Advent Technologies Reports Q2 2024 Results

Rhea-AI Summary

Advent Technologies Holdings, Inc. (NASDAQ: ADN) reported Q2 2024 financial results, highlighting operational progress despite financial challenges. Key points include:

- Revenue of $0.8 million and grant income of $0.7 million, totaling $1.5 million
- Operating expenses decreased by $1.2 million year-over-year to $10.0 million
- Net loss of $(11.3) million or $(4.28) per share
- Unrestricted cash reserves of $0.7 million as of June 30, 2024

The company continued work on projects with Airbus, U.S. Department of Defense, and major automotive manufacturers. Advent is focusing on developing its MEA technology to improve performance and reduce costs. A 1-for-30 reverse stock split was implemented to regain Nasdaq compliance and attract investors.

Positive

• Continued progress on Airbus-sponsored project for aviation fuel cell MEAs
• Met milestones with U.S. Department of Defense on two contracts for portable power systems
• Ongoing Technology Assessment Work for four major automotive manufacturers
• Reduction in operating expenses by $1.2 million year-over-year
• Successful completion of second quarter milestones for Airbus project
• Advancement in MEA technology development, aiming for 3x power density and lifetime performance improvements

Negative

• Revenue decline to $0.8 million in Q2 2024
• Net loss of $(11.3) million or $(4.28) per share
• Decrease in unrestricted cash reserves to $0.7 million
• Implementation of 1-for-30 reverse stock split to regain Nasdaq compliance
• Poor financial and technology delivery performance of Advent Denmark subsidiary

Insights

Financial Analyst

Advent Technologies' Q2 2024 results reveal a company in transition, focusing on cost reduction and core technology development. Revenue of $0.8 million plus $0.7 million in grants totaled $1.5 million, while operating expenses decreased by $1.2 million year-over-year to $10.0 million. The net loss of $(11.3) million or $(4.28) per share and low cash reserves of $0.7 million indicate significant financial challenges.

The company's strategy to reduce cash burn and focus on customer revenue and R&D grants is important for survival. Progress in key projects with Airbus and the U.S. Department of Defense, along with ongoing EU R&D grants, provide some stability. However, the 1-for-30 reverse stock split to maintain Nasdaq listing compliance signals investor concerns.

The development of the Advent MEA technology is pivotal, potentially reducing costs by 66% and opening mass market opportunities. While promising, the company's financial position remains precarious, necessitating swift commercialization and strategic partnerships to ensure long-term viability.

Tech Expert

Advent's focus on high-temperature PEM fuel cells for aviation with Airbus is a significant technological pursuit. Operating at temperatures above 180°C (360°F) addresses critical thermal management challenges in aviation, potentially enabling increased performance, passenger capacity and range compared to low-temperature alternatives.

The company's progress in portable fuel cell systems for the U.S. DoD, particularly the Honey Badger 50™ with Ion Pair MEA technology, demonstrates practical applications of their innovations. The goal to achieve 3x power density and 3x lifetime performance with the new Advent MEA is ambitious and could be a game-changer if realized.

However, the financial constraints are clearly impacting R&D capabilities, especially evident in the poor performance of the Denmark subsidiary. The pivot towards technology transfer agreements with OEMs could accelerate commercialization but may also risk diluting Advent's competitive edge. The company's survival and success hinge on rapidly translating these technological advancements into marketable, cost-effective products.

Operational Highlights

• Work continued on the Airbus-sponsored project to benchmark HT-PEM fuel cell MEAs in aviation for the second quarter. The project continued as planned without delays.
• Met milestones with the U.S. Department of Defense on two previously awarded contracts for portable power systems.
• Continued Technology Assessment Work for four of the largest 15 automotive manufacturers in the world.
• Continued streamlining operations to significantly reduce OPEX and non-R&D development costs, primarily associated with overhead, facilities, and administrative personnel.

LIVERMORE, Calif., Oct. 15, 2024 (GLOBE NEWSWIRE) -- Advent Technologies Holdings, Inc. (NASDAQ: ADN) (“Advent” or the “Company”), an innovation-driven leader in the fuel cell and hydrogen technology space, today announced consolidated financial results for the three months ended June 30, 2024. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

Q2 2024 Financial Highlights

(All comparisons are to Q2 2023, unless otherwise stated)

• Revenue of $0.8 million and income from grants of $0.7 million, for a total of $1.5 million.
• Operating expenses of $10.0 million, a year-over-year decrease of $1.2 million, primarily related to the streamlining of operations.
• Net loss in Q2 of $(11.3) million or $(4.28) per share.
• Unrestricted cash reserves were $0.7 million as of June 30, 2024, a decrease of $0.1 million from March 31, 2024.

“We are on the road to becoming a much leaner and focused company with the goal to substantially reduce our cash burn. We aim to soon rely mostly on customer revenue and R&D grants for our operations rather than on fundraising. Towards that goal, we are focusing our activities on our Livermore and Patras offices that are leading the US Army, Airbus, and R&D product development efforts. Technology-wise, we have made great progress with the Advent MEA and expect to announce strong performance improvements to the market by year-end. I am thankful to our employees in the USA and Greece for performing excellent work during these hard financial times and meeting all customer milestones and requirements,” said Dr. Vasilis Gregoriou, Chairman and CEO of Advent Technologies.

Business Updates

Airbus: The second quarter milestones were completed successfully, and the cooperation between the two companies continues to be strong. Aviation has by far the most challenging requirements compared to any other market. Advent believes that the benchmark performance achieved through this project will also be instrumental in achieving the performance requirements of other markets, especially stationary power, marine, and automotive.

The project aims to accelerate the development of Advent’s MEA and benchmark the Ion Pair MEA against aviation requirements and current/expected technological limits. HT-PEM MEAs operating at temperatures higher than 180°C (360°F) aim to solve one of the largest challenges in aviation fuel cell use: thermal management. High-temperature fuel cells allow increased performance, increased passenger carrying capability, and increased range compared to low-temperature fuel cell stack technology.

US Army: Work continued at a good pace in the two new contracts with the U.S. Department of Defense (“DoD”) ($2.2m and $2.8m awarded in 2023). Advent has successfully met all program milestones so far (on time or with minor delays) and the demanding mission requirements of the U.S. Army. These contracts are the continuation of a series of past contracts with the U.S. DoD, and their primary objective is to further optimize Advent’s proprietary Honey Badger 50™ (“HB50”) portable fuel cell system by integrating the Company’s innovative Ion Pair MEA technology. Upon the completion of these contracts, Advent and the U.S. DoD aim to reinforce their long-term collaboration by focusing on the further optimization of the HB50 and also on low-volume production manufacturing capacity.

Advent continued work for the ten EU-received R&D grants that are already ongoing and met milestones in multi-partner projects focused on further developing its technology and accelerating its product development roadmap.

Advent continued work on developing the Advent MEA with the goal to eventually achieve three times (3x) the power density performance and the 3x the lifetime performance of the legacy MEA that has been used for the last years across the line of Serene products. Advent believes that the development of the MEA is essential to continue and precede mass market efforts. The experience with the Serene systems is that despite their design and system maturity they remain too expensive for the markets intended (especially telecom power backup in Asia and Africa). The expected introduction of the Advent MEA into new fuel cell systems codeveloped with OEMs can bring the cost three times down effectively creating an inflection point for mass adoption.

Other Updates

Reverse Stock Split: On May 1, 2024, Advent announced that it would move forward with a 1-for-30 reverse stock split of its issued and outstanding common stock. The reverse stock split was approved on April 30, 2024 by Advent’s Board of Directors, following approval by the Company's stockholders at a special meeting held on April 29, 2024. The reverse stock split brought Advent back into compliance with Nasdaq's $1.00 per share minimum bid price requirement for continued listing and to make the Company's stock more attractive to a broader range of institutional and other investors. On May 9, 2024 Advent announced that it would file a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware after the close of business on Monday, May 13, 2024 to effectuate its previously announced 1-for-30 reverse stock split of its issued and outstanding common stock (the “Reverse Split”).

Dr. Gregoriou concluded, “We have continued our work on important projects with Airbus, US Army, Hyundai, and other automotive manufacturers. We are happy to report that despite financial difficulties, we have put our full focus and effort into these projects, and we have done our best work to date, meeting all the milestones. On the contrary, the Advent Denmark subsidiary has had poor financial and technology delivery performance, leading us to implement more cuts there. We intend to continue to reduce costs and focus our operations and people on what is truly world-changing and a competitive advantage for the company, and that is our Advent MEA technology. Furthermore, we are currently in talks with OEMs with the intention to enter into technology transfer agreements.”

About Advent Technologies Holdings, Inc.

Advent Technologies Holdings, Inc. (a U.S. corporation) is an advanced materials and technology development company operating in the fuel cell, methanol, and hydrogen technology space. Advent is a world-leading company in the development of the HT-PEM technology (with more than 100 patents issued, pending, or licensed worldwide). The HT-PEM fuel cell technology developed by Advent enables off-grid power systems to produce clean power from various green fuels (hydrogen, methanol, bio and eMethanol, and renewable natural gas) and to function with higher efficiency at extreme ambient temperatures and in general extreme environmental conditions (humidity, air pollution). Advent’s main operations focus on developing and manufacturing the Membrane Electrode Assembly (MEA), which is the core electrochemical element and the most critical component of the fuel cell. The MEA largely determines lifetime, power density, efficiency, and overall cost of installation and operation for all applications. Advent is working with world-leading market-leading OEMs with the goal of bringing to the market complete fuel cell systems for a range of applications in the stationary power markets (backup, off-grid, and portable power) and the heavy-duty mobility markets (automotive, aviation, marine).
For more information, please visit www.advent.energy.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “believe,” “estimate,” “forecast,” “goal,” “project,” and other words of similar meaning. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, the Company’s ability to maintain the listing of the Company’s common stock on Nasdaq; future financial performance; public securities’ potential liquidity and trading; impact from the outcome of any known and unknown litigation; ability to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses; expectations regarding future expenditures; future mix of revenue and effect on gross margins; attraction and retention of qualified directors, officers, employees, and key personnel; ability to compete effectively in a competitive industry; ability to protect and enhance our corporate reputation and brand; expectations concerning our relationships and actions with our technology partners and other third parties; impact from future regulatory, judicial and legislative changes to the industry; ability to locate and acquire complementary technologies or services and integrate those into the Company’s business; future arrangements with, or investments in, other entities or associations; and intense competition and competitive pressure from other companies worldwide in the industries in which the Company will operate; and the risks identified under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 13, 2024, as well as the other information we file with the SEC. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this document, and we undertake no obligation to update or revise any of these statements. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

Presentation of Non-GAAP Financial Measures

In addition to the results provided in accordance with U.S. GAAP throughout this press release, the Company has provided non-GAAP financial measures - Adjusted Net Income / (Loss) and Adjusted EBITDA - which present results on a basis adjusted for certain items. The Company uses these non-GAAP financial measures for business planning purposes and in measuring its performance relative to that of its competitors. The Company believes that these non-GAAP financial measures are useful financial metrics to assess its operating performance from period-to- period by excluding certain items that the Company believes are not representative of its core business. These non- GAAP financial measures are not intended to replace, and should not be considered superior to, the presentation of the Company’s financial results in accordance with GAAP. The use of the terms Adjusted Net Income / (Loss) and Adjusted EBITDA may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. These measures are reconciled from the respective measures under GAAP in the appendix below.

ADVENT TECHNOLOGIES HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in USD thousands, except share and per share amounts)
		As of
		June 30, 2024				December 31, 2023
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	682			$	3,562
Restricted cash, current			-				100
Accounts receivable, net			922				191
Contract assets			11				21
Inventories			1,986				2,707
Prepaid expenses and Other current assets			3,314				2,254
Total current assets			6,915				8,835
Non-current assets:
Intangibles, net			76				79
Property and equipment, net			6,734				21,549
Right-of-use assets			341				3,216
Restricted cash, non-current			-				750
Other non-current assets			303				308
Available for sale financial asset			-				-
Total non-current assets			7,454				25,902
Total assets		$	14,369			$	34,737
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade and other payables		$	6,283			$	5,087
Deferred income from grants, current			7				530
Contract liabilities			2,221				2,015
Loss contingency liabilities			5,162				-
Other current liabilities			1,768				1,916
Operating lease liabilities			162				2,186
Income tax payable			176				179
Total current liabilities			15,779				11,913
Non-current liabilities:
Bonds and other long-term debt, net			537				-
Warrant liability			-				59
Long-term operating lease liabilities			170				8,230
Defined benefit obligation			91				83
Deferred income from grants, non-current			-				320
Other long-term liabilities			671				684
Total non-current liabilities			1,469				9,376
Total liabilities			17,248				21,289
Commitments and contingent liabilities
Stockholders’ equity
Common stock ($0.0001 par value per share; Shares authorized: 500,000,000 at June 30, 2024 and December 31, 2023; Issued and outstanding: 2,636,508 and 2,580,159 at June 30, 2024 and December 31, 2023, respectively)			-				-
Preferred stock ($0.0001 par value per share; Shares authorized: 1,000,000 at June 30, 2024 and December 31, 2023; nil issued and outstanding at June 30, 2024 and December 31, 2023)			-				-
Additional paid-in capital			199,265				194,941
Accumulated other comprehensive loss			(2,356	)			(2,334	)
Accumulated deficit			(199,788	)			(179,159	)
Total stockholders’ equity / (deficit)			(2,879	)			13,448
Total liabilities and stockholders’ equity		$	14,369			$	34,737

ADVENT TECHNOLOGIES HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in USD thousands, except share and per share amounts)
		Three months ended June 30, (Unaudited)								Six months ended June 30, (Unaudited)
		2024				2023				2024				2023
Revenue, net		$	805			$	1,112			$	4,256			$	2,089
Cost of revenues			(155	)			(1,905	)			(1,174	)			(3,389	)
Gross loss			650				(793	)			3,082				(1,300	)
Income from grants			677				660				2,114				1,194
Research and development expenses			(3,587	)			(2,883	)			(5,002	)			(6,024	)
Administrative and selling expenses			(6,372	)			(8,331	)			(13,275	)			(16,820	)
Sublease income			-				138				145				265
Amortization of intangibles			(1	)			(188	)			(2	)			(409	)
Credit loss – customer contracts			-				(127	)			-				(127	)
Impairment losses			-				(9,763	)			-				(9,763	)
Operating loss			(8,633	)			(21,287	)			(12,938	)			(32,984	)
Fair value change of warrant liability			-				99				59				489
Finance income / (expenses), net			(54	)			8				(286	)			118
Foreign exchange gains / (losses), net			(156	)			159				(165	)			118
Loss contingency			36								(4,871	)
Other income / (expenses), net			(2,466	)			(806	)			(2,483	)			(760	)
Loss before income tax			(11,273	)			(21,827	)			(20,684	)			(33,019	)
Income taxes			-				(4	)			55				(800	)
Net loss		$	(11,273	)		$	(21,831	)		$	(20,629	)		$	(33,819	)
Net loss per share
Basic loss per share			(4.28	)			(12.26	)			(7.91	)			(19.25	)
Basic weighted average number of shares			2,634,179				1,780,574				2,609,549				1,757,137
Diluted loss per share			(4.28	)			(12.26	)			(7.91	)			(19.25	)
Diluted weighted average number of shares			2,634,179				1,780,574				2,609,549				1,757,137

ADVENT TECHNOLOGIES HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in USD thousands, except share and per share amounts)
		Six Months Ended June 30, (unaudited)
(Amounts in thousands)		2024				2023				$ change				% change
Net Cash used in Operating Activities		$	(4,810	)		$	(18,899	)		$	14,089				(74.5	)%
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment			300				-				300				N/A
Purchases of property and equipment			(28	)			(2,348	)			2,320				(98.8	)%
Advances for the acquisition of property and equipment			-				(1,214	)			1,214				N/A
Acquisition of subsidiaries			-				(1,864	)			1,864				N/A
Net Cash provided by / (used in) Investing Activities		$	272			$	(5,426	)		$	5,698				(105.0	)%
Cash Flows from Financing Activities:
Proceeds from issuance of common stock and paid-in capital			282				3,410				(3,128	)			(91.7	)%
Proceeds from borrowings			540				-				540				N/A
Net cash provided by Financing Activities		$	822			$	3,410			$	(2,588	)			(75.9	)%
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents		$	(3,716	)		$	(20,915	)		$	17,199				(82.2	)%
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents			(14	)			94				(108	)			(114.9	)%
Cash, cash equivalents, restricted cash and restricted cash equivalents at the beginning of year			4,412				33,619				(29,207	)			(86.9	)%
Cash, cash equivalents, restricted cash and restricted cash equivalents at the end of period		$	682			$	12,798			$	(12,116	)			(94.7	)%

Supplemental Non-GAAP Measures and Reconciliations

In addition to providing measures prepared in accordance with GAAP, we present certain supplemental non-GAAP measures. These measures are EBITDA, Adjusted EBITDA and Adjusted Net Income / (Loss), which we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our peers. These non-GAAP measures do not have any standardized meaning prescribed by GAAP and therefore may differ from similar measures presented by other companies and may not be comparable to other similarly titled measures. We believe these measures are useful in evaluating the operating performance of Advent’s ongoing business. These measures should be considered in addition to, and not as a substitute for net income, operating expense and income, cash flows and other measures of financial performance and liquidity reported in accordance with GAAP. The calculation of these non-GAAP measures has been made on a consistent basis for all periods presented.

EBITDA and Adjusted EBITDA

These supplemental non-GAAP measures are provided to assist readers in determining our operating performance. We believe this measure is useful in assessing performance and highlighting trends on an overall basis. We also believe EBITDA and Adjusted EBITDA are frequently used by securities analysts and investors when comparing our results with those of other companies. EBITDA differs from the most comparable GAAP measure, net income / (loss), primarily because it does not include interest, income taxes, depreciation of property, plant and equipment, and amortization of intangible assets. Adjusted EBITDA adjusts EBITDA for items such as one-time transaction costs, asset impairment charges, and fair value changes in the warrant liability.

The following tables show a reconciliation of net loss to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023.

EBITDA and Adjusted EBITDA		Three months ended June 30, (Unaudited)												Six months ended June 30, (Unaudited)
(in Millions of US dollars)		2024				2023				$ change				2024				2023				$ change
Net loss		$	(11.27	)		$	(21.83	)			10.56			$	(20.63	)		$	(33.82	)			13.19
Depreciation of property and equipment		$	0.40			$	0.81				(0.41	)		$	1.12			$	1.21				(0.09	)
Amortization of intangibles		$	-			$	0.19				(0.19	)		$	-			$	0.41				(0.41	)
Finance income / (expenses), net		$	0.06			$	(0.01	)			0.07			$	0.29			$	(0.12	)			0.41
Loss contingency		$	(0.04	)		$	-				(0.04	)		$	4.87			$	-				4.87
Other income / (expenses), net		$	2.46			$	0.81				1.65			$	2.48			$	0.76				1.72
Foreign exchange differences, net		$	0.16			$	(0.16	)			0.32			$	0.17			$	(0.12	)			0.29
Income taxes		$	-			$	-				-			$	(0.06	)		$	0.80				(0.86	)
EBITDA		$	(8.23	)		$	(20.19	)			11.96			$	(11.76	)		$	(30.88	)			19.12
Net change in warrant liability		$	-			$	(0.10	)			0.10			$	(0.06	)		$	(0.49	)			0.43
Impairment losses		$	-			$	9.76				(9.76	)		$	-			$	9.76				(9.76	)
Adjusted EBITDA		$	(8.23	)		$	(10.53	)			2.30			$	(11.82	)		$	(21.61	)			9.79

This supplemental non-GAAP measure is provided to assist readers in determining our financial performance. We believe this measure is useful in assessing performance and highlighting trends on an overall basis. Adjusted Net Loss differs from the most comparable GAAP measure, net loss, primarily because it does not include one-time transaction costs, asset impairment charges and warrant liability changes. The following table shows a reconciliation of net loss to Adjusted Net Loss for the three and six months ended June 30, 2024 and 2023.

Adjusted Net Loss		Three months ended June 30, (Unaudited)												Six months ended June 30, (Unaudited)
(in Millions of US dollars)		2024				2023				$ change				2024				2023				$ change
Net loss		$	(11.27	)		$	(21.83	)			10.56			$	(20.63	)		$	(33.82	)			13.19
Net change in warrant liability		$	-			$	(0.10	)			0.10			$	(0.06	)		$	(0.49	)			0.43
Impairment losses		$	-			$	9.76				(9.76	)		$	-			$	9.76				(9.76	)
Adjusted Net Loss		$	(11.27	)		$	(12.17	)			0.90			$	(20.69	)		$	(24.55	)			3.86

Advent Technologies Holdings, Inc.

Dr. Vasilis Gregoriou,
press@advent.energy

Source: Advent Technologies Holdings, Inc.

FAQ

What were Advent Technologies' Q2 2024 financial results?

Advent Technologies reported revenue of $0.8 million, grant income of $0.7 million, and a net loss of $(11.3) million or $(4.28) per share for Q2 2024.

How much did Advent Technologies' ADN stock operating expenses decrease in Q2 2024?

Advent Technologies' operating expenses decreased by $1.2 million year-over-year to $10.0 million in Q2 2024.

What major projects is Advent Technologies (ADN) working on?

Advent Technologies is working on projects with Airbus for aviation fuel cell MEAs, U.S. Department of Defense for portable power systems, and technology assessment for major automotive manufacturers.

Why did Advent Technologies (ADN) implement a reverse stock split in 2024?

Advent Technologies implemented a 1-for-30 reverse stock split to regain compliance with Nasdaq's $1.00 per share minimum bid price requirement and to attract a broader range of investors.

What is Advent Technologies' (ADN) focus for improving its technology?

Advent Technologies is focusing on developing its MEA technology to achieve three times the power density performance and lifetime performance of its legacy MEA, aiming to reduce costs and enable mass market adoption.