Advent Technologies Holdings Inc (ADN)

[WeTheMarket]

Advent Technologies Reports Q4 2023 Results
08/20/2024
Link to Press Release https://ir.advent.energy/news/news-details/2024/Advent-Technologies-Reports-Q4-2023-Results/default.aspx
Link to Webcast https://events.q4inc.com/attendee/199098183
Link to Previous (Q3 2023) Results https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173217007

LIVERMORE, Calif.--(BUSINESS WIRE)-- Advent Technologies Holdings, Inc. (NASDAQ: ADN) (“Advent” or the “Company”), an innovation-driven leader in the fuel cell and hydrogen technology space, announced on Tuesday, August 13, 2024 its consolidated financial results for the three months and year ended December 31, 2023. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

Q4 2023 Financial Highlights

(All comparisons are to Q4 2022, unless otherwise stated)

- Revenue of $1.5 million and income from grants of $0.8 million, totaling $2.3 million, which represents a decrease of (3.6)% year-over-year.
- Full year 2023 revenue of $4.9 million and income from grants of $2.5 million, totaling $7.4 million. This represents a decrease of (20.9)% year-over-year.
- Operating expenses of $44.6 million, representing a year-over-year decrease of $1.1 million.
- Net loss in Q4 of $(25.7) million or $(12.04) per share, and adjusted net loss of $(22.1) million or $(10.32) per share. Adjusted net loss excludes a $0.03 million gain from the change in the fair value of outstanding warrants, and a $3.71 million goodwill and intangible asset impairment charge.
- Unrestricted cash reserves were $3.6 million as of December 31, 2023, a decrease of $0.1 million from September 30, 2023.

“Our product development efforts center around a common core technology: a fuel cell and MEA (membrane electrode assembly) designed to address heavy-duty automotive applications and large-scale stationary systems. Success with our MEA technology is key to unlocking these markets with the right OEM partnerships,” said Dr. Vasilis Gregoriou, Advent’s Chairman and CEO . “Our recent restructuring initiatives have been pivotal in significantly reducing costs. We have already achieved a 70% cost reduction compared to the same time last year. As a result of our strategic shift and a reduction in direct sales efforts, particularly in remote regions, we experienced a decrease in revenue in 2023, which we view as a temporary adjustment. We believe it is prudent to demonstrate this short-term revenue reduction rather than overextend our financial resources. Our goal is to operate as close as possible to break-even relying on the strategic OEM partnership funds and R&D government funds and to have the maximum runway until the inflection point. The partnering OEMs plans for mass production will determine the inflection point timing. We appreciate your ongoing support and patience and look forward to updating you on our progress.”

Company Updates

Technology Update

The Advent Fuel Cell platform, based on our new Ion Pair™ Membrane Electrode Assembly (MEA), offers superior heat management and the ability to operate with liquid eFuels and biofuels. These unique properties, combined with the MEA’s increased power density, form the basis for breakthrough innovation in the fuel cell industry. Our partnerships with industry leaders such as Airbus, the US Army, Hyundai Motor Company, and Siemens Energy not only validate our technological achievements but also highlight the potential of our technology. Our HT-PEM fuel cell technology is ideal for marine and off-grid power applications, both of which are increasingly adopting methanol. Additionally, our high-temperature operation results in superior efficiency, reaching up to 85% when heat is utilized. This positions HT-PEM as optimal for a wide range of applications, including aviation and heavy-duty trucks. The Ion Pair MEA technology has achieved in 2024 approximately double the power of previous state of the art fuel cells per cm². We also have concrete data that we will achieve double the lifetime of competing HT-PEM fuel cell systems. Our fuel cells convert approximately 400 grams of methanol into 1kWh of electrical power, (equivalent to a battery with a power density of 2,500 Wh/kg)—exceeding by a factor of 10 the power density of lithium-ion batteries. Moreover, unlike batteries or hydrogen-based systems, our fuel cells utilize the existing global infrastructure for transporting and dispensing liquid fuels. This advantage is especially beneficial for developing regions. The Ion Pair MEA technology overcomes the prior limitations of the HT-PEM technology.

Operations Update

In the past year, our journey has been marked by a blend of both encouraging and challenging developments. On a positive note, there has been an unprecedented surge in interest across various markets for methanol fuel cells and clean power solutions. However, the financial landscape for clean energy investments has been less favorable, pushing us to seek support through EU infrastructure loans and grants and a private loan from a US-based institutional investor. These processes are typically accompanied by extended bureaucratic processes. Over the years, particularly after our acquisition of Serenergy (Denmark), we have advanced our hardware technology, selling 1,200 systems mainly to the telecom industry. This expertise provides a solid foundation for accelerating partnerships through technology transfer and licensing. However, we have chosen not to remain an end-product OEM across multiple markets, as achieving this would require very significant investment and considerable time. As a result, we have discontinued operations of certain subsidiaries that focused on end-system production, which demanded increasing capital for low-margin or negative-margin revenues.

We have closed non-profitable subsidiaries and facilities in Boston and Denmark, and the Philippines. The Danish subsidiary, in particular, was producing fuel cells with older HT-PEM technology at a cost exceeding $2,000 per kW. In contrast, with our Ion Pair MEA technology, we anticipate that OEMs can develop systems at a cost approaching $500 per kW at scale. Advent is now focusing on advancing MEA innovation, expanding intellectual property footprint, and scaling manufacturing in the future primarily through technology licensing and Joint Development Agreements. This strategic pivot enables us to reduce capital expenditures while maintaining high margins and a sustainable business model.

Business Update

Our new approach involves forming joint ventures and technology transfer agreements with major local integrators, Tier 1 suppliers, and OEMs. By focusing on manufacturing the MEA and potentially the fuel cell stack, we are establishing a scalable, low-capex, and high-margin operational framework.

Global Market Expansion and Partnerships

1. Automotive

In the automotive industry, our MEA technology is currently evaluated by four of the top ten global automakers. In addition, our collaboration with Hyundai Motors has progressed to a Joint Development Agreement, and we aim to secure similar agreements with other major automakers by the end of 2024. Our high-temperature fuel cells offer exceptional benefits for trucks and heavy-duty vehicles, particularly in regions with extreme heat.

2. Aerospace

In aerospace, we have established a $13-million strategic partnership with Airbus to develop our Ion Pair MEA for aviation applications. This two-year Joint Development Agreement is designed to meet aviation performance standards, paving the way for test flights and hardware systems in the near future, with the ultimate goal of enabling fuel cell-powered aircraft.

3. Defense

In the defense sector, we signed in September and December 2023 two contracts (representing total value to the Company of $5 million), with the U.S. Department of Defense. These contracts refer to the HB50 product, a human-portable fuel cell that delivers power for military missions. We are integrating our Ion Pair MEA technology to enhance the HB50’s performance and scale up production by 2026. The objective is to facilitate the shift from low-prototype volume to manufacturing-scale volume. The program is advancing steadily, with daily collaboration with the U.S. Department of Defense. Significant milestones to date have been successfully achieved.

4. Marine

Our technology is already deployed in Sanlorenzo’s 50Steel methanol fuel cell superyacht, Almax. We believe methanol, including biomethanol and e-methanol, is crucial for decarbonizing the marine industry. With over 130 methanol projects globally, we anticipate significant adoption in both retrofitted and new yachts.

5. Data Centers

We are also pursuing collaborations with OEMs in the data center off-grid power market, where we believe our fuel cell technology presents distinct advantages. Data centers currently account for 1-2% of global power usage, a figure expected to rise to 3-4% by 2030 (1000TWhs per year). We anticipate that this increase will drive substantial growth in electricity demand, particularly in the US and Europe, and could double carbon emissions from data centers by 2030.

We believe that our fuel cells can reduce capex and accelerate deployment by eliminating the need for grid upgrades and extensive permits. Our technology’s multifuel capability allows for immediate deployment with methanol (on green eMethanol), biogas and the option to switch to hydrogen or other fuels We are actively engaging with companies interested in leveraging our HT-PEM technology for large-scale data center projects.

R&D Programs

Our teams are actively engaged in a comprehensive portfolio of 13 research and development programs, with total funding amounting to approximately $10 million. These programs receive support from notable sources, including the European Union and key European institutions such as Horizon Europe and the Clean Hydrogen Partnership. In addition to these ongoing initiatives, we are also forming strategic partnerships and submitting proposals for new programs with substantial funding opportunities, such as the European Innovation Fund. These efforts are designed to further advance our technology and expand our collaborative network with leading industry partners. This extensive network not only enhances our technological capabilities but also ensures that we remain at the forefront of innovation in our field.

Conference Call

The Company will host a conference call on Tuesday, August 20, 2024, at 9:00 AM ET to discuss its results. To access the call please dial [phone] from the United States, or [phone] from outside the U.S. The conference call I.D. number is 9909908. Participants should dial in 5 to 10 minutes before the scheduled time. Participants can also attend the call virtually by visiting the homepage of Advent's Investor Relations (IR) website, where they can register for the event under the "Latest Events" section.

A replay of the call can also be accessed via phone through September 3, 2024, by dialing [phone] from the U.S., or [phone] from outside the U.S. The conference I.D. number is 9909908. An archived version will be available after the event on the homepage of Advent's Investor Relations (IR) website, under the "Latest Events" section.

About Advent Technologies Holdings, Inc

Advent Technologies Holdings, Inc. is a U.S. corporation that develops, manufactures, and assembles complete fuel cell systems as well as supplying customers with critical components for fuel cells in the renewable energy sector. Advent is headquartered in California and holds the IP for next-generation HT-PEM that enables various fuels to function at high temperatures and under extreme conditions, suitable for the automotive, aviation, defense, oil and gas, marine, and power generation sectors. For more information, visit www.advent.energy .