Akoustis CEO Provides Business Update

Jeff Shealy, CEO of Akoustis Technologies, Inc. (OTCQB: AKTS) (“Akoustis” or the “Company”), a manufacturer of innovative Bulk ONE™ single crystal piezoelectric RF bulk acoustic wave (BAW) filters for mobile wireless, provided today a business update.

Mr. Shealy’s update:

Since closing on a $5.7 million financing in May 2015, we have been developing a new, cutting edge class of high-band RF BAW filters which sort frequency signals in the RF Front-End of a smartphone. Our resonators, which are the core building blocks of such RF filters, are based upon our patented, vastly differentiated high purity, single crystal piezoelectric materials.

On the intellectual property front, we have filed 11 patent applications in key areas including base materials, resonator manufacturing, RF filter design, and mobile wireless systems utilizing single crystal RF Filters. We have been awarded claims on 3 of the 11 applications thus far. Further, we have completed agreements with exclusive licensing rights to 4 additional awarded patents with two leading universities in the US in the field of single crystal materials.

I can report that we are extremely pleased with our progress and continue on a path we believe will enable us to soon challenge, as a pure play supplier of high-band (4G/LTE/LTE-A) RF BAW filters, a fast growing $1.6 billion+ market, which today is dominated by two RF module manufacturers, Avago Technologies and Qorvo.

The investment thesis behind Akoustis’ business plan is that superior piezoelectric materials enable wider bandwidth RF filter solutions and lower the power losses associated with BAW resonators. At the time the Company was founded, we had not yet verified that such materials could be usefully configured to construct an RF filter.

Since then, we have built a supply chain to produce these raw materials on large diameter substrates, which support frequencies from 0.8GHz to 8GHz. Further, we have selected a development partner for wafer manufacturing. Using our manufacturing partnerships, we expect to develop and lock our resonator filter process technology by mid-2016 and qualify it for commercial production. To date, we have received eleven different learning-cycle iterations of wafers and we are now producing functional, high performance single crystal resonators.

We recently published an analytical study in the 2016 IEEE Radio Wireless Week conference comparing our single crystal resonators to incumbent poly crystal resonators. In the study, single crystal materials offered a 40% advantage in the resonator Figure-of-Merit (FOM). The FOM is the product of the electromechanical coupling coefficient (called k_eff², which determines the filter bandwidth) and quality factor (called Q, which determines energy losses). Our high k_eff² technology is expected to generate a FOM as high as 240, which is higher than any existing resonator technology in the mobile wireless market today.

We have benchmarked the acoustic performance of our single crystal materials against the current industry standard poly crystal materials and observed superior sound velocity, which is favorable for achieving high performance BAW filters. This superior sound velocity, combined with high k_eff², will allow us to exploit high frequency, high bandwidth RF Filters for current 4G/LTE, 5G WiFi and future high frequency 5G wireless standards. Our k_eff² results currently meet the minimum production target required for most 4G/LTE frequency bands, and we are currently focused on increasing our Q to attain a FOM that is competitive in the marketplace. The best Q delivered by our fabrication technology to date is greater than 1600. Our goal is to double Q as we mature our process and drive toward a production process release.

Akoustis has identified and met with multiple design clients over the last several months, to share our single crystal resonator experimental results and RF filter designs. We received positive feedback from our engagements as well as received key performance specifications for resonators and RF filters. Akoustis is currently working to achieve performance requirements to support engagements with potential design clients and strategic partners. Ultimately, we anticipate current client engagements will result in 1-3 strategic development agreements within the next 6-9 months. Finally, we have engaged key Asia-Pacific sales channel partners to explore the Chinese mobile wireless market.

Additional Industry/Market Information:

The mobile industry shipped ~2.1 billion phones in 2015 and smartphones were greater than 60% of that volume. Whereas smartphone growth is expected to slow to single digit annual growth for the next 5 years, the demand for high performance RF Filters is expected to increase dramatically. This is driven by the need for co-existence between adjacent frequencies and to keep unwanted signals from degrading the quality of desired frequencies. As multiple technologies are incorporated into smartphones, including multiple cellular (2G, 3G, 4G), multiple WiFi (2.4 GHz, 5.7 GHz, 60 GHz), GPS, Bluetooth, NFC, etc., as well as multiple bands (frequencies), the need for RF filtration is becoming more acute.

Today, 4G smartphones incorporate as many as 40 filters, more than twice the number needed for low-end mobile devices. In fact, the high-band RF BAW filter market for mobile applications in 2015 is estimated to have been $1.6 billion and is expected to grow to $2.3 billion in 2016, and $4.6 billion by 2020.

Technical feedback we receive from our potential clients is that current RF filter technologies drive significant power losses (meaning such components are "lossy”) as signals are transmitted and received from the mobile device. With the convergence of multiple signals in the mobile device, these lossy RF filters produce significant phone heat and drain precious battery life.

As a result, the RF filter has become the performance differentiator in the transmit/receive function within the mobile wireless device and arguably represents the last frontier in technology development.

About Akoustis

Akoustis™ (http://www.akoustis.com) is a high-tech RF filter solutions company that manufactures its unique, patent-pending Bulk ONE™ technology to produce single-crystal bulk acoustic wave (BAW) filters for the mobile-wireless industry, which facilitates signal acquisition and accelerates band performance between the antenna and the back end of mobile devices. Akoustis’ “fabless” business model is capital efficient, leveraging existing manufacturing infrastructure in the semiconductor industry. Akoustis™ is located in the Piedmont technology corridor between Charlotte and Raleigh, North Carolina.

Forward-Looking Statements

Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management’s current expectations and assumptions and are subject to risks and uncertainties. In some cases, you can identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” “will,” “would” or the negative of these terms or other comparable terminology. Factors that could cause actual results to differ materially from those currently anticipated include, without limitation,

• risks relating to the results of our research and development activities, including uncertainties relating to semiconductor process manufacturing;
• the early stage of our Bulk ONE^™ technology presently under development;
• our need for substantial additional funds in order to continue our operations and the uncertainty of whether we will be able to obtain the funding we need;
• our ability to retain or hire key scientific, engineering or management personnel; our ability to protect our intellectual property rights that are valuable to our business, including patent and other intellectual property rights;
• our dependence on third-party manufacturers, suppliers, research organizations, testing laboratories and other potential collaborators;
• our ability to successfully market and sell our technologies;
• the size and growth of the potential markets for any of our technologies, and the rate and degree of market acceptance of any of our technologies;
• competition in our industry; and
• regulatory developments in the U.S. and foreign countries.

In light of these risks, uncertainties and assumptions, the forward-looking statements regarding future events and circumstances discussed in this press release may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements included in this presentation speak only as of the date hereof, and, except as required by law, we undertake no obligation to update publicly or privately any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations.

THESE MATERIALS DO NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF ANY OFFER TO BUY, ANY SECURITIES OF AKOUSTIS, INC., OR OF ANY OTHER ENTITY WHATSOEVER. ANY REPRESENTATION TO THE CONTRARY BY ANY PARTY SHOULD BE IGNORED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160309005411/en/