Resonant Reports Third Quarter 2017 Financial Results and Provides Business Update

GOLETA, CA–(Marketwired – November 08, 2017) – Resonant Inc. (NASDAQ: RESN), a designer of filters for radio frequency, or RF, front-ends that specializes in delivering designs for difficult bands and complex requirements, today announced financial results for the third quarter ended September 30, 2017 and provided a business update.

Management Commentary
“We continued our momentum in the third quarter of 2017 as we’ve demonstrated seven straight quarters of execution and continued to retire risk,” said George B. Holmes, CEO of Resonant. “We’ve transformed from a purely development stage company to one focused on customer engagement, execution, and now, commercialization.

“Our customers clearly understand the value proposition our team, tools and technology bring to the marketplace, which is evidenced by our continued engagement and expansion of development agreements with both new and existing customers.” said Holmes. “We had a great quarter, with several key milestones, including our first fabless filter company sampling of a tier one OEM’s SAW/SAW quadplexer with competitive industry performance to established players. Most recently, we announced that one of our customers has qualified a full Band 41 filter we designed, which is being delivered on SAW. Both of these are industry firsts and are currently being sampled to OEMs.”

“To support our ambitious ramp of customers and designs under contract, we continue to invest in our core infrastructure. We recently added a new office in South Korea to support our growing list of customers in the Chinese and Korean markets, while appointing Jangwon Jung as the Country Sales Manager, Korea. A few other notable additions to our team were Vice President of Product Development Engineering, Sohrab Samadian, Vice President of Engineering Operations, Andrew Kay, and new independent board member, Jean Rankin. We believe these investments in infrastructure and personnel will help us support our organization as we grow towards predictable, recurring royalty revenues.”

Financial Results for the Third Quarter 2017
For the quarter ended September 30, 2017, Resonant recognized $106,000 of revenue primarily related to upfront payments from contracts with customers. This compares to $220,000 of revenue for the second quarter of 2017.

Research and development expenses totaled $2.3 million, compared with $2.4 million for the second quarter of 2017. The decrease was primarily the result of reduced hiring expenses.

General and administrative expenses totaled $2.0 million, compared to $2.1 million for the second quarter of 2017. The decrease was primarily related to headcount changes.

Net loss in the third quarter of 2017 totaled $4.2 million, or $(0.28) per fully diluted share, compared with a net loss of $4.3 million, or $(0.29) per fully diluted share, for the second quarter of 2017. The decrease was primarily due to the reduction in operating expenses.

On a non-GAAP basis, adjusted EBITDA for the third quarter of 2017, which excludes non-cash charges for stock-based compensation and depreciation and amortization, was $(3.4) million, or $(0.23) per fully diluted share. This compares with non-GAAP adjusted EBITDA for the second quarter of 2017 of $(3.4) million, or $(0.24) per fully diluted share.

Cash and cash equivalents at September 30, 2017 were $13.5 million. This compares with $9.1 million of cash and cash equivalents at June 30, 2017. During the quarter, the Company closed the first tranche of our $9.3 million capital raise which resulted in net proceeds of $7.5 million. Excluding the capital raise in the quarter, Resonant used $3.1 million in cash during the third quarter. This compares to $3.9 million used in the second quarter of 2017. The reduced cash use was primarily due to lower operating expenses and the timing of working capital changes.

Conference Call
Management will host an investor conference call today at 2:00 p.m. PST (5:00 p.m. EST) to discuss Resonant’s third quarter 2017 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

Date: Wednesday, November 8, 2017
Time: 2:00 p.m. Pacific time (5:00 p.m. Eastern time)
U.S. Dial-in: 1-877-407-3982
International Dial-in: 1-201-493-6780
Conference ID: 13672581

Please dial in at least 10 minutes before the start of the call to ensure timely participation.

A playback of the call will be available through December 8, 2017. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally. Please use the replay pin number 13672581. A webcast will also be available for 30 days on the IR section of the Resonant website or by clicking here: RESN Q3 2017 Webcast.

Note about Non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles, or GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.

In addition to financial results presented in accordance with GAAP, this press release presents adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA is determined by taking net loss and adding interest, taxes, depreciation, amortization, and stock-based compensation. The company believes that this non-GAAP measure, viewed in addition to and not in lieu of net loss, provides useful information to investors by providing a more focused measure of operating results. This metric is an integral part of the Company’s internal reporting to evaluate its operations and the performance of senior management. A reconciliation of adjusted EBITDA to net loss, the most comparable GAAP measure, is available in the accompanying financial tables below. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.

About Resonant Inc.
Resonant is creating innovative filter designs for the RF front-end, or RFFE, for the mobile device industry. The RFFE is the circuitry in a mobile device responsible for the radio frequency signal processing and is located between the device’s antenna and its digital baseband. Filters are a critical component of the RFFE that selects the desired radio frequency signals and rejects unwanted signals and noise.

About Resonant’s ISN® Technology
Resonant can create designs for difficult bands and complex requirements that we believe have the potential to be manufactured for half the cost and developed in half the time of traditional approaches. The Company’s large suite of proprietary mathematical methods, software design tools and network synthesis techniques enable it to explore a much bigger set of possible solutions and quickly derive the better ones. These improved filters still use existing manufacturing methods (i.e. SAW) and can perform as well as those using higher cost methods (i.e. BAW). While most of the industry designs surface acoustic wave filters using a coupling-of-modes model, Resonant uses circuit models and physical models. Circuit models are computationally much faster, and physical models are highly accurate models based entirely on fundamental material properties and dimensions. Resonant’s method delivers excellent predictability, enabling achievement of the desired product performance in roughly half as many turns through the fab. In addition, because Resonant’s models are fundamental, integration with its foundry and fab customers is eased because its models speak the “fab language” of basic material properties and dimensions.

Safe Harbor / Forward-Looking Statements
This press release contains forward-looking statements, which include the following subjects, among others: the capabilities of our filter designs and the contributions of our investments in infrastructure and personnel to growth in revenues. Forward-looking statements are made as of the date of this document and are inherently subject to risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following: our limited operating history; our ability to complete designs that meet customer specifications; the ability of our customers (or their manufacturers) to fabricate our designs in commercial quantities; changes in our expenditures and other uses of cash; the ability of our designs to significantly lower costs compared to other designs and solutions; the risk that the intense competition and rapid technological change in our industry renders our designs less useful or obsolete; our ability to find, recruit and retain the highly skilled personnel required for our design process in sufficient numbers to support our growth; our ability to manage growth; and general market, economic and business conditions. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report (Form 10-K) or Quarterly Report (Form 10-Q) filed with the Securities and Exchange Commission. Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements.

Resonant Inc.
Condensed Consolidated Balance Sheets

    September 30, 2017     December 31, 2016  
    (Unaudited)     (Audited)  
  Cash and cash equivalents   $ 13,530,000     $ 5,084,000  
  Investments held-to-maturity     -       4,747,000  
  Other Assets     373,000       216,000  
TOTAL CURRENT ASSETS     13,903,000       10,047,000  
PROPERTY AND EQUIPMENT, NET     866,000       994,000  
TOTAL NONCURRENT ASSETS     2,293,000       2,158,000  
TOTAL ASSETS   $ 17,062,000     $ 13,199,000  
  Accounts payable and accrued expenses   $ 2,000,000     $ 2,705,000  
  Other current liabilities     261,000       299,000  
TOTAL CURRENT LIABILITIES   $ 2,261,000     $ 3,004,000  
TOTAL LONG-TERM LIABILITIES     8,000       62,000  
STOCKHOLDERS’ EQUITY                
  Common stock     16,000       12,000  
  Additional paid-in capital     74,282,000       56,331,000  
  Accumulated other comprehensive income loss     (5,000 )     (51,000 )
  Accumulated deficit     (59,500,000 )     (46,159,000 )
TOTAL STOCKHOLDERS’ EQUITY     14,793,000       10,133,000  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 17,062,000     $ 13,199,000  

Resonant Inc.
Condensed Consolidated Statements of Operations

    Three Months Ended
 September 30, 2017
    Three Months Ended
 June 30, 2017
    Three Months Ended
 March 31, 2017
    Nine Months Ended September 30, 2017     Nine Months Ended September 30, 2016  
REVENUE   $ 106,000     $ 220,000     $ 156,000     $ 482,000     $ 115,000  
OPERATING EXPENSES                                        
  Research and development     2,336,000       2,380,000       2,240,000       6,956,000       4,299,000  
  General and administrative     1,978,000       2,117,000       2,844,000       6,939,000       5,866,000  
TOTAL OPERATING EXPENSES     4,314,000       4,497,000       5,084,000       13,895,000       10,165,000  
OPERATING LOSS     (4,208,000 )     (4,277,000 )     (4,928,000 )     (13,413,000 )     (10,050,000 )
OTHER INCOME, NET                                        
  Interest and investment income     14,000       16,000       9,000       39,000       10,000  
  Other expense     (6,000 )     (1,000 )     -       (7,000 )     -  
TOTAL OTHER INCOME, NET     8,000       15,000       9,000       32,000       10,000  
LOSS BEFORE INCOME TAXES     (4,200,000 )     (4,262,000 )     (4,919,000 )     (13,381,000 )     (10,040,000 )
Provision for (benefit from) income taxes     (16,000 )     1,000       (25,000 )     (40,000 )     1,000  
NET LOSS   $ (4,184,000 )   $ (4,263,000 )   $ (4,894,000 )   $ (13,341,000 )   $ (10,041,000 )
NET LOSS PER SHARE – BASIC AND DILUTED   $ (0.28 )   $ (0.29 )   $ (0.37 )   $ (0.94 )   $ (1.14 )
Weighted average shares outstanding – basic and diluted     14,757,688       14,535,451       13,393,190       14,233,774       8,772,582  

Resonant Inc.
Reconciliation of Non-GAAP Information

    Three Months Ended
 September 30, 2017
    Three Months Ended
 June 30, 2017
    Three Months Ended
 March 31, 2017
    Nine Months Ended
September 30, 2017
    Nine Months Ended
 September 30, 2016
Net loss (GAAP)   $ (4,184,000 )   $ (4,263,000 )   $ (4,894,000 )   $ (13,341,000 )   $ (10,041,000 )
Add (subtract) the following items:                                        
  Interest income     (14,000 )     (16,000 )     (9,000 )     (39,000 )     (10,000 )
  Stock compensation R&D     324,000       324,000       252,000       900,000       515,000  
  Stock compensation G&A     342,000       341,000       441,000       1,124,000       835,000  
  Depreciation and amortization R&D     135,000       135,000       130,000       400,000       321,000  
  Depreciation and amortization G&A     37,000       59,000       58,000       154,000       181,000  
  Provision for (benefit from) income taxes     (16,000 )     1,000       (25,000 )     (40,000 )     1,000  
Adjusted EBITDA (non-GAAP)   $ (3,376,000 )   $ (3,419,000 )   $ (4,047,000 )   $ (10,842,000 )   $ (8,198,000 )
NET EBITDA PER SHARE – BASIC AND DILUTED (non-GAAP)   $ (0.23 )   $ (0.24 )   $ (0.30 )   $ (0.76 )   $ (0.93 )
Weighted average shares outstanding – basic and diluted     14,757,688       14,535,451       13,393,190       14,233,774       8,772,582  

Investor Relations Contact:
Greg Falesnik
MZ North America