I will then hand over to Kevin, who will give a review of our financial performance and outlook in more detail. We remain focused on expanding and executing on commercial pipeline with a view to embedding our technology and product portfolio in these key power sectors. We also maintained our capital investment program in state-of-the-art equipment that's required to complete the scaling of production capacity. We believe that the future demand for Advent's high-temperature PEM technology and related products will create a significant opportunity, and we believe Advent will be ideally positioned to capitalize on these two suitable partnerships.

We look forward to growing our commercial activities and achieving long-term profitable growth. As part of this commitment, the industry is planning to significantly increase electrolyzer production in the EU, aiming to ramp up capacity by a factor of seven within seven years. This land acquisition underscores Advent's unwavering dedication to establishing a robust infrastructure that will effectively and strategically support the objective of the Green HiPo IPCEI project. Turning to our financials, we delivered revenue of $1.1 million in the second quarter, and income from grants of $0.7 million, for a total of $1.8 million.

As I mentioned earlier, we raised $3.4 million in the month of June using this equity line of credit, sufficient to cover our current monthly run rate for operating and capital expenses. Aside from raising capital, we will continue to manage our cost structure closely and capitalize on opportunities to reduce costs where possible. As we all know, however, not every opportunity in the pipeline will transpire due to factors that are beyond Advent's control. Due to the long-term contract nature of our business model, the timing of our revenue can also be difficult to predict.

What went well
  • Concluded a full-loop fuel-cell component supply-chain agreement with BASF Environmental Catalyst and Metal Solutions, cooperating on BASF's Celtec-Z membrane and Advent's Ion Pair MEA
  • Signed an MoU with Safran Power Systems to develop next-generation high-temperature PEM fuel cells for aerospace, backed by the Horizon Europe NYMPHEA consortium project (2023-2026)
  • Won a $1.1 million MEA supply contract with an East Asian truck fuel-cell manufacturer after a successful testing phase
  • Advanced the Green HiPo project by acquiring the Kozani, Greece land parcel, opening a coordination office, and beginning hiring of key scientists and engineers
  • Improved cash burn as non-core costs were eliminated and cost structure was managed more tightly
What went wrong
  • Recognized $9.8 million of asset impairment charges tied to goodwill and intangibles from the 2021 acquisitions
  • Net loss widened to $21.8 million ($0.41 per share)
  • Unrestricted cash fell $9.5 million in the quarter to $10.1 million, and management flagged going-concern doubt for the next 12 months
  • Green HiPo state-aid funding remained stalled with the Greek state, which the CEO called an unacceptable delay hurting the company's valuation
  • Total operating expenses rose $0.6 million year over year to $11.2 million

Guidance Changes

MetricPeriodCurrent guidance
2023 revenue and income from grants outlookFY2023Not provided due to uncertainty and Green HiPo still under Greek-state review
Monthly operating and capital spendH2 2023$2.5M to $3M per month

Performance Breakdown

MetricYoYNote
Total operating expenses +$0.6 million to $11.2 million Higher R&D costs and expenses related to the new Hood Park facility in Charlestown, Mass.

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Green HiPo IPCEI projectUpdate given May 15 on milestonesLand acquired in Kozani and hiring started, but state-aid funding still under Greek-state review as of August 4; company escalated the delay to the European Commission
Business focusConsolidating operationsFocused on core mobility and stationary power sectors, advancing high-temperature PEM technology and MEA/components sales
Liquidity and fundingEquity line of credit with Lincoln Park Capital finalized in AprilAdded a $50M ATM facility with H.C. Wainwright in June; drew $3.4M from the Lincoln Park line; relying on both facilities until Green HiPo or other funding arrives

Q&A Summary

What is the update on the Green HiPo project and expected timing on funding evaluation and release?
The company is eager to launch, has scheduled R&D, purchased the site, started planning, and signed strategic partner agreements (BASF plus an unnamed partner). The delay lies solely with the Greek state; Advent has escalated to Commissioner Breton and the EU, which will work with Greek authorities. Management expects resolution very soon.
Can you update on the Hyundai JDA and the next key milestone, including expected first sale?
Advent is developing a fuel-cell system with Hyundai under a joint development agreement incorporating Advent's Ion Pair MEA and fuel-cell expertise plus Hyundai's catalyst. The goal is to hit automotive power targets so it becomes an actual product; Advent is also working with other large, unnamed OEMs.
How has the collaboration with Siemens Energy for maritime fuel-cell solutions progressed, and could it become a JDA?
The maritime collaboration centers on Advent's methanol and e-methanol vision as a key fuel for net-zero shipping. Beyond Siemens Energy, Advent is engaging players like Alfa Laval and Maersk, and cited recent success with Siemens and Sanlorenzo.
What is the company's liquidity and cash burn situation?
Advent finished Q2 with about $10 million of available cash and has two equity facilities (Lincoln Park ELOC and an H.C. Wainwright ATM), each up to $50 million over three years, used at the company's discretion.
What monthly spend rate does the company expect in the second half of the year?
The CFO expects monthly operating and capital spend of roughly $2.5 million to $3 million; the $3.4 million raised in June is more than sufficient to cover that rate.
How will the company fund operations going forward?
The plan is to keep using the equity facilities to raise cash for operating expenses until funding is received from Green HiPo or other sources of capital, while continuing to reduce costs.

More on Advent Technologies Holdings, Inc.

Reported 2023-08-11 · figures from the Advent Technologies Holdings, Inc. Q2 2023 earnings call.

See how VectorShift works for your firm

Request Demo