ACU.V - Recurring revenue.


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 and June 2020. Listed below is an update of the recent activities.



News Releases


June 9 - Receives Order from Top-Tier Solar Cell Manufacturer: To supply a major China-based manufacturer of high-efficiency PERC solar cells with nine DM-110h measurements systems. ACU.V expects to ship these DM measurement systems during the current and next fiscal quarter.


"We are excited to have been awarded this initial business from another one of the top ten global solar cell manufacturers. With this new customer in Aurora's most important market, Aurora has now sold products to six of these ten dominant manufacturers," - ACU.V's Chief Executive Officer.

Aug. 5 - Provides Update for its Novel Insight(TM) Product. Insight maximizes solar cell manufacturing yield and extend Aurora's business scope to include software solutions capable of generating a recurring revenue stream.


COVID-19 pandemic means that full market introduction has been delayed to the final calendar quarter of 2020. Milestone reached to date: a) Practical verification of Insight's proprietary data mining algorithms using actual production line data from one of our trial sites, b) Development of an improved User Interface that is focused on the key use cases of production line yield optimization and fault identification. c) To initiate market visibility, publication of a joint paper with a lead customer and industry technology partners, outlining how the use of Insight's algorithms can aid continuous improvement and yield optimization in high-volume solar cell fabrication. "Statistical Insights from Inline Solar Cell Metrology Data in a PERC Production Environment", Photovoltaics International Vol. 44, May 2020).


Oct. 20 - Strengthens Scientific Team, Extends Intellectual Property Portfolio and Wins Customer R&D Facility Order:


Received an order from an existing customer for a DM-110h for use in their solar cell and module research and development. This system is expected to be used in the development of advanced solar cell designs.


Added Divya Ananthanarayanan to our team. Ms. Ananthanarayanan conducted her Ph.D. studies on the interaction of infrared light and diffused, textured silicon solar wafers (solar cell raw material), which is the scientific method used by Aurora's DM family of infrared reflectometry measurement systems. Her work breaks new ground in this area.


Together with ACU.V's Dr. Johnson Wong,developed a scientific approach that is applied in the DM product line to increase measurement accuracy and expand capabilities to measure more critical-to-quality silicon wafer properties in real time, such as emitter dopant "surface concentration", previously observable only through destructive off-line tests.


ACU.V is also pleased to announce that the Taiwan Patent Office and the Chinese Patent Office have each allowed patents for the "Mapping of Measurement Data to Production Tool Location and Batch or Time of Processing", previously granted in the United States as US Patent 10,559,709.


In addition, ACU.V has recently delivered a large quantity of DM measurement systems to numerous customers in China for the first time. As the Company progresses through the commissioning phase with these products, we expect the full benefits of our DM technology will be recognized by these customers, strengthening the foundation for continued sales and for the introduction of our InsightTM data science product for solar cell production yield optimization.


Dec. 1 - Announce Strategic Partnership with WAVELABS for Integration and Marketing of their Insight(TM) and LED Solar Simulator Products. In the partnership, WAVELABS will provide specialized cell test functionality and data that can be used in the advanced versions of Aurora's Insight product, and the companies will cooperate in the promotion, marketing and distribution of their respective products.


WAVELABS' solar cell testers are revolutionizing the solar industry by enabling near-perfect efficiency measurement at the end of the solar cell manufacturing line. WAVELABS products use proprietary LED illumination for sunlight simulation and are also capable of illuminating cells during the test to provide additional information for use by the production line performance analysis algorithms in Aurora's Insight (TM) product.


A solar cell tester, aka (solar simulator or IV tester) performs a test on each finished good at the end of a solar cell production line. Each cell is subjected to a flash of simulated sunlight and it is then classified according to its electrical characteristics (current, voltage, power, etc.). This classification is used to sort the cells into categories for valuation and later assembly into solar panels.


Aurora's InsightTM is a novel product using proprietary algorithms to evaluate the large volumes of data collected by the cell tester during solar cell fabrication. The Insight product evaluates these data to inform the manufacturer - in real time - how well its production equipment is performing, where problems may be occurring, or where yield might be improved. The strategic partnership offers both companies the opportunity for co-marketing and the development of additional value-added features and functionality in their respective products to accelerate their respective growth.


Jan. 6 - To present at the SNN Network Canada Virtual Event on Thursday January 7, 2021.


Jan. 22 - Provide Corporate Update.


Insight Update

Aurora has completed development of its market-entry version of Insight, called "Insight Essentials". ACU.V is at an advanced stage for introduction of Insight Essentials to a lead customer, initially for evaluation and confirmation of effectiveness and operational benefit. Installation and commissioning for this is expected to take place during the current quarter. Following this market introduction phase, the Company expects to market and roll the product out to one or more additional customers, pending the easing of international travel restrictions over the coming months.


DM installations and customer acceptances in China

During 2019 and 2020, ACU.V has delivered a large quantity of DM measurement systems to numerous customers in China for the first time. While DM products have been well-proven in installations outside China, some of the new China-based installations have faced challenges in meeting product performance requirements that are associated with novel customer manufacturing parameters that vary by site. These combined with COVID-19 travel restrictions preventing site access have adversely delayed completing system commissioning and acceptance testing.


Aurora is taking a proactive and systematic approach to resolving these matters, including product refinements, operational enhancements and customer training. Despite the pandemic-related travel and supply chain challenges, the performance of our products has steadily improved to accommodate the customer application challenges, and we are continuing a positive path to complete the commissioning processes. However, as previously stated, the impact of these delays on customer operations may affect the collection of final payments that are tied to successful commissioning or increase the potential for product returns. This situation cannot be reasonably estimated and there no assurance that ACV''s business will not be impacted by the Covid-19 pandemic and customer product adoption decisions.


DM suitability for new technologies

ACU.V's technological efforts as described above also benefit us in preparation for DM product usage for the next generation of solar cells, particularly "HJT" and "TOPCon" cells. These are the leading contenders for the next generation of solar cell designs for volume manufacturing and deployment. HJT stands for "Heterojunction Technology" and TOPCon stands for "Tunnel Oxide Passivated Contacts". Each of these technologies promise a relative efficiency improvement of four percent or more over the established PERC technology. Pilot or full-scale production of HJT and TOPCon solar cells is already underway at leading solar cell manufacturers.


The proprietary Infrared Reflectometry sensing technology used in Aurora's DM products has unique advantages for measurement of quality-related properties during HJT and TOPCon cell manufacturing. In both cell technologies, conductive layers must be measured independently of similar adjacent material, which is not possible with other measurement techniques used in production. Additionally, the DM is uniquely able to simultaneously measure both conductivity and thickness of certain HJT elements, which otherwise would require two separate measurements.


ACU.V has DM systems installed, accepted and operating at one HJT manufacturing facility that is operated by the top solar cell manufacturer in China, and is conducting pre-purchase TOPCon evaluations with another large customer.


UMS partnership

Aurora is entering into a product re-marketing agreement with Xiamen UMS Information Technology Co. Ltd ("UMS"), a subsidiary of Xiamen Intretech Inc. a China-based supplier of information systems for Industry 4.0 "Smart Factory" automation and operation.


UMS has previously acted as a reseller for Aurora DM products, including units that have been installed and accepted in China. Aurora expects that this strategic partnership with UMS will enhance our efforts in China especially given the near-term limitations associated with the Covid-19 pandemic.


Summary

In the last eight months, valuation went from $0.085 all the way up to $0.85 cents. Today, ACU.V closed at $0.59 cent.


Earnings

YTD, $2M in Revenue was reported with a relatively small ($0.28M) Net Income loss. As depicted below, revenues are lumpy but the company does fairly well in containing its losses even in the midst of a new product launch.











DM Orders

ACU.V continues to generate DM orders. It reported via press release nine for the period. However, it is estimated that it has received orders for more than 55 DM in the past 16 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, Covid-19 travel restrictions have created challenges with regards meeting product performance requirements which in turn adversely delayed completing system commissioning and acceptance testing. ACU.V responded by providing product refinements, operational enhancements and customer training. Nonetheless, the extend by which customer objectives are unmet may affect the collection of final payments or increase the potential for product returns. ACU.V stated: This situation cannot be reasonably estimated and there no assurance that ACV''s business will not be impacted by the Covid-19 pandemic and customer product adoption decisions.


ACU.V's DM are for many solar cell types, including bifacial. In fact, the last order issued via news release was high-efficiency PERC solar cells. Moreover, the company recently indicated that "HJT" and "TOPCon" cells are included.


ACU.V has DM systems installed, accepted and operating at one HJT manufacturing facility that is operated by the top solar cell manufacturer in China, and is conducting pre-purchase TOPCon evaluations with another large customer.


Insight Essential

ACU.V recently updated the market and claimed to have completed development of its market-entry version of Insight (i.e. Insight Essentials). ACU.V reported to be at an "advanced stage" for introduction of Insight Essentials to a lead customer, initially for evaluation and confirmation of effectiveness and operational benefit. Installation and commissioning are expected during the current quarter. Thereafter, ACU.V plans to promote and roll out.


Partnership

The partnership with Wavelab will provide specialized cell test functionality and data that can be used in the advanced versions of Aurora's Insight product. Additionally both companies will cooperate in marketing and distribution.


The alliance with Xiamen UMS Information Technology Co. Ltd ("UMS"), is a direct response to the DM challenges faced by the company due to COVID-19 travel restrictions. Aurora expects that this strategic partnership with UMS will enhance our efforts in China especially given the near-term limitations associated with the Covid-19 pandemic.


Patents

Aurora continues to accumulate patent and announced one more from the Taiwan Patent Office and the Chinese Patent Office for "Mapping of Measurement Data to Production Tool Location and Batch or Time of Processing", previously granted in the United States as US Patent 10,559,709 which was granted In April 2020.


These are incremental from those granted on 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".


In Short

Covid-19 has definitely had an impact on the business for ACU.V. However, the shear numbers of DM orders to date indicates the need for better inline process measurement, analysis, and control by solar cell manufacturers.


The fact that ACU.V is currently also working with PERC, HJT, and TOPCon manufacturers suggests that their technology is by no means outdated. Moreover, the appointment of Ms. Ananthanarayanan is another asset.


Together with ACU.V's Dr. Johnson Wong,developed a scientific approach that is applied in the DM product line to increase measurement accuracy and expand capabilities to measure more critical-to-quality silicon wafer properties in real time, such as emitter dopant "surface concentration", previously observable only through destructive off-line tests.


In light of the current traveling restrictions impacting commissioning of the DM, the partnership with UMS is a significant catalyst. The scale of the company, and its willingness to work with ACU.V are directional indicators.


Appreciation of the share price of late has been staggering. However, if ACU.V is able to capture a portion of the market with Insight, it could be transformative for the company and the industry. Yes, appreciation has been drastic in the last three weeks but it comes after years of R&D, patents, and delivering DM to China's top solar manufacturers.


Because ACU.V reported to be at an "advanced stage" of the introduction of Insight Essentials with installation and commissioning expected in the current quarter expectations are running high. Now in addition to its DM, the Insight software will be sold on a subscription model and will generate recurring revenue.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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