Aktis Oncology, Inc.

Good day, ladies and gentlemen, and welcome to the Acoustis Technologies Business Update conference call. As a reminder, this conference call is being recorded. At the conclusion of the company's presentation, Acoustis management will take questions. To ask a question, please press star 1 on your keypad to be placed into queue. A replay of the call will be available on the investor relations section of the Acoustis website. It is now my pleasure to introduce Tom Steppenzee, Director of Investor Relations. Thank you. You may begin.

Thank you, Operator, and good morning to everyone on the call. Welcome to ACOUSTA's third quarter fiscal 2021 business update conference call. We are joined today by our founder and CEO, Jeff Scheele, Interim CFO, Ken Bowler, and EVP of Business Development, Dave Eichle. Before we begin, please note that today's presentation includes forward-looking statements about our business outlook. All statements other than statements of historical facts included in this conference call, such as expectations regarding our strategies, operations, costs, plans, and objectives, including the timing and prospect of product development and customer orders, our expectations regarding achieving design wins from current and future customers, the possibility of entering into collaborative or partnering relationships, Potential impacts of the COVID-19 pandemic and guidance regarding expected revenue, product orders, and milestones for the current and future fiscal quarters are forward-looking statements. Such forward-looking statements are predictions based on the company's expectations as of today and are subject to numerous risks and uncertainties. The company and our management team assume no obligations to update any forward-looking statements made on today's call. Our SEC filings mention important factors that could cause actual results to differ materially. Please refer to our latest Form 10-K and Form 10-Q filed with the SEC to get a better understanding of those risks and uncertainties. In addition, our presentation today will also refer to certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measure is presented in our earnings call highlight release available in the Investors section of Acoustics.com. I would now like to turn the call over to Jeff Scheele, founder and CEO of Acoustis.

Thank you, Tom, and welcome everyone to our 2021 third fiscal quarter business update call. The March quarter was our strongest in history as we reported record quarterly revenue of $2.5 million, which was 11% above analysts' consensus of $2.25 million. and at the high end of our previous guided range of $2 to $2.5 million. Quarterly revenue increased over $1 million sequentially, an increase of 92% from December. The performance was driven by strength in our Wi-Fi and 5G mobile businesses, as well as revenue from our DARPA contract and 5G infrastructure customers. We achieved record quarterly XBAL filter revenue and unit shipments as RF filter sales were up more than 100% over the prior quarter. Given our robust sales pipeline, we expect quarterly filter shipments to continue to increase. We currently have 15 qualified commercial XBAL filters in our product catalog and recently introduced two new Wi-Fi 6E filters, which when qualified, will bring the number of catalog products to 17. As announced last week, Acoustis has recently been awarded nine new patents already in this calendar year, significantly expanding our IP portfolio. The patents together cover certain ball filter methods and devices for 5G, Wi-Fi 6, Wi-Fi 6E, and C-V2X automotive applications. The new issuances bring the total number of Acoustis patents to 47, with 78 additional patents pending, not to mention the numerous unpublished trade secrets contained within the company. In the March quarter, the entire $25 million of convertible debt was retired, resulting in a largely debt-free balance sheet as we exited the quarter. We further strengthened the balance sheet in the March quarter by raising an additional $52.3 million in cash through a combination of $21.5 million non-brokered registered direct offering at $14.36 per share, as well as $30.7 million through additional equity financing at an average price of $14.99 per share. As a result, we ended the March quarter with over $90 million in cash. The strength of our balance sheet enables us to expand WaferFab capital equipment to drive new capacity and build tool redundancy to support equipment uptime that ultimately supports the needs of our growing customer base. With challenging lead times to acquire new silicon fab equipment, coupled with further constraints expected in the future driven by current chip shortages, we are focusing on ensuring that we have the fab equipment to grow with anticipated customer ramps. Leveraging our strong balance sheet, we have begun hiring to support a 24-hour, 7-day-per-week, or 24-7 shift operation to dramatically reduce wafer fab cycle time and increase wafer capacity. Ultimately, the number of wafers we manufacture and sell is the key to driving our company to profitability. We believe the combination of our XBAR technology, RF filter product leadership, high volume wafer manufacturing capacity, and strong balance sheet leads to greater customer confidence to use Acoustas for their commercial wireless products. In summary, we are in the best position in our history to deliver on significant opportunities across multiple ball filter markets and to deliver substantial revenue and earnings growth for years to come. However, in the short term, we see supply chain headwinds impacting several ramp schedules from our customers due to shortage of key semiconductor components, as we will discuss later in this call. I would now like to provide a quick update on the impact of COVID-19 on our business and markets. While we continue to employ precautionary steps, including select remote work authorization and worksite isolation from outside visitors, I am pleased to report our onsite workforce attendance in office is approaching pre-pandemic levels Throughout these challenging times, the incredible flexibility afforded by our IDM manufacturing model has allowed us to continue to develop our products with minimal impact. Acoustis continues to operate with all key personnel as an essential business in both New York and North Carolina, and we continue to accelerate product development consistent with our strategic roadmap. We greatly appreciate our employees and value their flexibility and discipline staying safe during this challenging time, I would now like to address our business performance by market segment beginning with Wi-Fi. It is increasingly apparent that Wi-Fi 6E is one of the most compelling near to intermediate term market opportunities for Acoustus as enormous momentum for the planned adoption of the new Wi-Fi 6E spectrum continues to build both in the U.S. and worldwide. as other countries are making room for extended Wi-Fi capabilities above 5.9 gigahertz. We believe the Wi-Fi 6E filter market will expand significantly in calendar 2022 and beyond, driven by the rapid release and adoption of Wi-Fi 6E CPE and strong indications that handset OEMs are planning to incorporate the new Wi-Fi 6E standard in 5G smartphones, tablets, laptops, and other devices, likely making the Wi-Fi 6E market significantly larger than the current Wi-Fi 6 market by both volume and revenue. As our new and growing product portfolio of 6E filters is now able to target routers, cable set top boxes, and other CPE markets, as well as the future 5G-enabled mobile device market, The demand for our Wi-Fi 6E XBAW filters is robust, given our superior selectivity performance and smaller form factor as an early entrant in this rapidly developing market for high frequency BAW microfilters. On the Wi-Fi product front, we announced in January the successful design lock of our tandem 5.5 gigahertz and 6.5 gigahertz BAW microfilters for Wi-Fi 6E, both of which are currently in the production qualification process. We've recently added two new standard Wi-Fi 6E products, our 5.6 GHz and 6.6 GHz XBAL filters, which enable greater use of the 5 GHz portion of the Wi-Fi 6E specification. Furthermore, we also received our first order for these new filter solutions from an existing Tier 1 customer. Both the 5565 gigahertz and 5666 gigahertz Wi-Fi 6E coexistence solutions are breakthroughs given their incredibly challenging wide bandwidth requirements, which are five times wider than our first 5.2 gigahertz product for the Wi-Fi 6 market. Over the past month, we announced two new Wi-Fi 6E SOC reference design partners, that are incorporating Acoustis XBAW filters in multiple current and future designs. As we have previously stated, the reference design model enables a one customer to many customer or one to many sales opportunity as we benefit from inclusion on the bill of materials of leading baseband chipset suppliers. We now have multiple active engagements with OEMs, ODMs, SOC makers, and channel partners for both Wi-Fi 6 and Wi-Fi 6E. We are in the advanced stages of the sales cycle with several customers for Wi-Fi 6E and expect additional design win announcements in the coming months. In January, we announced a volume order for our 5.5, 6.5 gigahertz tandem Wi-Fi 6E solutions from a new Tier 1 customer. The order is for a multiple user, multiple in, multiple out, or MU-MIMO customer-focused router using multiple 5.5 and 6.5 gigahertz XBAL filters. The customer expects to ramp this platform in the second half of calendar 2021. During the March quarter, we revised and improved our custom Wi-Fi 6E filters for one of our two previously announced Tier 1 Enterprise Class customers, and delivered additional prototypes for their engineering builds. Both of our announced enterprise class Wi-Fi 6E customers intend to use our standard 5.5 and 6.5 gigahertz XBal filters, which we expect to be qualified by early July. We remain on track with both customers and expect to enter production once the respective product qualifications are complete. Our Wi-Fi 6 XBal filter solutions entered the commercial router market in the December quarter as our high-profile Tier 1 retail consumer-focused customer began shipping finished product. We have successfully delivered millions of units manufactured in our New York fab to our customer for a tri-band MU-MIMO mesh router with multiple XBAL filters per device. Feedback from this customer continues to be extremely positive. and our current sales forecast supports strong unit demand throughout calendar 2021. In addition, we have provided this customer samples and received an initial order of our standard Wi-Fi 6E 5.6 and 6.6 gigahertz filters for potential use in their future Wi-Fi 6E platforms. To summarize our Wi-Fi activity, we were awarded three new patents covering certain BAW devices, for Wi-Fi 6 and Wi-Fi 6E during this quarter. We have six XBAL Wi-Fi filters, four for Wi-Fi 6E and two for Wi-Fi 6. We have announced three design wins in Wi-Fi 6, one of which is in a commercially available tri-band mesh router. We announced two new Wi-Fi 6E SOC reference design partners in the March quarter. We have announced three Wi-Fi 6E customers that are planning to use our standard 5.5, 6.5 gigahertz XBall filters and one planning to use our 5.6, 6.6 gigahertz solution. We have signed a strategic purchase agreement and are building multiple custom 6E filters for a third enterprise class customer. And finally, we have over 15 customer engagements in Wi-Fi 6E 10 of which have already placed prototype purchase orders. Next, moving on to 5G mobile. The mobile handset BAW filter market is our largest potential intermediate to long-term market opportunity by both unit volume and revenue. We continue to see broad increased interest and activity for our XBAW filters for the 5G mobile market. In fact, our XBall filters have already been evaluated by several leading Tier 1 and Tier 2 mobile handset OEMs. In the December quarter, we added two new 5G mobile RF customers, which plan to incorporate our XBall filters in upcoming products targeting 5G handsets. The two new customers are in addition to the existing Tier 1 RF module maker that we have been engaged with for over a year. and we were actively engaged with all three of our mobile customers during the March quarter. As we have previously mentioned, entering the Tier 1 handset market in the near term would require a partner. However, we believe with our previously announced capacity expansion of our New York FAB, which is expected to complete by this June, and the plan to double that capacity once again by the end of the calendar 2021, that we will have the wherewithal to enter the mobile handset market servicing our recently announced new RF customers and or several Tier 2 handset OEMs without a partner. With respect to our first Tier 1 mobile customer, we've remained actively engaged and delivered new 5G XBall filters for testing and approval in the March quarter in line with our stated objectives. Our second RF module customer, which we announced in early November, is moving quickly to develop a module for mobile applications using our XBAL filters. The customer's product is expected to be available for sale by the end of calendar 2021. I am happy to report today that we have successfully completed the first filter engineering prototypes for this customer in the March quarter, which was one of our stated milestones. and expect to continue working with this customer to deliver a qualifiable product. Finally, in mid-December, we announced our third Tier 1 RF Solutions customer. We are currently developing two 5G mobile XBall filters for this customer with the goal of entering commercial production in calendar 2022. I'm also pleased to share today that we have released the first XBall filter design to the FAB and plan to release the second design to the FAB by the end of the June quarter. Given early discussions with this customer, we believe our engagement may expand to include multiple filters for multiple bands in both 5G and Wi-Fi modules. As this customer sells into multiple handset OEMs, we expect that it could be a significant contributor to both filter volume and revenue in calendar 2022 and beyond. As we have previously discussed, we have dedicated engineering resources to the development of advanced chip-scale packaging, or CSP, and wafer-level chip-scale packaging, or WLCSP, to address the next generation 5G mobile market. In the beginning of the March quarter, we announced that we had design and process locked our first WLCSP product, and we continue to work towards the qualification of this new packaging technology. This morning, we announced the introduction of our second chip scale package, one which is suitable across multiple XBAR devices in end markets and is slated for inclusion in an upcoming Wi-Fi 6E CPE with a Tier 1 enterprise class customer. We have recently taken significant steps to strengthen our supply chain during the March quarter, and once qualified and released, both new packages will be able to address the mobile device market across our entire product line given the significantly smaller footprint of our new packaging solutions delivering a one-to-one ratio to the size of the die. To summarize our 5G mobile activity, we have multiple customer-funded XBAL filters in design We have announced three customer engagements, two tier one RF component companies, and one leading RF front end module maker. And all three customer engagements are actively engaged with either our design or manufacturing teams. And finally, we have just completed the development of our second chip scale package and are working towards creating a more robust supply chain for wafer level packages in the second half of calendar 2021. Next, I would like to discuss our opportunities in 5G network infrastructure. Wide bandwidth, high power handling, low insertion loss, and high out-of-band rejection are the core filter performance requirements for 5G network infrastructure. Acoustis is ideally positioned to grow its market share in this segment given our small form factor solutions and our growing portfolio of RF filters above 3 gigahertz where 5G is being deployed worldwide. We are currently designing and or shipping filters in three main segments of the 5G infrastructure market, including small cell base stations, massive MIMO base stations, and citizen broadband radio service, or CBRS, equipment. The FCC C-band auction for 3.7 to 3.98 gigahertz spectrum began in December and raised over $80 billion on a new sub-6 gigahertz 5G spectrum in the United States. This has created yet another 5G network infrastructure opportunity for Kustis, and we expect to demonstrate XBAL filters addressing this new 3.8 gigahertz spectrum in the June quarter. We have several active engagements from OEMs that are targeting rollouts in calendar 2022 and beyond. We continue to ship XBAL filters to our Tier 1 5G small cell network infrastructure customer in support of its initial ramp. We have shipped a total of four filter products to this customer and have thus far received three design wins. The production ramp with this customer is presently slower than previously expected given operator-driven network deployment priorities and timing changes, but we will continue to expect to ramp production with multiple filters with this customer in the current calendar year. The ramp timing of our second small cell 5G network infrastructure customer has similarly been affected by operator-driven network deployment priorities and timing changes, but we expect volume shipments to begin in the second half of calendar 2021. The Citizens Broadband Radio Service, or CBRS, has emerged as a new market for Acoustis after the spectrum auctions that occurred last summer. We continue to believe that the successful utilization of the CBRS bands within the 5G network will require a significant amount of high frequency filters and recent customer design activity continues to support this thesis. We design locked our first 3.6 gigahertz CBRS XBAL filter in March of 2020 and announced our first order from a distributor in the September quarter to support promotion and customer engagements. In the December quarter, we received our first volume order from a leading wide area network equipment provider for both CBRS infrastructure and customer premise equipment. We understand that this customer remains on track to begin commercial ramp in the second half of calendar 2021. During the March quarter, We announced our first design win in CBRS with a leading infrastructure maker. The customer intends to use our 3.6 gigahertz CBRS filter modules for fixed wireless infrastructure equipment and is expected to ramp in the second half of calendar 2021. Furthermore, we are currently engaged with over 10 SOC OEM and ODM makers for the development of CBRS networks using 5G. and expect to have additional design wins in calendar 2021 and beyond. To summarize our 5G network infrastructure activity, Acoustis was awarded a new patent in the March quarter covering certain BAW devices for 5G band N79. Further, we have five completed 5G network infrastructure filters, four for small cell base stations and one for CBRS. In addition, we have also announced three design wins in small cell with our tier one customer. We expect volume shipments to our second tier customer in the second half of 2021. In addition, we've received our first design win for CBRS from a leading network infrastructure OEM. We also have announced the CBRS order from a leading wide area network customer for infrastructure and CPE. And finally, we have over 10 customer engagements, five of which that have already placed purchase orders. Next, I would like to discuss our progress in our Other Markets segment. During the March quarter, we continue to develop our technology involving the Multi-Year R&D Contract from the Defense Advanced Research Projects Agency, or DARPA, through the development of a Piezo MEMS Process Design Kit, or PDK, for the company's proprietary and patented XBAL process. The Direct-to-Phase II or DP2 contract is dedicated to developing a general-purpose PDK that will enable BAL and other similar men's structures to be designed and fabricated using the company's state-of-the-art and patented XBAL process. We expect this will expand the opportunities for XBAL moving forward as other designers will be able to develop new products utilizing our novel piezoelectric materials and substrates outside of the current devices, which could lead to new opportunities in adjacent vertical markets. To summarize our other market segment activity, we have seven completed XBAL filter solutions for the civilian and defense markets. We have one design win. and phased array radars and continue to ship production filters to our customer. We continue to refine and improve our XBAW PDK driven by the DP2 contract with DARPA. We were awarded a new patent covering certain BAW devices for 5.9 gigahertz CB2X automotive applications during the March quarter. And finally, we have a total of three customer engagements, two of which that have already placed purchase orders or provided NRE revenue. Now, I would like to turn the call over to Ken to go through select financial highlights.