Cepton, Inc.

Good afternoon and welcome to SEPTON's fourth quarter and full year 2021 business update and earnings conference call. Today's call is being recorded and a question and answer session will follow the prepared remarks. At this time, I'd like the call to be turned over to Mr. Paul Hsu, Vice President of Finance and Strategy for SEPTON. Thank you. You may now begin, sir.

Thank you and welcome everyone to SEPTOM's inaugural earnings call covering FY 2021 results and 2022 business update. With me today are Jun Pei, Chief Executive Officer, and Winston Fu, Chief Financial Officer. Jun will provide an overview of SEPTOM, a business update, and objectives for 2022. Winston will discuss the fourth quarter and full year 2021 financial performance and 2022 outlook. During the call, we may refer to our unaudited GAAP financials and non-GAAP measures in our release. I would like to remind everyone that comments made in this conference call may include forward-looking statements regarding the company's expected operational and financial performance for future periods. These statements are based on the company's current expectations and are subject to the Safe Harbor Statements for forward-looking statements that you'll find in today's news release. Actual results for future periods may differ materially from those expressed or implied by these future-looking statements due to a number of risks or other factors that are described in our form S-4 recently filed with the US SEC. We are not undertaking any commitment to update these statements if conditions change. As a quick reminder, this call is being recorded and you can find the earnings release, the slides that accompany this call, as well as the webcast replay of this call at investors.septown.com. Now, I'd like to turn the call over to Jun.

Thank you, Hall, and good afternoon, everyone. Thank you for joining SEPTOWN's very first earnings call as a public company. We will provide a business update, review full year 2021 performance, and share our 2022 outlook with you. But before I dive into the details, I'd like to give my thanks to our employees customers, partners, and investors who have supported SEPTOM since our inception in 2016, all the way until now as a public traded company. When we first started SEPTOM, we saw an opportunity to equip LiDAR sensors in every vehicle to improve safety and enable autonomy. We believe full autonomy will be a reality in due course, but in the meantime, ADAS is a very large and near-term market opportunity right for technology disruption. As a result, we have focused our effort primarily on serving the ADAS market, and our efforts have paid off. Along with our Tier 1 partner, Koito Manufacturing of Japan, we have won the largest series production award in the LiDAR industry from General Motors in support of its Ultra Cruise program. Looking back at the competition for this program, virtually every LiDAR company were in the race. Steptown was the only company that won this massive program due to our ability to achieve the perfect balance between performance, reliability, and cost, as well as our ability to do all that behind the windshield. So that happened at the end of 2019. Since then, we've been working diligently on the execution of this program, and I'm proud to report that we're on track to meet the timeline requirement from GM. As you can see, we have been working on executing this program for over two years now, and we expect at least another year of intense work between all three parties, Septon, Coetel, and General Motors, before consumers are able to buy GM vehicles equipped with Septon LiDARs. Winning the GM program is a big achievement for SEPTOM. But finally realizing our vision of SEPTOM's LiDAR in everyday vehicles would be a monumental achievement. And we can see that day very clearly in the not too far distance future. Many people ask me how SEPTOM differentiates itself among all the other LiDAR companies. My answer has always been let the commercial validation be the ultimate differentiation. Even though I have been a technologist all my professional life, I believe technology without commercial success is and will remain a science experiment. Steptown invented the unique MMT LiDAR to address a need in ADAS, where a perfect balance between performance, cost, and reliability must be achieved before wide-scale adoption can take place. We believe our MMT LiDAR has achieved this balance, supported by the trust placed in us from North America's number one and number two auto OEMs by volume, and that is General Motors and Ford Motor Companies, by the way. Many people also ask me, what does it take to win a large series production award like ours? In addition to having the right product, a Tier 1 automotive supplier partner is also critical as they stand behind the product. Many large auto OEMs will not even entertain a discussion if we don't have a Tier 1 partner, and we are fortunate that Koito Manufacturing of Japan, a Tier 1 supplier to the automotive industry for many decades, is one of our key Tier 1 partners. Looking back the last two years, even though COVID condition constrained many facets of our normal interaction between our engineers, partners, and customers, I'm proud to report that our teams worked around these new challenges and hit every milestone on the schedule that was crafted before COVID. We completed the A samples, B samples, and on track to complete C samples in the first half of 2022. We will also complete D samples by the end of the year, such that we will be in a position to ship products to saleable OEM vehicles by the year end. While our series production award covers multiple platforms and vehicle models, the same septon LiDAR is used across these vehicles. This allows us to take advantage of the economies of scale to reduce cost. However, scale is only one of the factors contributing to attractive cost profile. Cost is a key design parameters in every component choice we make from the very first time when we put pen to paper. As we mature our product offerings, we continue to invest in performance enhancement and cost reduction effort, such as combining multiple electronic components into an ASIC. We expect to take out our second ASIC this year as a result of these efforts. General Motors announced the Ultra Cools at its Investor Day event in October and disclosed the location of the LiDAR integration being behind the windshield. Since then, several other OEMs have reached out to us to learn how a similar integration can be achieved in their future fleet. We expect to advance our discussion with these OEMs and potentially secure additional large series production award this year. From a product perspective, we saw a need for near-range LiDAR with superior horizontal and vertical field of view performance for surround view applications such as pedestrian detection, automatic parking, low-speed maneuvering, just to name a few. To address these applications, we introduced our smallest LiDAR, the Nova, that can easily fit into your palm and cost significantly less than our long-range LiDAR product. By utilizing the same MMT concept and the engineering approach, we're able to further leverage our technology innovation, including our ASIC. Our perception software platform also accelerates NOVA's adoption in automotive and smart infrastructure market. We expect to complete B-sample design for NOVA and complete NOVA evaluation with multiple global top 10 automotive OEMs and with multiple top global trucking OEMs this year. On the software front, I wanted to mention that we currently have more software engineers than we do hardware engineers. We've taken on the challenging task of embedded automotive software that is required for our LiDAR to be deployed in everyday vehicles that you and I can buy. While this work is not often well advertised or well understood, it is absolutely table stakes for series production readiness. Moving higher up in the software stack, our perception software is already being sold to smart infrastructure customers, and we expect our automotive perception software to be evaluated by three of the global top 10 automotive OEMs this year. Consistent with our vision of enabling safe and autonomous transportation for everyone, we expect to make available our perception software stack to the broader developer community. and accelerate the development of various autonomous applications for the automotive and other markets. 2022 will be a momentous year for SEPTA. We will accelerate our commercial engagement, not only in North America, but also in the rest of the world. In particular, we have begun executing our China strategy, and we look forward to sharing more news on that front in future calls. I'll now turn the call over to our CFO, Winston Fu.