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transcript
Corporate Presentation August 28, 2015
NASDAQ: RESN
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Safe Harbor Statement
This document contains forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements may address the following subjects among others: the status of filter designs under development, the prospects for licensing filter designs upon completion of development, plans for other filter designs not currently in development, potential customers for our designs, the timing and amount of future royalty streams, the expected duration of our capital resources, our hiring plans, the impact of our designs on the mobile device market, and our business strategy. Forward-looking statements are inherently subject to risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following: our limited operating history (particularly as a new public company); our ability to complete designs that meet customer specifications; the ability of our customers (or their manufacturers) to fabricate our designs in commercial quantities; our dependence on a small number of customers; the ability of our designs to significantly lower costs as compared to other designs and solutions; the risk that the intense competition and rapid technological change in our industry renders our designs less useful or obsolete; our ability to find, recruit and retain the highly skilled personnel required for our design process in sufficient numbers to support our growth; our ability to manage growth; and general market, economic and business conditions. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report (Form 10-K) or Quarterly Report (Form 10-Q) filed with the Securities and Exchange Commission. Forward-looking statements are made as of the date of this document, and we expressly disclaim any obligation or undertaking to update forward-looking statements.
We may refer to information regarding potential markets for products and other industry data. We believe that all such information has been obtained from reliable sources that are customarily relied upon by companies in our industry. However, we have not independently verified any such information.
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Corporate Overview
NASDAQ: RESN
Share Price (Aug. 28) $5.10
Market Cap $36.6 M
Shares Outstanding 7.2 M
Public Float 4.2 M
Insider Ownership 15.5%
Fully Diluted Shares Outstanding
8.6 M
Resonant ® is a late-stage development company creating innovative filter designs for radio frequency (RF) front-ends for the mobile device industry.
Resonant uses fundamentally new technology called Infinite Synthesized Networks™, or ISN™, to configure and connect acoustic resonators, which are the building blocks of RF filters. Headquarters: Santa Barbara, Calif. Founded: May 2012 IPO: June 2014
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Compelling Investment
Ø Large and Rapidly Growing Market • 20B mobile device filters sold in 2014; Projected to grow to 35B by 2017
Ø Low Cost Business Model • Licensing business model requires no inventory and low overhead
Ø Disruptive Technology • New method of designing RF filters can displace conventional filters and combine multiple
filters into one delivering lower costs, smaller sizes, and improved performance • Fewer components would dramatically simplify the mobile device supply chain • Biggest fundamental change to mobile device filter design in more than 80 years
Ø Unique and Protected Intellectual Property • Aggressively patenting key elements of the ISN™ system • More than 70 patents (pending or issued) and growing rapidly
Ø Significant Barriers to Entry
• ISN™ technology; Patents; Suite of proprietary software design tools; Highly experienced design team; Multi-year technology lead
Ø Late Stage Development Company on the Cusp of Commercialization • Developing commercial designs in collaboration with two Filter Manufacturers (Fabricators or
Fabs) of RF front-end devices
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Market Challenges and Resonant’s Solution
Ø The RF front-end industry is undergoing dramatic increases in growth and complexity due to: • Band proliferation • Carrier Aggregation (CA) • Multiple-Input, Multiple-Output (MIMO)
Ø This significant increase in complexity is resulting in a rise in the number of SKUs, higher costs, and longer time to market
Ø These trends play to Resonant’s strength in design, modeling and novel approaches to dramatically reduce the size and cost of the RF front-end
Ø Resonant has created a disruptive circuit design platform that can help alleviate this problem by improving single-band filters, and most importantly, creating highly novel and efficient solutions to more complex filter challenges
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Band Proliferation Is Driving the Need for More Filters
One model with eight filters
Three models with 31-35 filters each
RF content increased 35% to $15.50 for “SKU Consolidation”*
* Canaccord Genuity
2011 2012 2013 2014
As carriers use more data bands, mobile devices need more filters creating a significant market opportunity
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Resonant Platform: A Multi-Year Technology Lead
Team
ISN (Tools & Methods)
Technology 15 technical staff members with ~20 years average experience:
• 8 PhDs on staff • Comprised of physicists & engineers
More than 70 patents pending or issued
Invested than 50,000 man hours to-date
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Resonant’s Design Process Allows for optimization of cost-size-performance design space
Traditional Approach
Specs Design Manufacturing
Driven by OEMs
Focus of today’s filter suppliers
Based on Lloyd Espenschied’s 1920s “acoustic wave ladder” design (patented 1931)
Specs Polynomial Designs
Possible Solutions Refinement Physical
Implementation Manufacturing
New design steps enabled by ISN™ filter design suite Same OEM specs Same mfg. methods
Resonant Design Approach
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Two-Pronged Commercialization Strategy
Traditional surface acoustic wave (SAW) filters struggle in “hard bands”
Therefore, manufacturers use more expensive bulk acoustic wave (BAW) filters
ISN™ can improve SAW filters to work in difficult bands and reduce manufacturing cost
A filter that can “tune” to multiple bands could replace several existing filters resulting in significant size and cost savings
Resonant is developing such a tunable filter
ISN technology can also deliver cost-effective designs for complex filter multiplexing
Single Band Designs: Improve Existing Filters
Tunable Designs: From Many Filters to One
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ISN™ Enables a New Class of Single Band SAW Filters Targeting extremely high volume filter opportunities
Product 1 – Band 3 TC-SAW Duplexer Ø Completed 1st generation (1.8x1.4mm) and 2nd generation (1.7x1.3mm) designs
for this high-volume, traditionally BAW band with competitive performance to existing products
Ø Commenced work on 3rd generation product (1.6x1.2mm), which will provide a further cost reduction
Ø Currently formalizing a business relationship with the Filter Manufacturer (Fab) in order to commence licensing to the Fab for sale to the module market
Product 2 – Also a Major Worldwide Band Ø Engaged a second filter manufacturer (Fab) in March 2015 Ø This design is a SAW duplexer for another high-volume, BAW/TC-SAW band Ø First parts have been received; next steps include a revised design turn
Ø On track to complete no later than Q1 2016
RF Filter Opportunities continue to grow because of industry
constraints on both supply and design
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Single Band Designs Initial filters show great promise on both performance and price
Avg. Cost of BAW Duplexer $0.58
Avg. Cost of SAW Duplexer $0.28
Difference (Enabled Margin) $0.30
Filter Costs (Navian Research, 2014)
Resonant’s single band design showed excellent agreement between modeled (green) and
measured (blue) performance
A comparison of Resonant and Avago Band 3 Duplexer key performance metrics
Resonant (TC-SAW)
Avago (FBAR- Best in Class)*
Tx Center Band Loss 0.9dB 1.2dB
Band Edge Loss 2.2dB 2.1dB
Rx Center Band Loss 0.9dB 1.1dB
Band Edge Loss 2.8dB 2.4dB
Isolation 54dB 53dB
Size 1.8x1.4x0.38mm 2.0x1.6x0.9mm
* Source: Avago ACMD- 6103 Band 3 Duplexer Datasheet
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Resonant’s Tunable Filters Will Reduce the Number Front-end Filters Needed
WW Average Cost Filter Set (2017) $1.85
Cost of Tunable Filter (Projected) < $1.00
Difference (Enabled Margin) > $0.85
Enabled margin could increase even further by reducing the number of power
amplifiers and switches as a result of Resonant technology
Data from Navian Research, 2013
Tunable Filter/Duplexer
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Demonstration of Two Band Tunable Filter
Prototype three band tunable filter scheduled for completion by year end
Tra
nsm
issi
on
Simulation of single filter tuning between transmitting in Band 5 and transmitting in Band 8
Band 5 (824-849
MHz)
Band 8 (880-915
MHz)
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Rapidly Growing IP Portfolio Six IP families protect Resonant methods and circuit designs
Proprietary software and tools continue to grow
Power Handling
Image Design
Tunability
Network Synthesis ISN™ Circuit
Structure
Methods Circuit Designs Physical
Implementation
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Business Model
Ø License Custom Designs for a Per-Unit Royalty and License Fees
• No costs or overhead for manufacturing a physical product
• Results in high operating income
Ø Utilize Existing Manufacturing Methods
• No modifications or new processes required
Ø Rapid Creation of Next-Generation Designs Expands Potential Customer Opportunities
Ø Retain all Intellectual Property
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Management Team & Board of Directors
Name Background Selected Current & Past Affiliations
Terry Lingren CEO, Director & Co-‐founder
20+ years experience as a senior technology execu>ve; BA Physics; MSEE
John Philpo0 CFO
20+ years financial and accoun>ng management experience;
MBA UCLA
Bob Hammond CTO, Director & Co-‐founder
20+ years as Founder and CTO of STI; Physics Ph.D. Caltech
Neal Fenzi COO & Co-‐founder
20+ years in engineering, opera>ons and marke>ng posi>ons at STI; BSEE
Mike Eddy VP, Corporate Business Development & Marke>ng
Founder and President of ANTONE Wireless; STI; Chemistry Ph.D. Oxford; MBA
John Major Chairman
Mul>ple board memberships with public and private high-‐tech companies
Tom Joseph Independent Director
Leader in the RF, semiconductor, cellular, fiber op>cs and SAW industries.
PhD & MSEE at USC
Rick Kornfeld Independent Director
VP Engineering and leader of first CDMA effort at Qualcomm; Serial Entrepreneur
Janet Cooper Independent Director
Financial exper>se in capital markets, audit, tax, accoun>ng, treasury and risk-‐
management
WESTELL
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Resonant is Reinventing the RF Front-End
Ø The RF front-end industry is undergoing dramatic increases in growth and complexity due to:
• Band proliferation
• Carrier Aggregation (CA)
• Multiple-Input, Multiple-Output (MIMO)
Ø Resonant is attacking these challenges with its Infinite Synthesized Networks™, or ISN™, technology, a fundamentally new way to configure and connect acoustic resonators
Ø Resonant is not only making improvements to single-band filters but can also create highly novel and efficient solutions that address the complexity problems