In a world where data is the new gold, managing and transmitting this invaluable resource efficiently is critical. AtomBeam Technologies, a burgeoning player in the data compaction software realm, is grabbing attention with its innovative solution that aims to redefine machine communication. The question on many investors' minds, however, is the investment prospects of AtomBeam. This article delves into the potential of AtomBeam as an investment, exploring its technological offerings, market potential, and financial outlook.
A Revolutionary Approach to Data Management
AtomBeam's core offering, Compaction software, is engineered to amplify machine data network capacity by an astonishing fourfold, all while bolstering security. Atombeam recently launched another raise on StartEngine in late September and cleared $167,626.20 on its first day. The company previously raised over $5.5 million.
The technology harbored by AtomBeam is believed to have the prowess to modify one of the world's swiftly expanding data sources. Its patented software expedites machine communication over any network by 4x, enhancing security in the process. The company’s noteworthy partnerships with industry stalwarts like Saab, USAF, U.S. Space Force, Nvidia, Amazon Web Services, Intel, and Viasat/Inmarsat, alongside $2.4M in DoD contracts, underscores the confidence vested in its technology.
Diverse Applications with Far-reaching Implications
AtomBeam’s Compaction isn’t confined to a single industry; its impact is expected to resonate across various sectors, including generative AI. The company is also developing Neurocompaction, which will leverage AI for advanced sensor image compression for satellites and autonomous vehicles. This technology aims at addressing the swiftly growing sensor image data source, showcasing AtomBeam's forward-thinking approach.
Compaction's ability to trim down data size by eliminating redundancy could be a game-changer for generative AI, potentially reducing memory usage, storage necessities, and bandwidth consumption during both training and operation phases. This could translate to quicker processing times and diminished operational costs, making it more viable to engage with more resource-intensive models.
Addressing the Overwhelming Surge in Machine Data
The proliferation of machine data, predicted to reach 90 zettabytes by 2025, is putting a strain on networks. The massive data inflow is often bogging down networks, and the staggering 98% of unsecured IoT data is a pressing concern. AtomBeam’s software comes as a breath of fresh air, promising to mitigate these challenges by autonomously and invisibly reducing machine/IoT data typically by 75%.
The IoT market's potential impact is pegged at a whopping $11 trillion by 2025. AtomBeam’s cost-effective solution could potentially cut down the projected total cost of connectivity, security, and cloud services by up to 75%, potentially translating to a $200 billion impact in 2025. The technology could find applications across a wide array of devices and sectors including computing, automotive, satellite communications, and more.
Strong Risk Score: Atombeam has patents, no key person or vender risks, no customer concentration risk, no lawsuits and no previous bankruptcies. This means it's unlikely AtomBeam will go out of business due to circumstances related to personnel or customers leaving, or ongoing circumstances like a lawsuit.
Lower Financials & Valuation Score: Atombeam does not have a ton of revenue, resulting in lower scores related to valuation and financials
Overall Score: Atombeam's Hubtas score is showing at relatively middle of the road at 2.146, but the highest score on the matrix does not break 4/5 so this is likely at, or above average. Once AtomBeam begins seeing continued revenue, this score will likely grow substantially due to a strong risk score.
AtomBeam’s technology is sheltered by seven issued and three pending patents, providing a solid foundation for its innovative offerings. The company has also seen successful corporate trials and is in testing phases with several large corporations, which bodes well for its market acceptance and future growth.
Pros and Cons for Investors
Innovative Technology: AtomBeam is in the vanguard with its data compaction technology that tackles the challenges of managing and transmitting burgeoning machine data.
Strong Industry Partnerships: Collaborations with industry giants like Nvidia, Amazon Web Services, and Intel underscore the potential and credibility of AtomBeam’s technology.
Patent-protected Technology: With seven issued and three pending patents, AtomBeam has a solid foundation to safeguard its innovations.
Diverse Applications: The technology has a broad spectrum of applications ranging from generative AI to satellite communications, indicating a vast market potential.
Tested Product: AtomBeam’s product is in the testing phase with several large corporations, reflecting a positive industry response.
Early-Stage Risk: As a company with a relatively new product, AtomBeam carries the inherent risks associated with early-stage ventures.
Market Adoption: The pace and extent of market adoption for AtomBeam’s technology remain uncertain.
Financial Liquidity: The company is currently not generating a profit, meaning there is a risk of not being able to raise sufficient funds to sustain operations.
Competitive Landscape: The rapidly evolving tech landscape could usher in competitors with superior or more cost-effective solutions.
The financials of AtomBeam Technologies reflect typical early-stage tech company dynamics. Here’s an analysis based on the provided financial statements for the years 2020 through 2022:
Liquidity and Solvency:
Cash Position: The cash and equivalents have dwindled from $333.5k in 2021 to $170.1k in 2022. The lack of revenue in the prior years and the initial revenue generation of $125.0k in 2022 haven’t been sufficient to bolster the cash position. The company just came off a $3 million raise, and currently cleared over $168k for the raise launched at the end of September so likely has sufficient runway to sustain operations in the short to mid-term.
Debt Levels: There's a noticeable escalation in both short-term and long-term debt over the years, with long-term debt surging from $0 in 2020 to $4.7M in 2022. The total liabilities now stand at $4.8M as of 2022, a significant increase from the previous years.
Shareholder Equity: Negative shareholder equity of $-4.4M in 2022 from $-3.6M in 2021 indicates a dilution of equity, presumably due to accrued losses and possibly additional debt or other liabilities.
Revenue Generation: 2022 marked the initiation of revenue generation with $125.0k. Although this is a positive sign, the revenue level is not enough to offset substantial losses.
Cost Management: The cost of goods sold remains at $0, which aligns with the company’s business model of virtually zero cost of goods. However, the total expenses have escalated to $1.5M in 2022 from $2.2M in 2021, reflecting high operational costs.
Net Profit/Loss: AtomBeam continues to incur losses with a net loss of $-1.5M in 2022, albeit lesser than the $-2.3M loss in 2021.
Cash Flow Analysis:
Cash from Operations: Negative cash from operations of $-1.3M in 2022 reflects the operational challenges and possibly the investments made towards marketing, sales, and development to foster growth.
Cash from Investing: The negative cash from investing indicates ongoing investments, probably in fixed assets as seen by the increase in total fixed assets from $204.1k in 2021 to $281.9k in 2022.
Cash from Financing: Positive cash from financing of $1.2M in 2022 suggests that the company is relying on external financing to fund its operations and investments.
AtomBeam's Executive Team
The team at AtomBeam reflects a diverse blend of expertise across various domains crucial for the company’s growth and operational efficiency. Here’s an in-depth look at the key personnel:
Charles Yeomans, CEO
With over 25 years in executive management and investment banking, Charles brings a wealth of experience to AtomBeam. His tenure as CEO at Trigemina, a biotech firm, and Portal Group Holdings, an employee benefits technology firm, alongside other notable positions such as COO at Frenkel & Co., Inc., and EVP of Ultralink, demonstrates his ability to lead and drive growth in tech-oriented firms. Charles’s investment banking background from Drexel Burnham Lambert and his stint as an intelligence officer in the U.S. Navy adds a unique dimension to his profile. Holding an AB degree from Kenyon College and an MBA from Stanford, Charles is well-equipped to navigate the financial and strategic landscapes that AtomBeam operates in.
David White, VP, Business Development
Dave’s 30-year career is rich in product management, sales of software products, and building business partnerships. His experiences as VP of Sales and/or Business Development at several tech companies like Ipanema, Expand Networks, and Procket Networks, make him a vital asset for AtomBeam’s business development and sales strategies.
JC Lin, VP, Customer Experience
JC Lin’s expertise lies in the development, deployment, and support of complex software solutions, underpinned by a 30-year career. His deep experience in managing software development programs and knowledge in wireless communications and cloud computing, especially within the oil and gas industry, brings a nuanced understanding of AtomBeam’s technological domain.
Josh Cooper, PhD, Chief Scientist
As a Professor of Mathematics and a consultant in Data Science/Machine Learning, Josh Cooper’s role is pivotal in AtomBeam’s product and IP development. His academic and professional background in discrete mathematics, theoretical computer science, and data science provides a strong foundation for AtomBeam’s software architecture and technological innovation.
Mojgan Haddad, PhD, Director
Mojgan Haddad, with 20+ years of experience in research informatics, holds a VP of Engineering position at Dotmatics while dedicating a portion of her time to AtomBeam. Her extensive experience in bioinformatics and software development, especially in the medical diagnostics field, brings a data science-centric perspective to the team.
Courtney Benham, Director
Courtney, a wine producer from Napa Valley, brings a different industry perspective to AtomBeam. His engagement, although part-time, could provide diverse insights beneficial for AtomBeam’s broader business strategies.
Kayla Vallarta, Director of Operations and Controller
Kayla Vallarta’s 14 years of experience in operations, financial modeling, and fiscal budgeting is crucial for AtomBeam’s financial management. Her recent role as a senior financial analyst in a consulting firm specializing in M&A transactions, coupled with an MBA in finance, strengthens AtomBeam’s financial and operational framework.
Is AtomBeam a Good Investment?
AtomBeam has a lot of traction and a great product, but it is currently working with a number of partners to find the right fit for its technology. Once AtomBeam begins landing a few large partners, the company could quickly begin seeing substantial traction. With a number of partners and customers in the pipeline, AtomBeam holds a lot of potential.