Crown ElectroKinetics Corp.
Q4 2022 Earnings Call Transcript
Published:
- Operator:
- Good morning, everyone, and welcome to the Crown ElectroKinetics Corporation Earnings Call for the Fourth Quarter and Year End 2022. At this time, participants are in a listen-only mode. A question-and-answer session will follow the management's remarks. This conference call is being recorded. A replay of today's call will be available on the Investor Relations section of Crown's website. I will now hand the call over to Jason Assad for introductions and the reading of the Safe Harbor statement. Please go ahead.
- Jason Assad:
- Thank you, operator. Good morning, everyone, and welcome to Crown's earnings call for the fourth quarter and year-end 2022. With us today on the call are Doug Croxall, Chief Executive Officer and Chairman; and Joel Krutz, Chief Financial Officer. Before we begin, I would like to remind you that today's call contains certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended. Words such as may, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company's quarterly report on Form 10-Q for the quarter ended -- for the quarter 2022 -- [fourth] (ph) quarter 2022 filed with the SEC. Copies of these documents are available on the SEC's website at www.sec.gov. Actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law. Now, at this time, it is my pleasure to introduce Doug Croxall, CEO and Chairman of Crown. Doug, please go ahead.
- Doug Croxall:
- Thanks, Jason. I'd like to thank everyone for joining us this morning for our fourth quarter and year-end 2022 earnings conference call. I'm going to talk about four primary topics today
- Joel Krutz:
- Thanks, Doug. Good morning, everyone. Today, I'll walk through Crown's year-end 2022 financials. And firstly, just a note to investors and the public that the audited financial statements will compare full year of 2022 with the nine-month stub period of 2021, which followed our change in fiscal year last year. For today's call though and consistent with the MD&A section of our 10-K, I'll be comparing a full year of 2022 results to a like-for-like, but unaudited full year of 2021. For the year ended December 31, 2022, Crown's net loss was approximately $14.3 million. This included non-cash compensation expenses of $2.4 million. Compared to 2021's $37.2 million net loss, this was $22.8 million lower, driven by stock-based compensation reducing $9.8 million and other income expenses down year-on-year by $15.8 million, which stemmed from the balance sheet restructure we effected in early 2021. Excluding these non-cash elements, the underlying net loss increased $2.7 million due to higher operating expenses. Total operating expenses for the year ended 2022 were $15.1 million, which consisted of $2.4 million of non-cash stock-based comp, $7 million of payroll and related expense, $2.6 million in consulting and professional fees, and $3.1 million of operating overheads. Excluding stock comp expense, operating expenses were higher by $2.7 million due to increased payroll costs of $1.5 million, rent utilities of $0.6 million and other overheads of $0.6 million. For the year ended December 31, 2022, net cash decreased $5.3 million with the company deploying $11.1 million of cash for operations and $0.8 million to investments. Crown raised $6.6 million from financing activities in 2022, with $3.1 million of equity issuance and $3.5 million of debt notes that we issued in Q4. As of December 31, cash and cash equivalents were $0.8 million. As Doug mentioned, subsequent to December 31, there have been a number of Q1 liquidity events worth highlighting. Most notably Crown raising $7.1 million of fresh capital and securing $100 million line of credit, which will support the customer expansion in our new fiber optics business. In terms of the capital raise, we've drawn $2 million down from the line of credit, and then we raised another $1 million of debt from a new note. A further $4.1 million was raised through equity with $2 million coming from cash exercise of warrants and $2.1 million from ATM activity, as we're continuing to see strong volume in Crown trading. That concludes our prepared remarks. And now, we'd like to open the call for questions. Operator?
- Doug Croxall:
- All right. Thank you, operator. Just want to point out where we were a year ago this day. We have -- this company has been through a lot, and have we not made the pivot that we did in January, quite honestly, I'm not sure how we would get our film to the finish line. So, while the stock price is frustrating to everybody, including myself, management team and the Board of Directors, we do feel that we put this company in a position to grow not just with revenue, but with earnings. And while we grow on the fiber side, we will continue to develop the film on the electrokinetic side. I do know that we will have product in the market this year. I have confidence that we will. I have confidence that we will also get through the NASDAQ de -- or relisting process, as I like to call it. And I know that we will have the proper capitalization to build this business going forward. I thank you for your support, and we look forward to talking to you in mid May on our Q1 earnings call.
- Operator:
- Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.