Akoustis Issues Redemption Notice on $10 Million of Company’s Outstanding 6.5% Convertible Senior Notes Due in 2023

Rhea-AI Summary

Akoustis Technologies (NASDAQ: AKTS) announced a redemption notice for its $10 million, 6.5% Convertible Senior Notes, due February 1, 2021. The redemption will cover the principal amount plus accrued interest, amounting to $10.833 per $1,000 of Notes, and a make-whole payment of $184.167. Holders can opt to convert Notes at a rate of 196.08 shares per $1,000 principal amount until January 29, 2021. CEO Jeff Shealy emphasized that eliminating this debt will reduce cash interest expenses by $650,000 annually, enhancing financial flexibility.

Positive

• Elimination of $10 million convertible debt improves balance sheet.
• Annual cash interest reduction of $650,000 enhances financial flexibility.

Negative

• None.

Charlotte, N.C., Dec. 07, 2020 (GLOBE NEWSWIRE) -- Akoustis Technologies, Inc. (NASDAQ: AKTS) (“Akoustis” or the “Company”), an integrated device manufacturer (IDM) of patented bulk acoustic wave (BAW) high-band RF filters for mobile and other wireless applications, announced today that it has issued a redemption notice to the holders of the Company’s outstanding $10,000,000 aggregate principal amount of 6.5% Convertible Senior Notes due 2023 (the “Notes”), pursuant to the indenture governing the Notes. The Company will redeem all Notes that continue to be outstanding on February 1, 2021.

The Company will pay holders of the Notes that are redeemed a redemption price equal to 100% of the aggregate principal amount of Notes being redeemed, plus accrued and unpaid interest as well as an interest make-whole payment with respect to those Notes that are redeemed. This redemption price will include $10.833 of accrued and unpaid interest for each $1,000 principal amount of Notes being redeemed and $184.167 as the interest make-whole payment for each $1,000 principal amount of Notes that are redeemed. The make-whole payment may be paid by the Company in cash or freely tradeable shares of its common stock so long as the volume weighted average price of the Company’s common stock for the ten trading days ending on and including January 29, 2021, multiplied by 0.95, is not less than $5.01 per share. 

Alternatively, holders of the Notes may elect to convert the Notes into shares of common stock of the Company at a conversion rate equal to 196.08 shares of common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $5.10 per share). This conversion right will terminate at the close of business on January 29, 2021.

Jeff Shealy, founder and CEO of Akoustis, stated, “I am pleased to report that we will be improving our balance sheet through the elimination of this convertible debt.” Mr. Shealy continued, “The elimination of these notes will result in a go-forward reduction in cash interest of $650,000 annually and should give us greater flexibility in the future.”

The details concerning the terms and conditions of the redemption are fully described in the redemption notice, a copy of which will be filed with the SEC in a current report on Form 8-K on December 7, 2020. This press release is not a notice of redemption. The redemption will be made solely pursuant to the redemption notice.

This announcement does not constitute an offer to buy or sell, or the solicitation of an offer to sell or buy, securities in any jurisdiction.

Akoustis’ high frequency, high performance XBAW® process and filters are experiencing growing interest as the Company has entered production in multiple markets in calendar 2020, including 5G network infrastructure, high-band WiFi and phased-array radar applications.

Akoustis has added 15 filters to its product catalog including a 5.6 GHz WiFi filter, a 5.2 GHz WiFi filter, a 5.5 GHz WiFi-6E filter, a 6.5 GHz WiFi 6E filter, three small cell 5G network infrastructure filters including two Band n77 filters and one Band n79 filter, a 3.8 GHz filter and five S-Band filters for defense phased-array radar applications, a 3.6 GHz filter for the CBRS 5G infrastructure market and a C-Band filter for the unmanned aircraft systems (UAS) market. The Company is also developing several new filters for the sub-7 GHz bands targeting 5G mobile device, network infrastructure, WiFi CPE and defense markets.

About Akoustis Technologies, Inc.

Akoustis® (http://www.akoustis.com/) is a high-tech BAW RF filter solutions company that is pioneering next-generation materials science and MEMS wafer manufacturing to address the market requirements for improved RF filters - targeting higher bandwidth, higher operating frequencies and higher output power compared to incumbent polycrystalline BAW technology deployed today. The Company utilizes its proprietary XBAW® manufacturing process to produce bulk acoustic wave RF filters for mobile and other wireless markets, which facilitate signal acquisition and accelerate band performance between the antenna and digital back end. Superior performance is driven by the significant advances of high-purity, single-crystal and associated piezoelectric materials and the resonator-filter process technology which drives electro-mechanical coupling and translates to wide filter bandwidth. 

Akoustis plans to service the fast growing multi-billion-dollar RF filter market using its integrated device manufacturer (IDM) business model. The Company owns and operates a 120,000 sq. ft. ISO-9001:2015 certified commercial wafer-manufacturing facility located in Canandaigua, NY, which includes a class 100 / class 1000 cleanroom facility - tooled for 150-mm diameter wafers - for the design, development, fabrication and packaging of RF filters, MEMS and other semiconductor devices. Akoustis Technologies, Inc. is headquartered in the Piedmont technology corridor near Charlotte, North Carolina.

Forward-Looking Statements

This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements about our estimates, expectations, beliefs, intentions, plans or strategies for the future (including our possible future results of operations, business strategies, competitive position, potential growth opportunities, potential market opportunities and the effects of competition), and the assumptions underlying such statements. Forward-looking statements include all statements that are not historical facts and typically are identified by use of terms such as "may," “might,” “would,” "will," "should," "could," “project,” "expect," "plan," “strategy,” "anticipate," “attempt,” “develop,” “help,” "believe," "estimate," "predict," “intend,” “forecast,” “seek,” "potential," "continue," “future,” and similar words (including the negative of any of the foregoing), although some forward-looking statements are expressed differently. Forward-looking statements are neither historical facts nor assurances of future results, performance, events or circumstances. Instead, these forward-looking statements are based on management’s current beliefs, expectations and assumptions and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those currently anticipated include, without limitation, risks relating to our ability to obtain adequate financing and sustain our status as a going concern; our limited operating history; the results of our research and development activities, including uncertainties relating to semiconductor process manufacturing; the development of our XBAW^® technology and products presently under development and the anticipated timing of such development; our ability to protect our intellectual property rights that are valuable to our business, including patent and other intellectual property rights; our reliance on third parties to complete certain processes in connection with the manufacture of our products; product quality and defects; existing or increased competition; our ability to successfully manufacture, market and sell products based on our technologies; the ability to achieve qualification of our products for commercial manufacturing in a timely manner and the size and growth of the potential markets for any products so qualified; our ability to successfully scale our New York wafer fabrication facility and related operations while maintaining quality control and assurance and avoiding delays in output; the rate and degree of market acceptance of any of our products; our ability to achieve design wins from current and future customers; contracting with customers and other parties with greater bargaining power and agreeing to terms and conditions that may adversely affect our business; risks related to doing business in foreign countries; any security breaches or other disruptions compromising our proprietary information and exposing us to liability; our ability to raise funding to support operations and the continued development and qualification of our products and the technologies underlying them; our ability to service our outstanding indebtedness represented by our $25.0 million principal amount of senior convertible notes due in 2023; and the impact of a pandemic or epidemic or a natural disaster, including the COVID-19 pandemic, on our operations, financial condition and the worldwide economy, including its impact on our ability to access the capital markets; our ability to maintain effective internal control over financial reporting; and our ability to obtain and maintain the Trusted Foundry accreditation of our New York wafer fabrication facility. These and other risks and uncertainties are described in more detail in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of the Company’s most recent Annual Report on Form 10-K and in subsequently filed Quarterly Reports on Form 10-Q. Considering these risks, uncertainties and assumptions, the forward-looking statements regarding future events and circumstances discussed in this document 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 document 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, whether written or oral, for any reason after the date of this document to conform these statements to new information, actual results or to changes in our expectations.

FAQ

What is the significance of the redemption notice issued by Akoustis (AKTS) on December 7, 2020?

The redemption notice allows Akoustis to eliminate $10 million in convertible debt, reducing annual cash interest expenses by $650,000.

When will the Convertible Senior Notes be redeemed by Akoustis (AKTS)?

The Convertible Senior Notes will be redeemed on February 1, 2021.

What options do holders of the Convertible Senior Notes have according to the Akoustis press release?

Holders can either redeem the Notes at a specified price or convert them into shares of common stock at a rate of 196.08 shares per $1,000 principal amount.

How much interest will Akoustis (AKTS) save annually after redeeming the Convertible Senior Notes?

Akoustis will save $650,000 in cash interest expenses annually.