Important Information for Investors and Stockholders
In connection with the proposed merger transaction, ACE has filed a registration statement on Form S-4 (the “Registration Statement”) with the SEC, which includes a preliminary proxy statement to be distributed to holders of Ace’s common stock in connection with ACE’s solicitation of proxies for the vote by ACE’s stockholders with respect to the proposed transaction and other matters as described in the Registration Statement, as well as the prospectus relating to the offer of securities to be issued to Achronix’s stockholders in connection with the proposed transaction. After the Registration Statement has been filed and declared effective, ACE will mail a definitive proxy statement, when available, to its stockholders. Investors and security holders and other interested parties are urged to read the proxy statement/prospectus, any amendments thereto and any other documents filed with the SEC carefully and in their entirety when they become available because they will contain important information about ACE, Achronix and the proposed transaction. Investors and security holders may obtain free copies of the preliminary proxy statement/prospectus and definitive proxy statement/prospectus (when available) and other documents filed with the SEC by ACE through the website maintained by the SEC at http://www.sec.gov, or by directing a request to: ACE Corporation, 1013 Centre Road, Suite 403S, Wilmington, DE. The information contained on, or that may be accessed through, the websites referenced in this press release is not incorporated by reference into, and is not a part of, this press release.
Participants in the Solicitation
ACE and its directors and officers may be deemed participants in the solicitation of proxies of ACE’s shareholders in connection with the proposed business combination. Security holders may obtain more detailed information regarding the names, affiliations and interests of certain of ACE’s executive officers and directors in the solicitation by reading ACE’s final prospectus filed with the SEC on July 28, 2020, the registration statement on Form S-4, proxy statement/prospectus and other relevant materials filed with the SEC in connection with the business combination when they become available. Information concerning the interests of ACE’s participants in the solicitation, which may, in some cases, be different than those of their stockholders generally, will be set forth in the registration statement, proxy statement relating to the business combination when it becomes available.
Non-Solicitation
This press release is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the potential transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of ACE, the combined company or Achronix, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended.
Trademarks
Achronix and Speedster are registered trademarks, and Speedcore and Speedchip are trademarks of Achronix Semiconductor Corporation. All other brands, product names and marks are the property of their respective owners.
ACHRONIX SEMICONDUCTOR CORPORATION |
||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||
(Dollar in thousands, except shares and per share amounts) |
||||||||||
(Unaudited) |
||||||||||
Three Months Ended |
||||||||||
March 31, |
||||||||||
2021 |
2020 |
|||||||||
| Revenue: | ||||||||||
| Product | $ |
25,604 |
|
$ |
5,216 |
|
||||
| Licensing |
|
4,249 |
|
|
246 |
|
||||
| Total revenue |
|
29,853 |
|
|
5,462 |
|
||||
| Cost of revenue |
|
6,627 |
|
|
1,423 |
|
||||
| Gross profit |
|
23,226 |
|
|
4,039 |
|
||||
| Operating expenses | ||||||||||
| Research and development |
|
7,582 |
|
|
6,565 |
|
||||
| Sales and marketing |
|
2,589 |
|
|
1,945 |
|
||||
| General and administrative |
|
3,382 |
|
|
973 |
|
||||
| Total operating expenses |
|
13,553 |
|
|
9,483 |
|
||||
| Income (loss) from operations |
|
9,673 |
|
|
(5,444 |
) |
||||
| Total other income (expense), net |
|
(811 |
) |
|
120 |
|
||||
| Income (loss) before income tax expenses |
|
8,862 |
|
|
(5,324 |
) |
||||
| Provision for income tax |
|
99 |
|
|
23 |
|
||||
| Net income (loss)* | $ |
8,763 |
|
$ |
(5,347 |
) |
||||
| Net income (loss) per share | ||||||||||
| Basic | $ |
0.53 |
|
$ |
(0.86 |
) |
||||
| Diluted | $ |
0.18 |
|
$ |
(0.86 |
) |
||||
| Weighted - average shares used in computing net income per share: | ||||||||||
| Basic |
|
16,506 |
|
|
6,203 |
|
||||
| Diluted** |
|
48,020 |
|
|
6,203 |
|
||||
| * Net income does not exclude undistributed earnings attributable to participating securities. |
| **Diluted shares include options and warrants on an as-if-converted basis and exclude redeemable preferred stocks. |
| ACHRONIX SEMICONDUCTOR CORPORATION |
||||||||||
| RECONCILIATION OF GAAP NET INCOME (LOSS) |
||||||||||
| TO NON-GAAP MEASURES |
||||||||||
| (Dollar in thousands, except shares and per share amounts) |
||||||||||
| (Unaudited) |
||||||||||
| Three Months Ended |
||||||||||
| March 31, |
||||||||||
| 2021 |
2020 |
|||||||||
| Non-GAAP gross margin | ||||||||||
| GAAP gross profit | $ |
23,226 |
|
$ |
4,039 |
|
||||
| GAAP gross margin |
|
78 |
% |
|
74 |
% |
||||
| Stock-based compensation expense - cost of revenue |
|
33 |
|
|
20 |
|
||||
| Non-GAAP gross profit | $ |
23,260 |
|
$ |
4,060 |
|
||||
| Non-GAAP gross margin |
|
78 |
% |
|
74 |
% |
||||
| Non-GAAP Operating income (loss) | ||||||||||
| GAAP operating income (loss) | $ |
9,673 |
|
$ |
(5,444 |
) |
||||
| Stock-based compensation expense | ||||||||||
| Cost of revenues |
|
33 |
|
|
20 |
|
||||
| Research and development |
|
251 |
|
|
107 |
|
||||
| Sales and marketing |
|
140 |
|
|
100 |
|
||||
| General and administrative |
|
284 |
|
|
112 |
|
||||
| Total stock-based compensation expense |
|
708 |
|
|
339 |
|
||||
| Non-GAAP operating income (loss) | $ |
10,381 |
|
$ |
(5,105 |
) |
||||
| Non-GAAP net income | ||||||||||
| GAAP net income (loss) | $ |
8,763 |
|
$ |
(5,347 |
) |
||||
| Stock-based compensation expense |
|
708 |
|
|
339 |
|
||||
| Change in fair value of warrant liability |
|
767 |
|
|
(340 |
) |
||||
| Non-GAAP net income (loss) | $ |
10,238 |
|
$ |
(5,348 |
) |
||||
| GAAP basic earnings per share | $ |
0.53 |
|
$ |
(0.86 |
) |
||||
| Effect of non-GAAP adjustments on basic earnings per share |
|
0.09 |
|
|
(0.00 |
) |
||||
| Non-GAAP basic earnings per share | $ |
0.62 |
|
$ |
(0.86 |
) |
||||
| GAAP diluted earnings per share | $ |
0.18 |
|
$ |
(0.86 |
) |
||||
| Effect of non-GAAP adjustments on diluted earnings per share |
|
0.03 |
|
|
(0.00 |
) |
||||
| Non-GAAP diluted earnings per share | $ |
0.21 |
|
$ |
(0.86 |
) |
||||
| Weighted - average shares used in computing net income (loss) per share: | ||||||||||
| Basic |
|
16,506 |
|
|
6,203 |
|
||||
| Diluted* |
|
48,020 |
|
|
6,203 |
|
||||
| *Diluted shares include options and warrants on an as-if-converted basis and exclude redeemable preferred stocks. |
||||||||||
| Three Months Ended |
||||||||||
| March 31, |
||||||||||
| 2021 |
2020 |
|||||||||
| Adjusted EBIT | ||||||||||
| GAAP net income (loss) | $ |
8,763 |
|
$ |
(5,347 |
) |
||||
| Stock-based compensation expense |
|
708 |
|
|
339 |
|
||||
| Total other income (expense), net |
|
811 |
|
|
(120 |
) |
||||
| Provision for income tax |
|
99 |
|
|
23 |
|
||||
| Adjusted EBIT | $ |
10,381 |
|
$ |
(5,105 |
) |
||||
| In addition to disclosing financial results calculated in accordance with U. S. generally accepted accounting principles (GAAP), the operating results presented contain non-GAAP financial measures that exclude the income statement effects of stock-based compensation expense and expenses related to the change in fair value of our redeemable preferred stock warrants. | |||||||||||
| Management believes it is useful to provide these non-GAAP financial measures and a reconciliation to comparable GAAP financial measures as we believe non-GAAP measures provide useful supplemental information for investors to evaluate our operating results in the same manner as used by industry research analysts, all of whom present non-GAAP projections in their published reports. As such, non-GAAP measures provided by Achronix facilitate a more direct comparison of its performance with the financial reports published by the industry analysts. The items reconciling GAAP financial measures to non-GAAP financial measures and additional comments and the usefulness of each item are set forth below: | |||||||||||
| (1) |
Stock-based compensation is excluded by management when evaluating operating activities and for strategic decision making, forecasting future results and evaluating current performance. Management believes that utilizing non-GAAP financial measures that exclude this non-cash item is useful in providing an alternate measure that excludes the variability caused by different methodologies and subjective assumptions used in the valuation of equity awards across different companies. | ||||||||||
| (2) |
Redeemable preferred stock warrant is excluded from the internal analysis of Achronix's operations and management does not view this non-cash expense as reflective of the business' current performance. Management believes that utilizing non-GAAP financial measures that exclude this non-cash item is useful in providing an alternate measure that excludes the variability caused by such item. | ||||||||||
| Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies' financial information and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. | |||||||||||
| ACHRONIX SEMICONDUCTOR CORPORATION | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||
| (Dollar in thousands) |
||||||||||
| March 31, |
December 31, |
|||||||||
| 2021 |
2020 |
|||||||||
| (unaudited) |
(audited) |
|||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ |
40,193 |
|
$ |
38,546 |
|
||||
| Restricted Cash |
|
5,011 |
|
|
5,011 |
|
||||
| Accounts receivable, net |
|
10,218 |
|
|
16,900 |
|
||||
| Inventories |
|
10,021 |
|
|
2,116 |
|
||||
| Prepaid expenses and other current assets |
|
2,016 |
|
|
2,251 |
|
||||
| Total current assets |
|
67,459 |
|
|
64,824 |
|
||||
| Property and equipment, net |
|
9,335 |
|
|
3,723 |
|
||||
| Operating lease assets, net |
|
6,049 |
|
|
- |
|
||||
| Intangible assets, net |
|
19,251 |
|
|
16,432 |
|
||||
| Other current assets |
|
3,232 |
|
|
1,247 |
|
||||
| Total assets | $ |
105,326 |
|
$ |
86,226 |
|
||||
| Liabilities, redeemable convertible preferred shares and stockholders' equity (deficit) | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ |
9,542 |
|
$ |
5,938 |
|
||||
| Accrued liabilities |
|
11,178 |
|
|
13,414 |
|
||||
| Operating lease liabilities |
|
941 |
|
|
- |
|
||||
| Deferred revenue |
|
1,476 |
|
|
4,176 |
|
||||
| Total current liabilities |
|
23,137 |
|
|
23,528 |
|
||||
| Preferred stock warrant liability |
|
5,078 |
|
|
4,311 |
|
||||
| Deferred revenue - noncurrent |
|
2,558 |
|
|
2,800 |
|
||||
| Operating lease liabilities - noncurrent |
|
5,400 |
|
|
- |
|
||||
| Other noncurrent liabilities |
|
8,413 |
|
|
6,125 |
|
||||
| Total liabilities | $ |
44,586 |
|
$ |
36,764 |
|
||||
| Redeemable convertible preferred stock | $ |
320,916 |
|
$ |
320,916 |
|
||||
| Stockholders' equity (deficit): | ||||||||||
| Common stock |
|
18 |
|
|
9 |
|
||||
| Additional paid-in capital |
|
8,488 |
|
|
5,983 |
|
||||
| Currency translation adjustment |
|
(86 |
) |
|
(87 |
) |
||||
| Accumulated deficit |
|
(268,596 |
) |
|
(277,359 |
) |
||||
| Total stockholders’ equity (deficit) |
|
(260,176 |
) |
|
(271,454 |
) |
||||
| Total liabilities, redeemable convertible preferred shares and stockholders' equity (deficit) | $ |
105,326 |
|
$ |
86,226 |
|
||||
