Crown Electrokinetics Reports Fiscal 2022 First Quarter Financial Results

Rhea-AI Summary

Crown Electrokinetics Corp. (NASDAQ: CRKN) reported a net loss of $5.4 million for Q1 fiscal 2022, down from $10.5 million in the same period last year. The company launched its DynamicTint Smart Glass Inserts, with initial tests indicating potential energy cost reductions of 26% in commercial buildings. SG&A expenses decreased to $5.0 million from $7.9 million year over year, driven by lower stock-based compensations. As of June 30, 2021, Crown's cash and cash equivalents stood at $12.5 million, alongside working capital of $11.9 million, supporting future growth activities.

Positive

• Initial field tests indicate a potential 26% reduction in energy costs for buildings.
• SG&A expenses decreased significantly from $7.9 million to $5.0 million.
• Inclusion in the Russell Microcap Index enhances visibility and credibility.

Negative

• Net loss of $5.4 million, though improved from $10.5 million year-over-year.
• High SG&A expenses of $5.0 million primarily due to stock-based compensations.

CORVALLIS, Ore., Aug. 16, 2021 /PRNewswire/ -- Crown Electrokinetics Corp. (NASDAQ: CRKN) ("Crown" or the "Company"), a smart glass technology company, today reported its financial results for the fiscal 2022 first quarter ended June 30, 2021. 

"Our team remains steadfast in our strategy to bring Crown's first-generation product, the DynamicTint^TM Smart Glass Insert to market to help reduce a building's energy costs and its carbon emissions. During the first quarter of fiscal 2022, we launched the first field test for our inserts with a large commercial REIT. The initial data collected suggests that our inserts can reduce energy costs of office buildings by approximately 26%, which we believe is just the baseline. In addition, there is preliminary evidence that our inserts will save energy related to the HVAC heating as well as cooling," said Doug Croxall, Crown Chairman & CEO. "We are enthusiastic to continue our analysis launching an updated field test while working with prospective customers, using this preliminary data, to gain a deep understanding of the impact our technology can have on our customer's sustainability and cost-saving initiatives."

"Crown is well-positioned in our growth phase to penetrate the smart glass market with our inserts. We believe our differentiated product that is deployed as an after-market retrofit solution at an affordable price will appeal to a large customer base looking to improve energy savings and lower carbon emissions," concluded Mr. Croxall.

Corporate Updates During and Subsequent to the Fiscal First Quarter 2022

• Launched field test of the DynamicTint Smart Glass inserts at a large commercial REIT's headquarters. In completing its preliminary field test, the Company announced that the inserts can potentially reduce the HVAC-related energy costs of office buildings by approximately 26%
• Included in the Russel Microcap® Index on June 28, 2021. Membership in the index, which remains in place for one year, means automatic inclusion in the appropriate growth and value style indexes.
• Appointed Joel Krutz as new Chief Financial Officer, effective June 21, 2021.

Financial Results for Fiscal First Quarter 2022

Net Loss: Net loss was $5.4 million for the quarter ended June 30, 2021, and $10.5 million during the quarter ended June 30, 2020. The main driver was SG&A expenses of $5.0 million, of which non-cash stock-based compensation is $2.6 million.

Research and development (R&D) expense: R&D expenses were $0.4 million for the quarter ended June 30, 2021, a decreased compared to $1.4 million for the quarter ended June 30, 2020. This is primarily due to lower stock-based compensation expenses related to employee and officer grants last year.

Selling, general and administrative (SG&A) expense: SG&A expenses were $5.0 million and $7.9 million for the three months ended June 30, 2021 and 2020, respectively. This differential was primarily due to lower stock-based compensation expenses of $4.6 million partially offset by increases in compensation $0.7 million as well as consulting and professional fees $0.7 million.

Other Income (Expense): Other expenses were nominal for the quarter, compared to $1.2 million incurred for the same quarter last year. The decrease is primarily due to reductions in interest expense following the conversion of all convertible debt notes at the end of fiscal 2021.

Cash Position: As of June 30, 2021, cash and cash equivalents were $12.5 million and working capital was $11.9 million.  

Conference Call and Webcast Information

The Company will host a conference call and audio webcast today, Monday, August 16^th at 11:00 a.m. Eastern Time featuring remarks by Doug Croxall, Chairman & CEO and Joel Krutz, CFO.

Event:	Crown Electrokinetics Fiscal 2022 First Quarter Earnings Conference Call
Date:	Monday, August 16, 2021
Time:	11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time
Live Call:	+ 1-877-451-6152 (Toll Free) or + 1-201-389-0879 (International)
Webcast:	http://public.viavid.com/index.php?id=1457777

For interested individuals unable to join the conference call, a replay will be available through August 30, 2021, at +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International). Participants must use the following code to access the replay of the call: 13722237. An archived version of the webcast will also be available on Crown's Investor Relations site: https://ir.crownek.com/.

About Crown Electrokinetics
Crown is a smart glass technology company and the creator of DynamicTint - We Make Your Glass Smarter™. Originally invented by Hewlett-Packard (HP, Inc.), our technology allows any glass surface to transition between clear and dark in seconds. With applications to a wide array of windows, including commercial buildings, automotive sunroofs, and residential skylights, we partner with leading glass and film manufacturers for mass production and distribution. At the core of our technology is a thin film that is powered by electrically-charged pigment which not only replaces common window tints but is also a more sustainable alternative to traditional window treatments. With its unique ability to be retrofitted to existing glass, DynamicTint™ offers myriad benefits related to reducing carbon emissions. The company is supported by a robust patent portfolio. For more information, please visit WWW.CROWNEK.COM.

Forward-Looking Statements
This press release contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, and terms such as "anticipate," "expect," "intend," "may," "will," "should" or other comparable terms, involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Those statements include statements regarding the intent, belief or current expectations of Crown Electrokinetics and members of its management, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in Crown Electrokinetics' periodic reports filed with the SEC, and that actual results may differ materially from those contemplated by such forward-looking statements. Except as required by federal securities law, Crown Electrokinetics undertakes no obligation to update or revise forward-looking statements to reflect changed conditions.

Crown Electrokinetics, Corp
Balance Sheets
	June 30, 2021		March 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash	$                  12,478		$            15,297
Prepaid & other current assets	255		346
Total current assets	12,733		15,643
Property and equipment, net	275		209
Intangible assets, net	1,603		1,650
Other assets	29		20
TOTAL ASSETS	$                  14,640		$            17,522
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$                       321		$                 285
Accrued expenses	104		211
Notes payable	439		439
Total current liabilities	864		935
Total liabilities	864		935
Commitments and Contingencies (Note 10)
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.0001; 50,000,000 shares authorized, no shares outstanding	-		-
Series A preferred stock, par value $0.0001; 300 shares authorized, 251 shares outstanding as of June 30, 2021 and March 31, 2021, respectively	-		-
Series B preferred stock, par value $0.0001; 1,500 shares authorized, 1,443 shares outstanding as of June 30, 2021 and March 31, 2021, respectively	-		-
Series C preferred stock, par value $0.0001; 600,000 shares authorized, 500,756 shares outstanding as of June 30, 2021 and March 31, 2021, respectively	-		-
Common stock, par value $0.0001; 200,000,000 shares authorized; 14,920,741 and 14,856,480 shares outstanding as of June 30, 2021 and March 31, 2021, respectively	1		1
Additional paid-in capital	76,376		73,789
Accumulated deficit	(62,601)		(57,203)
Total stockholders' equity	13,776		16,587
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$                  14,640		$            17,522

 

Crown Electrokinetics, Corp
Statements of Operations
		Three Months Ended June 30,
		2021		2020
Operating expenses:
Research and development		$                 435		$              1,373
Selling, general and administrative		4,961		7,938
Total operating expenses		5,396		9,311
Loss from operations		(5,396)		(9,311)
Other income (expense):
Interest expense		(2)		(1,234)
Loss on coversion of notes		-		(22)
Loss on extinguishment of debt		-		(18)
Change in fair value of warrant liability		-		123
Total other expense		(2)		(1,151)
Net loss		$             (5,398)		$           (10,462)
Net loss per share, basic and diluted:		$               (0.38)		$               (1.81)
Weighted average shares outstanding, basic and diluted:		14,315,142		5,780,844

 

Crown Electrokinetics, Corp
Statement of Cashflows
		Three Months Ended June 30,
		2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$              (5,398)		$           (10,462)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		2,339		8,079
Issuance of common stock to consultants		244		282
Depreciation and amortization		66		15
Loss on extinguishment of debt		-		18
Loss on conversion of notes		-		22
Amortization of debt discount		-		1,052
Change in fair value of warrant liability		-		(123)
Changes in operating assets and liabilities:
Prepaid and other assets		82		6
Account payable		36		(112)
Accrued expenses		(107)		(190)
Accrued interest		-		127
Net cash used in operating activities		(2,738)		(1,286)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		(85)		-
Net cash used in investing activities		(85)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the exercise of stock options		4		-
Repayment of senior secured promissory note		-		(200)
Proceeds from PPP loan		-		205
Proceeds from issuance of senior secured convertible notes and common stock warrants		-		2,050
Common stock repurchased and subsequently canceled		-		(225)
Net cash provided by financing activities		4		1,830
Net (decrease) increase in cash		(2,819)		544
Cash — beginning of period		15,297		48
Cash — end of period		$              12,478		$                  592
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Unpaid research and development license included in accounts payable		$                      -		$                  100
Beneficial conversion feature in connection with notes payable		$                      -		$                  619
Issuance of common stock in connection with conversion of notes		$                      -		$               2,151
Issuance of common stock in connection with notes payable		$                      -		$                  751
Issuance of common stock in satisfaction of accounts payable		$                      -		$                  122
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest		$                       2		$                    56
Cash paid income taxes		$                      -		$                    -

 

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SOURCE Crown Electrokinetics

FAQ

What were Crown Electrokinetics' earnings for Q1 fiscal 2022?

Crown reported a net loss of $5.4 million for Q1 fiscal 2022, an improvement from $10.5 million in Q1 fiscal 2021.

What is the significance of the DynamicTint Smart Glass Inserts?

The DynamicTint Smart Glass Inserts can potentially reduce HVAC-related energy costs in buildings by approximately 26%.

How did SG&A expenses change for Crown Electrokinetics?

SG&A expenses decreased from $7.9 million in Q1 2021 to $5.0 million in Q1 2022, mainly due to lower stock-based compensation.

What is Crown Electrokinetics' cash position as of June 30, 2021?

As of June 30, 2021, Crown had cash and cash equivalents of $12.5 million and working capital of $11.9 million.

What company index did Crown Electrokinetics join recently?

Crown was included in the Russell Microcap Index on June 28, 2021.