Amprius Technologies, Inc. — Form 10-Q Summary
Reporting period: Quarter and nine months ended September 30, 2022. Amounts are in U.S. dollars; financial statement amounts are in thousands unless stated otherwise. Amprius develops and sells lithium-ion batteries using silicon nanowire anodes, primarily for aviation and other mobility applications. It completed its business combination and became a public company on September 14, 2022. The transaction was accounted for as a reverse recapitalization, with Legacy Amprius as the accounting acquirer; historical results are presented on a carve-out basis.
Financial performance and position
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $816 | $330 | $3,617 | $1,556 |
| Gross loss | $(1,468) | $(1,656) | $(3,831) | $(3,434) |
| Operating expenses | $2,855 | $1,481 | $7,563 | $3,486 |
| Operating loss | $(4,323) | $(3,137) | $(11,394) | $(6,920) |
| Net loss | $(4,244) | $(3,141) | $(11,276) | $(6,194) |
| Basic and diluted loss per share | $(0.06) | $(0.05) | $(0.17) | $(0.09) |
- Gross margins remained negative: approximately -180% for Q3 2022 versus -502% in Q3 2021, and -106% for the first nine months of 2022 versus -221% in 2021.
- Revenue grew 147% in Q3 and 132% for the nine-month period. Management attributed the increases mainly to completed customer customization-design services and higher standard battery-cell sales.
- At September 30, cash and cash equivalents were $73.8 million, including approximately $70.9 million of net business-combination and PIPE proceeds. Cash, cash equivalents and restricted cash totaled $74.1 million, including $0.3 million of restricted cash.
- Total assets were $86.5 million; total liabilities were $10.5 million; stockholders’ equity was $76.0 million. The filing reports no interest-bearing borrowings at September 30.
- For the first nine months, operating cash outflow was $8.2 million, investing cash outflow was $0.7 million, and financing cash inflow was $71.6 million. Cash increased by $62.6 million.
- Deferred revenue was $2.6 million. Remaining performance obligations under customer contracts totaled $8.4 million, of which $3.1 million was expected to be recognized within one year; timing is subject to change.
Changes from the prior comparable period
- Revenue rose, but losses widened: nine-month net loss increased to $11.3 million from $6.2 million. Operating expenses more than doubled, driven principally by higher selling, general and administrative costs, including public-company preparation, personnel and stock-based compensation.
- Nine-month cost of revenue increased 49%, faster than revenue growth, and the company continued to report substantial gross losses.
- Financing changed materially following the September business combination and PIPE, which generated $70.9 million in net proceeds. Earlier-period financing included significant capital contributions from Amprius Holdings.
- Cash and cash equivalents increased from $11.5 million at December 31, 2021 to $73.8 million at September 30, 2022. The company also assumed its Fremont facility lease in May 2022 and recognized operating lease assets and liabilities.
Outlook, risks and unusual items
- Management expects continued losses and higher spending on manufacturing expansion, research and development, hiring and public-company costs. It believes cash on hand will fund operations for at least 12 months from issuance of the financial statements; this depends on execution of plans and could be affected by delays, costs or financing needs.
- The company operates at kWh-scale and is developing larger-scale production. Management said a newly received anode-production machine was being customized and tested, with a target of approximately 2 MWh of silicon-anode capacity by the end of 2023. It estimated $120–$150 million of capital equipment expenditures to reach 1.0 GWh per year and approximately two years after the business-combination closing to begin volume manufacturing. These are plans and estimates, not assured outcomes.
- A September 2022 agreement gives the company the option to sell up to $200 million of stock to B. Riley Principal Capital II over a 24-month period, subject to conditions and limitations. Shares sold generally carry a 3% discount to market pricing; proceeds are uncertain and issuances could dilute existing shareholders.
- After quarter-end, the Department of Energy awarded a $1 million grant and a $50 million cost-sharing grant. The $50 million award requires successful negotiation of a final contract, including cost-sharing terms; funding is not assured.
- Key risks include scaling manufacturing yield, throughput and quality; facility costs, permitting and timing; supplier and supply-chain availability; competition and customer concentration; battery safety and product liability; and the need for additional capital. Two customers represented 82% of Q3 revenue, and four represented 83% of nine-month revenue.
- Disclosure controls were not effective at September 30 because previously identified material weaknesses in financial-reporting controls and segregation of duties had not been remediated. Remediation efforts were ongoing; management said additional review procedures supported fair presentation of the statements.
- The filing reports no legal proceedings expected to have a material adverse effect. It identifies no material impact from inflation, COVID-19 or the Russia-Ukraine conflict to date, while noting uncertainty about future effects.
Important facts for investors to verify
- Whether the company can complete and commission its high-volume manufacturing line and GWh-scale facility on the stated timeline and within the estimated capital budget.
- Whether production can achieve commercially viable yields, throughput, product quality and unit costs, and whether customer demand converts into sustained orders and revenue.
- Actual cash burn and runway as manufacturing, R&D and public-company spending rise; availability and terms of any additional financing.
- Final terms, eligibility and funding conditions for the $50 million DOE grant, and progress or proceeds from the optional B. Riley equity financing.
- Revenue concentration, customer retention, remaining contract obligations and the timing of their conversion to recognized revenue and cash collections.
- Progress in remediating the disclosed material weaknesses, and potential dilution from equity financing, outstanding warrants and equity awards.