Aurora Control Technologies (ACU.V) is a leader 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 solar cell manufacturers for superior control of critical processes during solar cell manufacturing.
Coverage was initiated on January 2017, with notes issued on April 2017, June 2017, November 2017, March 2018, August 2018 , February 2019, September 2019 , June 2020 and February 2021. Listed below is an update of the recent activities.
News Releases
Feb. 25 - Enters into First Insight(TM) Evaluation Agreement: Entered into an agreement with a strategic technology leader in solar cell manufacturing for their evaluation of the Company's initial version of the InsightTM data science product, called "Insight Essentials", for solar cell production yield optimization.
Insight Essentials is the first of a planned series of Insight versions, focused on plant-wide yield (and quality control) visualization and reporting. Future versions of the product will integrate and add value to inline measurement systems such as Aurora's DM family of products, providing a fully integrated system for yield and quality control management in solar manufacturing. Aurora has designed its Insight platform using industry know-how along with novel proprietary algorithms and technology to evaluate the large volumes of data collected during solar cell fabrication.
Also granted 3.05M options ($0.54) to its employees, officers, directors and consultants for a period of five years.
Apr. 21 - Announces Overnight Marketed Private Placement: Stifel GMP to act as sole agent in connection with a proposed best efforts overnight marketed private placement C$3,000,000, at C$0.25 per Unit (Warrant $0.40 cents).
The net proceeds will be used for the market roll-out of the InsightTM data science product, called "Insight Essentials", for solar cell production yield optimization and for general corporate purposes.
May 13 - Closes Private Placement Financing Raising Gross Proceeds of $3,550,000:
The Warrants shall be callable by the Company, at the discretion of the Company, should the daily volume-weighted average trading price of the common shares of the Company on the TSX Venture Exchange exceed C$0.50 for a period of 20 consecutive trading days, at any time during the term of the Warrants ("Call Trigger").
June 22 - Provides Corporate Update: Insight Essentials is the first of a planned series of Insight versions, focused on plant-wide yield management and reporting. The first phase of the evaluation project consisted of integration and verification of the solar cell tester and wafer flow data collection functions, validation of the operation of the Insight Essentials analytical toolkit, and validation of the user interface and reporting capabilities.
With the above core elements completed, the evaluation has now proceeded to the second phase, which is the determination of utility and economic value. At this stage, the findings are that "problem batch" flagging, automated experiment analysis, and process equipment performance comparison and analysis show significant utility and value.
A "problem batch" is a group of wafers that are degraded due to a fault or process drift in one or more of the manufacturing steps. Insight quickly and efficiently identifies the problem batch, where and when the problem occurred, and can also ascribe the probable cause(s). Problem batches are not infrequent - they can occur multiple times per week.
Aurora estimates that the reduction or elimination of problem batches alone can generate millions of dollars in incremental annual value in a five-Gigawatt factory (production of approximately 900 million solar cells per year) at current finished goods selling prices.
"In early June, Aurora showcased Insight Essentials at the annual Shanghai New Energy Conference and Exhibition (SNEC), the industry's leading commercial event. Insight generated considerable interest at SNEC from both top-tier and emerging solar cell manfacturers.
At SNEC, the Company also introduced a new release of our product line for HJT solar cell transparent conductive oxide measurement, the TCM-120 and TCM-121. Like the DM series, these are based on the ACU.V's patented IR technology.
With our TCM and DM products, the company is well-positioned to capitalize on this rapid growth, and at SNEC we received strong interest in the products from multiple solar cell manufacturers of these next-generation solar cells.
Oct. 26 -Provides Insight(TM) and Organizational Update, and Announces Second Insight Evaluation Agreement: A second InsightTM Essentials evaluation agreement has been signed, with a major solar cell and module manufacturer in China. This new evaluation, starting in the current quarter and expected to complete during the first half of 2022, aligns with the Company's plan for a staged rollout of Insight, culminating in general market availability later in 2022.
The current evaluation that is underway with an industry technology leader is progressing favorably and as anticipated.
This strategic project is now expected to be finalized within the current quarter.
Insight's data analysis algorithms isolate, quantify, and compare individual tool performance by filtering out "noise" caused by fluctuations in other tools' behaviour and by calibration discrepancies amongst different measurement devices.
DM product enhancements at selected customer locations were conducted. These updates have systematically improved product performance and operational utility at these locations. Most of the DM products at these locations are now in production use, with four units now having received formal customer acceptance.
We are continuing this systematic approach to achieve further acceptances and to position the Company for the next buying cycle, which is now anticipated to be in early to mid 2022 due to supply issues associated with power outages in China and raw materials shortages within the industry in general.
Appointment: The Company is also pleased to announce that Tricia Pederson CPA, CMA has been promoted to Chief Financial Officer, succeeding Joseph Lee as interim CFO.
Summary
In the last eight months, valuation went from $0.71 cents all the way down to $0.18 cents!
Financing
On April 21, 2021, an overnight marketed private placement of C$3.0M at C$0.25 per Unit (Warrant $0.40 cents) was announced. May 13th 2021, it closed oversubscribed at $3.5M. Net Proceeds were for Insight Essential development.
Earnings
As depicted below, revenues have been absent in the last three quarters. Moreover, the Net Income losses incurred in the last three quarters amounts to $4M. Fortunately, the company had $5M in cash as of June 30, 2021.
DM Orders
ACU.V is estimated to have received more than 55 DM orders in the past 24 months ( 13 + 14 + 10 + 11 + 9) from new and existing customers alike, as well as, from the largest and top tiers solar manufacturers in China.
However, ACU.V has not announced a single DM order in the last eight months. The company cited that Covid-19 travel restrictions created challenges with regards meeting product performance requirements which in turn delayed completing system commissioning and acceptance testing. Nonetheless, in their last update ACU.V cited:
DM product enhancements at selected customer locations were conducted. These updates have systematically improved product performance and operational utility at these locations. Most of the DM products at these locations are now in production use, with four units now having received formal customer acceptance.
Furthermore in the June 2021 update, ACU.V reported having introduced a new product line for HJT solar cell transparent conductive oxide measurement, the TCM-120 and TCM-121.
Insight Essential
After completion of the development of its market entry version of Insight (i.e. Insight Essentials), in February 2021, ACU.V entered into an evaluation agreement with a technology leader in solar cell manufacturing.
Yesterday (eight months later), it was reported that that the evaluation was: progressing favorably and as anticipated.
Leveraging the capabilities of Insight Essentials associated with yield management and quality control, elimination of costly special diagnostic operations was pinpointed by our lead customer as a valuable use case for Insight. These special diagnostic operations - requiring the routing of a series of raw material batches through a selected set of paths in the factory - are regularly used to confirm and/or quantify suspected faults or poor performance in manufacturing tools.
Conversely, Insight not only eliminates the throughput reduction and labour, but also automatically pinpoints the highest-priority issues over any selected period and identifies the specific tools causing those issues – all based on actual production data rather than intuition.
In addition to providing an update on the first Evaluation Agreement, a second one was announced this time with...
A major solar cell and module manufacturer in China. This new evaluation, starting in the current quarter and expected to complete during the first half of 2022, aligns with the Company's plan for a staged rollout of Insight, culminating in general market availability later in 2022.
In short
Adding to introducing TCM-120 and TCM-121, to its existing product lines of DMs, ACU.V reported significant progress in its first evaluation agreement with Insight Essential with a solar cell manufacturer. Furthermore, another evaluation agreement with a major solar cell and module manufacturer in China was also announced yesterday.
Alas, this did not help with valuation as ACU.V closed today at a 52 week low of $0.18 cents. The market expectations for imminent sales (ACU.V has not reported revenue in the last three quarter) were not aligned with the timeline cited for the next buying cycle of DM and TCM (early to mid 2022), as well as, Insight Essential (mid 2022).
Going back to the initial objective of the first evaluation agreement does put sales expectations of Insight in context:
The principal objectives of this evaluation project are to determine the yield management and quality control cost-saving potential of Insight Essentials, and to quantify the business case for its use as a subscription-based product in a high-volume production environment.
It is sensible that a lengthy time horizon might suggest another financing. As of last earnings (June 30), ACU.V reported $5.0M in cash. Will this be sufficient until the next sale cycle? It is also rather unfortunate that the recent financing was at $0.25 cents (Warrant; $0.40 cents) especially when ACU.V was over $0.35 cents in March 2021.
Nonetheless, new product introductions take time even for larger entities. Also one must keep in mind that ACU.V is a relatively small company working much larger cell manufacturer and are subject to their timeline especially for the evaluation of a new software which gather data from different multiple instruments and provide yield management.
Additionally, the lack of sales and revenue from DM units in the last eight months were related to Covid-19 restrictions which in turn prevented onsite product enhancement and customization for existing and new customers. This is reportedly improving. As a reminder, ACU.V previously stated that these DM issues were critical: "may affect the collection of final payments that are tied to successful commissioning or increase the potential for product returns". Moreover, solar cell manufacturer's move to HJT cells is a factor and explains the introduction of TCMs.
Overall, despite the lack of revenues in the last three quarter, ACU.V continues to be well positioned to access solar manufacturers with DMs, TCMs and Insight. As such, the last ten AND the next six months will be pivotal,
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