Cepton, Inc.

Good day and welcome to the second quarter 2022 SEPTON, Inc. Business Update and Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Hal Hsu, Chief Financial Officer. Hal, please go ahead.

Thank you and welcome everyone to SEPTOM's second quarter 2022 earnings call and business update. With me today is Jun Pei, our co-founder and CEO, and Mitch Hortini, Senior Vice President of Business Development. During the call, we may refer to our unaudited GAAP financials and non-GAAP measures in our earnings release. The non-GAAP financial measures should now be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. Reconciliations for non-GAAP measures are included in our earnings release. I'd 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 relating to forward-looking statements containing our earnings release and the slides that accompany this call. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks, uncertainties, or other factors, including those discussed in the earnings release or during today's call. and those described in our filings with the U.S. SEC. We are not undertaking any commitment to update these statements as a result of future events, except as required by law. As a quick reminder, this call is being recorded, and you can find the earnings release and slides that accompany this call, as well as the webcast replay of this call at investors.septon.com. Now I would like to turn the call over to June.

Thank you, Hall, and good afternoon, everyone. Thank you for joining SEPTOM's second quarter earnings call. We will provide a business update and review second quarter 2022 financial results with you. Joining us today is also Mitch Hortini, SVP of Business Development, who will share updates on our exciting projects underway with automotive and the smart infrastructure customers. I'll start off with an update on our OEM series production execution. We continue to run D-sample shipments to COETO for final assembly, calibration, test, and delivery to multiple vehicle manufacturing plants across multiple states in the U.S. As a reminder, D-sample represents the final stage in hardware validation with production intent. In the second quarter, multiple SEPTON teams visited COETO's manufacturing facility in Japan in support of production readiness. Seeing the automated production line at Coetel in action was a truly significant milestone for us, as it represents our company's journey to LiDAR commercialization and how close we are to achieving our goal of making septon LiDARs available in everyday consumer vehicles. As we recently announced, we're expanding collaboration efforts with Coetel to extend beyond our current OEM series production program. This will cover both long-range and near-range LiDAR products, and both companies will jointly undertake go-to-market activities initially targeting Japanese automotive OEMs. COETO has been a key partner in the commercialization and manufacturing of SEPTON's LiDAR technology, and we anticipate the extended partnership will bolster production capabilities and accelerate time-to-market. This expanded partnership further demonstrates that LiDAR is an integral part of automotive safety and that we are well on our way to transform SEPTON's technological innovations into commercially viable and scalable products. We also recently announced the selection of FabriNet as a supplier of key submodules for our flagship OEM series production program. FabriNet will also be our supplier for full turnkey LiDAR solutions targeting the non-automotive end markets, as well as select automotive applications. Stepton launched the initial production of our Vista X90 LiDAR at FabriNet Thailand facility back in September 2021. And we are excited to see our partnership advance to be ready for scale production. Securing manufacturing capabilities and capacity remains our top priority in tight supply environment, and our recent partnership activity reflects the progress towards being production ready by the end of the year. More broadly on automotive, we expanded our office in Detroit to serve as our company's automotive hub in North America. This office will accommodate the team's rapid growth and support existing active engagement with OEM customers. Our expanding presence in Detroit deepens our relationship with OEM customers, and our field engineers are actively involved in deploying LIDARs as a standard automotive component for safety. Our LIDAR's unique balance of performance, cost, and reliability continues to drive progress with top 10 automotive OEMs. One question many followers of the LIDAR market have continued to ask is, when will we see LIDAR on saleable vehicles? While we can't provide specific names, a couple of our awarded vehicle models started taking orders recently, and consumer demand for those vehicles were extremely strong. Our unique ability to place septon LIDAR behind the windshield as a result of a LIDAR small form factor and low power consumption continues to be a point of differentiation separating Septon from its competitors. The early positive reception for these models and Septon's growing presence with OEMs creates a favorable outlook for our products. On the technology side, we achieved the ISO 26262 SOB certification on our first ASIC Our in-house ASIC development capabilities remain as an important piece of our technology roadmap as we take out our second ASIC towards the end of the year to drive further performance enhancement and cost reductions. Our software development team continues to make progress on our open source software development kit and we look forward to share more exciting news in the future quarters. As you can see, SEPTON has expanded its capabilities beyond LiDAR design and development. Our LiDAR solutions are designed and refined based on continuous OEM inputs while working with our Tier 1 partners to ensure scale production readiness. We expect to be one of the first to commercialize LiDAR technology in everyday consumer cars. Now I'll turn it over to Mitch.