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Akoustis (AKTS) Announced Even Higher Performance of its BAW Product…

By Lisa Thompson

OTC:AKTS

Today the company ( AKTS) announced today that it achieved a 40% performance improvement in its single-crystal BAW technology since August. It has now reached a quality factor (Q) of 2,914 and a technology figure-of-merit (FOM) of 152, and thinks it can surpass even this performance going forward. This performance level satisfies resonator requirements to produce commercial, high-band RF filters, including 4G/LTE, Wi-Fi, emerging 5G and other wireless applications. The company continues on track to deliver finalized samples to its Chinese customer in January and believes it may be providing product to the military for use in radar and communications products in the March time frame. In China, its RF-filter product will be used in a RF front-end module to compete with Skyworks Solutions and Qorvo. Product going to China will be much higher volume than that going to the military, but the unique capabilities making it the sole source supplier of the military product will allow it to sell to the government at much higher ASPs.

…Added a New VP of Engineering…

Yesterday, Akoustis announced that Rohan Houlden joined the company as Vice President of Engineering. He will oversee the development and qualification of Akoustis’ high-band RF BAW filter product portfolio. Rohan has 29 years of experience in design, development and management in the RF and wireless industry. He comes from Qorvo’s Connectivity business unit, where he was responsible for CPE Wi-Fi, Smart Energy, and Automotive product lines, and managed the product development and production ramp of custom Front End Modules (FEMs) and BAW filters for leading enterprise, retail OEMs, and automotive suppliers.

…And Reported the June 30, 2016 Quarter

The company changed its fiscal year from March to June and reported its June quarter results yesterday. We have adjusted out model accordingly. The company spent $1.7 million in the June quarter, significantly more than the $1.1 million we had expected. However this increase was not due to cash spending, but due to a reset of RSUs that were granted to consultants back in 2015. Since the stock price moved up considerably from Q3 2016 to Q4 2016, those expenses were revalued. The cash burn for the quarter was closer to $1.1 million than the $1.6 million a simple calculation would show. The company has enough cash to last through March and we expect it to raise more funds by year-end to support its production ramp and R&D efforts as well as to allow it to reach the criteria to uplist its stock. We expect funds to continue to be raised through PIPE offerings.

We believe the stock could be worth $10.20 per share based on an industry average of 3.9X EV to sales by FY 2019 if sales targets are met and we have forecasted its cash needs correctly.

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