Amprius Technologies, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. Amounts below are in U.S. dollars; financial statement figures are in millions unless stated otherwise.
Business context
Amprius develops and produces silicon-anode lithium-ion batteries, primarily for aviation and other mobility applications. Production remained at kWh scale; the company was expanding its Fremont operations and planning a GWh-scale facility in Brighton, Colorado.
Financial results and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $1.632 | $0.691 | $2.311 | $2.801 |
| Gross loss | $(3.032) | $(1.364) | $(6.549) | $(2.465) |
| Gross margin | (186)% | (197)% | (283)% | (88)% |
| Operating expenses | $7.051 | $2.797 | $13.285 | $4.606 |
| Operating loss | $(10.083) | $(4.161) | $(19.834) | $(7.071) |
| Net loss | $(9.448) | $(4.154) | $(18.550) | $(7.032) |
| Basic and diluted loss per share | $(0.11) | $(0.06) | $(0.22) | $(0.11) |
- Q2 revenue rose 136%, primarily on higher battery product and customized design-services revenue. First-half revenue fell 17%, mainly because customized design-services revenue declined by $1.2 million; product revenue and government-grant revenue partly offset the decrease.
- Q2 and first-half cost of revenue increased 127% and 68%, respectively. First-half costs included higher outside services and consulting, personnel, materials, and a nonrecurring fee related to selection of the Brighton manufacturing site.
- Cash and cash equivalents were $65.0 million at June 30, 2023, versus $69.7 million at December 31, 2022. Current assets were $70.7 million and current liabilities $12.0 million. Total liabilities were $19.9 million; the company reported no interest-bearing borrowings.
- For the first half, operating cash use was $12.1 million, investing cash use was $2.9 million, and financing provided $10.3 million, mainly from common-stock sales under the committed equity financing. Cash, cash equivalents and restricted cash decreased $4.7 million.
- Management said existing cash was expected to fund operating and capital requirements for at least 12 months from issuance of the statements. Approximately $189.4 million remained available under the optional $200 million equity purchase agreement, subject to contractual conditions, share limits, market prices and registration requirements.
Material changes and notable items
- SG&A increased 171% in Q2 and 212% in the first half, largely from public-company costs, professional and consulting fees, additional personnel and compensation, and corporate insurance.
- First-half capital expenditures were $2.9 million, compared with $0.2 million a year earlier, principally for production equipment and facility improvements.
- Revenue remained small relative to production costs, and losses widened. The company reported an accumulated deficit of $111.4 million at June 30.
- During the first half, Amprius issued 1.2 million shares under its committed equity financing for approximately $10.6 million in proceeds. Further use could dilute existing holders.
- Five customers represented 81% of Q2 revenue; three represented 51% of first-half revenue. Three customers accounted for 73% of accounts receivable at June 30.
Outlook, risks and contingencies
- Management expects losses, operating costs and capital requirements to rise as the company develops manufacturing capacity, increases R&D and adds employees. It estimated capital equipment spending of $120–$150 million to reach 1.0 GWh of annual capacity; the initial 500 MWh phase was expected to be operational in 2025.
- The first large-scale anode production machine had been received in Fremont. The company expected it to support silicon-anode production capacity of approximately 2 MWh by year-end 2023.
- The Brighton site’s zoning did not permit battery manufacturing as of the filing. Rezoning and permits remained outstanding; failure to obtain rezoning would automatically terminate the lease. The lease’s approximately $62.9 million of payments were scheduled to begin in December 2024, subject to commencement.
- Amprius and the U.S. Department of Energy mutually ended negotiations for a proposed $50 million cost-sharing grant in June 2023. The grant had depended on a final contract.
- A proposed merger with Amprius Holdings remained subject to conditions, including approval by unaffiliated stockholders. The special meeting originally scheduled for July 26, 2023 was postponed to a later date. Amprius Holdings owned approximately 76.2% of the company at June 30.
- Key risks include successful scale-up and manufacturing yields, facility rezoning and construction, financing availability and dilution, customer and supplier concentration, battery safety and product liability, competition, and the company’s ability to reduce manufacturing costs.
- Disclosure controls were deemed ineffective because previously identified material weaknesses in financial reporting controls and segregation of duties had not been remediated. Remediation efforts were ongoing.
- Management stated that no pending legal proceedings were expected to have a material adverse effect. The filing also describes prior cybersecurity and patent-infringement matters as risk context.
Important facts for investors to verify
- Whether the company meets production, yield, cost and capacity milestones, including the Fremont expansion and the planned 2025 initial Brighton capacity.
- Progress on Brighton rezoning, permits, construction plans and the timing and financial obligations of the facility lease.
- Actual cash burn, capital spending and funding needs, and the availability and potential dilution from further equity financing.
- Whether customer demand, orders and revenue diversify beyond a concentrated customer base, and whether gross margins improve.
- Completion and terms of the proposed Amprius Holdings merger, including any resulting share issuance and governance changes.
- Remediation of internal-control material weaknesses and any subsequent changes in disclosure-control effectiveness.