Enovix Corp
For the period ended Jun 30, 2024. Filed Aug 5, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 5, 2024
ENVX$2.76+15.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001828318-24-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0001628280-24-034500
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 124 current paragraphs.
58 unchanged; 27 reworded; 31 added; 13 removed; 1 previous and 8 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
•In April 2024, we completed Factory Acceptance Testing (“FAT”) for our second generation (“Gen2”) Agility Line in Malaysia. We subsequently commenced battery production on our Gen2 Agility line.
Current report
•In May 2024, we began sampling our EX-1M battery with samples that were built and tested at our first production line (“Fab1”) in Fremont, California. In addition, we initiated a restructuring plan (the “2024 Restructuring Plan”) to relocate our manufacturing operations from Fremont, California to Malaysia. As a result, during the quarter ended June 30, 2024, we recorded pre-tax restructuring charges of $38.1 million, including $35.1 million of Fab1 long-lived asset disposals, among other charges and costs of the restructuring. We may incur additional restructuring charges and costs in the second half of fiscal year 2024.
Current report
•In May 2024, we reached a development agreement with a leading worldwide smartphone OEM.
Current report
•In June 2024, we signed an agreement with a leading California-based technology company to provide silicon batteries and packs for a mixed reality headset. Also, in June 2024, we signed a Memorandum of Understanding (“MOU”) with Elentec Co., Ltd (“Elentec”), a leading consumer electronic battery pack manufacturing company in Asia.
Current report
In addition to the R&D headcount growth in Korea from our Routejade acquisition, we have grown our core R&D team significantly in the last year. Our lab in India is focused on evaluating next-generation battery materials for future technology nodes, and we anticipate our R&D team in Malaysia will double by end of fiscal 2024.
Current report
Market Focus and Expansion Strategy
Current report
Our product revenue is primarily generated from selling lithium-ion batteries or battery packs to commercial customers and military contractors. Product Revenue is recognized once we have satisfied the performance obligations as defined in the sales agreement, which is generally satisfied upon transfer of control of goods. Control is transferred upon delivery for our products. For certain customized products with customer acceptance criteria specified in the sales agreement, the performance obligations is generally satisfied upon our customer’s acceptance. Payment terms can vary depending on the contract and it is generally required within 90 days or less from the delivery date or the acceptance date of our product. The amounts of revenue recognized reflects the consideration for the product sold.
Current report
Impairment of Equipment and Restructuring Cost
Current report
Impairment of equipment results from our disposal of machinery and equipment that were identified to have no future or alternative usage.
Current report
Restructuring cost resulted from the 2024 Restructuring Plan approved in May 2024 and the relocation of our Fab1 manufacturing operations from Fremont, California to Malaysia. The 2024 Restructuring Plan also included a workforce reduction and disposals of our long-lived assets located in Fremont. Please refer to Note 12 “Restructuring Costs” of the notes to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.
Current report
Research and development (“R&D”) expenses for the quarter ended June 30, 2024 were $29.1 million, compared to $16.6 million during the quarter ended July 2, 2023. The increase of $12.5 million, or 76%, was primarily attributable to
Current report
Impairment of Equipment
Current report
There was no impairment of equipment recorded in the quarter ended June 30, 2024, while we recognized $4.4 million of impairment charge for the quarter ended July 2, 2023. See Note 5 “Property and Equipment” for more information.
Current report
Restructuring Cost
Current report
In May 2024, we initiated the 2024 Restructuring Plan to relocate our Fab1 manufacturing operations in Fremont, California to Malaysia. As a result, we recorded pre-tax restructuring charges of $38.1 million, which consisted of non-cash charges of $35.1 million of loss on disposals of Fab1 long-lived assets in Fremont and $1.1 million of stock-based compensation expense, and cash charges of $1.3 million of severance and termination benefits and $0.6 million of other charges. There was no restructuring cost for the same period last year.
Current report
Income Tax Benefit
Current report
Income tax benefit for the quarter ended June 30, 2024 was $4.6 million, which was calculated based on the estimated annualized effective tax rate and was due to the income tax benefit in foreign jurisdictions. There was no income tax benefit for the same period last year.
Current report
N/M – Not meaningful
Current report
Revenue
Current report
Research and development expenses for the fiscal year-to-date ended June 30, 2024 were $77.9 million, compared to $40.3 million during the prior fiscal year-to-date ended July 2, 2023. The increase of $37.6 million, or 93%, was primarily attributable to $24.0 million increase in depreciation expense, which included a $18.3 million of accelerated deprecation in connection with the strategic realignment in October 2023, and $6.7 million of overhead costs being recorded as R&D expenses (previously recorded as cost of revenue) as a result of Fab1 transitioning to a R&D focus center in 2024. In addition, there were a $5.0 million increase in material costs, a $4.9 million increase in stock-based compensation, a $4.7 million increase in technology and facilities costs with new office locations, a $3.1 million increase in salaries and employee benefits due to an increase in headcount in Asia and a $0.8 million of intangible amortization for the acquired technology from the acquisition of Routejade. These increases were partially offset by a one-time severance, benefits and stock-based compensation expense of $9.1 million in connection with the departures of certain executives and senior management in the first quarter of 2023, a $0.8 million decrease in professional fees and decreases in other miscellaneous expenses.
Current report
Selling, general and administrative expenses for the fiscal year-to-date period ended June 30, 2024 were $40.4 million, compared to $44.0 million during the prior fiscal year-to-date ended July 2, 2023. The decrease of $3.5 million, or 8%, was primarily attributable to a one-time severance, benefits and stock-based compensation expense of $15.7 million in connection with the departures of our former officers and certain executives during the corresponding period in 2023. This decrease was partially offset by a $6.7 million increase of stock-based compensation expense, a $1.9 million increase in salaries and benefits due to increased headcount in Asia, a $1.5 million increase of intangible amortization for the acquired intangible assets from the acquisition of Routejade, a $1.3 million increase of professional fees and a $0.7 million increase in depreciation expense.
Current report
Impairment of Equipment
Current report
There was no impairment of equipment recorded for the fiscal year-to-date ended June 30, 2024, while we recorded $4.4 million of impairment charges in the same period last year. See Note 5 “Property and Equipment” for more information.
Current report
Restructuring Cost
Current report
In May 2024, we initiated the 2024 Restructuring Plan to relocate our Fab1 manufacturing operations in Fremont, California to Malaysia. As a result, we recorded pre-tax restructuring charges of $38.1 million, which consisted of non-cash charges of $35.1 million of loss on disposals of Fab1 long-lived assets located in Fremont and $1.1 million of stock-based compensation expense, and cash charges of $1.3 million of severance and termination benefits and $0.6 million of other charges. There was no restructuring cost for the same period last year.
Current report
The change in fair value of common stock warrants of $12.5 million for the fiscal year-to-date ended June 30, 2024 was attributable to an increase in the fair value of the 6,000,000 Private Placement Warrants. The increase in fair value of Private Placement Warrants was primarily due to an increase in our common stock price during the year.
Current report
The change in fair value of common stock warrants of $27.2 million for the fiscal year-to-date ended July 2, 2023 was attributable to an increase in the fair value of the Private Placement Warrants. The increase in fair value of Private Placement Warrants was primarily due to an increase in our common stock price during 2023.
Current report
Interest Expense
Current report
Interest expense for the fiscal year-to-date ended June 30, 2024 was $3.4 million, compared to $1.3 million for the fiscal year-to-date ended July 2, 2023. The increase of $2.1 million, or 164%, was primarily attributable to the fact that the Convertible Senior Notes were issued in April 2023. Accordingly, we recognized six months of interest expense in the current year as compared to approximately 2.5 months of interest expense recognized for the fiscal year-to-date ended July 2, 2023.
Current report
Income Tax Benefit
Current report
Income tax benefit for the fiscal year-to-date ended June 30, 2024 was $4.7 million, which was calculated based on the estimated annualized effective tax rate and was due to the income tax benefit in foreign jurisdictions. There was no income tax benefit for the same period last year.
Removed paragraphs (13)
Previous report
•In January 2024, we announced a collaboration with Group14 Technologies, a leading manufacturer and supplier of active silicon battery material, to develop a silicon battery using Group14’s silicon-carbon composite SCC55® for 100% of the anode material within Enovix’s battery architecture. Enovix and Group14 will additionally explore new ways to advance the performance and efficiency of lithium-ion silicon batteries, in line with their commitments to innovation, renewable energy and customer satisfaction.
Previous report
•In February 2024, we announced that we had built out approximately 250,000 square feet of factory space at our facility in Malaysia (“Fab2”) and had begun receiving shipments of our second generation manufacturing lines (“Gen2”) production equipment that had cleared Factory Acceptance Testing (“FAT”).
Previous report
•In February 2024, we announced that we had entered into a development agreement with a leading automaker to validate the potential advantages of the Enovix cell architecture for an electric vehicle (“EV”) battery.
Previous report
Associated with this shift, we announced in the fourth quarter of 2023 a strategic realignment of our first production line (“Fab1”) designed to refocus the facility from a manufacturing hub to a facility focused on new product development. This is also supportive of our strategy to localize high-volume manufacturing in Asia near customers and suppliers.
Previous report
Market Focus and Market Expansion
Previous report
Product Revenue is recognized once we have satisfied the performance obligations and the customer obtains control of the goods at a point in time under the revenue recognition criteria. Product Revenue is recognized in an amount that reflects the consideration for the corresponding performance obligations for thelithium-ionbatteries or battery pack products transferred.
Previous report
Cost of Revenue
Previous report
Research and Development Expenses
Previous report
Selling, General and Administrative Expenses
Previous report
Cost of Revenue
Previous report
Research and Development Expenses
Previous report
$3.1 million increase in stock-based compensation expense, and a $0.8 million increase in travel expense and intangible amortization. These increases were offset by a one-time severance, benefits and stock-based compensation expense of $9.1 million for the departures of certain former officer and executive in the first quarter of 2023.
Previous report
Selling, General and Administrative Expenses
Reworded paragraphs (27)
Previous wording
Following is a summary of the activities in the first quarter of 2024:
Current wording
Following is a summary of the activities in the second quarter of 2024:
Previous wording
Our product development strategy is tightly aligned with the goals of meeting the market needs of higher energy density, cycle life, and fast charge while delivering breakthroughs in safety. We plan to begin sampling high cycle life smartphone batteries, which we call EX-1M, beginning in the second quarter of 2024.
Current wording
Our product development strategy is tightly aligned with the goals of meeting the market needs of higher energy density, cycle life, and fast charge while delivering breakthroughs in safety.
Previous wording
In the fourth quarter of 2023, we added a conventional lithium-ion battery business through the acquisition of Routejade. The product portfolio of our conventional battery business is targeted at end markets such as wearables, hearables, medical, industrial, and military applications. Our product strategy with this business is to increase energy density by using small blends of silicon in the anode.
Current wording
In the fourth quarter of 2023, we added a conventional lithium-ion battery business through the acquisition of Routejade, Inc. (“Routejade”). The product portfolio of our conventional battery business is targeted at end markets such as wearables, hearables, medical, industrial, and military applications. Our product strategy with this business is to increase energy density by using small blends of silicon in the anode.
Previous wording
Prior to 2023, our go-to-market strategy was to sample many customers across a broad set of end markets with a standard size battery while selectively considering customized batteries by size for certain customers. This is referred to as a horizontal business strategy. In 2023, we shifted our go-to-market strategy to a vertical business strategy based on our determination that it is more efficient to work with a smaller number of large customers and build highly customized batteries to their needs. With the shift to a vertical business strategy, we have put a particular emphasis on the largest end markets for portable electronics batteries such as smartphones and computing devices.
Current wording
Prior to 2023, our go-to-market strategy was to sample many customers across a broad set of end markets with a standard size battery while selectively considering customized batteries by size for certain customers. This is referred to as a horizontal business strategy. In 2023, we shifted our go-to-market strategy to a vertical business strategy based on our determination that it is more efficient to work with a smaller number of large customers and build highly customized batteries to their needs. With the shift to a vertical business strategy, we have put a particular emphasis on the largest end markets for portable electronics batteries such as smartphones and computing devices, and in 2024, have made progress with securing development and collaboration agreements with potential customers in the portable electronics market. We are also exploring incremental growth opportunities in the conventional battery business, with allied military customers, among other markets.
Previous wording
We believe focusing on these categories ahead of EVs is the right strategy for an advanced battery company because of the economic and time-to-market advantages. Entering the EV battery market requires billions of dollars of capital to build Gigafactories, offers lower prices per kWh than mobile electronics and demands long qualification cycles. We believe the best approach is to start in premium markets where we can leverage our differentiated technology and solidify our manufacturing process while driving toward profitability. At the same time, we are seeding our entry into the EV battery market by sampling batteries to EV OEMs and continuing work on our three-year grant with the U.S. Department of Energy to demonstrate batteries featuring our silicon anode paired with EV-class cathode materials. Our goal is to translate this work into partnerships (e.g., joint ventures or licensing) with EV OEMs or battery OEMs in order to commercialize our technology in this end market. We have entered into an agreement with a major automaker to validate the potential advantages of our battery in an EV.
Current wording
We believe focusing on these categories ahead of electric vehicles (“EVs”) is the right strategy for an advanced battery company because of the economic and time-to-market advantages. Entering the EV battery market requires billions of dollars of capital to build Gigafactories, offers lower prices per kWh than mobile electronics and demands long qualification cycles. We believe the best approach is to start in premium markets where we can leverage our differentiated technology and solidify our manufacturing process while driving toward profitability. At the same time, we are seeding our entry into the EV battery market by sampling batteries to EV OEMs and continuing work on our three-year grant with the U.S. Department of Energy to demonstrate batteries featuring our silicon anode paired with EV-class cathode materials. Our goal is to translate this work into partnerships (e.g., joint ventures or licensing) with EV OEMs or battery OEMs in order to commercialize our technology in this end market. We have entered into an agreement with a major automaker to validate the potential advantages of our battery in an EV.
Previous wording
We began to generate revenue from our planned principal business activities. We recognize revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. We generate revenue from our Product Revenue and Service Revenue for the development of lithium-ion battery technology.
Current wording
In 2022, we began to generate revenue from our planned principal business activities and, in October 2023, we acquired Routejade, an electrode coating and battery pack manufacturer for customers worldwide. We recognize revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. We generate revenue from our Product Revenue and Service Revenue for the development of lithium-ion battery technology.
Previous wording
Service Revenue contracts generally include the design and development efforts to conform our existing battery technology with customers’ required specifications. Consideration for Service Revenue contracts generally becomes payable when we meet specific contractual milestones, which include the design and approval of custom cells, procurement of fabrication tooling to meet the customer’s specifications, and fabrication and delivery of custom cells from our pilot production line. Within the existing Service Revenue contracts, the amount of consideration is fixed, the contracts contain a single performance obligation, and revenue is recognized at the point in time the final milestone is met (i.e., a final working prototype meeting all required specifications) and the customer obtains control of the deliverable.
Current wording
Service Revenue contracts generally include the design and development efforts to conform our existing battery technology with customers’ required specifications. Consideration for Service Revenue contracts generally become payable when we meet specific contractual milestones, which include the design and approval of custom cells, procurement of fabrication tooling to meet the customer’s specifications, and fabrication and delivery of custom cells from our pilot production line. Within the existing Service Revenue contracts, the amount of consideration is fixed, the contracts contain a single performance obligation, and revenue is recognized at the point in time the final milestone is met (i.e., a final working prototype meeting all required specifications) and the customer obtains control of the deliverable.
Previous wording
Revenue for the quarter ended March 31, 2024 was $5.3 million, which resulted from our product shipments, including $1.9 million to a South Korea military contractor. Revenue for the quarter ended April 2, 2023 was immaterial.
Current wording
Revenue for the quarter ended June 30, 2024 was $3.8 million, which primarily resulted from our product shipments, including $1.2 million to a South Korea military contractor. Revenue for the quarter ended July 2, 2023 was immaterial.
Previous wording
As of March 31, 2024 and December 31, 2023, we had $9.1 million and $10.5 million of deferred revenue on our Condensed Consolidated Balance Sheets, respectively.
Current wording
As of June 30, 2024 and December 31, 2023, we had $10.8 million and $10.5 million of deferred revenue on our Condensed Consolidated Balance Sheets, respectively.
Previous wording
Cost of revenue for the quarter ended March 31, 2024 was $7.1 million, compared to $12.2 million during the quarter ended April 2, 2023. The decrease in cost of revenue of $5.2 million was primarily attributable to the fact that we implemented astrategic realignment of our Fab1 in October 2023. As Fab1 became a “Center for Innovation” in the first quarter 2024 and focused on new product development, there was no production generated from Fab1 and accordingly no cost of revenue associated with Fab1 was recorded in the first quarter of 2024. This decrease was partially offset by a one-time inventory step-up amortization of $1.9 million in the first quarter of 2024.
Current wording
Cost of revenue for the quarter ended June 30, 2024 was $4.4 million, compared to $14.2 million during the quarter ended July 2, 2023. The decrease in cost of revenue of $9.8 million, or 69%, was primarily attributable to the fact that our Fab1 became a “Center for Innovation” in 2024 and focused on new product development. There was no production generated from Fab1 during the second quarter of 2024 and, accordingly, no cost of revenue associated with Fab1 was recorded in the second quarter of 2024. This decrease was partially offset by $3.8 million of manufacturing costs associated with the revenue recognized in the second quarter of 2024.
Previous wording
Research and development (“R&D”) expenses for the quarter ended March 31, 2024 were $48.8 million, compared to $23.7 million during the quarter ended April 2, 2023. The increase of $25.0 million, or 105%, was primarily attributable to a $18.3 million of accelerated depreciation in connection with the strategic realignment in October 2023, a $1.7 million increase in depreciation expense, and a $5.9 million of overhead costs being recorded as R&D expenses (previously recorded as cost of revenue) as a result of Fab1 being a R&D focus center in the first quarter of 2024. In addition, there were a $2.7 million increase in material costs, a $1.3 million increase in salaries and employee benefits, a
Current wording
$4.2 million of overhead costs being recorded as R&D expenses (previously recorded as cost of revenue) as a result of Fab1 transitioning to a R&D focus center in 2024. In addition, there was a $2.4 million increase in technology and facilities costs with new office locations, a $2.2 million increase in depreciation expense, a $2.2 million increase in material costs for testing, and a $1.6 million net increase in salaries, employee benefits and stock-based compensation expense due to an increase in headcount in Asia.
Previous wording
Selling, general and administrative expenses for the quarter ended March 31, 2024 were $19.5 million, compared to $27.3 million during the quarter ended April 2, 2023. The decrease of $7.7 million, or (28)%, was primarily attributable to a one-time severance, benefits and stock-based compensation expense of $13.8 million in connection with the departures of our former officer and certain executives in the first quarter of 2023. This decrease was partially offset by an $1.4 million increase of salaries and employee benefits resulting from headcount increases in the facilities located in Asia, a $2.6 million increase of stock-based compensation expense, a $1.1 million increase of professional fees, and a $0.8 million of intangible amortization for the acquired intangible assets from the acquisition of Routejade.
Current wording
Selling, general and administrative expenses for the quarter ended June 30, 2024 were $20.9 million, compared to $16.7 million during the quarter ended July 2, 2023. The increase of $4.2 million, or 25%, was primarily attributable to a $4.1 million increase of stock-based compensation expense, a $1.0 million increase in salaries and benefits due to increased headcount in Asia, a $0.9 million increase of intangible amortization for the acquired intangible assets from the acquisition of Routejade and a $0.8 million increase of professional fees. These increases were partially offset by a $1.9 million of one-time severance, benefits and stock-based compensation expense in the second quarter of 2023 and decreases in other miscellaneous expenses.
Previous wording
The change in fair value of common stock warrants of $21.1 million for the quarter ended March 31, 2024 was attributable to a decrease, during the quarter, in the fair value of the 6,000,000 common stock warrants that are held by Rodgers Capital, LLC (the “Sponsor”) and certain of its members (the “Private Placement Warrants”). The decrease in fair value of Private Placement Warrants was primarily due to a decrease in our common stock price during the first quarter of fiscal year 2024.
Current wording
The change in fair value of common stock warrants of $33.7 million for the quarter ended June 30, 2024 was attributable to an increase, during the quarter, in the fair value of the 6,000,000 common stock warrants that are held by Rodgers Capital, LLC (the “Sponsor”) and certain of its members (the “Private Placement Warrants”). The increase in fair value of Private Placement Warrants was primarily due to an increase in our common stock price during the quarter ended June 30, 2024.
Previous wording
The change in fair value of common stock warrants of $12.8 million for the quarter ended April 2, 2023 was attributable to an increase, during the quarter, in the fair value of the Private Placement Warrants, which primarily resulted from an increase in our common stock price during the first quarter of fiscal year 2023.
Current wording
The change in fair value of common stock warrants of $14.3 million for the quarter ended July 2, 2023 was attributable to an increase, during the quarter, in the fair value of the Private Placement Warrants, which primarily resulted from an increase in our common stock price during the quarter ended July 2, 2023.
Previous wording
Interest expense for the quarter ended March 31, 2024 was $1.7 million, which primarily incurred with the Convertible Senior Notes issued in the second quarter of 2023. No interest expense was incurred for the quarter ended April 2, 2023.
Current wording
Interest expense for the quarter ended June 30, 2024 was $1.7 million, compared to $1.3 million during the quarter ended July 2, 2023. The increase of $0.4 million, or 33%, was primarily attributable to the fact that the Convertible Senior Notes were issued in April 2023, and we recognize slightly higher interest expense during the quarter ended June 30, 2024.
Previous wording
Interest income for the quarter ended March 31, 2024 was $3.6 million, compared to $2.5 million during the quarter ended April 2, 2023. The increase of $1.1 million was primarily due to the fact that we received higher dividend income and interest income from our money market accounts and our investments during the quarter ended March 31, 2024 as compared to the corresponding period in 2023.
Current wording
Interest income for the fiscal year-to-date ended June 30, 2024 was $6.9 million, compared to $5.6 million during the fiscal year-to-date ended July 2, 2023. The increase of $1.3 million was primarily due to the fact that we received higher dividend income and interest income from our money market accounts and our investments for the fiscal year-to-date ended June 30, 2024 as compared to the corresponding period in 2023.
Previous wording
We have incurred operating losses and negative cash flows from operations since inception through March 31, 2024 and expect to incur operating losses for the foreseeable future. As of March 31, 2024, we had cash, cash equivalents, restricted cash, and short-term investments of $264.3 million, working capital of $221.1 million and an accumulated deficit of $645.2 million. In the first quarter of 2024, we received net proceeds of $5.8 million from the issuance of our common stock through an at-the-market (“ATM”) offering.
Current wording
We have incurred operating losses and negative cash flows from operations since inception through June 30, 2024 and expect to incur operating losses for the foreseeable future. As of June 30, 2024, we had cash, cash equivalents, restricted cash, and short-term investments of $251.8 million, working capital of $202.0 million and an accumulated deficit of $761.1 million. For the fiscal year-to-date ended June 30, 2024, we received net proceeds of $40.0 million from the issuance of our common stock under our ATM facility.
Previous wording
As of March 31, 2024, we had cash, cash equivalents, restricted cash, and short-term investments of $264.3 million. We use cash to fund operations, meet working capital requirements and fund our capital expenditures. For the fiscal year 2024, we expect that our spending in cost of revenues and operating expenses will continue to increase as we ramp up our operations.
Current wording
As of June 30, 2024, we had cash, cash equivalents, restricted cash, and short-term investments of $251.8 million. We use cash to fund operations, meet working capital requirements and fund our capital expenditures. For the remainder of fiscal year 2024, we expect that our spending in cost of revenues and operating expenses will continue to increase as we ramp up our operations.
Previous wording
For the fiscal year-to-date ended March 31, 2024, we used $15.1 million of our cash to fund our acquisitions of property and equipment. We will continue to increase our property and equipment purchases in the near future to support the build-out of our manufacturing facilities and our battery manufacturing production. For more information regarding our purchase commitments, please see the contractual obligations and commitments section below.
Current wording
For the fiscal year-to-date ended June 30, 2024, we used $40.3 million of our cash to fund our acquisitions of property and equipment. We will continue to increase our property and equipment purchases in the near future to support the build-out of our manufacturing facilities and our battery manufacturing production. For more information regarding our purchase commitments, please see the contractual obligations and commitments section below.
Previous wording
Net cash used in operating activities was $35.0 million for the fiscal quarter ended March 31, 2024. Net cash used in operating activities consists of net loss of $46.5 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include the change in fair value of the Private Placement Warrants of $21.1 million, stock-based compensation expense of $12.8 million, depreciation and amortization expense, net of accretion of $25.0 million.
Current wording
Net cash used in operating activities was $62.0 million for the fiscal year-to-date ended June 30, 2024. Net cash used in operating activities consists of net loss of $162.4 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include the change in fair value of the Private Placement Warrants of $12.5 million, stock-based compensation expense of $31.8 million, depreciation and amortization expense, net of accretion of $30.9 million and impairment and disposals of Fab1 long-lived assets of $35.1 million.
Previous wording
Net cash used in operating activities was $25.6 million for the fiscal quarter ended April 2, 2023. Net cash used in operating activities consists of net loss of $73.6 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include the change in fair value of Private Placement Warrants of $12.8 million, stock-based compensation expense of $29.2 million and depreciation and amortization expense of $3.6 million.
Current wording
Net cash used in operating activities was $49.2 million for the fiscal year-to-date ended July 2, 2023. Net cash used in operating activities consists of net loss of $137.9 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include the change in fair value of Private Placement Warrants of $27.2 million, stock-based compensation expense of $44.2 million, depreciation and amortization expense of $7.1 million and impairment of equipment of $4.4 million.
Previous wording
Our cash flows used in investing activities to date have been primarily comprised of purchases of property and equipment, as well as purchases of short-term investments. We expect the costs to acquire property and equipment to increase as we continue to build-out our Fab2 and develop our battery manufacturing production lines in Malaysia. Net cash provided by investment activities was $19.1 million for the fiscal quarter ended March 31, 2024, which primarily consisted of maturities of $51.3 million of short-term investments, partially offset by $15.1 million of equipment purchases and $17.1 million of short-term investments. Net cash used by investing activities for the fiscal quarter ended April 2, 2023 was $3.0 million, which primarily consisted of $3.0 million of equipment purchases.
Current wording
Our cash flows used in investing activities to date have been primarily comprised of purchases of property and equipment, as well as purchases of short-term investments. We expect the costs to acquire property and equipment to increase as we continue to build-out our facility in Malaysia (“Fab2”) and develop our battery manufacturing production lines in Malaysia. Net cash provided by investment activities was $19.5 million for the fiscal year-to-date ended June 30, 2024, which primarily consisted of maturities of $91.6 million of short-term investments, partially offset by $40.3 million of equipment purchases and $31.8 million of short-term investments. Net cash used by investing activities for the fiscal year-to-date ended July 2, 2023 was $81.5 million, which primarily consisted of $15.7 million of equipment purchases and $65.7 million of short-term investments.
Previous wording
Net cash provided by financing activities was $5.4 million for the fiscal quarter ended March 31, 2024, which primarily consisted of $1.8 million of gross proceeds from the loans and $5.9 million of proceeds from issuance of our common stock through an ATM offering and proceeds from the exercise of stock options to purchase our common stock, partially offset by $2.2 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
Current wording
Net cash provided by financing activities was $45.1 million for the fiscal year-to-date ended June 30, 2024, which primarily consisted of $4.6 million of gross proceeds from the loans, $42.8 million of proceeds from issuance of our common stock through an ATM offering and proceeds from the exercise of stock options to purchase our common stock, and $1.1 million of proceeds from our employee stock purchase plan (“ESPP”) to purchase our Common Stock, partially offset by $3.3 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
Previous wording
Net cash used in financing activities was $0.5 million for the fiscal quarter ended April 2, 2023, which was primarily consisted of $0.3 million of proceeds from the exercise of stock options to purchase our common stock, partially offset by $0.8 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
Current wording
Net cash used in financing activities was $150.9 million for the fiscal year-to-date ended July 2, 2023, which was primarily consisted of $172.5 million of gross proceeds from the Convertible Senior Notes, $1.0 million of proceeds from the exercise of stock options to purchase our common stock, and $1.2 million of proceeds from our ESPP to purchase our Common Stock, partially offset by $17.3 million of capped call transaction costs, $5.2 million of debt issuance costs, and $1.2 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
Previous wording
As of March 31, 2024, we had $172.5 million aggregate principal amount of 3.0% Convertible Senior Notes outstanding, which will mature on May 1, 2028 unless earlier converted, redeemed or repurchased. Please see Note 8
Current wording
As of June 30, 2024, we had $172.5 million aggregate principal amount of 3.0% Convertible Senior Notes outstanding, which will mature on May 1, 2028 unless earlier converted, redeemed or repurchased. Please see Note 8 “Borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Previous wording
In connection with our manufacturing agreement with YBS International Berhad (“YBS”), we have a cash deposit agreement with OCBC Bank (Malaysia) Berhad (“OCBC”) to collateralize $70.0 million of foreign currency term loan (the “Term Loan”) in financing for manufacturing operation. The Term Loan is expected to be repaid within five years. As of March 31, 2024, there is no outstanding balance of the Term Loan and no deposit was made to OCBC for the collateralization. As of March 31, 2024, we had $70.0 million deposit in an interest-bearing account with OCBC for interest earning purposes. For more information on the variable interest entity, please see Note 12 “Variable Interest Entity” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q.
Current wording
In connection with our manufacturing agreement with YBS International Berhad (“YBS”), we have a cash deposit agreement with OCBC Bank (Malaysia) Berhad (“OCBC”) to collateralize $70.0 million of foreign currency term loan (the “Term Loan”) in financing for manufacturing operation. The Term Loan is expected to be repaid within five years. As of June 30, 2024, there is no outstanding balance of the Term Loan and no deposit was made to OCBC for the collateralization. As of June 30, 2024, we had $70.0 million on deposit in an interest-bearing account with OCBC for interest earning purposes. For more information on the variable interest entity, please see Note 13 “Variable Interest Entity” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q.
Previous wording
We expect to enter into other commitments to support our product development, the build-out of our manufacturing facilities, and our business development, which are generally cancellable upon notice. Additionally, from time to time, we enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation. As of March 31, 2024, our commitments included approximately $57.7 million of our open purchase orders, including equipment purchase orders, and contractual obligations that occurred in the ordinary course of business. For contractual obligations, please See Note 9 “Commitments and Contingencies” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Current wording
We expect to enter into other commitments to support our product development, the build-out of our manufacturing facilities, and our business development, which are generally cancellable upon notice. Additionally, from time to time, we enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation. As of June 30, 2024, our commitments included approximately $34.1 million of our open purchase orders, including equipment purchase orders, and contractual obligations that occurred in the ordinary course of business. For contractual obligations, please See Note 9 “Commitments and Contingencies” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
•In May 2024, we received net proceeds of $34.2 million from the issuance of our common stock through an at-the-market (“ATM”) offering. Since then, we have not had any further issuance of our common stock through an ATM offering.
Current report — wording carried from elsewhere
Comparison of Fiscal Year-to-date Ended June 30, 2024 to Prior Fiscal Year-to-date Ended July 2, 2023
Current report — wording carried from elsewhere
The following table sets forth our condensed consolidated operating results for the periods presented below (in thousands):
Current report — wording carried from elsewhere
Revenue for the fiscal year-to-date ended June 30, 2024 was $9.0 million, which primarily resulted from our product shipments, including $3.1 million to a South Korea military contractor. Revenue for the fiscal year-to-date ended July 2, 2023 was immaterial.
Current report — wording carried from elsewhere
As of June 30, 2024 and December 31, 2023, we had $10.8 million and $10.5 million of deferred revenue on our Condensed Consolidated Balance Sheets.
Current report — wording carried from elsewhere
Cost of revenue for the fiscal year-to-date ended June 30, 2024 was $11.5 million, compared to $26.5 million during the prior fiscal year-to-date ended July 2, 2023. The decrease in cost of revenue of $15.0 million, or 57%, was primarily attributable to the fact that our Fab1 became a “Center for Innovation” in 2024 and focused on new product development. There was no production generated from Fab1 during the fiscal year-to-date ended June 30, 2024 and, accordingly, no cost of revenue associated with Fab1 was recorded during the fiscal year-to-date ended June 30, 2024. This decrease was partially offset bya one-time inventory step-up amortization of $1.9 million in the current year related to the acquisition of Routejade and $9.6 million of manufacturing costs associated with the revenue recognized for the fiscal year-to-date ended June 30, 2024.
Current report — wording carried from elsewhere
As of both June 30, 2024 and December 31, 2023, we had $0.8 million of deferred contract costs on our Condensed Consolidated Balance Sheets.
Current report — wording carried from elsewhere
Change in Fair Value of Common Stock Warrants
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
“Borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.