase 'design client' cycle not only helps us plan our process with future customers, it also helps investors easily track our progress as we reach our milestones in each phase. We will transition our design clients from Phase 1 - Design Client Engagement -, to Phase 2, - Technology Demonstrator -, by delivering samples including resonators, followed by RF filters. We will use client feedback from Phase 1 and 2 to identify target platforms and products of interest. Once we move to Phase 3 - Prototyping - our rapid NPI line will be essential to accelerating our technology commercialization into Phase 4 - Production. Ultimately, our client engagements are expected to secure 1-2 strategic agreements over the next 6-9 months.
Overall, I am proud of the accomplishments of our organization and I wish to thank you for your support. While we recognize there will be challenges ahead, we remain steadfast in the demonstrated value our technologies and focused on securing future design wins with clients and building shareholder value every step of the way.
Jeffrey B. Shealy - Chairman & CEO
September 30, 2015
Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. In some cases, you can identify forward-looking statements by terminology including "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "should," "will," "would" or the negative of these terms or other comparable terminology. Factors that could cause actual results to differ materially from those currently anticipated include, without limitation,
- risks relating to the results of our research and development activities, including uncertainties relating to semiconductor process manufacturing;
- the early stage of our Bulk ONE® technology presently under development;
- our need for substantial additional funds in order to continue our operations and the uncertainty of whether we will be able to obtain the funding we need;
- our ability to retain or hire key scientific, engineering or management personnel; our ability to protect our intellectual property rights that are valuable to our business, including patent and other intellectual property rights;
- our dependence on third-party manufacturers, suppliers, research organizations, testing laboratories and other potential collaborators;
- our ability to successfully market and sell our technologies;
- the size and growth of the potential markets for any of our technologies, and the rate and degree of market acceptance of any of our technologies;
- competition in our industry; and
- regulatory developments in the U.S. and foreign countries.
In light of these risks, uncertainties and assumptions, the forward-looking statements regarding future events and circumstances discussed in this press release may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements included in this presentation speak only as of the date hereof, and, except as required by law, we undertake no obligation to update publicly or privately any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations.
THESE MATERIALS DO NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF ANY OFFER TO BUY, ANY SECURITIES OF AKOUSTIS, INC., OR OF ANY OTHER ENTITY WHATSOEVER. ANY REPRESENTATION TO THE CONTRARY BY ANY PARTY SHOULD BE IGNORED.
About Akoustis Technologies
Akoustis™ is a semiconductor designer and manufacturer of radio frequency ("RF") resonators and filters that facilitate signal acquisition and accelerate band performance between the antenna and the back end of mobile devices. Akoustis' patent-pending Bulk ONE™ technology produces single crystal, piezoelectric bulk acoustic wave (BAW) filters to maximize mobile device performance and minimize energy demands. Founded in 2014, Akoustis is located in the Piedmont technology corridor between Charlotte and Raleigh, North Carolina.
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Source: Akoustis Technologies
Released October 1, 2015