UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report Pursuant to Section
13 or 15(d)
of the Securities Exchange Act of 1934
May 9, 2018
Date of Report (Date of earliest event reported)
ADESTO TECHNOLOGIES CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware | 001-37582 | 16-1755067 |
(State or other jurisdiction of incorporation) |
(Commission file number) | (I.R.S. Employer Identification No.) |
3600 Peterson Way, Santa Clara, CA | 95054 | ||
(Address of principal executive offices) | (Zip Code) | ||
(408) 400-0578 | |||
(Registrant’s telephone number, including area code) | |||
Not Applicable | |||
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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. ☒
Item 2.02. | Results of Operations and Financial Condition. |
On May 9, 2018, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01. | Regulation FD Disclosure. |
Presentation materials for the Registrant’s announcement of its acquisition of S3 Semiconductors are furnished as an exhibit to this report and are incorporated herein by reference.
The information furnished in this Current Report, including the exhibit hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. | Financial Statements and Exhibits. |
Exhibit 99.1. Press release dated May 9, 2018
Exhibit 99.2. Presentation materials dated May 9, 2018
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Adesto Technologies Corporation | ||||
Date: May 9, 2018 | By: | /s/ Ron Shelton | ||
Name: | Ron Shelton | |||
Title: | Chief Financial Officer and Secretary |
EXHIBIT 99.1
Adesto Technologies Reports First Quarter 2018 Financial Results
Achieves Fourth Consecutive Quarter of More Than 30% Year-Over-Year Revenue Growth; Guiding for Record Revenue in the Second Quarter
SANTA CLARA, Calif., May 09, 2018 (GLOBE NEWSWIRE) -- Adesto Technologies Corporation (NASDAQ:IOTS), a leading provider of innovative application-specific semiconductors for the IoT era, today announced financial results for its first quarter ended March 31, 2018.
First Quarter Financial Summary:
Commenting on the quarter, Narbeh Derhacobian, Adesto’s president and CEO, stated, “Revenue in the first quarter grew more than 35% year-over-year, representing the fourth consecutive quarter of above 30% growth and exceeding the high-end of our guidance range. Furthermore, we continued to closely manage operating expenses, which were again below the low-end of our expected range, contributing to our fourth consecutive quarter of positive adjusted EBITDA.
“During the quarter, we continued to make solid progress on expanding our design win pipeline, which has served as a key catalyst in driving our current and future revenue growth. Designs in the industrial market led the way and included wins for not only our DataFlash products, but also other product families. We also secured a number of design wins with new customers in the smart home market with our newly-released DataFlash-L family. Additionally, we had a number of design wins with leading tier 1 OEMs across consumer and communications end markets.”
Mr. Derhacobian further commented, “We are also pleased to announce today our agreement to acquire S3 Semiconductors, a Dublin-based global supplier of mixed-signal and RF ASICs to the industrial IoT and communications markets. This transaction represents a meaningful step for Adesto as we broaden our line of innovative semiconductor products, expand our addressable markets and drive accelerating revenue growth as well as margin and earnings expansion in the quarters and years ahead.”
First Quarter 2018 Results
Revenue in the first quarter of 2018 was up 35.3% to $15.3 million from $11.3 million in the first quarter of 2017, and sequentially down 5.3% from $16.2 million in the previous quarter.
Gross margin in the first quarter was 46.9%, compared to 49.1% in the first quarter of 2017 and 47.9% in the previous quarter. Gross margin remains within the Company’s targeted range.
GAAP operating expenses in the first quarter of 2018 were $8.1 million compared to $8.1 million in the first quarter of 2017 and $7.7 million in the fourth quarter of 2017. On a non-GAAP basis, operating expenses in the first quarter were $7.4 million, compared to $7.0 million in the year-ago quarter and $6.8 million in the prior quarter.
GAAP net loss in the first quarter of 2018 was $1.1 million, or ($0.05) per share, compared to a net loss of $2.8 million, or ($0.18) per share, in the first quarter of 2017 and a net loss of $165,000, or ($0.01) per share, in the previous quarter.
On a non-GAAP basis, the net loss for the first quarter of 2018 was $0.4 million, or ($0.02) per share, compared to a net loss of $1.6 million, or ($0.10) per share, in the first quarter of 2017 and net income of $0.8 million, or $0.03 per diluted share, last quarter.
Adjusted EBITDA for the first quarter of 2018 was a positive $0.3 million compared to a negative $1.1 million in the first quarter of 2017 and a positive $1.4 million in the previous quarter.
A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
Business Outlook
For the second quarter of 2018, the Company expects revenue to increase to a range between $18.1 million and $19.0 million, which includes approximately $1.5 to $2.0 million of expected revenue contribution from S3 Semiconductors. Gross margin is expected to be between 46% and 48% for the second quarter of 2018. For the second quarter, GAAP operating expenses are expected to range between $9.1 million and $9.7 million, or $8.2 million and $8.8 million on a non-GAAP basis, which excludes approximately $0.6 million in stock-based compensation expense and $0.3 million in amortization of acquisition-related intangible assets.
Conference Call Information
Adesto will host a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its first quarter 2018 financial results as well as the S3 Semiconductors transaction. Investors and analysts may join the call by dialing 1-844-419-1786 and providing confirmation code 6975696. International callers may join the teleconference by dialing +1-216-562-0473 using the same confirmation code. The call will also be available as a live and archived webcast in the Investor Relations section of the Company’s website at http://www.adestotech.com and will include a slide presentation.
A telephone replay of the conference call will be available approximately two hours after the conference call until Wednesday, May 16, 2018 at midnight Pacific Time. The replay dial-in number is 1-855-859-2056. International callers should dial +1-404-537-3406. The pass code is 6975696.
Non-GAAP Financial Information
To supplement our financial results presented in accordance with generally accepted accounting principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income (loss), non-GAAP net income (loss) per share and non-GAAP operating expenses. We believe these non-GAAP financial measures are useful in evaluating our past financial performance and future results. Our non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to help us evaluate growth trends, establish budgets, measure the effectiveness of our business strategies and assess operational efficiencies. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Our non-GAAP financial measures include adjustments based on the following items:
Our non-GAAP financial measures are described as follows:
For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of GAAP to Non-GAAP Financial Information.”
About Adesto Technologies
Adesto Technologies (NASDAQ:IOTS) is a leading provider of innovative application-specific semiconductors for the IoT era. The company’s technology is used by more than 2,000 customers worldwide who are creating differentiated solutions across industrial, consumer, medical and communications markets. With its growing portfolio of high-value technologies, Adesto is helping its customers usher in the era of the Internet of Things. See: www.adestotech.com.
Follow Adesto on Twitter.
Forward Looking Statements
The quotes of our Chief Executive Officer in this release regarding our momentum and expected revenue growth, non-GAAP operating expense maintenance, the acquisition of S3 Semiconductors and the expected benefits to Adesto and its customers, stockholders and investors from completing the acquisition, as well as all statements under “Business Outlook” are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including the businesses of the Company and S3 Semiconductors may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; the risk that that sales of S3 Semiconductors products will not be as high as anticipated; the expected growth opportunities from the acquisition may not be fully realized or may take longer to realize than expected; customer losses and business disruption following the acquisition, including adverse effects on relationships with former employees of S3 Semiconductors, may be greater than expected; and the risk that the Company may incur unanticipated or unknown losses or liabilities in the acquisition. Additional factors, that could cause actual results to differ materially from those expressed in the forward-looking statements include: our ability to predict the timing of design wins entering production and the potential future revenue associated with our design wins; market adoption of our CBRAM-based products; our limited operating history; our rate of growth; our ability to predict customer demand for our existing and future products and to secure adequate manufacturing capacity; consumer demand conditions affecting our end markets; our ability to manage our growth; our ability to hire, retain and motivate employees; the effects of competition, including price competition; technological, regulatory and legal developments; and developments in the economy and financial markets.
For a detailed discussion of these and other risk factors, please refer to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the period ended December 31, 2017, filed with the SEC on March 13, 2018, which are available on our investor relations Web site (ir.adestotech.com) and on the SEC’s Web site (www.sec.gov).
All information provided in this release and in the attachments is as of Wednesday, May 9, 2018, and stockholders of Adesto are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Adesto does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this May 9, 2018 press release, or to reflect the occurrence of unanticipated events.
Adesto Technologies and the Adesto logo are trademarks of Adesto Technologies in the United States and other regions. All other trademarks are property of their respective owners.
Company Contact:
Ron Shelton
Chief Financial Officer
P: 408-400-0578
E: ron.shelton@adestotech.com
Adesto Technologies Investor Relations:
Shelton Group
Leanne K. Sievers, President
P: 949-224-3874
E: sheltonir@sheltongroup.com
ADESTO TECHNOLOGIES CORPORATION | |||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||
(in thousands) | |||||||||||||
(unaudited) | |||||||||||||
March 31, | December 31, | ||||||||||||
2018 | 2017 | ||||||||||||
Assets | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 29,546 | $ | 30,078 | |||||||||
Accounts receivable, net | 12,188 | 8,668 | |||||||||||
Inventories | 7,554 | 5,814 | |||||||||||
Prepaid expenses | 1,153 | 993 | |||||||||||
Other current assets | 55 | 52 | |||||||||||
Total current assets | 50,496 | 45,605 | |||||||||||
Property and equipment, net | 7,632 | 7,183 | |||||||||||
Intangible assets, net | 6,808 | 7,102 | |||||||||||
Other non-current assets | 1,029 | 900 | |||||||||||
Goodwill | 22 | 22 | |||||||||||
Total assets | $ | 65,987 | $ | 60,812 | |||||||||
Liabilities and Stockholders' Equity | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | 7,845 | 7,075 | |||||||||||
Accrued compensation and benefits | 2,819 | 2,614 | |||||||||||
Accrued expenses and other current liabilities | 2,506 | 2,359 | |||||||||||
Price adjustments and other revenue reserves | 4,545 | - | |||||||||||
Line of credit, current | 1,500 | 1,500 | |||||||||||
Term loan, current | 1,929 | 926 | |||||||||||
Total current liabilities | 21,144 | 14,474 | |||||||||||
Term loan, non-current | 9,924 | 10,908 | |||||||||||
Other non-current liabilities | 75 | 75 | |||||||||||
Deferred rent, non-current | 2,294 | 2,404 | |||||||||||
Deferred tax liability, non-current | 2 | 1 | |||||||||||
Total liabilities | 33,439 | 27,862 | |||||||||||
Stockholders' equity: | |||||||||||||
Common stock | 2 | 2 | |||||||||||
Additional paid-in capital | 133,804 | 133,087 | |||||||||||
Accumulated other comprehensive loss | (312 | ) | (295 | ) | |||||||||
Accumulated deficit | (100,946 | ) | (99,844 | ) | |||||||||
Total stockholders' equity | 32,548 | 32,950 | |||||||||||
Total liabilities and stockholders' equity | $ | 65,987 | $ | 60,812 | |||||||||
ADESTO TECHNOLOGIES CORPORATION | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(in thousands, except for share and per share amounts) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2018 | 2017 | |||||||||||
Revenue, net | $ | 15,302 | $ | 11,307 | ||||||||
Cost of revenue | 8,122 | 5,753 | ||||||||||
Gross profit | 7,180 | 5,554 | ||||||||||
Operating expenses: | ||||||||||||
Research and development | 3,665 | 3,372 | ||||||||||
Sales and marketing | 2,752 | 2,600 | ||||||||||
General and administrative | 1,713 | 2,135 | ||||||||||
Total operating expenses | 8,130 | 8,107 | ||||||||||
Loss from operations | (950 | ) | (2,553 | ) | ||||||||
Other income (expense): | ||||||||||||
Interest expense, net | (141 | ) | (213 | ) | ||||||||
Other income, net | 10 | 18 | ||||||||||
Total other income (expense), net | (131 | ) | (195 | ) | ||||||||
Loss before provision for income taxes | (1,081 | ) | (2,748 | ) | ||||||||
Provision for income taxes | 21 | 27 | ||||||||||
Net loss | $ | (1,102 | ) | $ | (2,775 | ) | ||||||
Net loss per share: | ||||||||||||
Basic and diluted | $ | (0.05 | ) | $ | (0.18 | ) | ||||||
Weighted average number of shares used in computing | ||||||||||||
net loss per share: | ||||||||||||
Basic and diluted | 21,370,927 | 15,642,286 | ||||||||||
ADESTO TECHNOLOGIES CORPORATION | |||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION | |||||||||||||
(in thousands, except for share and per share amounts) | |||||||||||||
(unaudited) | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2018 | 2017 | ||||||||||||
GAAP gross profit | $ | 7,180 | $ | 5,554 | |||||||||
Stock-based compensation expense | 25 | 21 | |||||||||||
Non-GAAP gross profit | $ | 7,205 | $ | 5,575 | |||||||||
GAAP research and development expenses | $ | 3,665 | $ | 3,372 | |||||||||
Stock-based compensation expense | (183 | ) | (255 | ) | |||||||||
Amortization of acquisition-related intangible assets | (106 | ) | (122 | ) | |||||||||
Non-GAAP research and development expenses | $ | 3,376 | $ | 2,995 | |||||||||
GAAP sales and marketing expenses | $ | 2,752 | $ | 2,600 | |||||||||
Stock-based compensation expense | (104 | ) | (167 | ) | |||||||||
Amortization of acquisition-related intangible assets | (188 | ) | (187 | ) | |||||||||
Non-GAAP sales and marketing expenses | $ | 2,460 | $ | 2,246 | |||||||||
GAAP general and administrative expenses | $ | 1,713 | $ | 2,135 | |||||||||
Stock-based compensation expense | (131 | ) | (381 | ) | |||||||||
Non-GAAP general and administrative expenses | $ | 1,582 | $ | 1,754 | |||||||||
GAAP operating expenses | $ | 8,130 | $ | 8,107 | |||||||||
Stock-based compensation expense | (418 | ) | (803 | ) | |||||||||
Amortization of acquisition-related intangible assets | (294 | ) | (309 | ) | |||||||||
Non-GAAP operating expenses | $ | 7,418 | $ | 6,995 | |||||||||
GAAP loss from operations | $ | (950 | ) | $ | (2,553 | ) | |||||||
Stock-based compensation expense | 443 | 824 | |||||||||||
Amortization of acquisition-related intangible assets | 294 | 309 | |||||||||||
Non-GAAP loss from operations | $ | (213 | ) | $ | (1,420 | ) | |||||||
Reconciliation from GAAP net loss to adjusted EBITDA: | |||||||||||||
GAAP net loss: | $ | (1,102 | ) | $ | (2,775 | ) | |||||||
Stock-based compensation expense | 443 | 824 | |||||||||||
Amortization of acquisition-related intangible assets | 294 | 309 | |||||||||||
Non-GAAP net loss | (365 | ) | (1,642 | ) | |||||||||
Interest expense | 154 | 223 | |||||||||||
Provision for income taxes | 21 | 27 | |||||||||||
Depreciation and amortization | 488 | 304 | |||||||||||
Adjusted EBITDA | $ | 298 | $ | (1,088 | ) | ||||||||
Non-GAAP basic and diluted net loss per share | ($0.02 | ) | ($0.10 | ) | |||||||||
Weighted-average number of shares used in calculating | |||||||||||||
non-GAAP basic and diluted net loss per share | 21,370,927 | 15,642,286 | |||||||||||
EXHIBIT 99.2
1 May 9 th 2018 Adesto Technologies Acquisition of S3 Semiconductors
2 Safe Harbor Statement About Non - GAAP Financial Measures During this presentation, references to financial measures of Adesto Technologies Corporation will include references to non - GAAP financial measures. For an explanation to the most directly comparable GAAP financial measures, see the Appendix to these materials or the Company’s ear nin gs release, dated May 9, 2018. Forward - Looking Statements This presentation contains forward - looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements described as “Expected Financial Benefits,” on the slide entitled “Anticip ate d Benefits of the Transaction” and relating to expansion of the combined company’s addressable market, projections on the slide captioned “Financial Model” and sta tements regarding future events that involve risks and uncertainties. Actual results may differ materially from those contained in the forward - looking statemen ts contained in this presentation, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that cou ld cause actual results to differ from those projected include the risk that the businesses of the Company and S3 Semiconductors may not be combined successfully, o r s uch combination may take longer, be more difficult, time - consuming or costly to accomplish than expected; the risk that sales of S3 Semiconductors’ products will not be as high as anticipated; the expected growth opportunities, increases in average sales prices, revenues, gross margin and operating margin, sales channel imp rovements or cost savings from the acquisition may not be fully realized or may take longer to realize than expected; customer losses and business disruption fo llo wing the acquisition, including adverse effects on relationships with former employees of S3 Semiconductors, may be greater than expected; and the risk that the Comp any may incur unanticipated or unknown losses or liabilities in connection with the acquisition. Additional factors, that could cause actual results to diff er materially from those expressed in the forward - looking statements include our ability to predict the timing of design wins entering production and the potential future revenue associated with our design wins; market adoption of our CBRAM - based products; our limited operating history; our rate of growth; our ability to predict cus tomer demand for our existing and future products and to secure adequate manufacturing capacity; consumer demand conditions affecting our end markets; our abil ity to manage our growth; our ability to hire, retain and motivate employees; the effects of competition, including price competition; technological, regulatory an d l egal developments; and developments in the economy and financial markets.. These and other risks are discussed in greater detail in the Company's Securities and Exc han ge Commission filings, including its most recent annual report on Form 10 - K, which is available on the Company's investor relations website at ir.adestotech.com and on the SEC website at sec.gov. All information provided in this release and in the attachments is as of May 9, 2018, and the Company assumes no obligation to up dat e this information as a result of future events or developments.
3 Transaction Overview o Financed with a combination of existing cash and debt o $35 million senior secured loan Financing Structure o All cash transaction o $35M purchase price at the close o $15M earn out based on performance over 2 years Consideration o Acquisition of S3 Semiconductors o Dublin - based ASIC and IP solutions provider o Focused on industrial IoT and communications markets Transaction o Accelerates revenue growth o Immediately accretive to gross margin & EBITDA o Non - GAAP EPS accretive within 12 months Expected Financial Benefits
4 S3 Semiconductors Background Corporate Background Established : 1986, Headquartered in Dublin Offices : Ireland, Czech Republic, Portugal, US Competency : Mixed - Signal, Analog and Systems Engineering Solutions : Mixed - Signal, RF and Analog ASIC and IP Blocks Applications: Sensing, Controlling & Communication Nodes End Markets: Industrial IoT, Satellite Communication Markets and Applications Team : Over 70 Engineers Partners : Arm Global Design Partner Proven Track Record: Delivered Over 200 ASIC Designs Business Model Technical Excellence Revenue Sources: ASIC Supplier, ASIC Design, IP Licensing Gross Margin: Well Above Adesto’s Corp. Target Range Profile: Growing Revenue and Profitable
5 Anticipated Benefits of the Transaction o Merging of future roadmaps will provide opportunities to create highly differentiated products Roadmap Enrichment o High - value solutions command richer gross margins >60% o Mixed - Signal ASICs expand ASP opportunities o IP licensing augments GMs Margin Expansion o Differentiated Mixed - Signal, Analog and RF Solutions o Greatly expands Bill - of - Material and customer footprint Content Expansion o Minimal customer overlap allows cross - selling opportunities o Adesto’s broad channel provides rich opportunities for S3Semi o Expands Adesto’s opportunities into communications markets Sales Channel Expansion
6 S3semi Unique Market Focus and Positioning Delivering differentiated ASIC solutions More Than 60% Long Life - Cycle Proprietary Solutions Single Sourced Product Longevity Gross Margins Capitalizing on multi - billion dollar opportunity in Industrial IoT markets for custom SoCs
7 SAM Expansion IoT Edge Node controller memory sensor analog communication memory Analog Communication Controller 20B Connected Nodes by 2020 Expanding BoM Opportunity by More Than 10x $1B+ $10B+
8 Customer Synergies Driving Growth Targeted ASIC Opportunities with Adesto’s Industrial Customers Increasing ASIC Opportunities in S3Semi Pipeline Greenfield Opportunities in Asia for S3Semi Solutions China Japan Adesto’s Industrial Customers in China, Japan Broader Product Portfolio Across Respective Channels ASIC Analog IP Mixed Signal IP App Specific Non - Volatile Memories Representative target customers Current Adesto Customers
9 A Powerful Combination of Two Companies Over 180 People Engineers Over 100 Global Presence US Europe Asia Application Specific Non - Volatile Memory Industrial Communication Medical Consumer Computing Mixed - Signal, Analog, RF ASIC and IP Industrial Communication Medical +
10 Financial Model Revenue Adjusted EBITDA Gross Margin $56.1 $69.0 Adesto Combined 49% 51% Adesto Combined Adesto Combined Gross Margin 45 - 50% 48 - 53% Non - GAAP Op Margin 20 - 23% 23 - 28% * Revenue and Adjusted EBITDA in millions of dollars . For a reconciliation of Adjusted EBITDA, please see appendix. 2017 Pro - Forma Long Term Model $1.3 $3.5 Adesto Combined
11 New Adesto Expansion of Revenue, SAM and Gross Margin Increase Silicon Content in IoT Edge Nodes Expand Industrial IoT Edge Leadership and Differentiation IoT Edge Node controller memory sensor analog communication A leading provider of Innovative Application - Specific Semiconductor Solutions for the IoT Era
12 Thank You!
13 Appendix: Reconciliation of Adjusted EBITDA Adesto (1) S3 (2) Total Reconciliation from net loss to adjusted EBITDA: Net income (loss): $ (5,688) $ 1,856 $ (3,832) Stock-based compensation expense 3,502 - 3,502 Amortization of acquisition-related intangible assets 1,222 - 1,222 Interest expense 781 - 781 Provision for income taxes 101 157 258 Depreciation and amortization 1,384 137 1,521 Adjusted EBITDA $ 1,302 $ 2,150 $ 3,452 (1) Derived from the consolidated audited financial statements for Adesto for the year ended December 31, 2017 (2) Derived from the unaudited, pro forma financial statements of S3 Semiconductors for the year ended December 31, 2017
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