UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the quarterly period ended December 31, ~~2017~~2019

☐	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number:001-38029

AKOUSTIS TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		33-1229046
(State or other jurisdiction of	~~(I.R.S. Employer~~
incorporation or organization)		(IRS Employer Identification No.)

9805 Northcross Center Court, Suite A
Huntersville, NC		28078
(Address of principal executive offices)		(Postal Code)

~~9805 Northcross Center Court, Suite A~~

~~Huntersville, North Carolina 28078~~

~~(Address of principal executive offices) (Zip Code)~~

~~704-997-5735~~

(Registrant’s telephone number, including area ~~code)~~code: 1-704-997-5735

~~Not Applicable~~Securities registered under Section 12(b) of the Act:

~~(Former name, former address and former fiscal year, if changed since last report)~~

Title of Each Class:

Trading Symbol

Name of each exchange
on which registered:

Common Stock, $0.001 par value

AKTS

The Nasdaq Stock Market LLC

(Nasdaq Capital Market)

Securities registered under Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☐☒
Non-accelerated filer	☐	~~(Do not check if smaller reporting company)~~	Smaller reporting company	☒
			Emerging growth company	☒☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of ~~February 1, 2018,~~January 24, 2020, there were ~~22,320,700~~36,212,386 shares of the registrant’s common stock, $0.001 par value per share, issued and outstanding.

AKOUSTIS TECHNOLOGIES, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED~~December~~DECEMBER 31, 2019~~, 2017~~

TABLE OF CONTENTS

		Page No.

	PART I — FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of December 31, ~~2017 (unaudited)~~2019 and June 30, ~~2017~~2019 (unaudited)		21

Condensed Consolidated Statements of Operations for the three and six months ended December 31, ~~2017~~2019 and ~~2016~~2018 (unaudited)		2

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended December 31, 2019 and 2018 (unaudited)		3

~~Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended December 31, 2017 (unaudited)~~		4

Condensed Consolidated Statements of Cash Flows for the six months ended December 31, ~~2017~~2019 and ~~2016~~2018 (unaudited)		5

Notes to the Condensed Consolidated Financial Statements (unaudited)		6

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1720

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2426

ITEM 4.	CONTROLS AND PROCEDURES	2526

	PART II — OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	25

~~ITEM 1A.~~	~~RISK FACTORS~~	25

~~ITEM 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~	26

~~ITEM 3.~~	~~DEFAULTS UPON SENIOR SECURITIES~~	26

~~ITEM 4.~~	~~MINE SAFETY DISCLOSURES~~	26

~~ITEM 5.~~	~~OTHER INFORMATION~~	26

~~ITEM 6.~~	~~EXHIBITS~~	26

~~EXHIBIT INDEX~~		27

ITEM 1A.	RISK FACTORS	27

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	27

ITEM 4.	MINE SAFETY DISCLOSURES	27

ITEM 5.	OTHER INFORMATION	27

ITEM 6.	EXHIBITS	27

EXHIBIT INDEX		28

SIGNATURES		29

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

Akoustis Technologies, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

December 31, June 30,
2017 2017
(unaudited)
Assets

Assets:
Cash and cash equivalents $ 11,698,531 $ 9,631,520
Accounts receivable 298,797 —
Inventory 74,979 188,476
Prepaid expenses 182,307 158,457
Deposits 42,549 42,808
Total current assets 12,297,163 10,021,261

Property and equipment, net 12,283,207 7,853,814

Intangibles, net 231,701 206,527

Other assets 32,861 10,715
Total Assets $ 24,844,932 $ 18,092,317

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable and accrued expenses $ 3,027,331 $ 1,336,368
Deferred revenue 77,447 14,500
Total current liabilities 3,104,778 1,350,868

Long-term Liabilities:
Contingent real estate liability 1,809,847 1,730,542
Total long-term liabilities 1,809,847 1,730,542

Total Liabilities 4,914,625 3,081,410

Commitments and contingencies

Stockholders’ Equity
Preferred Stock, par value $0.001: 5,000,000 shares authorized; none issued and outstanding — —
Common stock, $0.001 par value; 45,000,000 shares authorized; 22,320,700 and 19,075,050 shares issued and outstanding at December 31, 2017 and June 30, 2017, respectively 22,321 19,075
Additional paid in capital 46,599,657 31,499,889
Accumulated deficit (26,691,671 ) (16,508,057 )
Total Stockholders’ Equity 19,930,307 15,010,907
Total Liabilities and Stockholders’ Equity $ 24,844,932 $ 18,092,317

	December 31,			June 30,
	2019			2019

Assets

Assets:
Cash and cash equivalents	$	46,253		$	30,054
Accounts receivable		1,126			285
Inventory		94			94
Other current assets		874			1,289
Total current assets		48,347			31,722

Property and equipment, net		19,382			15,178

Intangibles, net		463			388

Assets held for sale, net		21			300

Operating lease right-of-use asset		608			—
Restricted cash		100			100
Other assets		386			261
Total Assets	$	69,307		$	47,949

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable and accrued expenses	$	3,480		$	3,211
Deferred revenue		48			5
Contingent real estate liability		480			445
Operating lease liability-current		112			—
Total current liabilities		4,120			3,661

Long-term Liabilities:
Convertible notes payable, net		20,375			18,215
Operating lease liability - non current		500			—
Other long-term liabilities		118			118
Total long-term liabilities		20,993			18,333

Total Liabilities		25,113			21,994

Stockholders’ Equity
Preferred Stock, par value $0.001: 5,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,212,386 and 30,140,955 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively		36			30
Additional paid in capital		129,922			93,399
Accumulated deficit		(85,764	)		(67,474	)
Total Stockholders’ Equity		44,194			25,955
Total Liabilities and Stockholders’ Equity	$	69,307		$	47,949

See accompanying notes to the condensed consolidated financial statements

Akoustis Technologies, Inc.

Condensed Consolidated Statements of Operations

~~(unaudited)~~ (In thousands, except per share data)

(Unaudited)

	For the Three Months Ended December 31, 2017			For the Three Months Ended December 31, 2016			For the Six Months Ended December 31, 2017			For the Six Months Ended December 31, 2016
													For the Three Months Ended December 31, 2019			For the Three Months Ended December 31, 2018			For the Six Months Ended December 31, 2019			For the Six Months Ended December 31, 2018
Revenue	$	444,553		$	159,068		$	745,493		$	159,068
Revenue with customers													$	518		$	323		$	1,061		$	527
Grant revenue														—			—			—			109
Total revenue														518			323			1,061			636

Cost of revenue		329,836			—			523,065			—			787			370			1,123			514

Gross profit		114,717			159,068			222,428			159,068
Gross profit (loss)														(269	)		(47	)		(62	)		122

Operating expenses
Research and development		3,473,031			775,984			6,477,396			1,428,560			4,897			4,474			9,967			8,836
General and administrative expenses		2,189,904			2,066,768			4,022,526			3,330,011			2,759			1,834			5,569			4,338
Total operating expenses		5,662,935			2,842,752			10,499,922			4,758,571			7,656			6,308			15,536			13,174

Loss from operations		(5,548,218	)		(2,683,684	)		(10,277,494	)		(4,599,503	)		(7,925	)		(6,355	)		(15,598	)		(13,052	)

Other income (expense)
Interest income		263			209			997			299
Other (expense) income
Interest (expense) income														(1,102	)		(744	)		(2,096	)		(1,225	)
Rental income		86,844			—			172,188			—			55			70			109			137
Change in fair value of contingent real estate liability		(79,305	)		—			(79,305	)		—			(16	)		(54	)		(34	)		(100	)
Change in fair value of derivative liabilities		—			(712,246	)		—			(869,462	)		(326	)		338			(670	)		187
Total other income (expense)		7,802			(712,037	)		93,880			(869,163	)
Total other (expense) income														(1,389	)		(390	)		(2,691	)		(1,001	)
Net loss	$	(5,540,416	)	$	(3,395,721	)	$	(10,183,614	)	$	(5,468,666	)	$	(9,314	)	$	(6,745	)	$	(18,289	)	$	(14,053	)

Net loss per common share - basic and diluted	$	(0.27	)	$	(0.21	)	$	(0.52	)	$	(0.35	)	$	(0.30	)	$	(0.24	)	$	(0.59	)	$	(0.56	)

Weighted average common shares outstanding -basic and diluted		20,167,681			15,892,503			19,667,770			15,797,106
Weighted average common shares outstanding - basic and diluted														31,428,233			27,853,225			30,876,709			25,045,913

See accompanying notes to the condensed consolidated financial statements

Akoustis Technologies, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands)

(Unaudited)

	Common Stock				Additional Paid In		Accumulated			Stockholders’
	Shares		Par Value		Capital		Deficit			Equity

Balance, June 30, 2019		30,141	$	30	$	93,399	$	(67,474	)	$	25,955

Common stock issued for services		283		—		1,703		—			1,703

Common stock issued for exercise of warrants		6		—		—		—			—

Vesting of restricted shares		—		—		303		—			303

Common stock issued in payment of note interest		38		—		244		—			244

Net loss		—		—		—		(8,975	)		(8,975	)

Balance, September 30, 2019		30,468	$	30	$	95,649	$	(76,450	)	$	19,229

	Common Stock					Additional Paid In		Accumulated			Stockholders’
	Shares			Par Value		Capital		Deficit			Equity

Balance, September 30, 2019		30,468		$	30	$	95,649	$	(76,450	)	$	19,229

Common stock issued for cash, net of issuance costs		5,520			6		32,165		—			32,170

Common stock issued for services		178			—		1,602		—			1,602

Common stock issued for exercise of warrants		68			—		—		—			—

Common stock issued for exercise of options		10			—		55		—			55

Common stock issued for equipment purchase		5			—		40		—			40

ESPP purchase		28			—		168		—			168

Common stock issued in payment of note interest		34			—		244		—			244

Repurchase and retirement of common shares		(99	)		—		—		—			—

Net loss		—			—		—		(9,314	)		(9,314	)

Balance, December 31, 2019		36,212		$	36	$	129,922	$	(85,764	)	$	44,194

	Common Stock				Additional Paid In			Accumulated			Stockholders’
	Shares		Par Value		Capital			Deficit			Equity

Balance, June 30, 2018		22,203	$	22	$	52,074		$	(38,246	)	$	13,850

Cumulative-effect adjustment from adoption of ASC 60		—		—		—			20			20

Common stock issued for cash, net of issuance costs		—		—		(81	)		—			(81	)

Common stock issued for services		112		—		1,947			—			1,947

Common stock issued for exercise of warrants		19		—		71			—			71

Vesting of restricted shares		—		—		351			—			351

Common stock issued in payment of note interest		40		—		290			—			290

Net loss		—		—		—			(7,308	)		(7,308	)

Balance, September 30, 2018		22,374	$	22	$	54,652		$	(45,534	)	$	9,140

	Common Stock				Additional Paid In		Accumulated			Stockholders’
	Shares		Par Value		Capital		Deficit			Equity

Balance, September 30, 2018		22,374	$	22	$	54,652	$	(45,534	)	$	9,140

Common stock issued for cash, net of issuance costs		7,362		8		28,733		—			28,740

Common stock issued for services		121		—		1,044		—			1,044

Intrinsic value of beneficial conversion feature		—		—		3,951		—			3,951

Vesting of restricted shares		—		—		177		—			177

Common stock issued in payment of note interest		53		—		244		—			244

Net loss		—		—		—		(6,745	)		(6,745	)

Balance, December 31, 2018		29,910	$	30	$	88,801	$	(52,279	)	$	36,551

See accompanying notes to the condensed consolidated financial statements.

Akoustis Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands, except per share data)

(Unaudited)

	Six Months ended December 31, 2019			Six Months ended December 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(18,289	)	$	(14,053	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,419			1,187
Common stock issued for services		3,305			3,267
Amortization of debt discount		1,490			771
Amortization of operating lease right of use asset		55			—
Change in fair value of derivative liabilities		670			(187	)
Change in fair value of contingent real estate liability		34			100
Changes in operating assets and liabilities:
Accounts receivable		(841	)		(98	)
Inventory		—			(49	)
Other current assets		415			(92	)
Other assets		(125	)		(125	)
Accounts payable and accrued expenses		(175	)		737
Lease liabilities		(51	)		—
Change in other long-term liabilities		—			13
Deferred revenue		43			(28	)
Net Cash Used in Operating Activities		(12,050	)		(8,557	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for machinery and equipment		(4,171	)		(1,749	)
Cash received from sale of assets held for sale		28			33
Cash paid for intangibles		(108	)		(57	)
Net Cash Used in Investing Activities		(4,251	)		(1,773	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		32,277			28,659
Proceeds from stock option exercises		55			—
Proceeds from employee stock purchase plan		168			—
Proceeds from the exercise of warrants		—			71
Proceeds received from convertible note, net of issuance costs		—			8,867
Net Cash Provided by Financing Activities		32,500			37,597

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash		16,199			27,267

Cash, Cash Equivalents and Restricted Cash - Beginning of Period		30,154			14,817

Cash, Cash Equivalents and Restricted Cash - End of Period	$	46,353		$	42,084

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Interest		325			—

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Accrued interest paid in common shares		488			534
Stock compensation payable		303			—
Stock issuance costs in accounts payable and accrued expenses		107			—
ASC 606 transition adjustment		—			20
Convertible Notes – Beneficial Conversion Feature		—			3,951
Reclass from assets held for sale		(251	)		—
Assets purchase using common stock		40			—
Fixed assets in accounts payable		1,128			—

See accompanying notes to the condensed consolidated financial statements

~~Akoustis Technologies, Inc.~~

~~Condensed Consolidated Statement of Changes in Stockholders’ Equity~~

~~For the Six Months Ended December 31, 2017~~

~~(unaudited)~~

Common Stock Additional
Shares Amount Paid In Capital
Accumulated
Deficit
Stockholders’ Equity

Balance, July 1, 2017 19,075,050 $ 19,075 $ 31,499,889 $ (16,508,057 ) $ 15,010,907

Common stock issued for cash, net of issuance costs 3,183,269 3,183 13,254,880 — 13,258,063

Warrants issued to underwriter — — (645,757 ) — (645,757 )

Common stock issued for services 111,000 111 2,580,711 — 2,580,822

Common stock issued for exercise of warrants 9,533 10 47,655 — 47,665

Vesting of restricted shares — — (137,779 ) — (137,779 )

Repurchase of Common Shares (58,152)
(58
) 58 — —

Net loss for the six months ended December 31, 2017 — — — (10,183,614 ) (10,183,614 )

Balance, December 31, 2017 22,320,700 22,321 46,599,657 (26,691,671 ) 19,930,307

~~See accompanying notes to the condensed consolidated financial statements~~

~~Akoustis Technologies, Inc.~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(unaudited)~~

For the Six Months Ended For the Six Months Ended
December 31, 2017 December 31, 2016

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (10,183,614 ) $ (5,468,666 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 470,419 25,834
Amortization of intangibles 8,076 3,112
Share-based compensation 2,076,829 2,247,862
Change in fair value of derivative liabilities — 869,462
Change in fair value of contingent liability 79,305 —
Changes in operating assets and liabilities:
Accounts receivable (298,797 ) (29,000 )
Inventory 113,497 359
Prepaid expenses (23,850 ) (38,431 )
Deposits 259 —
Other assets (22,146 ) (10,000 )
Accounts payable and accrued expenses
982,729
244,109
Deferred revenue 62,947 29,000
Net Cash Used In Operating Activities (6,734,346 ) (2,126,359 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment
(4,471,121
) (444,429 )
Cash paid for intangibles (33,250 ) (39,650 )
Net Cash Used In Investing Activities
(4,504,371
) (484,079 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock 13,258,063 3,456,460
Proceeds from exercise of warrants 47,665 —
Net Cash Provided By Financing Activities 13,305,728 3,456,460

Net Increase in Cash 2,067,011 846,022

Cash - Beginning of Period 9,631,520 4,155,444

Cash - End of Period $ 11,698,531 $ 5,001,466

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes $ — $ —
Interest $ 199 $ —

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Stock compensation payable $
266,248
$ 208,699
Warrants issued for stock issuance costs $ 645,757 $ 107,432
Reclassification of derivative liability to additional paid in capital $ — $ 1,795,363
Accrued capital expenditures
$
428,691
$ —

~~See accompanying notes to the condensed consolidated financial statements~~

AKOUSTIS TECHNOLOGIES, INC.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

~~December 31, 2017~~

Note 1. Organization

Akoustis Technologies, Inc. ~~(formerly known as Danlax, Corp.)~~ (“the Company”) was incorporated under the laws of the State of Nevada ~~U.S.~~ on April 10, 2013. Effective December 15, 2016, the Company changed its state of incorporation from the State of Nevada to the State of Delaware. Through its ~~subsidiaries,~~subsidiary, Akoustis, Inc. ~~and Akoustis Manufacturing New York, Inc. (each a~~(a Delaware corporation), the Company, headquartered in Huntersville, North Carolina, is focused on developing, designing, and manufacturing innovative radio frequency (“RF”) filter products for the ~~mobile~~ wireless ~~device industry. The mission of~~industry, including for products such as smartphones and tablets, cellular infrastructure equipment, WiFi Customer Premise Equipment (“CPE”), and military and defense communication applications. Located between the device’s antenna and its digital backend, the RF front-end (“RFFE”) is the circuitry that performs the analog signal processing and contains components such as amplifiers, filters and switches. To construct the resonator devices that are the building blocks for its RF filters, the Company ~~is to commercialize and manufacture its patented BulkONE®~~has developed a family of novel, high purity acoustic wave technology to address the critical frequency-selectivity requirements in today’s mobile smartphones and other wireless devices - improving the efficiency and signal quality and helping enable the Internet of Things.

~~The Company is listed on the Nasdaq Capital Market, effective as of March 13, 2017, under the symbol AKTS.~~

~~Acquisition of Assets~~

On June 26, 2017, pursuant to a Definitive Asset Purchase Agreement and Definitive Real Property Purchase Agreement (collectively, the “Agreements”) with The Research Foundation for the State University of New York (“RF-SUNY”) and Fuller Road Management Corporation (“FRMC”), an affiliate of RF-SUNY, respectively, the Company completed the acquisition of certain specified assets, including STC-MEMS, a semiconductor wafer-manufacturing operation and microelectromechanical systems (“MEMS”) business with associated wafer-manufacturing tools,piezoelectric materials as well as ~~the real estate~~a unique microelectromechanical system (“MEMS”) wafer process, collectively referred to as XBAW™ technology. The Company leverages its integrated device manufacturing (“IDM”) business model to develop and ~~improvements associated with the facility located~~sell high performance RF filters using its XBAW^TM technology. Filters are critical in ~~Canandaigua, New York, which is used~~selecting and rejecting signals, and their performance enables differentiation in the ~~operation of STC-MEMS (the assets and real estate and improvements referred to together herein as~~modules defining the “STC-MEMS Business”), which was created in 2010 by RF-SUNY to form a vertically integrated “one-stop-shop” in smart system and smart-device innovation and manufacturing. The facility was designed to provide its customers the capacity, infrastructure and operational capabilities in all areas of semiconductor and advanced manufacturing, while covering a diverse number of markets including aerospace, biomedical, communications, defense, and energy. The Company also agreed to assume substantially all the on-going obligations of the STC-MEMS Business incurred in the ordinary course of business including with respect to the 29 employees employed by RF-SUNY.RFFE.

~~The Company acquired the STC-MEMS Business through its wholly-owned subsidiary, Akoustis Manufacturing New York, Inc., (“Akoustis NY”), a Delaware corporation.~~Note 2. Liquidity

~~See Note 4 for a detailed description of the transaction.~~

~~Note 2. Going Concern and Management Plans~~

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As ofAt December 31, 2017, the Company had working capital of $9.2 million and an accumulated deficit of $26.7 million. Since inception, the Company has recorded approximately $1,039,000 and $615,000 of revenue from contract research and government grants and engineering review services, respectively. As of February 1, 2018,2019, the Company had cash and cash equivalents of ~~$9.7~~$46.3 million ~~which the Company believes is sufficient to fund its current operations into the first quarter~~and working capital of ~~fiscal 2019. As a result, the Company will need to obtain additional capital to fund operations past that date.~~$44.7 million. The Company ~~is actively managing~~has historically incurred recurring operating losses and ~~controlling~~has experienced net cash used in operating activities of $11.9 million for the ~~Company’s cash outflows to mitigate these risks. These matters raise~~six months ended December 31, 2019 which raises substantial doubt about the Company’s ability to continue as a going ~~concern. The condensed consolidated financial statements do not include any adjustments relating to~~concern within one year after the ~~recoverability and classification~~issuance date.

As of ~~asset amounts or the classification of liabilities that might be necessary should~~January 24, 2020, the Company had $44.4 million of cash and cash equivalents. These funds will be ~~unable~~used to ~~continue as a going concern.~~

~~There is no assurance that~~fund the Company’s ~~projections~~operations, including capital expenditures, R&D, commercialization of our technology, development of our patent strategy and ~~estimates are accurate. The Company’s primary sources~~expansion of our patent portfolio, as well as to provide working capital and funds for ~~operations since inception have been with contract research and government grants, sales of our equity securities, and debt.~~other general corporate purposes. The Company ~~needs to obtain additional capital to accomplish its business plan objectives and~~expects that these funds will ~~continue its efforts to secure additional funds. However, the amount of funds raised, if any, may not~~ be sufficient to ~~enable the Company to attain profitable operations. To the extent that the Company is unsuccessful in obtaining additional financing, the Company may need to curtail or cease~~fund its operations ~~and implement a plan to extend payables or reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.~~beyond the next twelve months from the date of filing of this Form 10-Q.

Note 3. Summary of ~~significant accounting policies~~Significant Accounting Policies

Basis of ~~presentation~~Presentation

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered necessary for a fair presentation have been included. The Company has evaluated subsequent events through the ~~issuance~~filing of ~~these financial statements.~~this Form 10-Q. Operating results for the ~~six months~~quarter ended December 31, ~~2017~~2019 are not necessarily indicative of the results that may be expected for the year ending June 30, ~~2018~~2020 or any future interim period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s ~~Annual Report on~~ Form 10-K filed with the SEC on September ~~20, 2017~~13, 2019 (the ~~“2017~~“2019 Annual Report”).

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its ~~wholly-owned subsidiaries,~~wholly owned subsidiary, Akoustis, ~~Inc. and Akoustis Manufacturing New York,~~ Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

~~Revised Prior Period Amounts~~

The Company identified and recorded an out-of-period adjustment related to stock-based compensation that should have been recorded in the year ended June 30, 2017. The adjustment was reflected as a $725,000 increase in additional paid in capital and corresponding increase in accumulated deficit. Tabular summaries of the revisions are presented below:

Consolidated Balance Sheet
June 30, 2017

Previously Reported Revisions Revised Reported
Additional paid in capital $ 30,774,885 $ 725,004 $ 31,499,889

Accumulated deficit (15,783,053 ) (725,004 ) (16,508,057 )

Consolidated Statement of Operations
Year ended June 30, 2017

Previously Reported Revisions Revised Reported
Net loss $ (9,108,240 ) $ (725,004 ) $ (9,833,244 )

Net loss per ordinary share:
Basic $ (0.54 ) $ (0.04 ) $ (0.58 )

The Company analyzed the revisions under SEC Staff Accounting Bulletin No. 108 and determined that the revisions are immaterial on a quantitative and qualitative basis and that it is probable that the judgment of a reasonable person relying upon the financial statements would not have been changed or influenced by the inclusion or correction of the items in the year ended June 30, 2017. Therefore, amendment of the 2017 Annual Report is not considered necessary. However, if the adjustments to correct the errors were recorded in the first quarter of 2018, the Company believes the impact would have been significant to the first quarter and would impact comparisons to prior periods. The Company has also revised in this quarterly report on Form 10-Q the previously reported annual consolidated balance sheet as of June 30, 2017 on Form 10-K for these amounts. The Company will revise comparative prior period amounts prospectively.

Significant Accounting Policies and Estimates

The Company’s significant accounting policies are disclosed in Note 3-Summary of Significant Accounting Policies in the ~~2017~~2019 Annual Report. Since the date of the ~~2017~~2019 Annual Report, other than adopting ASC 842 “Leases” discussed in the footnote below, there have been no material changes to the Company’s significant accounting policies. The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and the accompanying notes thereto. ~~These~~The policies, estimates and assumptions include valuing equity securities and derivative financial instruments issued in financing transactions, deferred taxes and related valuation allowances, revenue recognition, contingent real estate liability and the fair values of ~~long lived~~long-lived assets. Actual results could differ from the estimates.

~~Accounts Receivable~~

Trade accounts receivable are stated net of allowances for doubtful accounts. Management estimates the allowance for doubtful accounts based on review and analysis of specific customer balances that may not be collectible, customer payment history and any other customer-specific information that may impact ability to collect the receivable. Accounts are considered for write-off when they become past due and when it is determined that the probability of collection is remote. There was no allowance for doubtful accounts at December 31, 2017.

~~Income Taxes~~

~~On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. ASC 740,~~~~Accounting for Income Taxes~~ requires companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The Company’s gross deferred tax assets were revalued based on the reduction in the federal statutory tax rate from 35% to 21%, which will result in a reduction in our effective tax rate from approximately 36.64% to 24.16% for the fiscal year ending June 30, 2018. A corresponding offset has been made to the valuation allowance, and any potential other taxes arising due to the Tax Act will result in reductions to the Company’s net operating loss carryforward and valuation allowance. Deferred tax assets of approximately $9.5 million were revalued to approximately $6.2 million with a corresponding decrease to the Company’s valuation allowance. The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s fiscal year ending June 30, 2018, but the Company does not expect the Tax Act to have a material impact on the Company’s consolidated financial statements. Because the Act became effective mid-way through the Company’s tax year, the Company will have a federal statutory income tax rate of approximately 28% for the fiscal year ending June 30, 2018 and will have an approximate 21% statutory income tax rate for fiscal years thereafter.

~~Loss Per Share~~

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three and six months ended December 31, 2017 and 2016 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

~~The Company had the following common stock equivalents at December 31, 2017 and 2016:~~

December 31, 2017 December 31, 2016
Options 1,166,859 160,000
Warrants 756,809 510,597
Totals 1,923,668 670,597

Shares Outstanding

Shares outstanding include shares of restricted stock with respect to which restrictions have not lapsed. ~~Restricted stock included in reportable shares outstanding was 1,023,506 shares and 1,822,055 shares as of December 31, 2017 and 2016, respectively.~~ Shares of restricted stock are included in the calculation of weighted average shares outstanding. Restricted stock included in reportable shares outstanding were as follows as of December 31, 2019 and 2018.

		December 31, 2019				December 31, 2018
Shares of restricted stock included in reportable shares outstanding			144,750				357,406

Reclassification

~~Reclassification~~

Certain prior period amounts have been reclassified to conform to current period presentation. The reclassifications did not have an impact on net loss as previously reported.

Restricted Cash

Restricted cash at December 31, 2019 and June 30, 2019 represents a retained balance obligation included in a deposit account control agreement required by the Company’s 6.5% Convertible Senior Secured Notes due 2023 issued in May 2018. The restriction on the cash will lapse in conjunction with the extinguishment of the debt.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In ~~September 2017,~~February 2016, the Financial Accounting Standards Board ~~(FASB)~~(“FASB”) issued Accounting Standards Update ~~(ASU) No. 2017-13,~~~~Revenue Recognition~~(“ASU”) 2016-02, “Leases (Topic ~~605)~~842), ~~Revenue from Contracts~~” with ~~Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842).~~multiple amendments subsequently issued. The new ~~standards, among other things, provide additional implementation~~ guidance requires that lease arrangements be presented on the lessee’s balance sheet by recording a right-of-use asset and a lease liability equal to the present value of the related future minimum lease payments. The Company adopted the standard in the first quarter of fiscal 2020, using the modified retrospective approach which permits lessees to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption. Upon adoption, the Company recorded a right-of-use asset of $0.7 million and a lease liability of $0.7 million.

The Company elected the transition package of practical expedients, under which the Company does not have to reassess (1) whether any expired or existing contracts are leases, or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. Further, the Company elected the practical expedient not to separate lease and non-lease components for substantially all of its classes of leases and to account for the combined lease and non-lease components as a single lease component. In addition, the Company made an accounting policy election to exclude leases with ~~respect~~an initial term of 12 months or less from the balance sheet. This standard did not have a material impact on the Condensed Consolidated Statement of Operations or Condensed Consolidated Statement of Cash Flows. See Note 12 for further disclosures resulting from the adoption of this new standard.

In June 2018, the FASB issued ASU No. 2018-07,Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ~~Standards Codification (ASC) Topic 606~~. Under the new standard, companies are no longer required to value non-employee awards differently from employee awards. Companies value all equity classified awards on their grant date under ASC718 and ~~ASC Topic 842.~~forgo revaluing the award after the grant date. ASU ~~2017-13~~2018-07 is effective for annual reporting periods beginning after December 15, ~~2017,~~2018, including interim reporting periods within that reporting period. The Company ~~is currently evaluating~~adopted the ~~impact~~standard during the first quarter of ~~the new~~fiscal year 2020. This standard ~~but does~~did not ~~expect it to~~ have a material impact on ~~its implementation strategies or its~~the Company’s condensed consolidated financial ~~statements upon adoption.~~statements. Approximately $0.3 million of accrued expenses associated with share-based compensation was reclassified to equity.

In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,”which provides guidance about which changes to the terms or conditions of a stock-based payment award require an entity to apply modification accounting in Topic 718. The Company adopted the standard during the first quarter of fiscal year 2020 and there was no material impact on its condensed consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements.

Note 4. ~~Acquisition of the STC-MEMS Business~~Revenue Recognition from Contracts with Customers

~~On March 23, 2017, the Company entered into the Agreements with RF-SUNY, a New York State education corporation, on behalf~~Disaggregation of The State University of New York Polytechnic Institute, and FRMC, an affiliate of RF-SUNY to acquire the STC- MEMS Business. The acquisition allows the Company to internalize manufacturing, increase capacity and control its wafer supply chain for single crystal bulk acoustic wave (“BAW”) radio frequency (“RF”) filters. The Company will utilize the NY facility to consolidate all aspects of wafer manufacturing for its high-band RF filters.Revenue

The ~~STC-MEM’s Business was created in 2010 by RF-SUNY~~Company’s primary revenue streams include foundry fabrication services and product sales.

Foundry Fabrication Services

Foundry fabrication services revenue includes microelectromechanical systems (“MEMS”) foundry services and Non-Recurring Engineering (“NRE”). Under these contracts, products are delivered to ~~form a vertically integrated “one-stop-shop” in smart system and smart-device innovation and manufacturing. The facility was designed to provide its customers~~ the ~~capacity, infrastructure and operational capabilities in all areas~~customer at the completion of ~~semiconductor and advanced manufacturing, while covering a diverse number~~the service which represents satisfaction of ~~markets including aerospace, biomedical, communications, defense, and energy. Located in Canandaigua, New York, just outside of Rochester,~~ the ~~STC-MEMS facility includes certified cleanroom manufacturing, advanced test and metrology,~~performance obligation as well as transfer of title. Depending on language with regards to enforceable right to payment for performance completed to date, related revenue will either be recognized over time or at a ~~MEMS~~point in time.

Product Sales

Product sales revenue consists of sales of RF filters and ~~optoelectronic packaging facility.~~amps which are sold with contract terms stating that title passes, and the customer takes control, at the time of shipment. Revenue is then recognized when the devices are shipped, and the performance obligation has been satisfied. If devices are sold under contract terms that specify that the customer does not take ownership until the goods are received, revenue is recognized when the customer receives the goods.

The following table summarizes the revenues of the Company’s reportable segments for the three months ended December 31, 2019 (in thousands):

	Foundry Fabrication Services Revenue		Product Sales Revenue		Total Revenue with Customers
MEMS	$	12	$	—	$	12
NRE - RF Filters		311		—		311
Filters/Amps		—		195		195
Total	$	323	$	195	$	518

The following table summarizes the revenues of the Company’s reportable segments for the six months ended December 31, 2019 (in thousands):

	Foundry Fabrication Services Revenue		Product Sales Revenue		Total Revenue with Customers
MEMS	$	257	$	—	$	257
NRE - RF Filters		427		—		427
Filters/Amps		—		377		377
Total	$	684	$	377	$	1,061

The following table summarizes the revenues of the Company’s reportable segments for the three months ended December 31, 2018 (in thousands):

	Foundry Fabrication Services Revenue		Product Sales Revenue		Total Revenue with Customers
MEMS	$	26	$	—	$	26
NRE - RF Filters		233		—		233
Filters/Amps		—		64		64
Total	$	259	$	64	$	323

The following table summarizes the revenues of the Company’s reportable segments for the six months ended December 31, 2018 (in thousands):

	Foundry Fabrication Services Revenue		Product Sales Revenue		Total Revenue with Customers
MEMS	$	145	$	—	$	145
NRE - RF Filters		263		—		263
Filters/Amps		—		119		119
Total	$	408	$	119	$	527

Performance Obligations

The Company ~~acquired the STC-MEMS Business through Akoustis NY. The Company also agreed to assume substantially all the on-going obligations~~has determined that contracts for product sales revenue and foundry fabrication services revenue involve one performance obligation, which is delivery of the ~~STC-MEMS Business incurred in the ordinary course of business, including with respect to the 29 employees employed by RF-SUNY. The acquisition closed on June 26, 2017.~~final product.

Contract Balances

The Company records a receivable when the title for goods has transferred. Generally, all sales are contract sales (with either an underlying contract or purchase ~~price paid for~~order), resulting in all receivables being contract receivables. When invoicing occurs prior to revenue recognition a contract liability is recorded (as deferred revenue on the transaction was an aggregate of approximately $4.58 million consisting of (i) $2.75 million in cash consideration, (ii) $96,000 in inventory, and (iii) a contingent real estate liability of approximately $1.73 million.Condensed Consolidated Balance Sheet).

The following ~~presents~~table summarizes the ~~unaudited pro-forma combined results of operations~~changes in the opening and closing balances of the ~~Company with~~Company’s contract asset and liability for the ~~STC-MEMS Business as if the entities were combined on July 1, 2016.~~six months ended December 31, 2019 and 2018 (in thousands):

For the Three Months Ended December 31,
For the Six Months Ended December 31,
2016 2016
Revenue $ 817,673 $ 1,288,485
Net loss $ (4,139,503 ) $ (7,314,370 )
Net loss per common share $ (0.26 ) $ (0.46 )
Weighted average common shares outstanding 15,892,503 15,797,106

	Contract Assets			Contract Liabilities
Balance, June 30, 2019	$	140		$	5
Closing, December 31, 2019		44			48
Increase/(Decrease)		(96	)		43

Balance, June 30, 2018	$	7		$	53
Closing, December 31, 2018		32			42
Increase/(Decrease)		25			(11	)

The ~~unaudited pro-forma~~amount of revenue recognized in the six months ended December 31, 2019 that was included in the opening contract liability balance was $5 thousand that related to filter sales. The amount of revenue recognized in the six months ended December 31, 2018 that was included in the opening contract liability balance was $28 thousand that related to non-recurring engineering sales and $25 thousand that related to MEMS business.

Contract assets are recorded when revenue recognized exceeds the amount invoiced. The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. The amount of contract assets invoiced in the six months ended December 31, 2019 that was included in the opening contract asset balance was $117 thousand which primarily related to MEMS business.

Backlog of Remaining Customer Performance Obligations

Revenue expected to be recognized and recorded as sales during this fiscal year from the backlog of performance obligations that are unsatisfied (or partially unsatisfied) was $0.5 million at December 31, 2019.

Grant Revenue

From time to time the Company applies for grants from various government bodies (state & federal), such as the National Science Foundation (“NSF”), to support research and development. In addition, the Company is eligible for “matching awards” from state boards to provide additional funds to the Company to supplement the funds awarded under the federal grant program. The Company records grant revenue as a part of revenue from operations ~~are presented for information purposes only.~~given that grant revenue is viewed as an ongoing function of its intended operations. The ~~unaudited pro-forma results~~revenue from grants is not viewed as “incidental” or “peripheral” which would result in the presentation of ~~operations are not intended to present actual results that would~~grant revenue as “Other income”. The Company recognizes nonrefundable grant revenue when the performance obligations have been ~~attained~~met, application has been submitted and approval is reasonably assured.

Note 5. Common Stock Equivalents

The Company had the ~~acquisitions been completed~~following common stock equivalents at December 31, 2019 and 2018. These are excluded from the loss per share calculation as ~~of July 1, 2016 or to project potential operating results as of any future date or for any future periods.~~they are considered anti-dilutive.

	December 31, 2019		December 31, 2018
Convertible Notes		4,960,800		4,960,800
Options		2,242,665		2,087,064
Warrants		541,999		728,493
Total		7,745,464		7,776,357

Note 5.6. Property and ~~equipment~~Equipment, net

Property and equipment, net consisted of the following as of December 31, ~~2017~~2019 and June 30, ~~2017:~~2019 (in thousands):

Estimated
Useful Life

December 31,
2017

June 30,
2017

Land n/a $ 1,000,000 $ 1,000,000
Research and development equipment 3 - 10 years 6,510,343 1,851,427
Computer equipment 5 years 69,642 16,783
Furniture and fixtures 5 - 10 years 3,725 3,725
STC-MEMS equipment 3 - 5 years 2,120,868 2,124,650
Building 11 years 3,191,819 3,000,000
Leasehold improvements * 3,240 3,240
12,899,637 7,999,825
Less: Accumulated depreciation (616,430 ) (146,011 )
Total $ 12,283,207 $ 7,853,814

	Estimated Useful Life	December 31, 2019			June 30, 2019
Land	n/a	$	1,000		$	1,000
Building	11 years		3,000			3,000
Equipment	2-10 years		19,098			13,611
Leasehold Improvements	*		949			949
Software	3 years		214			161
Furniture & Fixtures	5 years		11			11
Computer Equipment	3 years		212			203
Total			24,484			18,935
Less: Accumulated depreciation			(5,102	)		(3,757	)
Total		$	19,382		$	15,178

(*) ~~Amortized~~Leasehold improvements are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter.

The Company recorded depreciation expense of ~~$237,109~~$0.7 million and ~~$12,949~~$0.6 million for the three months ended December 31, ~~2017~~2019 and ~~2016,~~2018, respectively.

The Company recorded depreciation expense of ~~$470,419~~$1.4 million and ~~$25,834~~$1.2 million for the six months ended December 31, ~~2017~~2019 and ~~2016,~~2018, respectively.

~~As of December 31, 2017, research and development fixed assets totaling $5,386,457 were not placed in service and therefore not depreciated during the period.~~

~~Note 6. Intangible assets~~

~~The Company’s intangible assets consisted of the following:~~

Estimated
useful life December 31, 2017 June 30, 2017
Patents 15 years $ 168,541 $ 135,291
Customer relationships 14 years 81,773 81,773
Less: Accumulated amortization (20,173 ) (12,097 )
Subtotal 230,141 204,967
Trademarks 1,560 1,560
Intangible assets, net $ 231,701 $ 206,527

~~The Company recorded amortization expense of $4,161 and $1,762 for the three months ended December 31, 2017 and 2016, respectively.~~

~~The Company recorded amortization expense of $8,076 and $3,112 for the six months ended December 31, 2017 and 2016, respectively.~~

~~The following table outlines estimated future annual amortization expense for the next five years and thereafter:~~

December 31,
2018 $ 17,077
2019 17,077
2020 17,077
2021 17,077
2022 17,077
Thereafter 144,756
$ 230,141

Note 7. Accounts ~~payable~~Payable and ~~accrued expenses~~Accrued Expenses

Accounts payable and accrued expenses consisted of the following at December 31, ~~2017~~2019 and June 30, ~~2017:~~2019 (in thousands):

	December 31, 2017		June 30, 2017		December 31, 2019		June 30, 2019
Accounts payable	$	1,054,169	$	494,515	$	1,539	$	245
Accrued salaries and benefits		141,020		274,050		855		1,552
Accrued bonuses		362,589		—
Accrued stock-based compensation		678,116		399,157
Accrued capital expenditures		428,691		—
Accrued professional fees						137		315
Accrued utilities						159		193
Accrued interest						135		135
Accrued goods received not invoiced						153		69
Other accrued expenses		362,746		168,646		502		702
Totals	$	3,027,331	$	1,336,368	$	3,480	$	3,211

Note 8. Derivative Liabilities

~~Upon closing~~The table below provides a summary of the ~~private placements~~changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on ~~May 22, 2015 and June 9, 2015,~~a recurring basis using significant unobservable inputs (Level 3) during the Company issued 298,551 and 26,099 warrants, respectively, to purchase the same number of shares of common stock with an exercise price of $1.50 and a five-year term to the placement agent. Upon closing of a private placement in April 2016, the Company issued 153,713 warrants to purchase the same number of shares of common stock with an exercise price of $1.60 and a five-year term to the placement agent. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement, requiring the Company to classify the warrants as a derivative liability.six months ended December 31, 2019 (in thousands):

	Fair Value Measurement Using Level 3 Inputs Total
Balance, June 30, 2019	$	955
Change in fair value of derivative liabilities (included in other (expense) income)		670
Balance, December 31, 2019 (see footnote 9)	$	1,625

~~During the year ended June 30, 2017, the Company amended the warrant agreements to eliminate the derivative feature. Upon execution of the revised agreements, a total of 471,697 warrants with a~~

The fair value of ~~$2,200,219~~the derivative features of the convertible note at the balance sheet dates were ~~reclassified from liability to equity.~~calculated using the with-and-without method, a form of the income approach, valued with the following weighted average assumptions:

	December 31, 2019			June 30, 2019
Remaining term (years)		3.41-3.92			3.92
Expected volatility		55	%		49	%
Risk free interest rate		1.63%-1.65	%		1.73	%
Dividend yield		0.00			0.00	%

Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Bill with a similar term on the date of the issuance.

~~During~~Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

Volatility:The Company estimated the expected volatility of the stock price based on a blend of the Company’s own historic volatility and the corresponding volatility of the Company’s peer group stock price for a period consistent with the convertible notes’ expected term.

Remaining term: The Company’s remaining term is based on the remaining contractual term of the convertible notes.

Note 9. Convertible Notes

The following table summarizes convertible debt as of December 31, 2019 (in thousands):

	Maturity Date	Stated Interested Rate	Conversion Price		Face Value		Remaining Debt (Discount)			Fair Value of Embedded Conversion Option		Carrying Value
Long Term convertible notes payable
6.5% convertible senior secured notes	5/31/2023	6.50%	$	5.00	$	15,000	$	(5,508	)	$	1,425	$	10,917
6.5% convertible senior notes	11/30/2023	6.50%	$	5.10	$	10,000		(742	)		200		9,458
Ending Balance as of December 31, 2019					$	25,000	$	(6,250	)	$	1,625	$	20,375

The following table summarizes convertible debt as of June 30, 2019 (in thousands):

	Maturity Date	Stated Interested Rate	Conversion Price		Face Value		Remaining Debt (Discount)			Fair Value of Embedded Conversion Option		Carrying Value
Long Term convertible notes payable
6.5% convertible senior secured notes	5/31/2023	6.50%	$	5.00	$	15,000	$	(6,825	)	$	955	$	9,130
6.5% convertible senior notes	11/30/2023	6.50%	$	5.10	$	10,000		(915	)		—		9,085
Ending Balance as of June 30, 2019					$	25,000	$	(7,740	)	$	955	$	18,215

Note 10. Concentrations

Vendors

Vendor concentration as a percentage of purchases for the three months ended December 31, ~~2017~~2019 and ~~2016, the Company marked the derivative feature of the warrants to fair value and recorded a loss of $0 and $712,246, respectively, relating to the change in fair value.~~2018 are as follows:

	Three Months 12/31/2019			Three Months 12/31/2018
Vendor 1		19	%		—
Vendor 2		12	%		—
Vendor 3		—			11	%
Vendor 4		—			10	%

~~During~~

Vendor concentration as a percentage of purchases for the six months ended December 31, ~~2017~~2019 and ~~2016, the Company marked the derivative feature of the warrants to fair value and recorded a loss of $0 and $869,462, respectively, relating to the change in fair value.~~2018 are as follows:

	Six Months 12/31/2019			Six Months 12/31/2018
Vendor 1		18	%		—
Vendor 3		—			10	%

Customers

~~Note 9. Concentrations~~

~~For~~Customer concentration as a percentage of revenue for the three months ended December 31, ~~2017, no vendors represented greater than 10% of the Company’s purchases. For the three months ended December 31, 2016, two vendors represented 28%~~2019 and ~~14% of the Company’s purchases.~~2018 are as follows:

	Three Months 12/31/2019			Three Months 12/31/2018
Customer 1		55	%		—
Customer 2		29	%		23	%
Customer 3		—			35	%
Customer 4		—			15	%
Customer 5		—			12	%

~~For~~

Customer concentration as a percentage of revenue (excluding grant revenue) for the six months ended December 31, ~~2017, no vendors represented greater than 10% of the Company’s purchases. For the six months ended December 31, 2016, two vendors represented 28%~~2019 and ~~14% of the Company’s purchases.~~2018 are as follows:

	Six Months 12/31/2019			Six Months 12/31/2018
Customer 1		30	%		—
Customer 2		23	%		21	%
Customer 3		14	%		19	%
Customer 4		13	%		—
Customer 5		10	%		—
Customer 6		—			14	%
Customer 7		—			21	%

Note ~~10.~~11. Stockholders’ Equity

~~Equity issuances~~Underwritten Public Offering of Common Stock

During the quarter ended December 31, ~~2017,~~2019, the Company sold a total of ~~2,640,819~~5,520,000 shares of its common stock at a price to the ~~$5.50~~public of $6.25 per share for aggregate gross proceeds of ~~$14.5~~$34.5 million before deducting ~~commissions~~the underwriting discount and offering expenses payable by the Company of approximately ~~$1.2~~$2.3 million. The Company expects to use the proceeds of the offering ~~will be used~~ to fund the Company’s operations and growth of its business, including for capital expenditures, working capital, research and development, ~~and~~the commercialization of ~~the Company’s~~its technology ~~capital expenditures~~ and other general corporate expenditures. In addition to the commissions and expenses paid, the Company issued to the placement agents warrants to purchase 154,177 shares of the Company’s common stock. The warrants represent a cost of the offering, have a grant date fair value of $645,757 and are shown as an offset on the consolidated statements of changes in stockholders’ equity.

~~The fair values of the warrants were estimated at the dates of grant using a binomial option pricing model with the following weighted average assumptions:~~

~~Expected term (years)~~	~~5.50~~
~~Risk-free interest rate~~	~~2.12~~	%
~~Volatility~~	69	%
~~Dividend yield~~	0	%

During the quarter ended December 31, 2017, the Company also issued 542,450 shares of its common stock to investors in the Company’s private placement offering that closed in May 2017. These issuances were made pursuant to the price-protection provisions granted to such investors in their subscription agreements.purposes.

~~Stock incentive plans~~Equity Incentive Plans

During the six months ended December 31, ~~2017,~~2019, the Company granted employees and directors options to purchase ~~1,006,859~~an aggregate of 189,000 shares of common ~~stock.~~stock with a weighted average grant date fair value of $4.38. The fair values of the Company’s options were estimated at the dates of grant using a Black-Scholes option pricing model with the following weighted average assumptions:

		Six Months Ended December 31, 2019
Exercise price			$~~6.24 – $7.12~~	7.55 - 8.09
Expected term (years)			~~4.00~~4.75 – ~~7.00~~	5.00
Risk-free interest rate			~~1.72~~1.65% – ~~2.10~~	%1.74%
Volatility			7066 - 88	%67%
Dividend yield		0%
Weighted Average Grant Date Fair Value of Options granted during the period	0	%$4.38

Expected term: The Company’s expected term is based on the period the options are expected to remain outstanding. The Company estimated this amount utilizing the “Simplified Method” in that the Company does not have sufficient historical experience to provide a reasonable basis to estimate an expected term.

Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note with a similar term on the date of the grant.

Volatility: The Company calculates the expected volatility of the stock price using the historical volatilities of the Company’s common stock traded on the Nasdaq Capital Market.

Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

~~The following is a summary of the option activity:~~

Options
Weighted
Average
Exercise
Price

Outstanding - June 30, 2017 160,000 $ 1.50
Exercisable - June 30, 2017 80,000 $ 1.50
Granted 1,006,859 6.74
Exercised — —
Forfeited/Cancelled — —
Outstanding – December 31, 2017 1,166,859 $ 6.02
Exercisable – December 31, 2017 80,000 $ 1.50

As of December 31, 2017, the total intrinsic value of options outstanding and exercisable was $756,800 and $378,400, respectively. As of December 31, 2017, the Company has approximately $3.8 million in unrecognized stock-based compensation expense attributable to the outstanding options, which will be amortized over a period of 2.94 years.

For the three months ended December 31, 2017 and 2016, the Company recorded $466,177 and $7,040, respectively, in stock-based compensation related to stock options, which is reflected in the condensed consolidated statements of operations.

~~For~~During the six months ended December 31, ~~2017 and 2016,~~2019 the Company ~~recorded $484,840 and $14,080, respectively, in stock-based compensation related to stock options, which is reflected in the condensed consolidated statements of operations.~~

~~Issuance of restricted shares -~~awarded certain employees and ~~consultants~~

~~Restricted stock awards are considered outstanding at the time~~contractors grants of ~~execution by the Company and the recipient~~an aggregate of a803,061 restricted stock agreement, as the holders of such restricted stock award are entitled to dividend and voting rights. As of December 31, 2017, the number of shares granted for which the restrictions have not lapsed was 1,023,506 shares.

~~The Company recognizes the compensation expense for all share-based compensation granted based on the~~units (“RSUs”) with a weighted average grant date fair value ~~for directors and employees and the reporting period remeasured fair value for consultants. Share-based compensation expense is recognized on a straight-line basis~~of $7.70. The RSUs will be expensed over the requisite service ~~period for each separately vesting portion of the award as if the award was, in-substance, multiple awards.~~period. The fair value of the award is recorded as share-based compensation expense over the respective restricted period. Any portion of the grant awarded to consultants, directors, employees, and other service providers as to which the repurchase option has not lapsed is accrued on the condensed consolidated balance sheet as a component of accounts payable and accrued expenses. As of December 31, 2017 and June 30, 2017, the accrued stock-based compensation was $678,116 and $399,157, respectively. The Company has the right to repurchase some or all of such shares in certain circumstances upon termination of the recipient’s service with the Company, for up to 60 months from the date of termination (“repurchase option”). The shares as to which the repurchase option has not lapsed are subject to forfeiture upon certain terminations of consulting and employment relationships.

In September 2015, the Company amended the original restricted stock award agreement for certain award recipients. Pursuant to the amendment, 75% of the shares as to which the repurchase option had not lapsed as of September 30, 2015 were released from the repurchase option on the third anniversary of the original effective date of the respective agreements. The remaining 25% of the shares will be released from the repurchase option on the fourth anniversary of the original effective date.

Unvested restricted stock awards granted under the Akoustis, Inc. 2014 Stock Plan (the “2014 Plan”) and the Akoustis Technologies, Inc. 2015 Equity Incentive Plan (the “2015 Plan”) are subject to repurchase options upon certain terminations of the respective recipient’s service with the Company. Under the terms of the ~~respective award agreements, repurchases~~RSUs include vesting provisions based solely on continued service. If the service criteria are satisfied, the RSUs will generally be made for no value or for par value. In connection with the resignations of two employees, the Company delivered notices to such employees in September 2017, notifying them that the Company would repurchase an aggregate 58,152 shares of restricted stock from them pursuant to the terms of their respective award agreements. The Company completed these repurchases during the second quarter of fiscal 2018.vest over 4 – 5 years.

~~The following is a summary of restricted stock units (“RSU’s”) and restricted stock~~Compensation expense related to our stock-based awards ~~(“RSA’s”)~~described above was as follows (in thousands):

Grant Date
Shares
Issued

Fair
Value (1)

Shares
Vested

June 2014 (RSA) 307,876 $ 483,284 247,111
July 2014 (RSA) 32,408 48,612 24,306
August 2014 (RSA) 81,020 121,179 63,296
September 2014 (RSA) 129,633 196,313 121,531
March 2015 (RSA) 72,919 378,109 18,230
October 2015 (RSA) 293,000 411,000 146,500
November 2015 (RSA) 36,200 54,300 18,100
December 2015 (RSA) 300,000 105,000 247,500
January 2016 (RSA) 40,000 68,000 10,000
March 2016 (RSA) 60,000 — 60,000
June 2016 (RSA) 118,000 533,160 45,000
August 2016 (RSA) 351,000 1,218,110 40,000
January 2017 (RSA) 192,000 1,153,951 25,000
February 2017 (RSA) 110,000 697,500 —
March 2017 (RSA) 20,000 — —
September 2017 (RSA) 111,000 790,320 —
September 2017 (RSU) 253,000 1,796,910 —
October 2017 (RSU) 301,000 1,872,220 —
November 2017 (RSU) 97,494 608,362 —
December 2017 (RSU) 120,000 775,800 —

3,026,550 $ 11,312,130 1,066,574

~~(1)~~

~~The fair value of the restricted stock awards as shown above is based on either the balance sheet date for consultants or grant date for employees.~~

	Three Months Ended December 31,				Six Months Ended December 31,
	2019		2018		2019		2018
Research and Development	$	790	$	645	$	1,746	$	1,559
General and Administrative		812		524		1,559		1,708
Total	$	1,602	$	1,168	$	3,305	$	3,267

~~In relation to the above restricted stock agreements for the three months ended December 31, 2017 and 2016, the Company recorded~~Unrecognized stock-based compensation expense ~~for the shares that have vested of $931,894~~ and ~~$1,536,602, respectively.~~weighted-average years to be recognized are as follows (in thousands):

In relation to the above restricted stock agreements for the six months ended December 31, 2017 and 2016, the Company recorded stock-based compensation expense for the shares that have vested of $1,450,226 and $2,233,782, respectively.

~~As of December 31, 2017, the Company had approximately $7.0 million in unrecognized stock-based compensation expense related to the unvested shares.~~

	As of December 31, 2019
	Unrecognized stock- based compensation		Weighted- average years to be recognized
Options	$	2,434		2.15
Restricted stock awards/units	$	8,203		2.21

Note ~~11.~~12. Commitments and Contingencies

~~Operating leases~~Leases

The Company leases ~~two~~ office ~~locations~~space and office equipment in Huntersville, NC ~~pursuant~~as well as equipment in Canandaigua, NY. Our leases have remaining lease terms of up to ~~five-~~five years, some of which include options to extend the leases for up to twenty-four months. Following adoption of ASC 842, lease expense excludes capital area maintenance and ~~three-year~~property taxes.

The components of lease ~~agreements.~~ expense were as follows (in thousands):

Three
Months Ended
December 31,
2019

Three
Months Ended
December 31
2018

Six

Months Ended
December 31,
2019

Six

Months Ended
December 31,
2018

Operating Lease Expense

102

111

Supplemental balance sheet information related to leases was as follows (in thousands):

	Classification on the Condensed Consolidated Balance Sheet	December 31, 2019
Assets
Operating lease assets	Other non-current assets	$	608

Liabilities
Other current liabilities	Current liabilities		112
Operating lease liabilities	Other non-current liabilities		500

Weighted Average Remaining Lease Term:
Operating leases	4.3 Years

Weighted Average Discount Rate:
Operating leases		10.97	%

The ~~three-year~~following table outlines the minimum future lease ~~agreement expires~~payments for the next five years and thereafter, (in thousands):

For the year ending June 30,
2020	$	85
2021		174
2022		178
2023		182
2024		149
Thereafter		—
Total lease payments (Undiscounted cash flows)		768

Less imputed interest		(155	)
Total	$	612

Ontario County Industrial Development Authority Agreement

On February 27, 2018, the Company entered into a Lease and Project Agreement (the “Lease and Project Agreement”) and a Company Lease Agreement (the “Company Lease Agreement” and together with the Lease and Project Agreement, the “Agreements”), each dated as of February 1, 2018, with the Ontario County Industrial Development Agency, a public benefit corporation of the State of New York (the “OCIDA”). Pursuant to the Agreements, the Company leases for $1.00 annually to the OCIDA an approximately 9.995 acre parcel of land in ~~April 2018.~~Canandaigua, New York, together with the improvements thereon (including the Company’s New York fabrication facility), and transferred title to certain related equipment and personal property to the OCIDA (collectively, the “Facility”). The ~~operating leases provide~~OCIDA will lease the Facility back to the Company for annual ~~real estate tax and cost of living increases and contain predetermined increases~~rent payments specified in the ~~rentals payable~~Lease and Project Agreement for the Company’s primary use as research and development, manufacturing, warehouse and professional office space in its business, and subleased, in part, by the Company to various tenants. The Company estimates substantial tax savings during the term of the Agreements, which expire on December 31, 2028. In addition, subject to the terms of the ~~leases.~~Lease and Project Agreement, certain purchases and leases of eligible items will be exempt from the imposition of sales and use taxes. Subject to the terms of the Lease and Project Agreement, the OCIDA has also granted to the Company an exemption from certain mortgage recording taxes for one or more mortgages securing an aggregate principal amount not to exceed $12.0 million, or such greater amount as approved by the OCIDA in its sole and absolute discretion. The ~~aggregate rent expense is recognized on a straight-line basis~~benefits provided to the Company pursuant to the terms of the Lease and Project Agreement are subject to claw back over the ~~lease term. The total lease rental expense was $51,718 and $28,404 for~~life of the ~~six months ended December 31, 2017 and 2016, respectively. The total lease rental expense was $34,611 and $14,202 for the three months ended December 31, 2017 and 2016, respectively.~~

The Company currently leases equipment for its Canandaigua, NY facility on a month-to-month basis. The original lease agreement had a three-month term beginning on June 16, 2017. The aggregate rent expense is recognized on a straight-line basis over the lease term. The total lease rental expense was $70,087 and $0 for the six months ended December 31, 2017 and 2016, respectively. The total lease rental expense was $35,087 and $0 for the three months ended December 31, 2017 and 2016, respectively.Agreements upon certain recapture events, including certain events of default.

Real Estate Contingent Liability

On March 23, 2017, we entered into an Asset Purchase Agreement and a Real Property Purchase Agreement (collectively, the “STC-MEMS Agreements”) with The Research Foundation for the State University of New York (“RF-SUNY”) and Fuller Road Management Corporation (“FRMC”), an affiliate of RF-SUNY (collectively, “Sellers”), respectively, to acquire certain specified assets, including STC-MEMS, a semiconductor wafer-manufacturing and MEMS operation with associated wafer-manufacturing tools, and the associated real estate and improvements located in Canandaigua, NY used in the operation of STC-MEMS (the assets and real estate and improvements referred to together herein as the “STC-MEMS Business”).

In connection with the acquisition of the STC-MEMS Business, the Company agreed to pay to FRMC a penalty, as set forth below, if the Company sells the property subject to the related Definitive Real Property Purchase Agreement within three (3) years after the date of such agreement for an amount in excess of ~~$1,750,000,~~$1.75 million, subject to certain enumerated exceptions. The penalty imposed shall be equivalent to the amount that the sales price of the property exceeds ~~$1,750,000~~$1.75 million up to the maximum penalty (“Maximum Penalty”) defined ~~below:~~below, (in thousands):

Maximum Penalty
Year 1 $ 5,960,000
Year 2 $ 3,973,333
Year 3 $ 1,986,667

		Maximum Penalty
Year 3, ending March 23, 2020		$	480

The fair value of the contingent liability was calculated by an independent third-party appraisal firm, utilizing a present value calculation based on the probability the Company sells the property triggering the contingent penalty and a discount rate of ~~16.1%~~14.8%. The ~~16.1%~~14.8% discount rate was derived from a weighted average cost of capital, modified to include the effects of the bargain purchase price. As of December 31, ~~2017~~2019, and June 30, ~~2017,~~2019, the fair value of the contingent liability was ~~$1,809,847~~$0.5 million and ~~$1,730,542,~~$0.4 million, respectively. During the three months ended December 31, ~~2017~~2019 and ~~2016,~~2018, the Company marked the contingent liability to fair value and recorded a loss of ~~$79,305~~$0.02 million and ~~$0,~~$0.05 million, respectively, relating to the change in fair value. During the six months ended December 31, ~~2017~~2019 and ~~2016,~~2018, the Company marked the contingent liability to fair value and recorded a loss of ~~$79,305~~$0.03 million and ~~$0,~~$0.1 million, respectively, relating to the change in fair value.

Litigation, Claims and Assessments

From time to time, the Company may become involved in lawsuits, investigations and claims that arise in the ordinary course of business. The Company believes it has meritorious defenses against all pending claims and intends to vigorously pursue them. While it is not possible to predict or determine the outcomes of any pending actions, the Company believes the amount of liability, if any, with respect to such actions, would not materially affect its financial position, results of operations or cash flows.

Effective November 5, 2018, the employment by the Company of its former principal financial officer, John T. Kurtzweil (the “Former CFO”), ended, after which the Former CFO filed for an arbitration hearing pursuant to the terms of his employment agreement and filed a complaint under the whistleblower provisions of the Sarbanes-Oxley Act of 2002 with the Occupational Safety and Health Administration (“OSHA”) of the U.S. Department of Labor. On October 28, 2019, the Company and the Former CFO entered into a Settlement Agreement that resolved all pending disputes between the parties with no admission of liability by either party. OSHA approved the Settlement Agreement and closed its investigation of the Former CEO’s whistleblower complaint on November 26, 2019. Pursuant to the Settlement Agreement, the Company paid the Former CFO an all-inclusive settlement amount of $375 thousand in cash. As part of the Settlement Agreement, all unvested restricted stock units and stock options were acknowledged as forfeited as of such date. The arbitration was closed on December 30, 2019.

Tax Credit Contingency

The Company accrues a liability for indirect tax contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made.

The Company’s gross unrecognized indirect tax credits totaled $0.1 million as of December 31, 2019 and $0.1 million as of June 30, 2019 and is recorded on the Consolidated Balance Sheet as a long-term liability.

Note ~~12.~~13. Related Party Transactions

Consulting Services

~~AEG Consulting,~~Total stock-based compensation expense related to stock-based awards granted in prior years for consulting services provided by a firm owned by one of the Co-Chairmen of the Company’s ~~Board~~board of ~~Directors received $10,245~~directors was $10 thousand and ~~$8,100~~$(2) thousand for ~~consulting fees~~the three months ended December 31, 2019 and 2018, respectively, and $24 thousand and $14 thousand for the six months ended December 31, ~~2017~~2019 and ~~2016,~~2018, respectively. On September 27, 2017, the Company granted the Co-Chairman restricted stock units for 5,000 shares of the Company’s common stock with a fair value on the grant date of $35,600, and stock options to purchase 10,000 shares of the Company’s common stock with a fair value on the grant date of $46,292 for consulting services provided by AEG Consulting. Both awards vest 25% on each of the first four anniversaries of the grant date. The options carry an exercise price of $7.12 and have an expiration period of 7 years.

On September 27, 2017, the Company granted a restricted stock award of 11,000 shares of the Company’s common stock with a fair value on the grant date of $78,320 to a director for board advisory services provided from January 2017 to June 2017, prior to the director’s appointment to the Board of Directors on July 14, 2017. The award vests 25% on each of the first four anniversaries of the grant date.

~~Private Placement~~Equipment Purchase

On ~~November 14, 2017, certain members of~~October 11, 2019, the ~~Company’s Board of Directors purchased~~Company issued 2,500 shares of common stock to the Company’s Common Stock at a price of $5.50 per share in a private placement. One of the Company’s Co-Chairmen purchased 154,545 shares at a price of $5.50 per share for an aggregate purchase price of $849,998. The other Co-Chairman purchased 1,818 shares at a price of $5.50 per share for an aggregate purchase price of $9,999. Three additional members of the Company’s Board of Directors each purchased 5,454 shares at a price of $5.50 per share for an aggregate purchase price of $29,997 for each such Board member.

~~On December 1, 2017 a~~ brother of the Company’s Chief Executive Officer ~~purchased 12,000 shares~~in exchange for equipment with a fair market value of ~~the Company’s common stock in a private placement at a price of $5.50 per share for an aggregate purchase price of $66,000.~~$20,000.

Note ~~13.~~14. Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision–making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company operates in two segments, Foundry Fabrication Services which consists of engineering review services and STC-MEMS foundry ~~services;~~services, and RF ~~Filters~~Product, which consists of amplifier and filter product sales, and grant revenue. The Company records all general and administrative costs in the RF Product segment.

The Company evaluates performance of its operating segments based on revenue and operating profit (loss). Segment information for the three and six months ended December 31, ~~2017~~2019 and ~~2016~~2018 are as ~~follows:~~follows (in thousands):

Foundry Fabrication Services �� RF Filters Total

Three months ended December 31, 2017
Revenue $ 291,833 $ 5,488 $ 297,321
Grant revenue — 147,232 147,232
Cost of revenue 329,556 280 329,836
Gross margin (37,723 ) 152,440 114,717
Research and development — 3,473,031 3,473,031
General and administrative — 2,189,904 2,189,904
Loss from Operations $ (37,723 ) $ (5,510,495 ) $ (5,548,218 )

Three months ended December 31, 2016
Revenue $ — $ 159,068 $ 159,068
Cost of revenue — — —
Gross margin — 159,068 159,068
Research and development — 775,984 775,984
General and administrative — 2,066,768 2,066,768
Loss from Operations $ — $ (2,683,684 ) $ (2,683,684 )

	Foundry Fabrication Services		RF Filters			Total			Foundry/ Fabrication Services			RF Product			Total

Six months ended December 31, 2017
Revenue	$	589,733	$	8,528		$	598,261
Grant revenue		—		147,232			147,232
Three months ended December 31, 2019
Revenue with customers									$	323		$	195		$	518
Total Revenue										323			195			518
Cost of revenue		522,585		480			523,065			270			517			787
Gross margin		67,148		155,280			222,428			53			(322	)		(269	)
Research and development		—		6,477,396			6,477,396			—			4,897			4,897
General and administrative		—		4,022,526			4,022,526			—			2,759			2,759
Loss from Operations	$	67,148	$	(10,344,642	)	$	(10,277,494	)
Income (Loss) from Operations									$	53			(7,978	)		(7,925	)

Six months ended December 31, 2016
Revenue	$	—	$	159,068		$	159,068
Three months ended December 31, 2018
Revenue with customers									$	260		$	64		$	323
Total Revenue										260			64			323
Cost of revenue		—		—			—			357			14			370
Gross margin		—		159,068			159,068			(97	)		50			(47	)
Research and development		—		1,428,560			1,428,560			—			4,474			4,474
General and administrative		—		3,330,011			3,330,011			—			1,834			1,834
Loss from Operations	$	—	$	(4,599,503	)	$	(4,599,503	)
Income (Loss) from Operations									$	(97	)	$	(6,258	)		(6,355	)

As of December 31, 2017
Six months ended December 31, 2019
Revenue with customers									$	684		$	377		$	1,061
Total Revenue										684			377			1,061
Cost of revenue										407			716			1,123
Gross margin										277			(339	)		(62	)
Research and development										—			9,967			9,967
General and administrative										—			5,569			5,569
Income (Loss) from Operations									$	277			(15,875	)		(15,598	)

Six months ended December 31, 2018
Revenue with customers									$	408		$	119		$	527
Grant revenue										—			109			109
Total Revenue										408			228			636
Cost of revenue										489			24			514
Gross margin										(81	)		204			122
Research and development										—			8,836			8,836
General and administrative										—			4,338			4,338
Income (Loss) from Operations									$	(81	)	$	(12,970	)		(13,052	)

As of December 31, 2019
Accounts receivable	$	296,909	$	1,888		$	298,797		$	337		$	789		$	1,126
Property and Equipment		424,174		12,475,463			12,899,637
As of June 30, 2017
Property and equipment, net										—		$	19,382		$	19,382

As of June 30, 2019
Accounts receivable	$	—	$	—		$	—		$	150		$	135		$	285
Property and Equipment		424,174		7,575,651			7,999,825
Property and equipment, net									$	54		$	15,124		$	15,178

Note 15. Subsequent Events

~~Note 14. Subsequent Events~~

The Company has evaluated subsequent events through the date of issuance of these financial statements and has determined that there have been no subsequent events which require accounting or disclosure through such date.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF ~~OPERATION~~OPERATIONS

References in this report to “Akoustis,” the “Company,” “we,” “us,” and “our” refer to Akoustis Technologies, Inc. and its consolidated ~~subsidiaries,~~subsidiary, Akoustis, Inc. ~~and Akoustis Manufacturing New York, Inc.,~~ each of which are Delaware corporations.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that relate to our plans, objectives, estimates, and goals. Any and all statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to the development of commercially viable radio frequency ~~(RF)~~(“RF”) filters, (ii) ~~a projection~~projections of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our future financial performance, including any such statement contained in this management’s discussion and analysis of financial condition or in the results of operations included pursuant to the rules and regulations of the Securities and Exchange Commission ~~(SEC)~~(the “SEC”), (iv) our ability to efficiently utilize cash and cash equivalents to support our operations for a given period of time, (v) our ability to engage customers while maintaining ownership of our intellectual property, and (vi) the assumptions underlying or relating to any statement described in (i), (ii) or (iii) above.

The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates, and assumptions and are subject to a number of risks and uncertainties and other influences, many of which are beyond our control. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, our ability to continue as a going concern; our inability to obtain adequate financing; our limited operating history; our inability to generate revenues or achieve profitability; the results of our research and development ~~(R&D)~~(“R&D”) activities; our inability to achieve acceptance of our products in the market; general economic conditions, including upturns and downturns in the industry; our limited number of patents; failure to obtain, maintain, and enforce our intellectual property rights; our inability to attract and retain qualified personnel; our reliance on third parties to complete certain processes in connection with the manufacture of our products; product quality and defects; existing or increased competition; our ability to market and sell our products; our inability to successfully ~~integrate~~scale our New York wafer fabrication facility and related operations ~~into our business;~~while maintaining quality control and assurance and avoiding delays in output; our failure to innovate or adapt to new or emerging technologies; our failure to comply with regulatory requirements; results of any arbitration or litigation that may arise; stock volatility and illiquidity; our failure to implement our business plans or strategies; our failure to remediate the material ~~weakness~~weaknesses in our internal control over financial reporting; and our failure to maintain the Trusted Foundry accreditation of our New York wafer fabrication facility.

These and other risks and uncertainties, which are described in more detail in our Annual Report on Form 10-K, filed with the SEC on September ~~20, 2017~~13, 2019 (the ~~“2017~~“2019 Annual Report”), could cause our actual results to differ materially from those expressed or implied by the forward-looking statements in this report. Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them. Except as may be required by law, we do not undertake any obligation to update the forward-looking statements contained in this report to reflect any new information or future events or circumstances or otherwise.

Overview

~~Akoustis~~Akoustis® is an ~~early-stage~~emerging commercial company focused on developing, designing, and manufacturing innovative RF filter products for the ~~mobile~~ wireless ~~device~~ industry, including for products such as smartphones and tablets, ~~cellular~~network infrastructure equipment, WiFi Customer Premise Equipment (“CPE”) and ~~WiFi premise equipment.~~defense applications. Filters are critical in selecting and rejecting signals, and their performance enables differentiation in the modules defining the RF front-end (“RFFE”). Located between the device’s antenna and its digital backend, the ~~RF front-end (RFFE)~~“RFFE” is the circuitry that performs the analog signal processing and contains components such as amplifiers, filters and switches. ~~To construct the resonators that are the building blocks for the RF filter, we~~We have developed a ~~fundamentally new single-crystal~~proprietary microelectromechanical system (“MEMS”) based bulk acoustic wave (“BAW”) technology and a unique manufacturing process flow, called “XBAW”, for our filters produced for use in RFFE modules. Our XBAW^TMfilters incorporate optimized high purity piezoelectric materials for high power, high frequency and ~~device technology that we refer to as BulkONE®. Filters are critical in selecting and rejecting signals, and their performance enables differentiation in the modules defining the RFFE.~~wide bandwidth operation.

We believe owning the core resonator device technology, manufacturing facility and ~~manufacturing~~intellectual property (“IP”) to produce our RF filter designs is the most direct and ~~effective~~efficient means of delivering our solutions to the market. Furthermore, our technology is based upon bulk-mode acoustic resonance, which we believe is superior to surface-mode resonance for high-band applications that include 4G/LTE, ~~emerging~~ 5G, WiFi, and ~~WiFi frequency bands. While~~defense applications. Although some of our target customers utilize or make the RFFE module, ~~several customers~~they may lack access to critical ~~high-band~~ultra-high-band (UHB) filter technology needed to compete in ~~high-band applications and other traditional surface-mode solutions where higher power performance is required.~~high frequency applications. We ~~intend~~seek to design, manufacture, and market our RF filter products to ~~multiple~~ mobile phone original equipment manufacturers ~~(OEMs)~~(“OEMs”), ~~cellular~~defense OEMs, network infrastructure OEMs, and WiFi ~~router customers and~~CPE OEM’s to enable broader competition among the front-end module manufacturers. We ~~plan to~~ operate as a “pure-play” RF filter supplier and align with the front-end module manufacturers who seek to acquire high performance filters to ~~grow~~expand their module business.

We ~~have built prototype resonators~~currently build high performance RF filter circuits, using our ~~proprietary single-crystal materials. We are currently optimizing our BulkONE® technology~~first generation XBAW^TM wafer process, in our 120,000-square foot wafer-manufacturing ~~plant~~facility located in Canandaigua, New York, which we acquired in June 2017. WeAs of January 17, 2020, our intellectual property (IP) portfolio included 29 patents, including a blocking patent that we have licensed from Cornell University. Additionally, as of January 17, 2020, we have 54 pending patent applications. These patents cover our XBAW^TMRF filter technology from raw materials through the system architectures. Where possible, we leverage both federal and state level ~~non-dilutive~~ R&D grants to support development and commercialization of our technology.

We are developing ~~resonators~~RF filters for 4G/LTE, ~~emerging~~ 5G, WiFi and ~~WiFi~~defense bands ~~and the associated~~using our proprietary resonator device models and product design kits ~~required to design our RF filters.~~(PDKs). As we ~~stabilize the wafer process technology,~~qualify our first RF filter products, we ~~plan to engage~~are engaging with ~~strategic~~target customers to evaluate our filter ~~prototypes.~~solutions. Our initial designs ~~will~~ target ~~high-band~~UHB, sub 7 GHz 4G/LTE, ~~emerging~~ 5G, WiFi and ~~WiFi frequency~~defense bands. Since Akoustis owns its core technology and controls access to its intellectual property, we expect to offer several ways to engage with potential customers. First, we ~~could~~intend to engage with ~~the mobile~~multiple wireless ~~market,~~markets, providing standardized filters that we design and offer as a standard catalog ~~component to multiple customers.~~components. Second, we ~~could start with a~~expect to deliver unique filters to customer-supplied ~~filter specification,~~specifications, which we will design and fabricate ~~for~~on a ~~specific customer.~~customized basis. Finally, we ~~could~~may offer our models and design kits for our customers to design their own ~~filter into~~filters utilizing our proprietary technology.

We have earned minimal revenue from operations since inception, and we have funded our operations primarily with ~~contract research~~development contracts, RF filter and production orders, government grants, MEMS foundry and engineering services, and sales of ~~our~~debt and equity ~~securities, and debt.~~securities. We have incurred losses totaling approximately ~~$26.7~~$85.8 million from inception through December 31, ~~2017.~~2019. These losses are primarily the result of material and ~~material~~ processing costs associated with developing and commercializing our technology, as well as personnel costs, professional fees (primarily accounting and legal), and other general and administrative (“G&A”) expenses. We expect to continue to incur substantial costs for commercialization of our technology on a continuous basis because our business model involves materials and solid-state device technology development and engineering of catalog and custom filter ~~designs.~~design solutions.

Plan of Operation

We plan to commercialize our technology by designing and manufacturing single-band and multi-band BAW RF filter solutions in our New York wafer fabrication facility. We expect our filter solutions will address problems (such as loss, bandwidth, power handling, and isolation) created by the growing number of frequency bands in the RFFE of mobile devices, infrastructure and premise equipment to support 4G/LTE, ~~emerging~~ 5G, and WiFi. We have prototyped our first single-band low-loss BAW filter designs for 4G/LTE frequency bands, which are dominated by competitive BAW solutions and historically cannot be addressed with low-band, lower power handling surface acoustic wave ~~(SAW)~~(“SAW”) technology. During the second half of calendar 2017 we sampled filter product prototypes to prospective customers that cover LTE-Band 41, Radar and 5GHz WiFi applications. As we receive customer evaluations, we will do further iterations on the designs and provide next generation samples for evaluation and characterization.

~~In order to~~To succeed, we must convince mobile phone OEMs, RFFE module manufacturers, cellular infrastructure OEMs, WiFi CPE OEMs and ~~WiFi router OEMs~~military customers to use our ~~BulkONE®~~XBAW^TM filter technology in their systems and modules. However, since there are ~~only~~ two dominant BAW filter suppliers in the industry that have high-band technology, and both utilize such technology as a competitive advantage at the module level, we expect customers that lack access to high-band filter technology will be open to engage with our pure-play filter company.

Once we complete customer validation of our technology, we expect to complete qualification of our BulkONE® process technology in the first half of calendar 2018 to support an initial product family of 4G/LTE, and WiFi filter solutions. Once we have stabilized our process technology in a manufacturing environment, we intend to complete a production release of our high-band filter products in the frequency range from 2.5 GHz to 6.0 GHz. The target frequency bands will be prioritized based upon customer priority. We expect this will require recruiting and hiring additional personnel and capital investments.

We plan to pursue RF filter design and R&D development agreements and potentially joint ventures with target customers and other strategic ~~partners.~~partners, although we cannot guarantee we will be successful in these efforts. These types of arrangements may subsidize technology development costs and qualification, filter design costs, and offer complementary technology and market intelligence and other avenues to revenue. However, we intend to retain ownership of our core technology, intellectual property, designs, and related improvements. We expect to pursue development of catalog designs for multiple customers and to offer such catalog products in multiple sales channels.

As of ~~February 1, 2018,~~January 24, 2020, the Company had ~~$9.7~~$44.4 million of cash and cash equivalents to fund our operations, including capital expenditures, R&D, commercialization of our technology, development of our patent strategy and expansion of our patent portfolio, as well as to provide working capital and funds for other general corporate purposes. ~~These funds are expected to be sufficient to fund our operations into the first quarter of fiscal 2019. However, there is no assurance that the Company’s projections and estimates are accurate.~~ Our anticipated expenses include employee salaries and benefits, compensation paid to consultants, capital costs for research and other equipment, costs associated with development activities (including travel and administration), costs associated with the integration and operation of our New York wafer fabrication facility and related operations, legal expenses, sales and marketing costs, G&A expenses, and other costs associated with an early stage, public technology company. We anticipate increasing the number of employees; however, this is highly dependent on the nature of our development efforts, and our success in ~~commercialization, and our ability to source additional funds.~~commercialization. We anticipate adding employees for R&D in both our New York and North Carolina facilities, as well as G&A functions, to support our efforts. We expect capital expenditures to be ~~approximately $5.93~~between $8 million and $10 million for the purchase of equipment and software during the next 12 ~~months, and we are currently investigating the feasibility of using debt facilities, equipment leases, or government grants to fund all or part of the purchase of the equipment.~~ months.

The amounts we actually spend for any specific purpose may vary significantly and will depend on a number of factors, including, but not limited to, the pace of progress of our commercialization and development efforts, actual needs with respect to product testing, R&D, market conditions and changes in or revisions to our marketing ~~strategies, and the integration of our New York wafer fabrication facility and related operations into our business.~~strategies.

Commercial development of new technology, by its nature, is unpredictable. Although we will undertake development efforts with commercially reasonable diligence, there can be no assurance that our current cash position will be sufficient to enable us to commercialize our technology to the extent needed to create future sales to sustain operations. If our current cash is insufficient for these purposes, we are unable to source additional funds on terms acceptable to the Company (or at all), or we experience costs in excess of estimates to continue our R&D plan, it is possible that we would not have sufficient resources to continue as a going concern and we may be required to curtail or suspend our operations. Even if we are able to source sufficient funds to continue as a going concern, our technology may not be accepted, we may never earn revenues sufficient to support our operations, and we may never be profitable.

Recent Developments

On November 19, 2019 Akoustis shipped 60,000 5.6 GHz filters to an existing distributor partner. In early December 2019, the Company received its first 5G network infrastructure filter order for small cell base stations.

On December 16, 2019 the Company shipped two new XBAW filters to its 5G mobile customer, bringing the total number of mobile filters shipped to the customer to three. In December 2019, Akoustis also shipped the first sample of its wafer level package (WLP), with the small form factor designed to penetrate the mobile device market.

At the end of December 2019, Akoustis shipped five new S-band filters in the 2-4 GHz range to a defense customer for phased array radar applications. The Company also shipped its tandem 5.2/5.6 GHz WiFi filter solutions to a tier-1 OEM and received a second 5G massive MIMO network infrastructure development order from a tier-1 customer.

Underwritten Public Offering of Common Stock

During the quarter ended December 31, 2019, the Company sold a total of 5,520,000 shares of its common stock at a price to the public of $6.25 per share for aggregate gross proceeds of $34.5 million before deducting the underwriting discount and offering expenses payable by the Company of approximately $2.3 million. The Company expects to use the proceeds of the offering to fund the Company’s operations and growth of its business, including for capital expenditures, working capital, research and development, the commercialization of its technology and other general corporate purposes.

Critical Accounting Policies

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our ~~2017~~2019 Annual Report.

Results of Operations

Three Months Ended December 31, ~~2017~~2019 and ~~2016~~2018

Revenue

The Company recorded revenue of ~~$444,553~~$0.5 million during the three months ended December 31, ~~2017, of which $291,833 was revenue~~2019 as compared to $0.3 million for ~~foundry services provided at our New York facility, acquired on June 26, 2017. The remaining revenue consisted primarily of grant revenue. The Company recorded revenue of $159,068 in~~ the ~~comparative three-month period~~three months ended December 31, ~~2016,~~2018. Revenue recorded during the three months ended December 31, 2019 included $0.2 million of RF filter and amplifier sales and $0.3 million of non-recurring engineering services. The RF filters sales were primarily ~~consisting~~sales of ~~grant revenue.~~infrastructure filters as well as WiFi filters. Revenue for the three months ended December 31, 2018 consisted of $0.2 million of non-recurring engineering services and $0.1 million of RF filter and amplifier sales.

Cost of Revenue

The Company recorded cost of revenue of ~~$329,836 for~~$0.8 million in the three months ended December 31, ~~2017~~2019 and $0.4 million in the three months ended December 31, 2018, which included direct labor, direct materials and facility ~~costs associated with the foundry services revenue.~~costs. The ~~Company did not record any~~increase in cost of ~~revenue for the comparative three-month period~~sales was primarily related to sales of ~~2016.~~

~~Operating Expenses~~

~~Total operating expenses for the three-month period ended December 31, 2017 were $5.7 million~~infrastructure and included R&D expenses of $3.5 million and G&A expenses of $2.2 million. Total operating expenses for the three-month period ended December 31, 2016 were $2.8 million and included R&D expenses of $0.8 million and G&A expenses of $2.0 million. WiFi filters.

Research and Development Expenses

R&D expenses ~~of $3.5~~were $4.9 million for the three months ended December 31, ~~2017~~2019 and were ~~comprised~~$0.4 million, or 9%, higher than the prior year amount for the same period of $4.5 million. The period-over-period increase was primarily in the areas of ~~salaries and wages for~~ R&D personnel ~~of $1,116,000,~~costs. Personnel costs, including stock-based compensation, of $831,000, material and third-party processing costs of $220,000, facility costs of $1,078,000, and depreciation of $164,000. R&D expense for the three months ended December 31, 2016 was $0.8 million. The period over period increase waswere $2.7 million compared to $2.4 million in the prior year period, an increase of $0.3 million or ~~348%~~15%. The higher ~~spend~~personnel cost was due to ~~the increase in salaries and wages for the assumed~~additional R&D ~~personnel in our recently acquired~~headcount at both the Huntersville, NC location and the Company’s Canandaigua NY ~~fabrication~~wafer-manufacturing facility (the “NY Facility”) as well as ~~incremental R&D hires made since the closing of the acquisition. In addition, we saw~~ an increase ~~of $562,000, or 209%,~~ in stock-based compensation associated with R&D personnel due to restricted stock grants made to personnel hired since December 31, 2016 and additional issuances to personnel on the payroll as of December 31, 2016. Facility costs of $1,078,000 were associated with the NY facility acquired in June 2017 and include utilities of $207,000, repair and maintenance costs of $408,000, and supplies and parts costs of $463,000. Depreciation expense of $164,000 was higher over the comparative period by $152,000, mainly due to higher deprecation recorded for assets included in the NY facility acquisition. compensation.

General and Administrative Expense

General and administrative (“G&A”) expenses include salaries and wages for executive and administrative staff, stock-based compensation, professional fees, insurance costs and other general costs associated with the administration of our business. G&A expenses for the three months ended December 31, 2019 were ~~$2.2~~$2.8 million, which is an increase of $1.0 million compared to the three months ended December 31, 2018. Year over year changes within G&A expenses include an increase in employee compensation including stock based compensation of $0.6 million as well as an increase in professional fees of $0.3 million.

Other (Expense)/Income

Other expenses for the three months ended December 31, 2019 were $1.4 million, which included debt discount amortization of $0.8 million, interest expense, net of $0.3 million, and a change in fair value of our derivative liability of $0.3 million. Other expenses for the three months ended December 31, 2018 were $0.4 million, consisting of interest expense of $0.3 million and $0.5 million of debt discount amortization offset by a $0.3 million reduction of our derivative liability and interest income of $0.1 million.

Net Loss

The Company recorded a net loss of $9.3 million for the three months ended December 31, ~~2017, as~~2019, compared to ~~$2.0~~a net loss of $6.7 million for the three months ended December 31, ~~2016,~~2018. The period-over-period incremental loss of $2.6 million, or 38%, was primarily driven by an increase in other expenses of ~~$123,000, or 6%. G&A expense for the quarter was comprised primarily of salary and wages of $526,000, stock-based~~$1.0 million, increases in R&D related compensation of ~~$648,000,~~$0.4 million and increases in general expenses, including professional fees ~~(primarily legal~~ and accounting) of $429,000, recruiting fees of $120,000, depreciation of $73,000, and travel of $82,000. We recorded an increase of $269,000, or 105%, in salaries and wages due to the onboarding of new administrative personnel since December 31, 2016. Stock-based compensation of $648,000 decreased from the comparative period by $627,000, or 49%. Professional fees increased by $85,000, or 25%, mainly for accounting fees due to costs associated with the valuation of the NY fabrication facility and the fees for the review and audit of the associated filings. Travel expense for G&A personnel increased by $39,000, or 89%, due to increased travel to the NY facility for transition activities, as well as increased travel associated with investor conferences and customer outreach. $0.9 million.

~~Net Loss~~

The Company recorded a net loss of $5.5 million for the three months ended December 31, 2017, compared to a net loss of $3.4 million for the three months ended December 31, 2016. The primary drivers of the additional loss of $2.1 million were higher personnel cost primarily in the NY facility acquired on June 26, 2017 (higher by $1.1 million), higher depreciation and facility costs of $224,000 and $1,072,000, respectively, both mainly due to the ramp up of R&D activities and the acquisition of our NY facility in June 2017.

Six Months Ended December 31, ~~2017~~2019 and ~~2016~~2018

Revenue

The Company recorded revenue of ~~$745,493~~$1.1 million during the six months ended December 31, ~~2017,~~2019 as compared to $0.6 million for the six months ended December 31, 2018. Revenue recorded during the six months ended December 31, 2019 included $0.4 million of ~~which $589,733 was~~RF filter and amplifier sales, $0.3 million of foundry services, and $0.4 million of revenue for non-recurring engineering services. The revenue for the six months ended December 31, 2018 consisted of $0.3 million of revenue for non-recurring engineering services, $0.1 million of revenue for foundry services, ~~provided at our New York facility, acquired on June 26, 2017. The remaining revenue consisted primarily~~$0.1 million of grant ~~revenue. The Company recorded~~ revenue and $0.1 million of ~~$159,068 in the comparative six-month period ended December 31, 2016, primarily consisting of grant revenue.~~RF filter and amplifier sales.

Cost of Revenue

The Company recorded cost of revenue of ~~$523,065 for~~$1.1 million in the six months ended December 31, ~~2017,~~2019 and $0.5 million in the six months ended December 31, 2018, which included direct labor, direct materials and facility ~~costs associated with the foundry services revenue.~~costs. The ~~Company did not record any~~increase in cost of ~~revenue for the comparative six-month period~~sales was primarily related to sales of ~~2016.~~infrastructure and WiFi filters.

~~Operating Expenses~~

Total operating expenses for the six-month period ended December 31, 2017 were $10.5 million and included R&D expenses of $6.5 million and G&A expenses of $4.0 million. Total operating expenses for the six-month period ended December 31, 2016 were $4.8 million and included R&D expenses of $1.4 million and G&A expenses of $3.4 million.

Research and Development Expenses

R&D expenses ~~of $6.5~~were $10.0 million for the six months ended December 31, ~~2017~~2019 and were comprised primarily of salaries and wages for R&D personnel of $2,369,000, stock-based compensation of $1,113,000, material and third-party processing costs of $808,000, facility costs of $1,783,000 and depreciation of $321,000. R&D expense$1.2 million, or 14%, higher than the prior year amount for the ~~six months ended December 31, 2016 was $1.4~~same period of $8.8 million. The period-over-period increase was primarily in the areas of R&D personnel costs and R&D equipment depreciation. Personnel costs, including stock-based compensation, were $5.8 million compared to $5.1 million in the prior year period, an increase of $0.7 million or ~~353%~~14%. The higher ~~spend~~personnel cost was due to ~~the increase in salaries and wages for the assumed~~additional R&D ~~personnel in our recently acquired NY fabrication facility as well as incremental R&D hires made since~~headcount at both the closing of the acquisition. In addition, we saw an increase of $648,000, or 139%, in stock-based compensation associated with R&D personnel due to restricted stock grants made to personnel hired since December 31, 2016Huntersville, NC location and additional issuances to personnel on the payroll as of December 31, 2016. Material and third-party material processing costs increased over the comparative six-month period by $435,000, or 116%, as the result of the ramp up of development activities, primarily in our NY facility. Facility costs of $1,783,000 were associated with the NY ~~facility acquired in June 2017 and included utilities of $600,000, repair and maintenance costs of $605,000, and supplies and parts costs of $578,000.~~Facility. Depreciation expense ~~of $321,000 for~~was $0.2 million higher than the six months ended December 31, 2017 was higher over the comparative six-month period ended December 31, 2016 by $298,000, mainly due to higher deprecation recorded for assets included in the NY facility acquisition. prior year at $1.4 million.

General and Administrative Expense

General and administrative (“G&A”) expenses include salaries and wages for executive and administrative staff, stock-based compensation, professional fees, insurance costs and other general costs associated with the administration of our business. G&A expenses ~~were $4.0 million~~ for the six months ended December 31, ~~2017,~~2019 were $5.6 million, which is an increase of $1.2 million compared to ~~$3.4~~the six months ended December 31, 2018. Year over year changes within G&A expenses include an increase in employee compensation including stock compensation, of $0.5 million, an increase in professional fees of $0.5 million and an increase in other administrative expenses of $0.2 million.

Other (Expense)/Income

Other expenses for the six months ended December 31, ~~2016, an increase~~2019 were $2.7 million, which included debt discount amortization of ~~$693,000, or 21%. G&A~~$1.5 million, interest expense of $0.8 million, and a change in fair value of our derivative liability of $0.7 million. These expenses were partially offset by interest income of $0.2 million. Other expenses for the six months ended December 31, ~~2017 was comprised primarily~~2018 were $1.0 million, consisting of ~~salary~~$0.8 million of debt discount amortization and ~~wages~~interest expense of ~~$930,000, stock-based compensation~~$0.6 million. These were partially offset by interest income of ~~$964,000, professional fees (primarily legal~~$0.1 million and ~~accounting)~~a reduction to our derivative liability of $949,000, insurance of $163,000, depreciation of 149,000, recruiting and relocation fees of $305,000, and travel of $191,000. We recorded an increase of $343,000, or 58%, in salaries and wages, and an increase of $299,000 in relocation and recruiting fees due to the onboarding of new administrative personnel since December 31, 2016. Stock-based compensation of $964,000 decreased from the comparative period by $819,000, or 46%. Professional fees increased by $339,000, or 55%, mainly for accounting fees due to costs associated with the valuation of the NY fabrication facility and the fees for the review and audit of the associated filings. Travel expense for G&A personnel increased by $124,000, or 185%, due to increased travel to the NY facility for transition activities, as well as increased travel associated with investor conferences and customer outreach. $0.2 million.

Net Loss

The Company recorded a net loss of ~~$10.2~~$18.3 million for the six months ended December 31, ~~2017,~~2019, compared to a net loss of ~~$5.5~~$14.1 million for the six months ended December 31, ~~2016.~~2018. The ~~primary drivers of the additional~~period-over-period incremental loss of ~~$4.7~~$4.2 million, ~~were higher personnel costs~~or 30%, was primarily driven by an increase in ~~the NY facility acquired on June 26, 2017 (higher by $2.2 million), higher material and material processing costs and facility costs~~other expenses of ~~$435,000 and $1,770,000, respectively, both mainly due to the ramp up of~~$1.7 million, increases in R&D ~~activities~~related expenses of $1.1 million and ~~the acquisition~~increases in general expenses, including professional fees and compensation of ~~our NY facility in June 2017.~~$1.2 million.

Liquidity and Capital Resources

Since inception, the Company has recorded approximately $1,039,000 and $615,000 of revenue from contract research and government grants and engineering review services, respectively. Our operations thus far have been funded primarily with contract research and government grants, sales of our equity securities, and debt.Financing Activities

The Company ~~has $9.7~~had $46.4 million of cash and cash equivalents on hand as of ~~February 1, 2018,~~December 31, 2019, which reflects an increase of ~~$0.1~~$16.2 million compared to ~~$9.6~~$30.2 million as of June 30, ~~2017.~~2019. The ~~$0.1~~$16.2 million increase is ~~mostly~~primarily due to ~~the receipt of $13.3~~$32.3 million in net cash proceeds from ~~sales~~issuance of ~~our~~ common stock ~~during~~from the ~~three~~recent equity raise. The Company used $11.9 million for operating activities and $4.1 million in capital expenditures for the six months ended December 31, ~~2017, offset primarily by $13.2 million in net cash used in operating activities and capital expenditures from July 1, 2017 to February 1, 2018.~~2019. The Company estimates that cash on hand will fund its operations, including current capital expense commitments ~~into~~beyond the ~~first quarter~~next twelve months from the date of ~~fiscal 2019. As a result, we will need to obtain additional capital through the sale~~filing of additional equity securities, debt and additional grants, or otherwise, to fund operations past that date. There is no assurance that the Company’s projections and estimates are accurate. Although the Company is actively managing and controlling the Company’s cash outflows to mitigate these risks, these matters raise substantial doubt about the Company’s ability to continue as a going concern. this Form 10-Q.

Balance Sheet and Working Capital

December 31, ~~2017~~2019 compared to June 30, ~~2017~~2019

As of December 31, ~~2017,~~2019, the Company had current assets of ~~$12.3~~$48.3 million made up primarily of total cash on hand of ~~$11.7 million, accounts receivable~~$46.3 million. As of ~~$299,000 and prepaid expenses of $182,000. Current assets as of the end of the prior year were $10.0 million. The increase in~~June 30, 2019, current assets were $31.7 million comprised primarily of ~~$2.3 million was due to a $2.1 million increase in~~total cash on hand ~~and an increase in receivables~~ of ~~$299,000, which was partially offset by a decrease in inventory.~~$30.2 million.

Property, ~~plant~~Plant and ~~equipment, net~~Equipment was ~~$12.3~~$19.4 million as of December 31, ~~2017,~~2019 as compared to ~~$7.9~~a balance of $15.2 million as of June 30, ~~2017.~~2019. The ~~$4.4~~approximate $4.2 million increase is ~~mostly~~primarily due to the purchase of R&D and manufacturing equipment ~~for the NY facility.~~

~~Other assets, primarily intangibles and deposits, were $265,000 as~~ of ~~December 31, 2017, compared to $217,000 as~~$5.6 million, offset by depreciation of ~~June 30, 2017. The increase is primarily attributable to additional intangibles, and a deposit on an asset not yet in service as of December 31, 2017.~~$1.4 million.

Total assets as of December 31, ~~2017 were $24.8 million, compared to $18.1 million at~~2019 and June 30, ~~2017.~~2019 were $69.3 million and $47.9 million, respectively.

Current liabilities as of December 31, ~~2017~~2019 and June 30, 2019 were ~~$3.1~~$3.6 million ~~an increase~~and $3.2 million, respectively.

Long-term liabilities totaled $21.5 million as of ~~$1.7 million~~December 31, 2019, compared to ~~$1.4~~$18.8 million as of June 30, ~~2017.~~2019. The increase of $2.7 million was ~~mainly in accounts payable and accrued expenses ($1.7 million) mostly~~ due to ~~payroll-related accruals, stock-based compensation accruals,~~the increase in convertible notes, net of debt discount and ~~accruals recorded for fixed assets in process.~~issuance costs as well as the establishment of a right of use liability upon adoption of ASC 842 which totaled $0.6 million.

~~Long-term liabilities totaled $1.8~~Stockholders’ equity was $44.2 million as of December 31, ~~2017 and $1.7~~2019, compared to $26.0 million as of June 30, ~~2017, representing the long-term contingent real estate liability associated with the acquisition of the STC-MEMS Business on June 26, 2017.~~

~~Stockholders’ equity was $19.9 million as of December 31, 2017, compared to $15.0 million as of June 30, 2017. The~~2019, an increase of ~~$4.9~~$18.2 million, ~~was due to the $15.1 million~~or 70%. This increase ~~in additional paid-in-capital~~was primarily due to ~~the recording~~common stock issued for cash, net of ~~stock-based compensation $2.6~~issuance costs of $32.2 million, common stock issued for services of $3.3 million, vesting of restricted shares of $0.3 million, employee stock purchases of $0.2 million and ~~net proceeds from the issuance of~~ common stock issued for payment of ~~$13.3 million, partially~~note interest of $0.5 million. These were offset by the ~~$10.2 million~~ net loss ~~recorded~~ for the six months ended December 31, ~~2017.~~2019 of $18.3 million.

~~Working capital as of December 31, 2017 was $9.2 million, compared to $8.7 million as of June 30, 2017. The primary use of cash was to fund operations as well as invest in additional R&D equipment.~~

Cash Flow Analysis

Operating activities used cash of ~~$6.7~~$12.0 million ~~for~~during the six months ended December 31, ~~2017, compared to $2.1~~2019 and $8.6 million ~~for~~during the ~~six months ended December 31, 2016.~~2018 comparative period. The ~~$4.6~~$3.4 million period-over-period increase in cash used was attributable to higher operating expenses ~~of $4.7 million~~ associated with the ramp up of ~~R&D~~development and commercialization activities (primarily R&D personnel and the increased costs associated with the New York facility acquired in June 2017, in addition to $0.9 million less in fair value of contingent liability. This was partially offset by an increase of accounts payable and accrued expenses of $0.7 million, and higher period-over-period depreciation expense of $0.4 million. material costs).

Investing activities used cash of ~~$4.5~~$4.3 million for the six months ended December 31, ~~2017,~~2019 compared to ~~$0.5~~$1.8 million for the comparative period ended December 31, 2018. The $2.5 million period-over-period increase was primarily due to increased spend on R&D equipment.

Cash provided by financing activities was $32.5 million for the six months ended December 31, ~~2016. The increase was mostly due~~2019 compared to ~~investments in fixed assets for our NY facility to enhance our development and commercialization efforts.~~

~~Financing activities provided cash of $13.3~~$37.6 million for the ~~six months~~comparative period ended December 31, ~~2017, compared to $3.5 million for the six months ended December 31, 2016~~2018 due ~~to proceeds we~~a reduction in cash received from equity and convertible note issuances in the ~~issuance of common stock during the six months ended December 31, 2017.~~comparative period.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the ~~Securities~~ Exchange ~~Act of 1934, as amended (the “Exchange Act”))~~Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the ~~SEC’s~~Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to ~~our~~the issuer’s management, including ~~our~~its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We conducted an evaluation under the supervision and with the participation of our Chief Executive Officer and our Interim Chief Financial Officer (our principal executive officer and principal financial officer) of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, ~~2017.~~2019. Based on that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of such date due to ~~(i)~~ the material ~~weakness in~~weaknesses described below with respect to our internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, ~~described in Part II, Item 9A~~such that there is a reasonable possibility that a material misstatement of our ~~2017 Annual Report, which~~annual or interim financial statements will not be prevented or detected on a timely basis. As previously disclosed in our annual report on Form 10K for the fiscal year ended June 30, 2019, we identified the following material weakness relates to our acquisition accounting and reporting practices in connection with the acquisition of our New York wafer fabrication facility and related operations; and (ii) a material weaknessweaknesses in the ~~design of our~~Company’s internal controls ~~related to our accounting for and reporting of stock-based compensation.~~over financial reporting:

The Company did not design and implement effective Information Technology General Controls (“ITGC”) for certain information systems that are relevant to the preparation of the Company’s financial statements. Specifically, applications supporting the processes of payroll, cash management, fixed assets and financial close included deficiencies related to user access controls, change management, information technology operations and third-party service providers. These ITGC deficiencies, combined with inadequate compensating review controls, create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis.

Management review controls designed to address risks associated with complex accounting matters that arise from significant routine and non-routine transactions – related to revenue, share-based compensation, research and development expense, and debt – to ensure that those transactions are properly accounted for in accordance with U.S. GAAP did not operate effectively.

Remediation Plan

~~We cannot yet estimate when~~IT General Controls: During the ~~material weaknesses~~first quarter of fiscal year 2020, key mitigating controls were designed and implemented to mitigate risks in ~~our internal control over financial reporting~~the absence of full year coverage of SSAE-18 (SOC1) reports. These controls will be ~~fully remediated. Since the filing of our 2017 Annual Report, we have hired three additional individuals into the finance~~tested for design and accounting team, including a new Corporate Controller, Director of Tax and Treasury, and Accounting Manager. While these new hires increase the size and capabilities of our accounting department in accordance with our previously disclosed remediation plan, in order to fully remediate the material weaknesses, we intend to take the following additional actions to improve the overall process of our acquisition and stock-based compensation accounting and reporting practices:operating effectiveness during fiscal year 2020.

●

Provide additional training to employees in the accounting department to increase the department’s capabilities and strengthen their understanding of our accounting and internal control policies and procedures;

Non-Routine Transaction Review: During the first quarter of fiscal year 2020, controls were designed and implemented to mitigate risks related to review of all non-routing, material transactions specifically around revenue, share-based compensation, research and development expense and debt. These controls will be tested for design and operating effectiveness during fiscal year 2020.

●

~~Place less reliance on external consultants and Excel Spreadsheets; and~~

●

~~Perform additional internal review processes, including enhancing our Internal Audit programs, in the compilation and reporting of financial statements.~~

Changes in Internal Control over Financial Reporting

Other than ~~as set forth~~the mitigating controls referenced above, ~~in this Item 4,~~ there have been no changes in our internal control over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may have an adverse effect on our business, financial condition or results of operations and prospects.

WeExcept as noted below, we are currently not aware of any material pending legal proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any such proceedings that are contemplated by any governmental authority.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report. There have been no material changes to the risk factors described in Part I, Item 1A, ~~“Risk~~“Risk Factors,” included in our ~~2017~~2019 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.¹

~~Repurchases~~

Unvested restricted stock awards granted under the Akoustis, Inc. 2014 Stock Plan (the “2014 Plan”) and the Akoustis Technologies, Inc. 2015 Equity Incentive Plan (the “2015 Plan”) are subject to repurchase options upon certain terminations of the respective recipient’s service with the Company. Under the terms of the respective award agreements, repurchases will generally be made for no value or for par value. In connection with the resignations of two employees, the Company delivered notices to such employees in September 2017, notifying them that the Company would repurchase an aggregate 58,152 shares of restricted stock from them pursuant to the terms of their respective award agreements. We completed these repurchases during the second quarter of fiscal 2018, as shown in the table below.

Period Total
Number of
Shares (or
Units)
Purchased Average
Price Paid
per Share
(or Unit) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs Maximum Number (or
Approximate Dollar Value) of
Shares (or Units) that May Yet
Be Purchased Under the Plans
or Programs (1)
October 2017 — — — 831,030
November 2017 — — — 821,030
December 2017 58,152 — 58,152 685,506
Total 58,152 — 58,152 685,506

~~(1)~~

As of December 31, 2017, approximately 144,381 shares and 541,125 shares remain subject to repurchase options under the 2014 Plan and the 2015 Plan, respectively. The repurchase options expire as the restricted shares vest and generally extend through August 2020.

Unregistered Sales of Equity Securities

On October 11, 2019, the Company issued 2,500 shares of common stock to the brother of the Company’s Chief Executive Officer in exchange for equipment with a fair market value of $20,000. The shares were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof as a transaction by an issuer not involving any public offering.

Other than asthe issuance described above and any sales previously reported in the Company’s Current Reports on Form 8-K, the Company did not sell any unregistered securities during the period covered by this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The exhibits in the Exhibit Index below are filed or furnished, as applicable, as part of this report.

EXHIBIT INDEX

Exhibit Number		Description

~~10.1†~~3.1		~~Summary~~Articles of ~~Akoustis Technologies, Inc. Director Compensation Program, effective October 3, 2017~~Conversion of the Company, as filed with the Nevada Secretary of State on December 15, 2016 (incorporated by reference to Exhibit ~~10.6~~3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 16, 2016)

3.2		Certificate of Conversion of the Company, as filed with the Delaware Secretary of State on December 15, 2016 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 16, 2016)

3.3		Certificate of Incorporation, as filed with the Delaware Secretary of State on December 15, 2016 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on December 16, 2016)

3.4		Bylaws of the Company (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed with the SEC on December 16, 2016)

3.5		Certificate of Amendment to the Certificate of Incorporation of the Company, as filed with the Delaware Secretary of State on November 4, 2019 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 6, 2019)

10.1†		Purchase Order and Agreement of Sale, dated October 25, 2019, by and between the Company and EV Group, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November ~~14, 2017)~~7, 2019)

10.2††		Amendment to 2018 Stock Incentive Plan (incorporated by reference to Appendix B of the Company’s definitive proxy statement for its 2019 Annual Meeting of Stockholders, filed September 24, 2019)

~~10.2†~~31.1*		Form of Nonqualified Stock Option Agreement for Directors under the Akoustis Technologies, Inc. 2016 Stock Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2017)

~~10.3†~~		Form of Restricted Stock Unit Agreement for Directors under the Akoustis Technologies, Inc. 2016 Stock Incentive Plan (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2017)

~~10.4~~		Form of Registration Rights Agreement by and among the Company and the investors in the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 17, 2017)

~~10.5~~		Form of Amendment No. 1 to the Amended Subscription Agreement by and among the Company and the investors in the May 2017 Private Placement Offering (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on December 15, 2017)

~~10.6.1~~		Form of Subscription Agreement by and among the Company and the director investors in the first round of the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.29.1 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.6.2~~		Form of Subscription Agreement by and among the Company and the non-director investors in the first round of the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.29.2 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.6.3~~		Form of Subscription Agreement by and among the Company and certain investors in the second round of the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.29.3 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.6.4~~		Form of Subscription Agreement by and among the Company and certain investors in the second round of the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.29.4 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.6.5~~		Form of Subscription Agreement by and among the Company and the investors in the third round of the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.29.5 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.6.6~~		Form of Subscription Agreement by and among the Company and the investors in the fourth round of the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.29.6 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)


~~10.7~~		Placement Agent Agreement by and between the Company and Katalyst Securities, LLC in connection with the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.31 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.8.1~~		Placement Agent Agreement by and between the Company and Drexel Hamilton, LLC in connection with the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.32.1 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.8.2~~		Amendment to Placement Agent Agreement by and between the Company and Drexel Hamilton, LLC in connection with the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.32.2 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.9.1~~		Placement Agent Agreement by and between the Company and Joseph Gunnar in connection with the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.33.1 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.9.2~~		Amendment to Placement Agent Agreement by and between the Company and Joseph Gunnar in connection with the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.33.2 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

~~10.10~~		Form of Placement Agent Warrant in the November/December 2017 Private Placement Offering (incorporated by reference to Exhibit 10.34 to the Company’s Registration Statement on Form S-1 (File No. 333-222552), filed with the SEC on January 16, 2018)

31.1*		Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive Officer

31.2*		Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Financial Officer

32.1*		Section 1350 Certification of Principal Executive Officer

32.2*		Section 1350 Certification of Principal Financial Officer

101*		Interactive Data Files of Financial Statements and Notes

101.INS*		Instant Document

101.SCH*		XBRL Taxonomy Schema Document

101.CAL*		XBRL Taxonomy Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Definition Linkbase Document

101.LAB*		XBRL Taxonomy Label Linkbase Document

101.PRE*		XBRL Taxonomy Presentation Linkbase Document

Filed herewith

†

Confidential portions of this exhibit have been omitted

* Filed herewith

~~† Management contract or compensatory arrangement~~

††

Management contract or compensatory plan or arrangement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: ~~February 14, 2018~~January 31, 2020	Akoustis Technologies, Inc.

	By:	/s/ ~~John T. Kurtzweil~~Kenneth E. Boller
		~~John T. Kurtzweil~~Kenneth E. Boller
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)

	December 31,			June 30,
	2017			2017
	(unaudited)
Assets

Assets:
Cash and cash equivalents	$	11,698,531		$	9,631,520
Accounts receivable		298,797			—
Inventory		74,979			188,476
Prepaid expenses		182,307			158,457
Deposits		42,549			42,808
Total current assets		12,297,163			10,021,261

Property and equipment, net		12,283,207			7,853,814

Intangibles, net		231,701			206,527

Other assets		32,861			10,715
Total Assets	$	24,844,932		$	18,092,317

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable and accrued expenses	$	3,027,331		$	1,336,368
Deferred revenue		77,447			14,500
Total current liabilities		3,104,778			1,350,868

Long-term Liabilities:
Contingent real estate liability		1,809,847			1,730,542
Total long-term liabilities		1,809,847			1,730,542

Total Liabilities		4,914,625			3,081,410

Commitments and contingencies

Stockholders’ Equity
Preferred Stock, par value $0.001: 5,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value; 45,000,000 shares authorized; 22,320,700 and 19,075,050 shares issued and outstanding at December 31, 2017 and June 30, 2017, respectively		22,321			19,075
Additional paid in capital		46,599,657			31,499,889
Accumulated deficit		(26,691,671	)		(16,508,057	)
Total Stockholders’ Equity		19,930,307			15,010,907
Total Liabilities and Stockholders’ Equity	$	24,844,932		$	18,092,317

	Common Stock					Additional
	Shares		Amount			Paid In Capital			Accumulated Deficit			Stockholders’ Equity

Balance, July 1, 2017		19,075,050	$	19,075		$	31,499,889		$	(16,508,057	)	$	15,010,907

Common stock issued for cash, net of issuance costs		3,183,269		3,183			13,254,880			—			13,258,063

Warrants issued to underwriter		—		—			(645,757	)		—			(645,757	)

Common stock issued for services		111,000		111			2,580,711			—			2,580,822

Common stock issued for exercise of warrants		9,533		10			47,655			—			47,665

Vesting of restricted shares		—		—			(137,779	)		—			(137,779	)

Repurchase of Common Shares		(58,152)		(58	)		58			—			—

Net loss for the six months ended December 31, 2017		—		—			—			(10,183,614	)		(10,183,614	)

Balance, December 31, 2017		22,320,700		22,321			46,599,657			(26,691,671	)		19,930,307

	For the Six Months Ended			For the Six Months Ended
	December 31, 2017			December 31, 2016

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(10,183,614	)	$	(5,468,666	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		470,419			25,834
Amortization of intangibles		8,076			3,112
Share-based compensation		2,076,829			2,247,862
Change in fair value of derivative liabilities		—			869,462
Change in fair value of contingent liability		79,305			—
Changes in operating assets and liabilities:
Accounts receivable		(298,797	)		(29,000	)
Inventory		113,497			359
Prepaid expenses		(23,850	)		(38,431	)
Deposits		259			—
Other assets		(22,146	)		(10,000	)
Accounts payable and accrued expenses		982,729			244,109
Deferred revenue		62,947			29,000
Net Cash Used In Operating Activities		(6,734,346	)		(2,126,359	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment		(4,471,121	)		(444,429	)
Cash paid for intangibles		(33,250	)		(39,650	)
Net Cash Used In Investing Activities		(4,504,371	)		(484,079	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock		13,258,063			3,456,460
Proceeds from exercise of warrants		47,665			—
Net Cash Provided By Financing Activities		13,305,728			3,456,460

Net Increase in Cash		2,067,011			846,022

Cash - Beginning of Period		9,631,520			4,155,444

Cash - End of Period	$	11,698,531		$	5,001,466

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes	$	—		$	—
Interest	$	199		$	—

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Stock compensation payable	$	266,248		$	208,699
Warrants issued for stock issuance costs	$	645,757		$	107,432
Reclassification of derivative liability to additional paid in capital	$	—		$	1,795,363
Accrued capital expenditures	$	428,691		$	—

	Consolidated Balance Sheet June 30, 2017
	Previously Reported			Revisions			Revised Reported
Additional paid in capital	$	30,774,885		$	725,004		$	31,499,889

Accumulated deficit		(15,783,053	)		(725,004	)		(16,508,057	)

	For the Three Months Ended December 31,			For the Six Months Ended December 31,
	2016			2016
Revenue	$	817,673		$	1,288,485
Net loss	$	(4,139,503	)	$	(7,314,370	)
Net loss per common share	$	(0.26	)	$	(0.46	)
Weighted average common shares outstanding		15,892,503			15,797,106

	Estimated Useful Life	December 31, 2017			June 30, 2017
Land	n/a	$	1,000,000		$	1,000,000
Research and development equipment	3 - 10 years		6,510,343			1,851,427
Computer equipment	5 years		69,642			16,783
Furniture and fixtures	5 - 10 years		3,725			3,725
STC-MEMS equipment	3 - 5 years		2,120,868			2,124,650
Building	11 years		3,191,819			3,000,000
Leasehold improvements	*		3,240			3,240
			12,899,637			7,999,825
Less: Accumulated depreciation			(616,430	)		(146,011	)
Total		$	12,283,207		$	7,853,814

	Estimated useful life	December 31, 2017			June 30, 2017
Patents	15 years	$	168,541		$	135,291
Customer relationships	14 years		81,773			81,773
Less: Accumulated amortization			(20,173	)		(12,097	)
Subtotal			230,141			204,967
Trademarks			1,560			1,560
Intangible assets, net		$	231,701		$	206,527

December 31,
2018	$	17,077
2019		17,077
2020		17,077
2021		17,077
2022		17,077
Thereafter		144,756
	$	230,141

	Options		Weighted Average Exercise Price
Outstanding - June 30, 2017		160,000	$	1.50
Exercisable - June 30, 2017		80,000	$	1.50
Granted		1,006,859		6.74
Exercised		—		—
Forfeited/Cancelled		—		—
Outstanding – December 31, 2017		1,166,859	$	6.02
Exercisable – December 31, 2017		80,000	$	1.50

Grant Date	Shares Issued		Fair Value (1)		Shares Vested
June 2014 (RSA)		307,876	$	483,284		247,111
July 2014 (RSA)		32,408		48,612		24,306
August 2014 (RSA)		81,020		121,179		63,296
September 2014 (RSA)		129,633		196,313		121,531
March 2015 (RSA)		72,919		378,109		18,230
October 2015 (RSA)		293,000		411,000		146,500
November 2015 (RSA)		36,200		54,300		18,100
December 2015 (RSA)		300,000		105,000		247,500
January 2016 (RSA)		40,000		68,000		10,000
March 2016 (RSA)		60,000		—		60,000
June 2016 (RSA)		118,000		533,160		45,000
August 2016 (RSA)		351,000		1,218,110		40,000
January 2017 (RSA)		192,000		1,153,951		25,000
February 2017 (RSA)		110,000		697,500		—
March 2017 (RSA)		20,000		—		—
September 2017 (RSA)		111,000		790,320		—
September 2017 (RSU)		253,000		1,796,910		—
October 2017 (RSU)		301,000		1,872,220		—
November 2017 (RSU)		97,494		608,362		—
December 2017 (RSU)		120,000		775,800		—

		3,026,550	$	11,312,130		1,066,574

	Maximum Penalty
Year 1	$	5,960,000
Year 2	$	3,973,333
Year 3	$	1,986,667

	Foundry Fabrication Services			��	RF Filters			Total

Three months ended December 31, 2017
Revenue	$	291,833			$	5,488		$	297,321
Grant revenue		—				147,232			147,232
Cost of revenue		329,556				280			329,836
Gross margin		(37,723	)			152,440			114,717
Research and development		—				3,473,031			3,473,031
General and administrative		—				2,189,904			2,189,904
Loss from Operations	$	(37,723	)		$	(5,510,495	)	$	(5,548,218	)

Three months ended December 31, 2016
Revenue	$	—			$	159,068		$	159,068
Cost of revenue		—				—			—
Gross margin		—				159,068			159,068
Research and development		—				775,984			775,984
General and administrative		—				2,066,768			2,066,768
Loss from Operations	$	—			$	(2,683,684	)	$	(2,683,684	)

Period	Total Number of Shares (or Units) Purchased		Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
October 2017		—		—		—		831,030
November 2017		—		—		—		821,030
December 2017		58,152		—		58,152		685,506
Total		58,152		—		58,152		685,506