Aktis Oncology, Inc.

Good day, ladies and gentlemen, and welcome to the Acoustis Technologies Fiscal 2023 First 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 the queue. A replay of this 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 first quarter fiscal 2023 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 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 Acoustis.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 fiscal 2023 first quarter conference call. I am pleased to report that Acoustis delivered over 195% year-over-year revenue growth and more than 6% sequential revenue growth as we continue to ramp commercialization of our leading RF filter products. This was in line with the revenue guidance that we gave at the end of the June quarter of up more than 5% sequentially. We were able to accomplish this despite the ongoing challenges in the macro environment driven by COVID triggered lockdowns, power outages in part of Asia, and 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 created production backlog across the Wi-Fi landscape. Nevertheless, we were able to post record quarterly revenue in September of 5.6 million. Looking ahead, we expect to continue revenue growth in the current quarter with 5% to 10% sequential growth and further expect growth throughout calendar 2023. From a product development standpoint, we achieved the majority of our stated milestones for the quarter, including multiple targets in 5G mobile and Wi-Fi, as well as renewed activity in our 5G network infrastructure and other markets segment. During the September quarter, two new customers enter production with finished products incorporating Acoustus XBAL filters, bringing the total number of customers ramping production to 15. We expect to see this number continue to grow during the December quarter, including at least four new expected Wi-Fi design wins. Given the current headwinds, we have decided to protect our cash reserves by reducing spending where possible and by delaying new capital expenditures. Before discussing each of our target market segments in greater detail, I would like to give a brief update regarding 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. This past September, Senator Schumer once again visited our fab facility in Canandaigua, New York, and was pleased with the growth in manufacturing capacity and new jobs that we have delivered over the past 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 opportunities in upstate New York, 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 Acousta's RF filter chip manufacturing is located. Over the past five years, Acousta 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 apply for funding under the CHIPS Act when the submission window opens in early calendar 2023 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 secure CHIPS Act funding to build an advanced packaging center to reshore our packaging supply chain to reduce product costs, and support shorter time to market. Such funding would position Acoustus to manufacture and deliver billions of XBall filter chips annually, and position us to service both tier one and tier two mobile companies for 5G smartphones, as well as other multi-billion dollar end markets, including 5G networks, high frequency Wi-Fi devices, and other wireless markets. The outstanding performance of Acousys 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 Chipsack funding would allow us to make that enormous leap and build a world-class, state-of-the-art fab and advanced packaging center that makes New York State and our country proud. I would now like to discuss each of our target markets segments in greater detail, beginning with the Wi-Fi segment. As I mentioned earlier, the Wi-Fi market continues to experience significant disruption from the supply chain issues, as well as further COVID lockdowns in China, and this continues to impede our top line growth in the near term. While 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 lower visibility in our near-term Wi-Fi related revenue, we are beginning to see signs that the supply chain challenges are being addressed through new capacity, fewer shutdowns, and the shift to newer Wi-Fi technologies, particularly Wi-Fi 6E and Wi-Fi 7. On a more positive note, we had multiple significant product achievements during the September quarter. We started sampling two exciting new Wi-Fi 6E and Wi-Fi 7 compatible XBAL filter solutions during the September quarter, including our next generation 5.5 and 6.5 gigahertz coexistence filter solution that covers the UNI 1 through 3 and UNI 5 through 8 bands. We have completed fabrication and plan to start sampling in the December quarter our new 5.6 and 6.6 gigahertz coexistence filter solutions that cover the UNI 1 through 4 and UNI 5 through 8 bands in the high frequency Wi-Fi spectrum. Each of these XBAL filters offer significantly reduced form factor relative to our legacy products with a greater than four times reduction in size utilizing our new advanced chip scale packages. The next generation 5.5 and 6.5 gigahertz solution offers enormous improvements in out of band rejection relative to our first generation products and has already attracted significant interest from Wi-Fi ODM and OEMs. Our new 5.6 and 6.6 gigahertz solution can utilize all the 5 gigahertz bands in Wi-Fi 6E and Wi-Fi 7 to support the North America market. We expect design wins for both our new next-gen 5.5, 6.5 gigahertz and our new 5.6, 6.6 gigahertz solutions and expect the new filters to be qualified and in production by the June quarter of 2023. Our current generation products continue to have success, and we announced two new Wi-Fi 6E design wins in early September in the gaming market, a new area for Acoustas. One of the design wins is for a specialized high-speed, low-latency gaming router that is expected to enter production in mid-calendar 2023. The second design win is with a leading mobile gaming platform and is also expected to go into production in mid-2023. Both devices use multi-user, multiple in, multiple out architectures and are expected to ship with multiple XBAL filters per device. Recently, we announced three additional Wi-Fi design wins in Wi-Fi 6E for carrier class applications. Two design wins are for leading European carrier class Wi-Fi OEM. that will be using the Acoustus 5.5 gigahertz and 6.5 gigahertz standard XBAL coexistence filter solutions, as well as the 5.6 and 6.6 gigahertz standard XBAL coexistence filter solution that allows for greater usage of the Uni-4 band. The first Wi-Fi 6E router is expected to ramp production by the end of calendar 2022. And the second router is expected to begin ramping by the end of March 2023 quarter. The third design win is for a global network communication solutions provider that will be using the Acousys 5.6 and 6.6 gigahertz standard XBAR coexistence solutions to sell a Wi-Fi 6E extender to its carrier partner with a production ramp expected by August of calendar 2023. I am also pleased that we received a development order from a Fortune 100 internet company for two new diplexer products during the September quarter. This is our second Fortune 100 diplexer customer, and the new diplexers we are developing are for Wi-Fi 7 applications, including virtual reality and augmented reality headsets, as well as advanced wearable devices. The new diplexers are expected to be completed and enter production in calendar 2024. Additionally, we continue to advance the progress of 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 2021, and we received positive feedback on the design. The initial diplexer performed well. and enable the customer to characterize it within their system architecture, providing valuable technical feedback for the next design iteration, which has already been produced in our New York manufacturing facility. 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. We attributed our surge in recent design wins to the fact that we were an early entrant in Wi-Fi 6, 6E, and Wi-Fi 7 ball filter solutions, and today have one of the most extensive high-frequency Wi-Fi portfolios that address the enormous challenges of difficult dual-band coexist, wideband operation within the 5 to 7 gigahertz frequency spectrum. While near-term macro supply chain issues remain, we are executing on design wins new product ramps, and new product development at a higher pace than ever before, and we expect to see the outlook improve quickly once the broader supply chain issues improve. To summarize our recent Wi-Fi activity, with the addition of the new 5.5, 6.5 gigahertz, and 5.6, 6.6 gigahertz solutions, we will have 16 commercialized XBALL Wi-Fi filters, 12 for Wi-Fi 6E, and Wi-Fi 7 and 4 for Wi-Fi 6. As of today, we have announced a total of 20 design wins, including the three we recently announced. We are currently in production with 10 customers in Wi-Fi 6 and Wi-Fi 6E. And lastly, we are advancing the development of our XBAR multiplexer products, led by our diplexer efforts, which have resulted in two development orders from two different Fortune 100 companies. Moving on to 5G mobile. We continued our momentum in 5G mobile during the September quarter, getting closer to our goal of securing our first design win in the 5G mobile market by the end of the current quarter and entering production in the first half of 2023 with the first of three tier one customers with whom we are currently engaged. We shipped a second design to this 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 during the September quarter. And we remain focused on entering production with this customer. During the September quarter, we received our first purchase order from our second tier one RF module maker that we engaged with in the December quarter of 2021. The new filter was designed using resonator models that were delivered to this customer earlier in the year with our PDK and will target challenging 5G transmit and receive coexistence requirements. We now expect a production ramp with this new filter in calendar 2025. We also successfully developed and delivered one new engineering sample to our third tier one mobile customer, an RF front end module maker. We initiated the next phase of this development with new engineering samples expected to be delivered in the first quarter of calendar year 2023. These new XBAL filters incorporate the customer's designs and we are targeting production ramp in late calendar 2024 or early calendar 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 wafer-level packaging. We continue to target a production ramp with this customer in mid-calendar 2023 for the first filter And during the September quarter, we received a purchase order for the development of two additional XBAL filters that target Wi-Fi 6E applications. As we have discussed previously, we are bringing 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 qualification expected to complete later this calendar year. I am pleased to announce that we have completed the process flow for our new WLP products and have a design locked the first package for our tier one RF component company. During the September quarter, we shipped a second filter design to this tier one RF component customer in our new wafer level packages. 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 received our first purchase order from a Tier 1 RF module maker customer that we engaged with last December. We iterated our first RF filter design for a Tier 2 foundry customer and received a purchase order for two additional filters. We received a volume order from a Tier 1 RF component company for an expected production ramp in the first half of calendar 2023. And finally, we have completed the process flow for our new WLP and chip scale package products and have design locked the first WLP for our Tier 1 RF component company customer. And now I would like to discuss our network infrastructure business highlights. We continue to ramp production with three citizen broadband radio service or CBRS infrastructure companies in the September quarter, one of which is experiencing higher than expected in customer demand. We expect these three customers to continue to ramp in the current December quarter and beyond and believe we may see revenue upside in this segment given the current demand picture is improving. We announced a new design win for our 3.5 gigahertz 5G network infrastructure filter in the September quarter with a new customer. This is the fourth design win we have received for this filter and it is expected to be one of the first to enter production. Our customer is targeting both small cell and MIMO applications with our XBAL filter in the European and Asian network infrastructure markets. We are currently expecting this customer to begin ramping in the current quarter. We recently completed the first iteration of our 3.7 GHz to 3.98 GHz XBAW infrastructure RF filter for the U.S. 5G market. We are currently sampling this new C-band filter with multiple OEMs and expect to see greater small cell adoption beginning in the second half of 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 T-band filter for the US 5G market. To date, we have announced five design wins in 5G small cell, and 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 segment during the September 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 began executing on 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. These new materials may have positive implications in our current two to seven gigahertz frequency range that we are focused on today, given higher power handling capability and higher Q values. Our acquisition of the RFMI brand continues to bear fruit as the new product line has added to our growing portfolio of filter and timing control products and we are beginning to leverage the RFMI sales channel with our XBAL portfolio of high frequency filters. RFMI experienced a significant design win during the September quarter being selected by a leading IC supplier as a reference to be used in a secure wireless battery management system for electric vehicles. Also 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. During the September quarter, we started the qualification of our first two timing control products for our first customer, who is expected to start production ramp in the first half of 2023. I am pleased to announce that our work with this first customer has led to an order from a new second timing control customer, which has placed a development order and will start evaluating our resonators for use in their products. 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 part of this groundbreaking opportunity. To summarize our other markets segment activity, we have seven completed XBAL filter solutions for the civilian and defense markets. Further, our ultra high frequency XBAL resonators are now being used to develop disruptive digital timing and control products for the broader communications industry. In addition, we continue to refine and improve our XBAL PDK driven by the direct to phase two contract with DARPA. We started executing on our new multi-year, multi-million dollar contract with DARPA to scale our XBAL technology up to 18 gigahertz. And finally, in addition to the numerous customers acquired through the RFMI product line acquisition, we have a total of three XBAL customer engagements, two of which have already placed purchase orders with us or provided NRE revenue. And now I would like to hand the call over to Ken to go through our financial highlights.