Growing losses are seeing investors sell their shares in the company
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At the time of writing, shares in the computer chip developer are trading for $2.64 – down 4%. For context, the ASX All Ordinaries Index (ASX: XAO) is 0.12% lower.
Let’s take a closer look at today’s news.
Weebit Nano share price slumps as R&D expenses jump 3,400%
Here are some of the highlights from the Weebit Nano results:
Nil revenue for the period, which is the same as the prior corresponding period (pcp). The company cites being in the “research and development stage” of its operations as to why this is the case.
Losses before tax of $11.3 million – up 180% on the pcp. This was driven by a 3,400% jump in R&D expenses to $5.3 million, a 378% rise in sales and marketing expenses to $1.3 million, and a 23% lift in general and administrative expenses to $4.6 million.
Basic loss per share of 10.1 cents – up 77.2% on the pcp. Tangible assets per share are 17.19 cents. This is 328% higher than the pcp.
Net operating cash outflow of about $7 million.
What happened in FY21 for Weebit Nano?
The biggest story of the financial year overall and that affecting the Weebit Nano share price was the COVID-19 pandemic.
CEO Coby Hanoch conceded the pandemic had an adverse impact on the company in 20/21. He said:
…Ongoing COVID-19 restrictions and lockdowns have slightly delayed our original development and commercial timelines. Travel restrictions have prevented our engineers from being able to work alongside [development partner] Leti in the fab, as well as hindered our ability to have face-to-face meetings with potential customers and production partners. In June, we had our first international face-to-face meetings in more than a year, and hope these will increase in FY22 as vaccines are rolled out and restrictions continue to ease.
Besides the coronavirus, other major stories that affected the Weebit Nano share price included a capital raise via a share purchase plan and an important step in the commercialisation of its ReRam chips.
What else did management say?
Hanoch also had the following to say:
Weebit Nano made substantial progress towards first commercialisation and productisation over the past year, despite dealing with challenging operating conditions. In FY21, we achieved key technical milestones within both the embedded and discrete markets, broadened our development partnership with Leti, advanced negotiations with potential customers and partners, and were included in the S&P/ASX All Technology Index and the S&P/ASX All Ordinaries Index.
Weebit enters FY22 well funded to execute its commercialisation program, including securing first commercial agreements, transferring its technology to a production fab, technology qualification, and progressing the development of a solution for the discrete memory market.
What’s next for Weebit Nano?
In what may be significant for the Weebit Nano share price going forward, the company says it is on the “cusp of commercialisation”. It expects to announce revenue in this financial year.
Hanoch says the company’s products will “address the growing global demand for faster and more efficient memory technology for use in almost every application – everything from smartphones and consumer products through to cars, IoT and artificial intelligence”.
Weebit Nano share price snapshot
Over the past 12 months, the Weebit Nano share price has increased by around 380%. Year-to-date, however, it is down 0.38%.
Weebit Nano has a market capitalisation of around $340 million.
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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.