Aurora Control Technologies (ACU.V) is involved in the development and delivery of inline process measurement, analysis and control systems for solar cell manufacturers. ACU.V's products are used by some of the world's most advanced and respected solar cell manufacturers. Headquarters near Vancouver, Canada, ACU.V has operations in Shanghai, China and partners in all major solar manufacturing markets.
Coverage was initiated on January 2017, with notes issued on April 2017, June 2017, November 2017, March 2018, August 2018 , February 2019 and September 2019. Listed below is an update of the recent activities.
Oct. 22 - Increases Intellectual Property Portfolio and Announces Key R&D Grant. Received two patent grants related to its established "DM" infrared-based inline measurement technology. European patent No. 2567217 "Non-Contact Measurement of the Dopant Content of Semiconductor Layers" extends the protection of our core Intellectual Property to the European Union. United States patent No. 10,386,310 "System for Measuring Levels of Radiation Reflecting from Semiconductor Material for Use in Measuring the Dopant Content Thereof" deepens our protection to include the latest version of the technology and continues protection until 2035.
The R&D grant, totaling $0.25M, is from the National Research Council of Canada's Industrial Research Assistance Program (IRAP). This grant, entitled "Industry 4.0 Data Aggregation and Analysis System for Solar Cells Manufacturing", will support advancement of data science technology underpinning ACU.V's Insight production-line analysis product.
Oct. 28 - Announces Susan Pan as Chief Financial Officer and Controller.
Also granted stock options to key employees to acquire 200,000 shares exercisable at $0.065 for a period of five years.
Oct. 29 - Announces repeat volume orders. Received two new volume orders, for thirteen DM measurement systems.
These orders, from two top-tier China-based manufacturers of high-efficiency PERC solar cells, build on our existing business of more than 40 DM systems with these customers. Expects to ship these later in the current fiscal quarter.
"These continuing volume orders from the largest solar cell manufacturers in the world are reflective of the explosive growth of this business in China, and of Aurora's emerging position as the dominant player in our field,"
-Gordon Deans, Aurora's Chief Executive Officer.
Jan. 7 - Announces volume order from the world's largest solar cell manufacturer. For fourteen DM measurement systems. This order, from the largest manufacturer of high-efficiency PERC solar cells, continues to build on our growing business with our top-tier customers. Expects to ship these later in the current fiscal quarter.
The Insight product is being designed as an innovative platform to maximize solar cell manufacturing yield and extend Aurora's business to include software solutions capable of generating a recurring revenue stream.
These include the following attributes: 1) Development of proprietary algorithms to "mine" the end-of-line data, 2) Addition of a new end-of-line test that increases the resolution and accuracy of Insight's analysis, 3) Development and testing of wafer path tracking tools, and 4) Extensive field testing and refinement of the technology.
Since 2018, successive versions of the technology have been tested and applied within the production facility of one of Aurora's long-standing customers. Recently a second customer trial site has been added .
Aurora has been developing Insight with the cooperation of two lead customers and our research partners since 2018, and the initial version of this product is now planned for introduction in the second half of 2020.
For most cell manufacturers the underlying material and process variations are often hidden or difficult to detect using traditional techniques such as inline instrumentation or offline laboratory tests. Insight is targeted for general release to the market in the second half of 2020 with initial introduction to key strategic customers and will be packaged as a server-based product, co-located in the customers' production facilities.
It will be marketed to customers by Aurora on an annual subscription basis.
Feb. 11 - Announces new volume order from China-based manufacturer. For ten DM measurement systems. Aurora expects to ship these DM measurement systems in this final quarter of the current fiscal year or early next quarter.
This order again continues to build on our growing business with our top-tier customers. ACU.V's China-based team of four engineers works directly with customers for product sales, installation and support, and additional in-country sales and service support from Saratoga Technology, our partner in the Chinese market.
Feb. 14 - Announces Non-Brokered Private Placement For $1.5M through the sale of up to 15M units at of $0.10 per Unit; Warrant at $0.15 cents. The net proceeds for ongoing development of its Insight product and for general working capital.
Feb. 18 - Announces volume order from additional China-based manufacturer. For eleven DM measurement systems.
This order comes from a new customer and again continues to build on our growing business in China. This customer is a long-standing top-tier player that is now modernizing and automating their production. Aurora expects to ship these DM measurement systems in this final quarter of the current fiscal year or early in the next quarter.
Mar. 5 - Closes First Tranche of Private Placement. 16,840,000 units at $0.10 for gross proceeds of $1,684,000. Warrant $0.15 cents. All securities will be subject to a 4-month hold period which expires on July 6, 2020.
Mar. 12 - Closes Second and Final Tranche of Private Placement. 2,080,000 units for gross proceeds of $208,000.
Apr. 8 - Granted New Patent and Announces Stock Option Grants. Granted a key patent in the field of manufacturing process data visualization. The patent that was recently granted by the United States Patent Office, entitled "Mapping Of Measurement Data To Production Tool Location And Batch Or Time Of Processing" describes Aurora's proprietary method for intuitive data display and monitoring of the performance of solar cell manufacturing equipment, using measurements of critical-to-quality parameters such as those provided by the Company's DM measurement systems.
Also announces granting 1,23M stock options at $0.10 cents to employees, management and consultants for five years.
Apr. 14 - Receives Order from China-Based Manufacturer. Three DM measurement systems. This order comes from an existing customer and continues to build on our growing business in China. Expects to ship in the current fiscal quarter.
May 26 - Appoints Joseph Lee as Interim Chief Financial Officer. Effective May 12, 2020, the Company is pleased to announce the appointment of Joseph Lee, CPA, CA as Interim Chief Financial Officer, succeeding Susan Pan in this role.
June 2 - Receives another order from China-based manufacturer. For two DM measurement systems. This order comes from an existing customer. ACU.V expects to ship these DM measurement systems in the current fiscal quarter.
Summary
In the period ACU.V traded between $0.055 to $0.14 cents in a cyclical pattern.
Earnings & Orders
YTD, $3M in Revenue was reported with a slightly ($0.17M) Net Income.
ACU.V should report Q4 imminently, results should be interesting.
Orders
Activities on the order books were pretty steady until Covid-19.
However, orders from Existing Customer speak for themselves.
Given, that a slow down is anticipated, the mix of orders by customer types will be telling.
Patents
ACU.V secured three patents for the period. In October 2019, 1) the European patent No. 2567217 "Non-Contact Measurement of the Dopant Content of Semiconductor Layers" and 2) United States patent No. 10,386,310 "System for Measuring Levels of Radiation Reflecting from Semiconductor Material for Use in Measuring the Dopant Content Thereof" were reported to have been granted to the company. Note that both of these have respective expiration dates of (2031-05-03) and (2035-08-28). In April 2020, ACU.V also disclosed another one; 3) The US version: "Mapping Of Measurement Data To Production Tool Location And Batch Or Time Of Processing".
Product Development
One of the most salient announcement for the period (January 2020) was related to the Insight Software. At the time, ACU.V reported that it had been working since 2018 on the initiative (with successive versions) with one customer and also disclosed working with another on a Beta version. This is significant as it extends the product offering with a recurring revenue model that is subscription based. A detailed interview on the matter is available here.
A lot of what is mentioned is triangulated in this article with LONGi Vice President Li Wenxue. He states: that it is necessary to speed up the intelligentization and digitization of the company, which are important for the transformation and upgrading of the photovoltaic manufacturing industry in general. The pandemic outbreak has made more photovoltaic companies realize the limitations of “human”. The pandemic will become the catalyst for the intelligentization and digitization of the photovoltaic manufacturing industry, obliging companies to accelerate intelligent production.
Furthermore, PV ModuleTech Bankability of Q2 2020 states: "For the second consecutive quarter of releases this year, LONGi remains on the only AAA-Rated module supplier. This continues to be driven by the company’s strong operational performance, specifically the gross margins being achieved on wafer sales that are accounting for more than 50% of company revenues now. Combined with being a 10-GW-level global module supplier (not to mention the continued capex allocations to cell and module capacity levels this year), this is rather unchartered waters for a major PV module supplier."
Coincidence? Perhaps not. Its likely that LONGI is has a blue print that others will be looking to replicate.
Grant and Financing
In October 2019, ACU.V reported a $0.25M grant from the National Research Council of Canada's Industrial Research Assistance Program (IRAP) for "Industry 4.0 Data Aggregation and Analysis System for Solar Cells Manufacturing".
In February 2020, ACU.V announced a Non-brokered Private Placement of 15M shares at $0.10 cents; warrant $0.15.
In early March, the first tranche was oversubscribed at $ 1.684M, and eventually closed an incremental $0.208M for a total of $1.89M with 26% more than original amount.
This is important as it reflect confidence from investors but it also indicates that depending on the performance, one can expect some resistance at $0.15 cents which is corroborated in the Weekly R2 levels at $0.16 cents.
In Short
Covid-19 has enhanced the competitive environment for solar manufacturer, with lower prices and an emphasis on cost reduction. As a result, ACU.V seems very well positioned to perform in this new era of digitization.
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