Aktis Oncology, Inc.

Good day, ladies and gentlemen, and welcome to the Acoustis Technologies Fiscal 2022 Fourth Quarter Conference Call. As a reminder, this conference call is being recorded. At the conclusion of the company presentation, Acoustis Management will take questions. To ask a question, please press star 1 on your telephone keypad to be placed into queue. A replay of the call will be available on the Investor Relations section of the Acoustis website.

Thank you, Operator, and good morning to everyone on the call. Welcome to Acousta's fourth quarter fiscal 2022 conference call. We are joined today by our founder and CEO, Jeff Scheele, 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 prospects 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, litigation matters, guidance regarding expected revenue, product orders, and milestones for the current and future fiscal quarters, and expectations regarding the integration of acquired business operations, our 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 obligation 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 to 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 Acoustus.com. I would now like to turn the call over to Jeff Shealy, founder and CEO of Acoustus.

Thank you, Tom, and welcome everyone to our fiscal 2022 fourth quarter conference call. I am pleased to report that Acoustis delivered over 140% year-over-year revenue growth and more than 13% sequential revenue growth as we continue to ramp commercialization of our leading ball filter products. We were able to accomplish this despite the ongoing challenges in the macro environment driven by COVID triggered lockdowns and power outages in parts of Asia as well as the associated semiconductor chip shortages. The silicon chip shortages continue to have a major impact on the number of Wi-Fi access points that can be produced by our customers and has led to a significant production backlog across the Wi-Fi landscape. I'll discuss this in greater detail in a few minutes. Nevertheless, we were able to post a record quarterly revenue in June of $5.2 million and expect to continue revenue growth in sequential quarters with robust growth expected in calendar 2023. From a product development standpoint, we had one of our most successful quarters to date. We managed to achieve 10 out of the 11 stated milestones that we laid out at the end of the March quarter. I would like to congratulate the Incustis team for working with a great sense of urgency and focus given the difficulties in the broader market. During the June quarter, five new customers enter production of finished products, which incorporate Acoustis XBall filters, bringing the total number of customers ramping production to 13. We expect to see this number continue to grow throughout calendar 2022, including two new expected Wi-Fi 6E design wins in the current September quarter. Our growing customer activity in Wi-Fi, 5G mobile, 5G infrastructure and other markets is being offset by the previously discussed headwinds in our backend supply chain. As such, we expect revenue growth in the current first fiscal quarter ending September 30th, 2022 of more than 5% with continued top line growth expected in the December quarter and throughout calendar 2023. Before discussing each of our target market segments in greater detail, I'm going to speak about the recent passage of the CHIPS and Science Act of 2022, commonly referred to the CHIPS Act, and how Acoustis hopes to benefit from the Act. The CHIPS Act legislation was introduced and authored in part by Senate Majority Leader Chuck Schumer. Its goal was to boost U.S. competitiveness with China by allocating tens of billions of dollars to increase domestic semiconductor manufacturing and science research. As some of you may recall, Senator Schumer gave a speech at the Acoustis Fab in upstate New York in June 2021, shortly after he introduced legislation to provide $52 billion in funding to implement semiconductor-related manufacturing and R&D programs in the United States. More recently, in August 2022, Acoustis had the opportunity to provide an extended tour of our New York Fab facility to Senator Schumer. to share our commercial progress over the last year. Acousta Senior Management plans to work closely with the local, regional, and state government of New York, along with Senator Schumer's office, to support implementation of the CHIPS Act, which we expect will present a significant opportunity for the revitalization of upstate New York's semiconductor presence, and in particular, the greater Rochester area, where Acoustis' RF filter chip manufacturing facility is located. The CHIPS Act includes capital for U.S. semiconductor chip manufacturers as well as billions more in tax credits to encourage investment in domestic U.S. semiconductor chip manufacturing. It also provides billions of dollars to fund scientific research and to spur innovation and development of other U.S. technologies. Over the past five years, Acoustis has proudly manufactured its innovative RF filter chip products in the USA. We believe we are an ideal candidate for chips funding and that we fit perfectly as part of Senator Schumer's blueprint to make New York the global innovation and semiconductor hub. We plan to promptly apply for funding under the CHIPS Act to add multiple new 8-inch silicon wafer manufacturing lines at our New York site. In addition, Given the supply chain delays, energy shortages, and constraints associated with our Asia packaging partners, we hope to leverage Chips Act funding to build an advanced packaging center to reduce product costs and support shorter time to market for our products. Such funding would position Acousis to manufacture and deliver billions of XBAL filter chips annually and position us to service both Tier 1 and Tier 2 mobile companies for 5G smartphones. as well as other high-volume end markets, including 5G networks, high-frequency Wi-Fi devices, and other wireless markets. The outstanding performance of Acoustis XBall filters has, in fact, attracted the interest of many of the largest wireless companies in the world, names that everyone would recognize. But the reality is the capital cost to build out capacity to service these billion-dollar wireless companies is substantial. We believe that CHPSAC funding would allow us to make that enormous leap and build a world-class, state-of-the-art fab and advanced packaging center that both New York State and our country would be proud of. I would now like to discuss each of our target market segments in greater detail, beginning with the Wi-Fi segment. As I previously discussed, the Wi-Fi market continues to experience significant disruption from the ongoing supply chain issues as well as COVID lockdowns in China. And this has negatively impacted our near-term top line growth relative to earlier expectations. An industry report by the Del Oro Group noted that the lead time for receiving wireless LAN access points has stretched to between six months and a year, a significant change from the weeks to months lead time at the end of 2021. I want to clarify that the impact on Acoustis is not due to our ability to supply RF filter chips to our Wi-Fi OEM customers, but rather the inability of our OEM customers to procure the complete bill of materials necessary to ramp production of the finished goods. So, whereas we continue to gain design wins in Wi-Fi, our end customers simply are not able to procure several other components necessary to produce new access points routers, and other Wi-Fi devices. While this has resulted in weakness and imperfect visibility in our near-term Wi-Fi-related revenue, we expect the supply chain issues to resolve over the next six to 12 months, which will improve both the clarity and the ramp of our future Wi-Fi filter revenue. On a more positive note, in the June quarter, we were thrilled to add Aruba Networks to our growing list of Wi-Fi customers bringing the total number of Wi-Fi customers in production to nine. Aruba is one of the leading enterprise class Wi-Fi infrastructure providers in the world, and they are using our custom-made XBAL filter solution to deliver the highest performing Wi-Fi 6E access point on the market today. Each Wi-Fi 6E access point uses multiple Acoustis XBAL filters, providing multi-user, multiple in multiple out architectures for high throughput and allows for the use of uni one through four and uni five through eight performance unmatched by any other rf filter solution we now have over 15 announced wi-fi design wins and we expect to add both additional customers in production as well as new design wins throughout the balance of calendar 2022 including the two expected new Wi-Fi 6E design wins I previously mentioned. Recently, we completed significant and frankly very exciting performance improvements to our 5.5 gigahertz and 6.5 gigahertz Wi-Fi 6E and Wi-Fi 7 filter solutions. These enhanced filters use our new chip scale packages and are currently shipping to multiple customers for testing. The advantages of these new filters include a massive improvement in out-of-band rejection, far superior to anything we have seen from our competitors. We have received significant interest from customers for these new filter products and expect to see design wins and production ramps using these new filter products in the near term. I am also pleased to announce that we fully qualified for Wi-Fi 6E, Wi-Fi 7 XBAL filter products during the June quarter, in line with the milestones we set at the end of March. We expect to release into production these four Wi-Fi 6E, Wi-Fi 7 filters in the current September quarter. Additionally, we continue to advance the progress on our Wi-Fi 7 diplexer, which we are currently developing for one of the largest PC chipset makers in the world. The first design of this new diplexer was shipped to this Fortune 100 customer in December, and we received positive feedback on the design. The initial diplexer performed well and enabled the customer to characterize the product in their system, providing valuable technical feedback for the next design iteration, which was produced in our New York manufacturing facility in the June quarter and recently shipped to the customer in the past month. We remain on schedule for commercialization of this extremely exciting product and have received interest from other OEMs for diplexer, triplexer, and other multiplexer products. This includes the new Fortune 100 Internet Company customer that we announced on August 24th, which has given us a development order for two new Wi-Fi 7 X-Ball RF filters for the AR-VR markets and wearables and other mobile devices. Both the PC chipset company and the internet company expect to enter production with our developing diplexer products in calendar 2024. We attribute our surge in recent design wins to the fact that we were an early entrant in Wi-Fi 6, 6E, and 7 ball filter solutions and today have one of the most extensive Wi-Fi 6E portfolios and are expanding to include seven ball filters to address the enormous challenges of difficult dual band coexist, wide bandwidth, and high frequency operation within the five to seven gigahertz frequency spectrum. While near term macro supply chain issues remain, we are executing on design wins, new production ramps, and new product development at a higher pace than ever before. and we expect to see the outlook improve quickly once the supply chain issues improve. To summarize our recent Wi-Fi activity, we now have 12 commercialized XBall Wi-Fi filters, eight for Wi-Fi 6E and four for Wi-Fi 6. As of today, we have announced a total of 15 design wins, including the two we announced last week. We are currently in production with nine customers in Wi-Fi 6, and Wi-Fi 6E. And lastly, we are advancing the development of our XBOM multiplexer products, led by our diplexer efforts, which have resulted in two development orders from two Fortune 100 companies. Moving on to 5G mobile, we continued our momentum in 5G mobile during the June quarter, getting closer to our goal of entering production in the 5G mobile market by late calendar 2022, early calendar 2023 with the first of three tier one customers with whom we are currently engaged. We shipped a second design to our tier one customer in the June quarter using our new advanced wafer level packaging. We recently completed a quality audit with this customer and received a volume order for the first design. We remain focused on entering production with this customer on the targeted timeline. We also successfully developed and delivered one new engineering sample to our third Tier 1 customer, an RF front-end module maker. We initiated the next phase of this development with new engineering samples expected by the end of calendar 2022. These new XBAL filters incorporate the customer's design, and we are targeting production ramp in late calendar 2024, early 2025. During the June quarter, we also iterated a redesigned filter for our Tier 2 5G mobile customer and shipped first samples to this customer in our new WLP. We continue to target a production ramp with this customer in mid-calendar 2023 for this first filter and have just received a purchase order for the development of two additional XBAL filters targeting Wi-Fi 6E applications. As we mentioned on our last quarterly update call, we have brought the production of our WLP in-house within our New York FAB. We continue to work towards the design lock of multiple new advanced packages with full WLP process qualifications expected to complete later this calendar year. We believe bringing the WLP process in-house enhances substantially our ability to control the quality, cost, and customization of our advanced packages. To summarize our 5G mobile activity, we have multiple customer-funded XBAL filters in design with four customer engagements, including three Tier 1 customers. We ship samples of our second design XBAL mobile filter to our Tier 1 RF component company in our advanced wafer-level packages. We also successfully developed and delivered one new engineering sample to our third tier one customer, an RF front end module maker, and we iterated a redesigned filter for our tier two 5G mobile customer and shipped first samples to this customer in our new wafer level package. Our customer engagements also included our second tier one RF front end module maker, that is using our XBall resonators to develop multiple filters for 5G handsets. We shipped multiple 5G mobile XBall filter samples to our customers during the June quarter, including multiple wafer samples utilizing our new advanced wafer-level packaging. And finally, we are currently migrating the manufacturing supply chain of WLP into our New York FAB, which we expect to have design locked and available for qualified production later this calendar year. And now I would like to discuss our network infrastructure business highlights. I am pleased to announce we officially began ramping production with three Citizens Broadband Radio Service, or CBRS, infrastructure companies in the June quarter, one of which is already experiencing higher than expected in customer demand. We expect these three customers to continue to ramp in the current September quarter and beyond, and believe we may see revenue upside in this segment given the current demand picture is increasing. During the June quarter, we successfully completed the next iteration of our 3.7 gigahertz to 3.98 gigahertz XBAW infrastructure RF filter for the US 5G market in CBAN. We are currently sampling this new filter with multiple OEMs and expect to see greater small cell adoption beginning in the second half of calendar 2023 when we will be well positioned. To summarize our 5G network infrastructure activity, we have four completed 5G network infrastructure XBAL filters, three for 5G small cell base stations and one for CBRS. We are currently sampling our new 3.7 to 3.98 gigahertz T-band filter for the US 5G market. To date, we have announced three design wins in small cell with our tier one customer and one design win from a second customer. Additionally, we have received four design wins for CBRS from three leading network infrastructure OEMs. And now, I would like to discuss the highlights from our other business segments during the June quarter. In our defense contract business, we continue to progress on our existing R&D contract with DARPA to further enhance our XBAL PDK. In addition, we recently finalized a multi-year, multi-million dollar contract with DARPA to extend the operating range of our XBAL RF filters up to 18 gigahertz using novel materials and device manufacturing as we announced in June. These new materials may have positive implications in our current 2 to 7 gigahertz frequency range that we are focused on today, given higher power handling capability and higher Q values. In our other market segment, we recently announced entering the RF timing and frequency market with our leading XBall resonators. We are working with a leading maker of timing RF components. to develop ultra-high frequency XBall resonators for use in the customer's finished devices. The timing RF market represents a significant opportunity for Acoustus in both unit volume and revenue. Our primary customer is developing products that could be disruptive in the timing RF components market, looking to displace older analog technologies with ultra-low jitter and phase noise devices. We are extremely excited that our leading XBall resonators can be a part of this groundbreaking opportunity, and we have a new development in this area that I will be discussing shortly as part of our upcoming milestones. To summarize our other market segment activity, we have seven completed XBall filter solutions for civilian and defense markets. Further, our ultra-high frequency XBall resonators are now being used to deliver disruptive digital timing and control products to the broader communications industry. In addition, we continue to refine and improve our XBAR PDK, driven by the Direct-to-Phase 2 contract with DARPA. We signed a new multi-year, multi-million dollar contract with DARPA in June to scale our XBAR technology to 18 gigahertz. And finally, In addition to the numerous customers acquired through the RFMI acquisition, we have a total of three XBAL customer engagements, two of which have already placed purchase orders for us or provided NRE revenue. And now I would like to hand the call over to Ken to go through our financial highlights.