While expenditures remain consistent, management has already begun laying the groundwork to “retool” the company as to support the transition from a research and development focused company to one that is capable of a large-scale global production, marketing and sales. Currently activities are predominately focused on the recruitment of experienced personnel as well as improvement and expansion of our quality assurance capabilities and programs. This effort includes supporting production with customized in-situ measurement and characterization systems, that are compatible with the fabricators production lines.
The amounts included in Item 6.1 of $44,900 include directors’ fees and superannuation paid to entities associated with non-executive directors of $37,400 and consulting fees paid to entities associated with a non-executive director of $7,500.
This announcement has been authorised for release to ASX by Fred Bart, Chairman. ..."
We know that there were delays as a result of ZERO COVID policies in China, and that this delayed the progress somewhat, but in the 4C of April 22 we were told that the first production wafers began to be received in late March 22.
We also know (Ann 13/4/22) that the demo boards that were the product of the massive efforts of last year had been completed and finished units were on hand last year at this time, only awaiting finished chips. These should have been coming off production lines since late March 2022 as indicated above. The AGM updated this as "first production wafers delivered end of April 2022". The same 29/4/22 4C tentatively scheduled release of demonstrators to 2Q-22, (i.e. before July 22).
"... The results of exhaustive testing and characterization conducted on these wafers met expectations and required specifications. These results signify the successful culmination of our multiyear effort to mass-produce our MEMS transducer arrays using a commercially viable surface micromachining approach.The increasing easing of restrictions combined with the exceptional results of the wafers (and chip packaging) enables management to tentatively revise its schedule for release of initial technology demonstrators, to Q2-2022.
The completion of our proprietary multiphysics simulation models enabled very extensive exploration of the multitude of physical regimes that influence the acoustic output in our transducers. The ability to simulate the impact varying combinations of parameters have on our device function enabled the company to further refine its high-output transducer design even further, thereby potentially offering a significant improvement in the commercial appeal of our devices through the reduced number of chips required to achieve the same or even higher sound pressure levels for particular applications.During the reporting period, the company undertook the conversion of these findings into prototypes of high-performance devices, with first silicon anticipated sometime in June.
In addition to the three new patent applications that were submitted during the period, the company filed for global trademark protection of “AudioPixels” which has been already approved by various regional authorities. ..."
"... Overall, the magnitude of accomplishments achieved during the reporting period presents a very positive outlook on the company’s ability to achieve its next series of milestones. The primary milestone is commencing the “public” exposure phase of the company’s industry-altering technology via a series of demonstrations. ..."
The next event on the calendar was the failure to deliver any demonstration of these boards and chips to eager shareholders at the AGM. From the character of the commentary and the "last minute" look of what seemed to be a substitute presentation at the AGM it was obvious that there had been a sudden and unexpected snafu in getting any boards with any chips turned into a working demo system that could be shown. This no-show incurred the close attention of the ASX. This began the slide in the SP as holders lost substantial confidence in the company's ability to deliver. Ongoing commentary on HC has marked this indignation very clearly. All this has taken place despite the explanations and assurances by the company that its major problems were related to manufacturing delays as a result of COVID in China and elsewhere.
I am inclined to believe AP's difficulties given that my own company has had immense problems getting product shipments across the world through its distributor network. My distributor has effectively closed its doors rather than have to explain to its customers where their orders have gotten to weeks after the indicated and tracked arrival dates. It has been cheaper to do that rather than his having to reship 40-50-60% of order replacements at his own cost.
This has also been exaggerated by suspicions posed by some popsters on HC (largely non-holders) that the chip has technical problems ("noisy"). I am still not convinced that the chip is underperforming or shows background noise. I base this on the (publicly unreleased) demo video footage and the explanations surrounding it. Others may choose to differ in their interpretations. But I think it is a pretty strong accusation against the company that this would be the case given all its announcements to the contrary, including those posted here.
"... Among the many activities conducted by the company during the reporting period, there has been an intense effort to transition our development environments to portable demonstration systems - that among its many purposes would have allowed us to demonstrate the technology at this AGM. Unfortunately, as the deadline neared, this proved to be impossible, as the global pandemic induced unimaginable disruptions and delays to our supply chain particularly Shanghai which has been in hard lock down for several months as well as other component suppliers in China.
Upon receipt and integration of the missing critical components, we will call a special meeting whereby our shareholders will be invited to experience our ground breaking technology firsthand.
As will be detailed shortly, I can say that having a formidable and committed fabrication and packaging partner in Earth Mountain, that has consistently delivered to specification – served as an accelerant, enabling major progress to occur during this period. ..."
In the 29/7/22 4C we were again told that the main problems related to lock-down related issues. The progress was clarified (slightly) with respect to the Gen 1 and Gen 2 chips and the Gen 2 ASIC. Gen 1 chips were destined for use in headphone type applications, while Gen 2 (being 8 times louder) would become the main chip for all other purposes with the Gen 2 ASIC. There appeared to be a clear shift in the planning as to what chips would be put into what demo units to make the best use of the best chips irrespective of the timing of any demos (particularly to SH). This seems reasonable.
We know that EM tech and business executives were in Israel in Sept 22 to be shown everything they needed to be shown to effectively commence production of final chips, i.e. full details of how to produce, test, and optimise production or incorporation of MEMS, ASICs, and packaging. Demonstration systems also appear to have been given to EM during this visit.
The 1HFY22 report (31/08/22) simply continues the announced progress along the lines that had been announced over the past couple of years. Progress is moving inexorably from the product development phase to a marketing phase in which finished product will be offered to prospective customers. While we see commentary alluding tor work updating the demo boards in line with progress achieved in the manufactured chips, nowhere do we see any comments to indicate that there has been any failure of the chip to produce sound of the intended, expected, and required quality and volume.
The report simply reiterates, qualifies, clarifies and extends the same story: soon there will be mass production quality chips installed on the best and most appropriate demonstrator boards, and that these are known to do the business like they were expected to do.
The most recent issue has been the difficulties encountered in getting committed cash from EM our of China pending approval by the Chinese government. I regard this as an accounting problem only, that will eventually be resolved, either favourably or unfavourably. Either way I do not expect it to affect the viability of the business arrangement between AP and EM, nor the inevitability of seeing working, marketable chips quite soon. I expect to hear one way or the other in the next couple of days, as announced on 30/12/22.
Let the Games Begin! GLTAH but DYOR. BTW, all this stuff is my own opinion only. Make of it what you like. If you don't like it, or its formatting, then nobody is making you read it.
(20min delay)