Aktis Oncology, Inc.

Good day, ladies and gentlemen, and welcome to the Acoustis Technologies Fiscal 2024 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 queue. A replay of the call will be available on the Investor Relations section of the Acoustis website. Thank you.

Thank you, operator, and good morning to everyone on the call. Welcome to ACOUSIS' first quarter fiscal 2024 conference call. We're 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 and operations, including the timing and prospects of product development and customer orders and design wins, possible collaborative or partnering relationships, litigation matters, and expected financial and operating results, or 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 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 gap measure is presented in our earnings call highlight release available in the investor section of Acoustis.com. I would now like to turn the call over to Jeff Scheele, founder and CEO of Acoustis.

Thank you, Ken, and welcome everyone to our fiscal first quarter conference call. Revenue in the September quarter was within our guided range of down 15% sequentially. During the September quarter, we had one customer that made up greater than 10% of our revenue. XBAL-related sales accounted for the top five customers and seven out of the top 10 customers. Our top 10 customers made up 59% of revenue. Our top 25 customers made up 74% of revenue. In terms of regional sales from our top 35 customers, which make up 80% of our revenue, 53% of those sales came from Asian customers, followed by 35% of sales came from North American customers, and 12% of our sales came from European customers. Earlier this calendar year, we commented on the buildup in channel inventory, particularly at our Wi-Fi customers in the Asia region. As we stated on last quarter's call, we expected two quarters of slowdown as we transition and ramp to new Wi-Fi AP platforms, work through a slowdown in the infrastructure segment, and transition a portion of our defense activity to new contract business. Consistent with our guidance on last quarter's investor call, we expect revenue for the December quarter to be $7 million or flat sequentially. In reaction to the slowdown in the market, the company implemented two rounds of meaningful expense and cost savings plans to significantly reduce cash burn moving forward. Ken will detail our activities and impact on reducing our cash burn during his upcoming comments. However, looking around the corner at the March quarter, we are seeing signals of inventory channel clearing. We are presently delivering new, lower cost RF filter products and are receiving multiple new design wins in new Wi-Fi AP platforms, with more RF filter content in early calendar 2024. As a first look, we expect to return to record quarterly revenue for the March quarter in the range of 8.3 to 8.8 million, or a sequential increase of 18 to 25%. We will update the March quarter guidance during next quarter's investor call. I would now like to take a moment to discuss updates involving the company's activity related to the Chips and Science Act of 2022. Regarding Chips Act funding, there are four updates to share with investors. First, in mid-September, our Microelectronics Commons proposal focused on EW Tech Hub was not selected by the DoD. According to the September 20th announcement made by the government, the majority of the eight DOD Tech Hub awards went to major universities across the U.S. Second, on October 23rd, Senator Schumer announced that the greater Rochester region was selected as a prestigious Tech Hub, opening significant federal funds from the Department of Commerce to boost critical supply chains in upstate New York. Acoustics, is a member of the Tech Hub Consortium and will pursue meaningful opportunities with the Tech Hub residing in our backyard in upstate New York. Third, the CHIPS Act of 2022 includes a provision for a 25% refundable investment tax credit or CHIPS ITC on investments in facilities that manufacture semiconductors or semiconductor manufacturing equipment that were placed into service after December 31st, 2022. We estimate the amount of the refundable tax credit applicable to Acoustis to be $3.5 to $4 million over the next 18 months. And fourth and finally, regarding our proposed expansion of our domestic manufacturing footprint, including both semiconductors and advanced packaging at our New York campus, under the Department of Commerce CHIPS for America program. We have completed a first pre-application with the DOC. The CHIPS program office or CPO of the DOC has received the pre-application submitted by Acoustis Technologies, Inc. The CPO recommends that we move forward and submit a revised pre-application addressing questions raised in our original application. Our next step in the process is to file a revised pre-application once we complete a strategic review with our potential semiconductor partners who require a partner to manufacture semiconductor materials, wafers, and or packaging on our New York manufacturing campus. Next, I would like to discuss several updates in our primary target markets, beginning with Wi-Fi. Our first milestone for the September quarter, was to receive a design win for next generation Wi-Fi 7 with a consumer focused OEM. We delivered a total of three design wins on the consumer front with all programs currently planned to begin production ramp in the March quarter of calendar 2024. Two programs are four by four MIMO architectures and the third program is a two by two MIMO architecture all utilizing our recently released wide bandwidth XBAL RF filter solutions in the high band spectrum. Our second milestone was to secure a design win for a next generation Wi-Fi 7 solution with a tier one US-based carrier. We remain confident that this carrier will launch with our filters on their platform, but we have moved this milestone to the December quarter in order to see volume shipments to validate our milestone. Our third milestone was to secure multiple RF filter design wins for our tier one enterprise class customers Wi-Fi 7 suite of routers and access points. We have been aggressively developing and qualifying these parts for our customer and have made shipments to our customer over the past few months and expect to announce this design win in the December quarter. Also during the September quarter, we announced the introduction of our latest single crystal-doped piezoelectric materials into a key product which is slated to ramp with an upcoming Wi-Fi 7 Enterprise customer. These advanced materials are utilized to allow greater design margin and flexibility to the customer in the design of their system. While the overall Wi-Fi market has been impacted over the past 12 months by excess inventory and slowing Wi-Fi AP demand post-COVID, We see signs of reduced inventory in the channels for existing volume programs, along with new platforms launching in early 2024. Looking ahead in the December quarter, we expect to announce a design win for a next-generation Wi-Fi 7 solution with a Tier 1 U.S.-based carrier. Further, we plan to secure multiple design wins for our Tier 1 Enterprise Class Customers Wi-Fi 7 suite of routers and We plan to secure a design win for Wi-Fi 7 solution with a tier one enterprise class OEM. Next, I would like to discuss our recent developments in the 5G mobile market. During the September quarter, we made no new shipments to our tier one RF component customer. The slowdown in shipments is due to a slowdown in marketing and adoption of the product in the China market our customers' inability to secure a production slot on a new design program in the Tier 1 market, as well as other market headwinds. During the September quarter, we expected to receive an order for a 2.4 GHz Wi-Fi filter for our Tier 2 5G RF front-end module customer. We received not only an ex-boss foundry order for the 2.4 GHz band, but the customer also added two additional high frequency Wi-Fi bands. This customer has completed previous design evaluation and has down-selected the final design for release in the first half of calendar year 2024. With the slowdown in headwinds in the mobile market, we have been focusing our resources on near-term opportunities in the Wi-Fi, 5G infrastructure, and automotive segment. However, our anticipated milestones for the December quarter include, we expect to deliver the first of the three Wi-Fi filters to our Tier 2 5G mobile RF front-end module-making customer, and finally, we expect to engage a fifth mobile partner offering our XBAR process and foundry for their module and discrete product needs. I will now discuss our progress in our network infrastructure business. During the September quarter, we experienced strong XBAL filter shipments to our CBRS customers targeting the US market. However, we experienced minimal shipments in our small cell RF filters in the September quarter. Overall, we are seeing the 5G O-RAN and RAN market slow in the December quarter as operators take inventory of existing deployments. We do expect the 5G small cell market to begin to improve in the March quarter and throughout calendar 2024 as carriers throughout the U.S., Europe, the Middle East, and Africa continue to deploy sub-5 gigahertz networks. Regarding our milestone from the September quarter, we received a design win for our XBAL RF filters from a Tier 2 network infrastructure OEM for a massive MIMO base station. The radio design includes 64 TRX paths with one filter in the transmit path and one filter in the receive path. Altogether, we have 128 filters of content in the radio unit and expect production to begin ramping in the second quarter of calendar 2024. For the December quarter, we expect to complete the redesign and sample of our new and improved 5G band 41 and 5G US 3.8 gigahertz network infrastructure filter solutions. The redesign of these filters pushed into the December quarter, given engineering priorities related to near-term Wi-Fi business. Finally, before handing the call off to Ken, I would like to provide an update on our defense and other markets business. It is noteworthy that six out of our top 10 customers are in our defense and other businesses category. and I will begin with an update on our published milestones for the September quarter. First, we made steady progress on securing a design win for an automotive wireless battery management system, or WBMS, solution used in a Tier 1 IC reference design, and we expect to close out this milestone in the December quarter. Second, we received a specification change from a key customer which delayed the start of the product qualification of our second XBall resonator for the timing control market. At this point, we already started the qualification and plan to complete this product qualification in the December quarter. Beyond our published milestones, we achieved other notable milestones during the quarter in this segment. As mentioned in the past, our biggest success in the defense and other market segment was the introduction of our new XP3F technology, which incorporates a new revolutionary patented multilayer nanomaterial that incorporates our single crystal piezoelectric material. This new nanomaterial was developed with funding from the Defense Advanced Research Projects Agency, or DARPA, to scale the XBAR technology to frequencies up to 18 gigahertz. At the end of the September quarter, we were awarded a multi-million dollar phase two contract option, which extends our current DARPA coffee contract to $4.8 million, including base and exercise options. The new phase two contract extends the funding for the program through December of 2024. During the September quarter, we received a purchase order as a foundry supplier supporting a new DARPA contract unrelated to our current DARPA coffee contract, which requires high-performance custom resonators for timing control applications. Further, we completed initial wafer shipments from our New York fab during the September quarter, and we expect additional shipments over the next few quarters. In addition, we achieved a design win at an international engineering and technology company supplying timing products for an electric meter application, and we have received purchase orders for more than 300,000 pieces of initial volumes with scheduled delivery now into Q3 fiscal year 2024. For the December quarter and the defense and other market segments, we are expecting to achieve a design win of at least one of the following. Crystal oscillator, ball filter, and or saw filter used in an automotive wireless battery management system solution used in a tier one IC reference design. Also, we plan to complete the qualification of the optimized second X-Ball resonator for a key customer in the timing control market. And we expect to deliver an X-band ball filter utilizing Acoustis' advanced XP3F technology to a Tier 1 defense customer. And now I would like to hand the call over to Ken to go through our financial highlights.