Crown Electrokinetics Corp. Reports Year End 2023 Financial Results and Revises Guidance
- None.
- The net loss for the year ended December 31, 2023, was $29.0 million, indicating a significant financial challenge for the company.
- The cash position of $1.1 million as of December 31, 2023, raises concerns about the company's liquidity and financial stability.
- The increase in operating expenses to $19.4 million in 2023, coupled with the net loss, suggests potential financial strain on the company.
- The reliance on financing activities to raise $19.2 million in 2023, including common equity issuance and debt notes, may lead to dilution for existing shareholders.
Insights
The financial results of Crown Electrokinetics Corp. show a significant net loss, which is a concern for stakeholders and potential investors. The net loss has increased from 2022, indicating that the company's expenses, particularly those associated with the establishment of the Fiber division, are outpacing its revenue generation. The investment in the new Fiber Optics business, while potentially strategic for long-term growth, currently contributes to the company's financial strain.
From a liquidity standpoint, the cash position of $1.1 million after deploying $16.7 million for operations and capital investments suggests a tight financial situation. The reliance on financing through equity issuance and debt notes to fund operations is a double-edged sword—it provides necessary capital but also dilutes shareholder value and increases financial liabilities.
However, the updated guidance for the first half of 2024 indicates an expected increase in revenue and a narrowing of net loss, which may signal that the company's strategic investments are beginning to bear fruit. This will be an important trend to monitor in the upcoming quarters as it could impact the company's stock performance and investor confidence.
The entry into the Fiber Optics business by Crown Electrokinetics Corp. reflects a diversification strategy that aligns with the growing demand for high-speed data transmission solutions. While the film division remains a concern due to its contribution to the net loss, the focus on the Fiber division could capitalize on the burgeoning smart glass technology market.
The significant investment in establishing the Fiber division, as evidenced by the increased SG&A expenses, is indicative of the company's commitment to capturing market share in this new segment. The majority of the revenue booked in the fourth quarter suggests a potential uptick in market acceptance and customer acquisition.
As the Fiber division's revenue is projected to increase substantially in the second quarter of 2024, it will be critical to assess the division's ability to sustain this growth and achieve profitability. The ability to convert these technological advancements into commercially viable products will be key to the company's success in a competitive market.
The smart glass technology and fiber optic networks are areas with high growth potential, driven by trends in energy efficiency and the need for enhanced connectivity. Crown's financial results highlight the challenges of scaling in a capital-intensive industry. The reduction in R&D spending for the Film division may raise questions about the company's long-term commitment to innovation in this area.
The updated financial guidance, showing an expected increase in revenue for the Fiber division, could be indicative of the company's strategic pivot towards areas with higher growth prospects. The anticipated reduction in net loss for the first quarter and potential breakeven in the second quarter of 2024 may reflect operational efficiencies or successful market penetration.
It is important to monitor the company's ability to manage its operating expenses and cost of revenues as it scales up. The success of the Fiber division will hinge not only on market acceptance but also on the company's operational execution in the face of technological challenges and competition.
LOS ANGELES, CA / ACCESSWIRE / April 1, 2024 / Crown Electrokinetics Corp. (NASDAQ:CRKN) ("Crown" or the "Company"), ("Crown" or the "Company a leading smart glass technology company and an expert in constructing fiber optic networks, today announced its year-end 2023 financial results.
Financial Results for the year ended December 31, 2023 compared to 2022
Net Loss: Net loss for the year ended December 31, 2022, was
Revenues: Total 2023 Revenues were
Operating Expenses: Total Operating Expenses for the year-ended 2023 were
Cash Position: For the year ended December 31, 2023, the Company deployed
Updated Financial Guidance for First and Second Quarters of 2024
First Quarter 2024 Guidance - Revised
- Revenue for the first quarter of 2024 is now expected to be between
$0.9 million and$1.0 million - compared to the previous guidance of$0.7 million and$0.9 million . - Net Loss for the first quarter of 2024 is anticipated to be between (
$3.1) million and ($3.3) million - compared to the previous guidance of ($3.3) million and ($3.5) million .
Second Quarter 2024 Guidance
- Revenue for the second quarter of 2024 is expected to be between
$7.0 million and$ 8.0 million - no change. - Net Income (Loss) for the second quarter of 2024 is anticipated to be between (
$0.5) million and$0.0 million - no change.
The Company will host a conference call and audio webcast that morning at 11:00 a.m. Eastern time featuring remarks by Doug Croxall, Chairman & CEO and Joel Krutz, COO.
To participate in this event, please log-on or dial-in approximately 5 to 10 minutes before the beginning of the call.
Date: April 1, 2024
Time: 11:00 a.m. ETT
1-877-451-6152 or 1-201-389-0879
Conference ID: 13745352
Webcast:- https://viavid.webcasts.com/starthere.jsp?ei=1662854&tp_key=0ceef58cf5
Call me™: https://callme.viavid.com/viavid/?callme=true&passcode=13722237&h=true&info=company&r=true&B=6
Participants can use Guest dial-in #s above and be answered by an operator OR click the Call me™ link for instant telephone access to the event.
Call me™ link will be made active 15 minutes prior to scheduled start time.
Conference Call Replay Information
1-844-512-2921 or 1-412-317-6671
Access ID: 13745352
About Crown Electrokinetics
Crown is comprised of two divisions, Fiber Optics and Electrokinetics Film. The Electrokinetics Film division is a smart glass technology and the creator of our Smart Window Insert based on its patented electrokinetic film. Crown's Fiber Optics division is a builder of underground fiber optic networks as well as other utility infrastructure projects.
Safe Harbor Statement:
Statements in this news release may be "forward-looking statements". Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release and Crown Electrokinetic Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release.
This press release does not constitute a public offer of any securities for sale. Any securities offered privately will not be or have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Crown Electrokinetics
IR Email: info@crownek.com
www.crownek.com
Crown Electrokinetics, Corp
Balance Sheets
(in thousands)
| December 31, 2023 | December 31, 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 1,059 | $ | 821 | ||||
Prepaid and other current assets | 728 | 590 | ||||||
Accounts receivable , net | 83 | - | ||||||
Total current assets | 1,870 | 1,411 | ||||||
Property and equipment, net | 3,129 | 1,409 | ||||||
Intangible assets, net | 1,382 | 1,598 | ||||||
Right of use asset | 1,701 | 1,842 | ||||||
Deferred debt issuance costs | 1,306 | 150 | ||||||
Other assets | 139 | 180 | ||||||
TOTAL ASSETS | $ | 9,527 | $ | 6,590 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,500 | $ | 865 | ||||
Accrued expenses | 1,190 | 621 | ||||||
Lease liability - current portion | 655 | 574 | ||||||
Warrant liability | - | 972 | ||||||
Notes payable at fair value | - | 1,654 | ||||||
Notes payable | 429 | 8 | ||||||
Warranty customer liability | 2 | - | ||||||
Total current liabilities | 3,776 | 4,694 | ||||||
Lease liability - non-current portion | 1,072 | 1,366 | ||||||
Warranty customer liability long term | 2 | - | ||||||
Total liabilities | 4,850 | 6,060 | ||||||
STOCKHOLDERS' EQUITY: | ||||||||
Preferred stock, par value | - | - | ||||||
Series A preferred stock, par value | - | - | ||||||
Series B preferred stock, par value | - | - | ||||||
Series C preferred stock, par value | - | - | ||||||
Series D preferred stock, par value | - | - | ||||||
Series E preferred stock, par value and outstanding as of December 31, 2023 and December 31, 2022 | - | - | ||||||
Series F preferred stock, par value | - | - | ||||||
Series F-1 preferred stock, par value | - | - | ||||||
Series F-2 preferred stock, par value | - | |||||||
Common stock, par value | 7 | 2 | ||||||
Additional paid-in capital | 121,665 | 88,533 | ||||||
Accumulated deficit | (116,995 | ) | (88,005 | ) | ||||
Total stockholders' equity | 4,677 | 530 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 9,527 | $ | 6,590 | ||||
Crown Electrokinetics, Corp
Statements of Operations
(in thousands)
| Twelve months ended December 31, | ||||||||
| 2023 | 2022 | |||||||
Revenue | $ | 153 | $ | - | ||||
Cost of revenue, excluding depreciation and amortization | (886 | ) | - | |||||
Depreciation and amortization | (733 | ) | 503 | |||||
Research and development | (2,231 | ) | 4,107 | |||||
Selling, general and administrative | (14,962 | ) | 10,498 | |||||
Goodwill impairment charge | (649 | ) | - | |||||
Loss from operations | (19,308 | ) | (15,108 | ) | ||||
Other income (expense): | ||||||||
Interest expense | (9,417 | ) | (7 | ) | ||||
Loss on extinguishment of warrant liability | (504 | ) | 1,023 | |||||
Loss on extinguishment of debt | (2,345 | ) | ||||||
Gain on issuance of convertible notes | 64 | - | ||||||
Change in fair value of warrants | 10,458 | - | ||||||
Change in fair value of notes | (7,040 | ) | (149 | ) | ||||
Change in fair value of derivative liability | 401 | - | ||||||
Other expense | (1,293 | ) | (74 | ) | ||||
Total other income (expense) | (9,676 | ) | 793 | |||||
Loss before income taxes | (28,984 | ) | (14,315 | ) | ||||
Income tax expense | - | - | ||||||
Net loss | (28,984 | ) | (14,315 | ) | ||||
Statement of Cashflows
(in thousands)
| Year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (28,984 | ) | $ | (14,315 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Stock-based compensation | 714 | 2,405 | ||||||
Depreciation and amortization | 733 | 503 | ||||||
Loss on extinguishment of warrant liability | 504 | - | ||||||
Change in fair value of warrant liability | (10,458 | ) | (1,023 | ) | ||||
Change in fair value of liability | (401 | ) | - | |||||
Gain on issuance of convertible note | (64 | ) | - | |||||
Loss on extinguishment of debt | 2,345 | - | ||||||
Change in fair value of notes | 7,040 | 149 | ||||||
Amortization of deferred debt issuance costs | 9,341 | 73 | ||||||
Amortization of right of use assets | 626 | 494 | ||||||
Other expenses | 628 | - | ||||||
Impairment of Goodwill | 649 | - | ||||||
Intangible asset impairment | 200 | - | ||||||
| 214 | - | |||||||
Loss on disposal of equipment | 144 | 52 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid and other assets | 61 | 182 | ||||||
Accounts receivable | (83 | ) | - | |||||
Accounts payable | 1,253 | 413 | ||||||
Accrued expenses | 440 | 323 | ||||||
Lease liability | (1,062 | ) | (396 | ) | ||||
Net cash used in operating activities | (16,160 | ) | (11,140 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Cash paid for acquisition of Amerigen 7 | (645 | ) | - | |||||
Purchase of equipment | (2,173 | ) | (751 | ) | ||||
Purchase of patents | - | (61 | ) | |||||
Net cash used in investing activities | (2,818 | ) | (812 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from the exercise of warrants | 2,062 | - | ||||||
Proceeds from the issuance of common stock and warrants, net of fees | - | 855 | ||||||
Proceeds from the issuance of common stock / At-the-market offering | 8,398 | 1,295 | ||||||
Proceeds from the issuance of notes in connection with Line of Credit | 2,350 | - | ||||||
Offering costs for the issuance of common stock / At-the-market offering | (170 | ) | (46 | ) | ||||
Proceeds from issuance of senior secured convertible notes and common stock warrants | - | 3,500 | ||||||
Proceeds from issuance of Series D preferred stock and warrants, net of fees | - | 1,039 | ||||||
Proceeds from issuance of Series F-1 preferred stock | 2,328 | - | ||||||
Proceeds from issuance of Series F-2 preferred stock | 748 | - | ||||||
Proceeds from issuance of January promissory notes, net of fees paid | 1,357 | - | ||||||
Repayment of notes payable | (2,348 | ) | - | |||||
Proceeds from the issuance of common stock in connection with equity line of credit, net of offering costs | 4,489 | - | ||||||
Net cash provided by financing activities | 19,214 | 6,643 | ||||||
Net increase / decrease in cash | 238 | (5,309 | ) | |||||
Cash - beginning of period | 821 | 6,130 | ||||||
Cash - end of period | 1,059 | $ | 821 | |||||
SOURCE: Crown Electrokinetics
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FAQ
What was Crown Electrokinetics Corp.'s (CRKN) net loss for the year ended December 31, 2023?
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How much did Crown Electrokinetics Corp. raise from financing activities in 2023?
What is the updated revenue guidance for the first quarter of 2024 for Crown Electrokinetics Corp.?
What is the revised net loss expectation for the first quarter of 2024 for Crown Electrokinetics Corp.?
What is the revenue expectation for the second quarter of 2024 for Crown Electrokinetics Corp.?
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