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Airgain Reports Fourth Quarter and Full Year 2016 Results

SAN DIEGO, CA--(Marketwired - February 16, 2017) - Airgain, Inc. (NASDAQ: AIRG), a leading provider of embedded antenna technologies used to enable high performance wireless networking, today reported unaudited results for the fourth quarter and full year ended December 31, 2016.

Fourth Quarter 2016 Financial Results
Sales increased 35% to $12.6 million from $9.3 million in the same year-ago period. The increase was primarily driven by an increase in product sales.

Gross profit increased 43% to $5.5 million (43.4% of sales) from $3.8 million (41.2% of sales) in the same year-ago period. The increase in gross profit as a percentage of sales was primarily driven by an increase in the sales of board-mounted antennas, which tend to have lower per unit pricing and higher gross margins.

Total operating expenses increased 19% to $4.3 million from $3.6 million in the same year-ago period. The increase was primarily due to higher personnel expenses to support the company's sales and marketing and research and development initiatives. The increase was also due to higher administrative expenses incurred as a public company, including expenses related to the company's public equity offerings.

Net income attributable to common stockholders totaled $1.1 million or $0.12 per diluted share, an improvement from a net loss attributable to common stockholders of $(660) thousand or $(0.99) per diluted share in the same year-ago period.

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, fair market value for adjustments of warrants, and share-based compensation) increased to $1.4 million from $837 thousand in the same year-ago period (see note regarding "Use of Non-GAAP Financial Measures," below for further discussion of this non-GAAP measure).

Fourth Quarter 2016 Key Performance Indicators (compared to same year-ago period)

  • Total customer devices increased 29% or 3.4 million devices to 14.9 million devices
  • The average number of antennas per device increased 11% to 2.96
  • The average selling price per device increased 7% to $0.83

Full Year 2016 Financial Results
Sales increased 56% to $43.4 million from $27.8 million in the same year-ago period. The increase was primarily driven by an increase in product sales.

Gross profit increased 66% to $19.3 million (44.4% of sales) from $11.6 million (41.9% of sales) in the same year-ago period. The increase in gross profit as a percentage of sales was primarily driven by an increase in the sales of board-mounted antennas, which tend to have lower per unit pricing and higher gross margins.

Total operating expenses increased 32% to $15.8 million from $12.0 million in the same year-ago period. The increase was primarily due to higher personnel expenses to support the company's sales and marketing and research and development initiatives. The increase was also due to higher administrative expenses incurred as a public company, including expenses related to the company's public equity offerings.

Net income attributable to common stockholders totaled $2.2 million or $0.40 per diluted share, an improvement from net loss attributable to common stockholders of $(2.7) million or $(4.30) per diluted share in the same year-ago period.

Adjusted EBITDA increased to $4.6 million from $1.2 million in the same year-ago period (see note regarding "Use of Non-GAAP Financial Measures," below for further discussion of this non-GAAP measure).

Full Year 2016 Key Performance Indicators (compared to same year-ago period)

  • Total customer devices increased 55% or 19.0 million devices to 53.6 million devices
  • The average number of antennas per device increased 18% to 2.97
  • The average selling price per device increased 1% to $0.79

Management Commentary
"2016 was an exciting year for Airgain," said Airgain president and CEO, Charles Myers. "First and foremost, we became a publicly traded company listed on the NASDAQ stock exchange. Operationally, we experienced continued growth in our core gateway and set-top-box markets, while making accelerated progress in some of our key emerging markets, and even expanding into newer markets, like automotive and small cell. This led to impressive results across the board, with our sales up 56%, gross profit up 66%, and adjusted EBITDA more than tripling for the year. On top of that, we generated $2.2 million of net income, or $0.40 per share on a fully diluted basis."

"Q4 echoed the positive performance throughout the year, especially in terms of our top and bottom-line growth. From a customer and operations standpoint, we continued to gain traction in products targeting cable operators, with increasing demand and new design wins in the gateway and set-top-box markets. We are also experiencing demand for our products in the enterprise and retail WLAN segments."

"As we move in to 2017, we will continue forward with our strategy of growing organically as well as inorganically when and where it makes strategic and financial sense. Our continued focus on R&D initiatives will enable us to not only bring new solutions to the market, but also to continue expanding into other strategic markets."

Conference Call
Airgain management will hold a conference call today (February 16, 2017) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results and provide an update on business conditions.

Company president and CEO, Charles Myers, and CFO, Leo Johnson, will host the call, followed by a question and answer period.

Date: Thursday, February 16, 2017
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
U.S. dial-in number: 1-877-451-6152
International dial-in number: 1-201-389-0879

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay in the investor relations section of the company's website.

A replay of the conference call will be available after 7:30 p.m. Eastern Time through March 16, 2017

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13655519

About Airgain, Inc.
Airgain is a leading provider of embedded antenna technologies used to enable high performance wireless networking across a broad range of home, enterprise, and industrial devices. Our innovative antenna systems open up exciting new possibilities in wireless services requiring high speed throughput, broad coverage footprint, and carrier grade quality. Our antennas are found in devices deployed in carrier, enterprise, and residential wireless networks and systems, including set-top boxes, access points, routers, gateways, media adapters, digital televisions, and Internet of Things (IoT) devices. Airgain partners with and supplies the largest blue chip brands in the world, including original equipment and design manufacturers, chipset makers, and global operators. Airgain is headquartered in San Diego, California, and maintains design and test centers in San Diego, Cambridge, United Kingdom, and Suzhou and Shenzhen, China. For more information, visit airgain.com.

Airgain and the Airgain logo are registered trademarks of Airgain, Inc.

Forward-Looking Statements
Airgain cautions you that statements in this press release that are not a description of historical facts are forward-looking statements. These statements are based on the company's current beliefs and expectations. These forward-looking statements include statements regarding our future organic and inorganic growth, focus on R&D initiatives, expansion into other strategic markets and our ability to execute on our key strategic initiatives. In addition, the unaudited financial results for the fourth quarter and year ended December 31, 2016 included in this press release are preliminary and represent the most current information available to management. The inclusion of forward-looking statements should not be regarded as a representation by Airgain that any of our plans will be achieved. Actual results may differ from those set forth in this press release due to the risk and uncertainties inherent in our business, including, without limitation: adjustments to the unaudited financial results reported for the fourth quarter and year ended December 31, 2016 in connection with the completion of the company's final closing process and procedures, final adjustments, completion of the audit by the company's independent registered accounting firm and other developments that may arise during the preparation of our Annual Report on Form 10-K; the market for our antenna products is developing and may not develop as we expect; our operating results may fluctuate significantly, including based on seasonal factors, which makes future operating results difficult to predict and could cause our operating results to fall below expectations or guidance; our products are subject to intense competition, including competition from the customers to whom we sell, and competitive pressures from existing and new companies may harm our business, sales, growth rates and market share; our future success depends on our ability to develop and successfully introduce new and enhanced products for the wireless market that meet the needs of our customers; we sell to customers who are extremely price conscious, and a few customers represent a significant portion of our sales, and if we lose any of these customers, our sales could decrease significantly; we rely on a few contract manufacturers to produce and ship all of our products, a single or limited number of suppliers for some components of our products and channel partners to sell and support our products, and the failure to manage our relationships with these parties successfully could adversely affect our ability to market and sell our products; if we cannot protect our intellectual property rights, our competitive position could be harmed or we could incur significant expenses to enforce our rights; and other risks described in our prior press releases and in our filings with the Securities and Exchange Commission, including under the heading "Risk Factors" in our final prospectus. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date hereof, and we undertake no obligation to revise or update this press release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Note Regarding Use of Non-GAAP Financial Measures
To supplement Airgain's condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). We believe Adjusted EBITDA provides useful information to investors with which to analyze our operating trends and performance. In computing Adjusted EBITDA, we also exclude stock-based compensation expense, which represents non-cash charges for the fair value of stock options and other non-cash awards granted to employees, as well as the fair market value adjustments for warrants. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company's non-cash operating expenses, we believe that providing a non-GAAP financial measure that excludes non-cash expense allows for meaningful comparisons between our core business operating results and those of other companies, as well as providing us with an important tool for financial and operational decision making and for evaluating our own core business operating results over different periods of time.

Our Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Our Adjusted EBITDA is not a measurement of financial performance under GAAP, and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. We do not consider Adjusted EBITDA to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of specific adjustments to GAAP results is provided in the last table at the end of this release.

                                                                            
                                                                            
                                Airgain, Inc.                               
                          Condensed Balance Sheets                          
                                 (unaudited)                                
                                                                            
                                                     As of December 31,     
                                                ----------------------------
                                                     2016           2015    
                                                -------------  -------------
Assets                                                                      
Current assets:                                                             
  Cash and cash equivalents                     $  45,161,403  $   5,335,913
  Trade accounts receivable, net                    5,154,996      3,731,998
  Inventory                                           146,815        119,733
  Prepaid expenses and other current assets           349,550        191,502
                                                -------------  -------------
Total current assets                               50,812,764      9,379,146
Property and equipment, net                           807,086      1,026,784
Goodwill                                            1,249,956      1,249,956
Customer relationships, net                         2,822,918      3,137,918
Intangible assets, net                                286,719        345,069
Other assets                                           84,060        121,541
                                                -------------  -------------
Total assets                                    $  56,063,503  $  15,260,414
                                                =============  =============
Liabilities, preferred redeemable convertible                               
 stock, and stockholders' equity (deficit)                                  
Current liabilities:                                                        
  Accounts payable                              $   3,949,005  $   2,873,471
  Accrued bonus                                     1,748,551      1,335,500
  Accrued liabilities                               1,072,242        660,987
  Deferred purchase price                           1,000,000      1,000,000
  Current portion of long-term notes payable        1,388,563      1,625,030
  Current portion of deferred rent obligation                               
   under operating lease                               81,332         81,332
                                                -------------  -------------
Total current liabilities                           9,239,693      7,576,320
Preferred stock warrant liability                           —        709,504
Long-term notes payable                             1,333,333      2,721,865
Deferred tax liability                                  6,166              —
Deferred rent obligation under operating lease        451,909        558,641
                                                -------------  -------------
Total liabilities                                  11,031,101     11,566,330
Preferred redeemable convertible stock:                                     
  Series E preferred redeemable convertible                                 
   stock— 10,500,000 shares authorized at                                   
   December 31, 2015; no shares issued and                                  
   outstanding at December 31, 2016 and                                     
   8,202,466 shares issued and outstanding at                               
   December 31, 2015; aggregate liquidation                                 
   preference of $0 and $16,274,823 at December                             
   31, 2016 and December 31, 2015, respectively             —     16,274,823
  Series F preferred redeemable convertible                                 
   stock— 5,000,000 shares authorized at                                    
   December 31, 2015; no shares issued and                                  
   outstanding at December 31, 2016 and                                     
   4,734,374 shares issued and outstanding at                               
   December 31, 2015; aggregate liquidation                                 
   preference of $0 and $10,517,081 at December                             
   31, 2016 and December 31, 2015, respectively             —     10,517,081
  Series G preferred redeemable convertible                                 
   stock— 23,500,000 shares authorized at                                   
   December 31, 2015; no shares issued and                                  
   authorized at December 31, 2016 and                                      
   10,334,862 shares issued and outstanding at                              
   December 31, 2015; aggregate liquidation                                 
   preference of $0 and $17,987,553 at December                             
   31, 2016 and December 31, 2015, respectively             —     16,315,002
Stockholders' equity (deficit):                                             
Preferred convertible stock:                                                
  Series A preferred convertible stock— 313,500                             
   shares authorized, issued and outstanding at                             
   December 31, 2015 and no shares issued and                               
   outstanding at December 31, 2016; aggregate                              
   liquidation preference of $0 and $2,416,194                              
   at December 31, 2016 and December 31, 2015,                              
   respectively                                             —        976,000
  Series B preferred convertible stock—                                     
   1,183,330 shares authorized at December 31,                              
   2015; no shares issued and outstanding at                                
   December 31, 2016 and 1,157,606 shares                                   
   issued and outstanding at December 31, 2015;                             
   aggregate liquidation preference of $0 and                               
   $5,081,890 at December 31, 2016 and December                             
   31, 2015, respectively                                   —      2,457,253
  Series C preferred convertible stock— 682,000                             
   shares authorized at December 31, 2015; no                               
   shares and 682,000 shares issued and                                     
   outstanding at December 31, 2016 and                                     
   December 31, 2015, respectively; aggregate                               
   liquidation preference of $0 and $682,000 at                             
   December 31, 2016 and December 31, 2015,                                 
   respectively                                             —        549,010
  Series D preferred convertible stock—                                     
   4,276,003 shares authorized at December 31,                              
   2015; no shares issued and outstanding at                                
   December 31, 2016 and 4,091,068 shares                                   
   issued and outstanding at December 31, 2015;                             
   aggregate liquidation preference of $0 and                               
   $4,516,013 at December 31, 2016 and December                             
   31, 2015, respectively                                   —      1,986,286
 Common shares, par value $0.0001, 200,000,000                              
 and 80,000,000 shares authorized at December                               
 31, 2016 and December 31, 2015, respectively;                              
 9,275,062 and 665,842 shares issued and                                    
 outstanding at December 31, 2016 and December                              
 31, 2015, respectively                                   928      1,094,375
Additional paid in capital                         88,582,470              —
  Accumulated deficit                            (43,550,996)   (46,475,746)
                                                -------------  -------------
Total stockholders' equity (deficit)               45,032,402   (39,412,822)
Commitments and contingencies                                               
                                                -------------  -------------
Total liabilities, preferred redeemable                                     
 convertible stock and stockholders' equity                                 
 (deficit)                                      $  56,063,503  $  15,260,414
                                                -------------  -------------
                                                                             
                                                                             
                                Airgain, Inc.                                
                     Condensed Statements of Operations                      
                                 (unaudited)                                 
                                                                             
                            For the Three Months       For the Year Ended    
                             Ended December 31,           December 31,       
                          ------------------------- -------------------------
                              2016         2015         2016         2015    
                          ------------ ------------ ------------ ------------
Sales                     $12,625,966  $ 9,333,483  $43,433,867  $27,793,073 
Cost of goods sold          7,149,563    5,490,667   24,156,792   16,148,163 
                          ------------ ------------ ------------ ------------
  Gross profit              5,476,403    3,842,816   19,277,075   11,644,910 
                          ------------ ------------ ------------ ------------
Operating expenses:                                                          
  Research and                                                               
   development              1,525,462    1,158,320    5,622,132    4,257,400 
  Sales and marketing       1,592,376    1,231,666    5,670,625    4,035,591 
  General and                                                                
   administrative           1,227,360    1,278,975    4,532,151    3,453,288 
  IPO costs                         -      (26,376)           -      229,332 
                          ------------ ------------ ------------ ------------
Total operating expenses    4,345,198    3,642,585   15,824,908   11,975,611 
                          ------------ ------------ ------------ ------------
Income (loss) from                                                           
 operations                 1,131,205      200,231    3,452,167     (330,701)
Other expense (income):                                                      
  Interest income              (6,067)           -       (7,803)           - 
  Interest expense             36,867       14,489      178,371       39,489 
  Fair market value                                                          
   adjustment - warrants            -      236,501     (460,289)     (85,325)
  Exercise and expiration                                                    
   of warrants                      -            -            -      (15,145)
                          ------------ ------------ ------------ ------------
Total other expense                                                          
 (income)                      30,800      250,990     (289,721)     (60,981)
Income (loss) before                                                         
 income taxes               1,100,405      (50,759)   3,741,888     (269,720)
Provision (benefit) for                                                      
 income taxes                     103       (8,600)       8,181          622 
                          ------------ ------------ ------------ ------------
Net income (loss)           1,100,302      (42,159)   3,733,707     (270,342)
Accretion of dividends on                                                    
 preferred convertible                                                       
 stock                              -     (617,493)  (1,537,021)  (2,444,954)
                          ------------ ------------ ------------ ------------
Net income (loss)                                                            
 attributable to common                                                      
 stockholders             $ 1,100,302  $  (659,652) $ 2,196,686  $(2,715,296)
                          ============ ============ ============ ============
Net income (loss) per                                                        
 share:                                                                      
  Basic                   $      0.14  $     (0.99) $      0.65  $     (4.17)
                          ============ ============ ============ ============
  Diluted                 $      0.12  $     (0.99) $      0.40  $     (4.30)
                          ============ ============ ============ ============
Weighted average shares                                                      
 used in calculating                                                         
 income (loss) per share                                                     
  Basic                     7,911,185      664,133    3,373,316      651,593 
                          ============ ============ ============ ============
  Diluted                   8,855,433      664,133    4,667,503      651,593 
                          ------------ ------------ ------------ ------------
                                                                            
                                                                            
                               Airgain, Inc.                                
           Condensed Statements of Stockholders' Equity (Deficit)           
                                (unaudited)                                 
                                                                            
                               Preferred                                    
                           Convertible Stock            Common Stock        
                       -------------------------- ------------------------- 
                          Shares       Amount        Shares      Amount     
                       ------------ ------------- ----------- ------------- 
Balance at December                                                         
 31, 2013                6,244,174  $  5,968,549      380,566 $  1,016,783  
                       ------------ ------------- ----------- ------------- 
  Stock-based                                                               
   compensation                  -             -            -            -  
  Shares issued                                                             
   pursuant to stock                                                        
   awards                        -             -      244,616            -  
  Exercise of Stock                                                         
   Options                       -             -          100          220  
  Issuance of note to                                                       
   employee                      -             -            -            -  
  Effect of accretion                                                       
   to redemption value           -             -            -            -  
  Net income                     -             -            -            -  
                       ------------ ------------- ----------- ------------- 
Balance at December                                                         
 31, 2014                6,244,174  $  5,968,549      625,282 $  1,017,003  
                       ------------ ------------- ----------- ------------- 
  Stock-based                                                               
   compensation                  -             -            -            -  
  Shares issued                                                             
   pursuant to stock                                                        
   awards                        -             -       16,300            -  
  Exercise of Stock                                                         
   Options                       -             -       24,260       77,372  
  Forgiveness of note                                                       
   to employee                   -             -            -            -  
  Effect of accretion                                                       
   to redemption value           -             -            -            -  
  Net loss                       -             -            -            -  
                       ------------ ------------- ----------- ------------- 
Balance at December                                                         
 31, 2015                6,244,174  $  5,968,549      665,842 $  1,094,375  
                       ------------ ------------- ----------- ------------- 
  Stock-based                                                               
   compensation                  -             -            -            -  
  Conversion of                                                             
   warrants                      -             -      127,143            -  
  Exercise of stock                                                         
   options                       -             -       58,155      112,101  
  Effect of accretion                                                       
   to redemption value           -             -            -            -  
  Change in par value                                                       
   from no par value                                                        
   to $0.0001                    -             -            -   (1,206,391) 
  Issuance of common                                                        
   stock upon initial                                                       
   public offering,                                                         
   net of issuance                                                          
   costs                         -             -    1,700,100          170  
  Issuance of warrants           -             -            -            -  
  Conversion of                                                             
   preferred                                                                
   redeemable                                                               
   convertible stock                                                        
   to common stock                                                          
   upon initial public                                                      
   offering                      -             -    3,778,753          378  
  Conversion of                                                             
   preferred                                                                
   convertible stock                                                        
   to common stock                                                          
   upon initial public                                                      
   offering             (6,244,174)   (5,968,549)   1,259,187          126  
  Issuance of common                                                        
   stock upon                                                               
   secondary public                                                         
   offering, net of                                                         
   issuance costs                -             -    1,685,882          169  
  Net income                     -             -            -            -  
                       ------------ ------------- ----------- ------------- 
Balance at December                                                         
 31, 2016                        -  $          -    9,275,062 $        928  
                       ============ ============= =========== ============= 
                                                                            
                       Additional                                 Total     
                        Paid-in      Note to    Accumulated   Stockholders' 
                                                                  Equity    
                        Capital     Employee      Deficit       (Deficit)   
                      ------------ ----------- -------------- --------------
Balance at December                                                         
 31, 2013             $         -  $        -  $ (46,491,004) $ (39,505,672)
                      ------------ ----------- -------------- --------------
  Stock-based                                                               
   compensation           657,730           -              -        657,730 
  Shares issued                                                             
   pursuant to stock                                                        
   awards                       -           -              -              - 
  Exercise of Stock                                                         
   Options                      -           -              -            220 
  Issuance of note to                                                       
   employee                     -    (266,282)             -       (266,282)
  Effect of accretion                                                       
   to redemption value   (657,730)          -     (1,486,704)    (2,144,434)
  Net income                    -           -      3,588,300      3,588,300 
                      ------------ ----------- -------------- --------------
Balance at December                                                         
 31, 2014             $         -  $ (266,282) $ (44,389,408) $ (37,670,138)
                      ------------ ----------- -------------- --------------
  Stock-based                                                               
   compensation           341,554           -              -        341,554 
  Shares issued                                                             
   pursuant to stock                                                        
   awards                       -           -              -              - 
  Exercise of Stock                                                         
   Options                      -           -              -         77,372 
  Forgiveness of note                                                       
   to employee                  -     266,282              -        266,282 
  Effect of accretion                                                       
   to redemption value   (341,554)          -     (1,815,996)    (2,157,550)
  Net loss                      -           -       (270,342)      (270,342)
                      ------------ ----------- -------------- --------------
Balance at December                                                         
 31, 2015             $         -  $        -  $ (46,475,746) $ (39,412,822)
                      ------------ ----------- -------------- --------------
  Stock-based                                                               
   compensation           298,535           -              -        298,535 
  Conversion of                                                             
   warrants               249,215           -              -        249,215 
  Exercise of stock                                                         
   options                 25,302           -              -        137,403 
  Effect of accretion                                                       
   to redemption value   (547,750)          -       (808,957)    (1,356,707)
  Change in par value                                                       
   from no par value                                                        
   to $0.0001           1,206,391           -              -              - 
  Issuance of common                                                        
   stock upon initial                                                       
   public offering,                                                         
   net of issuance                                                          
   costs               10,816,808           -              -     10,816,978 
  Issuance of warrants    126,218           -              -        126,218 
  Conversion of                                                             
   preferred                                                                
   redeemable                                                               
   convertible stock                                                        
   to common stock                                                          
   upon initial public                                                      
   offering            44,463,235           -              -     44,463,613 
  Conversion of                                                             
   preferred                                                                
   convertible stock                                                        
   to common stock                                                          
   upon initial public                                                      
   offering             5,968,423           -              -              - 
  Issuance of common                                                        
   stock upon                                                               
   secondary public                                                         
   offering, net of                                                         
   issuance costs      25,976,093           -              -     25,976,262 
  Net income                    -           -      3,733,707      3,733,707 
                      ------------ ----------- -------------- --------------
Balance at December                                                         
 31, 2016             $88,582,470  $        -  $ (43,550,996) $  45,032,402 
                      ============ =========== ============== ==============
                                                                            
                                                                            
                               Airgain, Inc.                                
                          Statements of Cash Flows                          
                                (unaudited)                                 
                                                                            
                                                      For the Year Ended    
                                                         December 31,       
                                                   ------------------------ 
                                                       2016         2015    
                                                   -----------  ----------- 
Cash flows from operating activities:                                       
Net income (loss)                                  $ 3,733,707  $  (270,342)
Adjustments to reconcile net income (loss) to net                           
 cash provided by operating activities:                                     
  Depreciation                                         495,347      458,734 
  Amortization                                         373,350       14,013 
  Fair market value adjustment - warrants             (460,289)     (85,325)
  Exercise and expiration of warrants                        —      (15,145)
  Stock-based compensation                             298,535      341,554 
  Forgiveness of note to employee                            —      266,282 
  Gain on disposal of fixed assets                           —            — 
  Changes in operating assets and liabilities:                              
    Trade accounts receivable                       (1,422,998)     210,140 
    Inventory                                          (27,082)    (119,733)
    Prepaid expenses and other assets                 (120,567)     (36,265)
    Accounts payable                                 1,075,534      298,920 
    Accrued bonus                                      413,051      516,409 
    Accrued liabilities                                411,255      361,067 
    Deferred tax liability                               6,166            — 
    Deferred obligation under operating lease         (106,732)     (91,482)
                                                   -----------  ----------- 
Net cash provided by operating activities            4,669,277    1,848,827 
Cash flows from investing activities:                                       
Cash paid for acquisition                                    —   (4,000,000)
Purchases of property and equipment                   (275,650)    (132,854)
Proceeds from sale of equipment                              —            — 
                                                   -----------  ----------- 
Net cash used in investing activities                 (275,650)  (4,132,854)
Cash flows from financing activities:                                       
Proceeds from notes payable                                  —    4,000,000 
Repayment of notes payable                          (1,624,998)    (273,175)
Issuance of note to employee                                 —            — 
Proceeds from initial public offering               13,600,800            — 
Costs related to initial public offering            (2,657,604)           — 
Proceeds from secondary public offering             26,797,094            — 
Costs related to secondary public offering            (820,832)           — 
Proceeds from exercise of warrants                           —      225,000 
Proceeds from exercise of stock options                137,403       77,372 
                                                   -----------  ----------- 
Net cash provided by financing activities           35,431,863    4,029,197 
Net increase in cash and cash equivalents           39,825,490    1,745,170 
Cash, beginning of period                            5,335,913    3,590,745 
                                                   -----------  ----------- 
Cash, end of period                                $45,161,403  $ 5,335,915 
                                                   ===========  =========== 
Supplemental disclosure of cash flow information                            
Interest paid                                      $   177,460  $    39,489 
Income taxes paid                                  $         —  $     6,171 
Supplemental disclosure of non-cash investing and                           
 financing activities:                                                      
Accretion of Series E, F, and G preferred                                   
 redeemable convertible stock to redemption amount $ 1,356,707  $ 2,157,549 
Property and equipment acquired through lease                               
 incentives                                        $         —  $         — 
Conversion of warrants                             $   249,215  $         — 
Conversion of preferred stock into common stock    $50,432,162  $         — 
Issuance of warrants to underwriters in connection                          
 with initial public offering                      $   126,218  $         — 
                                                                            
                                                                            
                                                                            
                               Airgain, Inc.                                
           Reconciliation of Net Income (Loss) to Adjusted EBITDA           
                                (unaudited)                                 
                                                                            
                            For the Three Months      For the Year Ended    
                             Ended December 31,          December 31,       
                          ------------------------ -------------------------
                              2016        2015         2016         2015    
                          ----------- ------------ ------------ ------------
Reconciliation of Net                                                       
 Income (Loss) to                                                           
 Adjusted EBITDA                                                            
  Net income (loss)       $ 1,100,302 $   (42,159) $ 3,733,707  $  (270,342)
    Stock-based                                                             
     compensation expense      74,496      30,836      298,535      341,554 
    Depreciation and                                                        
     amortization             235,267     129,218      868,697      472,747 
    Non-recurring                                                           
     expenses (1)(2)                -     476,320            -      732,028 
    Other expense                                                           
     (income)                  30,800     250,990     (289,721)     (60,981)
    Provision (benefit)                                                     
     for income taxes             103      (8,600)       8,181          622 
                          ----------- ------------ ------------ ------------
  Adjusted EBITDA         $ 1,440,968 $   836,605  $ 4,619,399  $ 1,215,628 
                          =========== ============ ============ ============
                                                                            
(1) Non-recurring                                                           
 expenses for the three                                                     
 months ended December                                                      
 31, 2015 consists of                                                       
 $266,282 related to the                                                    
 foregiveness of a loan                                                     
 and $236,414 for taxes                                                     
 arising from the                                                           
 forgiveness of the loan                                                    
 offset by $26,376                                                          
 related to IPO expenses.                                                   
(2) Non-recurring                                                           
 expenses for the year                                                      
 ended December 31, 2015                                                    
 consists of $266,282                                                       
 related to the                                                             
 foregiveness of a loan,                                                    
 $236,414 for taxes                                                         
 arising from the                                                           
 forgiveness of the loan                                                    
 and $229,332 related to                                                    
 IPO expenses.                                                              

Investor Relations Contact
Matt Glover or Najim Mostamand
Liolios Group, Inc.
+1 949 574 3860
[email protected]

Airgain Public Relations Contact

Jules M. Cassano
Director of Marketing
Airgain, Inc.
+1 760 444 6008
[email protected]

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