Everspin Reports Fourth Quarter and Fiscal Year 2017 Financial Results
Summary
“We made solid progress on several strategic priorities, most significantly on 256Mb STT-MRAM with the start of production and first recognized revenue in the fourth quarter.We believe our focus on technology innovation and development of high-value products for our customers will position Everspin to benefit from the growing demand for persistent memory solutions.“To gain the necessary capital for executing this strategy, Everspin raised a net $24.5 million, after underwriter fees, through a secondary public stock offering in February.Headquartered in Chandler, Arizona, Everspin Technologies, Inc. is the worldwide leader in designing, manufacturing, and commercially shipping discrete and embedded Magnetoresistive RAM (MRAM) into markets and applications where data persistence, performance, and endurance are paramount.EVERSPIN TECHNOLOGIES, INC.Balance Sheets(In thousands, except share and per share amounts)December 31, 20172016Assets Current assets:Cash and cash equivalents$ 12,950$ 29,727Accounts receivable, net 3,429 3,170Amounts due from related parties 612 486Inventory 9,837 5,069Prepaid expenses and other current assets 590 1,050Total current assets 27,418 39,502Property and equipment, net 3,946 1,920Other assets 73 50Total assets$ 31,437$ 41,472 Liabilities and Stockholders’ Equity Current liabilities:Accounts payable$ 2,720$ 1,502Accrued liabilities 2,254 1,811Amounts due to related parties 1,694 1,359Deferred income on shipments to distributors 1,720 1,827Current portion of long-term debt 3,987 3,884Total current liabilities 12,375 10,383Long-term debt, net of current portion 8,178 4,218Total liabilities 20,553 14,601Commitments and contingenciesStockholders’ equity:Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized as of December 31, 2017 and 2016; no shares issued and outstanding as of December 31, 2017 and 2016 — —Common stock, $0.0001 par value per share; 100,000,000 shares authorized as of December 31, 2017 and 2016; 12,817,201 and 12,498,128 shares issued and outstanding as of December 31, 2017 and 2016 1 1Additional paid-in capital 128,422 123,309Accumulated deficit (117,539) (96,439)Total stockholders’ equity 10,884 26,871Total liabilities and stockholders’ equity$ 31,437$ 41,472 EVERSPIN TECHNOLOGIES, INC.Statements of Operations and Comprehensive Loss(In thousands, except share and per share amounts)Year Ended December 31, 201720162015 Product sales$ 31,361$ 24,233$ 22,403Product sales - related party 2,316 2,378 3,472Licensing and royalty revenue 634 483 671Licensing and royalty revenue - related party 1,625 — —Total revenue 35,936 27,094 26,546Cost of sales 14,451 12,395 12,568Gross profit 21,485 14,699 13,978Operating expenses:Research and development 25,437 19,233 21,126General and administrative 11,516 7,281 6,565Sales and marketing 4,740 3,706 3,823Total operating expenses 41,693 30,220 31,514Loss from operations (20,208) (15,521) (17,536)Interest expense (764) (2,347) (653)Other income, net 118 1,160 6Loss on extinguishment of debt (246) — —Net loss and comprehensive loss$ (21,100)$ (16,708)$ (18,183)Net loss per common share, basic and diluted$ (1.69)$ (3.53)$ (7.12)Weighted-average shares used to compute net loss per common share, basic and diluted 12,484,984 4,738,496 2,552,205 EVERSPIN TECHNOLOGIES, INC.Statement of Cash Flows(In thousands)Year Ended December 31, 201720162015Cash flows from operating activities Net loss$ (21,100)$ (16,708)$ (18,183)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization 1,191 826 1,340Loss on disposal of property and equipment — 80 —Stock-based compensation 2,048 1,141 416Change in fair value of redeemable convertible preferred stock warrant liability — (372) (15)Non-cash loss on extinguishment of debt 185 — —Change in fair value of derivative liability — (798) —Non-cash interest expense 297 1,183 232Compensation expense related to vesting of common stock to GLOBALFOUNDRIES 1,472 965 1,761Changes in operating assets and liabilities:Accounts receivable (259) (1,261) 339Amounts due from related parties (126) 78 102Inventory (3,871) (893) (431)Prepaid expenses and other current assets 460 (860) (77)Other assets (23) (21) (10)Accounts payable 1,114 340 233Accrued liabilities (120) 56 428Amounts due to related parties (49) (2,453) 3,328Deferred income on shipments to distributors (107) 387 (362)Deferred revenue — (229) 229Net cash used in operating activities (18,888) (18,539) (10,670) Cash flows from investing activities Purchases of property and equipment (3,070) (1,040) (1,295)Net cash used in investing activities (3,070) (1,040) (1,295) Cash flows from financing activities Proceeds from convertible promissory notes-related party — 8,500 —Proceeds from debt 12,000 1,500 8,000Payments on debt (8,356) (1,325) (3,000)Payments of debt issuance costs (49) (40) (130)Payments on capital lease obligation (7) (198) (226)Proceeds from exercise of stock options and purchase of shares in employee stock purchase plan 1,593 48 4Proceeds from issuance of common stock in connection with initial public offering, net of offering costs — 33,864 —Proceeds from issuance of common stock in private placement, net of issuance costs — 4,650 —Net cash provided by financing activities 5,181 46,999 4,648Net (decrease) increase in cash and cash equivalents (16,777) 27,420 (7,317)Cash and cash equivalents at beginning of period 29,727 2,307 9,624Cash and cash equivalents at end of period$ 12,950$ 29,727$ 2,307 Supplementary cash flow information: Interest paid$ 467$ 806$ 421Interest paid to related party$ —$ 359$ — Non-cash investing and financing activities: Purchase of property and equipment in accounts payable and amounts due to related parties$ 116$ —$ —Purchase of inventory in accrued liabilities and amounts due to related parties$ 897$ —$ —Purchase of property and equipment under capital lease obligations$ 31$ —$ 431Conversion of convertible promissory notes into common stock$ —$ 8,634$ —Issuance of warrants with debt$ —$ —$ 307Conversion of redeemable convertible preferred stock into common stock$ —$ 64,642$ —Reclassification of warrant liability to additional paid-in capital$ —$ 65$ —