Good day, ladies and gentlemen, and welcome to AmpliTech Group's Quarterly Investor Update Call, where the company will discuss its full-year results for 2022. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, today's conference is being recorded. I would now like to turn the call over to AmpliTech’s Director of Corporate Communications, Shan Sawant.

Hey, thanks and thanks everyone for joining today's call to review the progress of AmpliTech’s growth initiatives and to answer our investor questions. On the call today are AmpliTech’s Founder and CEO, Fawad Maqbool; the company's COO, Jorge Flores; and the company's CFO, Louisa Sanfratello. Following management's comments, we will open the call up to investor questions and I'll also take on some questions I was given through email. An archived replay of today's call will be posted to our Investor Relations section of AmpliTech’s Corporate website. And just a reminder, this call is taking place on Monday, April 10, 2023. The remarks that follow and answers to questions include statements that the company believes to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally include words such as anticipate, believe, expect, or words of similar importance. Likewise, statements that describe future plans, objectives or goals are also forward-looking. These forward-looking statements are subject to various risks that could cause actual results to be materially different than expected. Such risks include, among others, matters that the company described in its press releases and its filings with the Securities and Exchange Commission. Except as described in these filings, the company disclaims any obligation to update forward-looking statements which are made as of today's date. So again, thanks everyone for joining. And with that, let me turn the call over to our CEO, Fawad Maqbool.

Thank you, Shan. Ladies and gentlemen, thank you for joining us today on our 2022 review call. I'm delighted to have this opportunity to share some of the achievements and milestones that AmpliTech has accomplished over the past year. It's been a busy and productive year for our team and I'd like to take a moment to highlight some of our key financial and operational successes, provide updates on our product development, and reflect the ambitious goals we've set for ourselves in 2023. Some key highlights over the past year include the revenue increased 267% to $19.4 million in fiscal year ‘22, compared to $5.3 million in fiscal year ‘21. Fiscal year ‘22 gross profit grew to $8.9 million, an almost seven-fold increase from fiscal year ‘21 gross profit of $3.1 million or $1.3 million, excuse me. The gross profit margin nearly doubled to 46%, compared to 24.5% a year ago. Fiscal year ‘22 net loss was $677,000, compared to a fiscal year ‘21 net loss of $4.8 million, a positive swing of approximately $4.1 million. The net loss includes a one-time revenue earnout of approximately $816,000 as a result of Spectrum beating sales expectations for the years 2021 and 2022. This is a big plus for us because we got increased sales from Spectrum, which exceeded whatever we expected. So we look at this as a very positive thing. It's important to note that without this earnout payment, the company would have been profitable for the fiscal year. As of December 31, 2022, cash and equivalents totaled $13.3 million and working capital was $20.3 million, which is sufficient capital for AmpliTech on all of its strategic growth initiatives. AmpliTech experienced great success in trade shows such as Satellite 2022, IMS 2022, the AOC 2022, and the APS March Meeting 2022, achieving positive customer engagement and setting company records at each event for the number of meetings with new and existing customers. All these shows are special trade shows that display the technology we are developing. Customers began to sample AGMDC's new MMIC chip products, which received positive feedback. We include MMICs for 5G, Quantum computing, and Satellite applications among others. I'd now like to provide some insight into broader market conditions and their impact on our company. Demand for AmpliTech's product remains robust. At the start of 2022, we set ambitious targets to grow revenue, expand margins, and develop the world's lowest noise MMIC amplifier. I'm incredibly proud of the AmpliTech team for making significant strides in achieving these objectives. Our annual revenue reached approximately $19.4 million in 2022, representing a nearly four-fold increase from our 2021 revenue, which was approximately $5.3 million. This growth can be attributed to the addition of our semiconductor packaging distributor arm Spectrum, as well as the rising demand for our core LNA product line, which includes low noise amplifiers, modules, and assemblies. Spectrum also had a rising demand for our core LNA product line. Despite the industry-wide challenge of escalating material costs, we successfully nearly doubled our gross margins from 24.5% to 46% through strategic inventory purchasing, optimizing manufacturing methods, and tightening processes across the organization. In terms of profitability, we achieved a net operating profit during our fiscal year of 2022. Although we did incur a net loss of $677,000, this was due to a one-time $816,000 revenue earnout as I mentioned earlier. This was part of the deal with the Spectrum acquisition; Spectrum exceeded sales estimates for 2021 and 2022. This represents an improvement of over $4 million during the fiscal year of 2022. As such, AmpliTech remains well capitalized for our ongoing initiatives, bolstered by robust cash reserves and healthy working capital of $20.3 million. Consequently, we currently have no need to raise additional funds. As other companies face rising cost of capital due to interest rate hikes, we do not foresee a necessity to take on debt given our ample and existing capital along with low cash burn rate. That said, we continue to closely monitor our mark-to-market conditions, which are constantly evolving. We will be providing our revenue guidance and updated backlog numbers for fiscal year 2023 during our Q1 conference call in mid-May. I'd like to take a moment to discuss the state of today's industry communication infrastructure and the vast opportunities that we see in this dynamic market. As we highlighted during our last quarterly call, the industry's existing communication infrastructure requires significant enhancements to power the next generation technologies. We believe that the gap between current performance levels and what's anticipated presents an extraordinary opportunity for our company. As technology evolves and the demand for high performance communication systems escalates, the necessity for more efficient and compact MMIC amplifiers is intensifying. Advanced MMIC amplifier chips with superior signal-to-noise ratios have the capability to unlock higher data transmission rates, reduced latency, and enhanced connectivity for 5G and 6G networks, as well as more dependable long-distance communication for satellite systems. Moreover, these chips can improve the accuracy of target detection and tracking in radar systems used in defense, aerospace, and weather monitoring. In the realm of IoT, Internet of Things, a multi-trillion dollar market where size, weight, and power constraints are critical, highly integrated components like our new MMIC amplifier chips are essential. We expect MMIC sales to account for a growing portion of our revenue mix going forward and contribute to the sustained profitability of the company. We're proud of the cutting-edge technology and product line that our team has developed in a remarkably short period of time. These products address the industry's most pressing technical challenges for the communications infrastructure. The overwhelmingly positive response we received while showcasing these products at events such as Satellite, IMS, and AOC validates our market alignment. In summary, the evolution of high-performance MMIC amplifiers is vital to meeting the ever-increasing demands of modern communications systems and emerging technologies. At AmpliTech, our unwavering commitment lies in continuously pushing the boundaries of MMIC technology and LNA technology, paving the way for faster and more efficient communication systems that will revolutionize various industries. We are looking forward to new domains that have long been part of our vision, and we eagerly embrace the challenges that lie ahead as we continue to shape the future of communication. Back to you, Shan.

So that concludes the Q&A session. I will now turn the call over to Fawad for closing remarks. Oh, sorry, let’s actually start with the Q&A session.

So if anybody has any questions on the results or anything, please ask them now.

The first question today comes from Jack Vander Aarde with Maxim Group. Please go ahead.

Okay, great. Thanks, guys. I appreciate the update and congrats on the strong finish to 2022. I'll start with a question for Fawad. You guys have clearly had success in your more recent trade shows or in past trade shows, and it seems like the success is growing in terms of the number of meetings. I'm wondering if you can give me a sense of or give us a sense of how RFPs are coming in or the potential for RFPs, as well as actual orders from these trade shows. Just like to get some extra color there. Thanks.

Yes, Jack. Thanks for the question. Yes, we've had a large response at these meetings. I mean, it's all a result of our CRM efforts and our business development efforts. At the last satellite show, we broke our record; we had over 100 meetings and at least 80% of those meetings led to RFQ activity. So we have seen an increase in RFQ activity in all areas of communications, particularly in satellite. It seems that the satellite market is growing very fast. The LEO constellations and the MEO constellations that are going up are very important now, and they're all looking for higher data rates and revamping their older infrastructure. They don't want to be obsolete in a couple of years. So this is a big market for us because we've already been in the space business for many years, and satellites require space-qualified hardware that takes a lot of experience. So it really blends in well with our past experience, and all the MMICs that we're making right now are specifically geared towards satellite and space-qualified hardware. So it is very good for us. We expect an increase in the RFQ activity, as well as subsequent sales, because we do not have that much competition in terms of performance for all these systems, both in satellite systems, and for all the 5G systems and the ground stations.

Thank you for the information. I have a follow-up question that is more about housekeeping. In the past, you've typically shared customer orders or backlog figures at the end of the period. Did you provide that information this time? If not, could you give us a general sense of where the backorders stand?

Yes. We're going to give full guidance to revenue in our next quarterly call. But right now, we don't have all the numbers yet. But we are going to provide that guidance in the next call.

Okay, great. And then maybe just another follow-up question in general. I think in the past, you've talked about the seasonality between your core business and Spectrum. Is there a seasonal stronger period in the first half of this year expected? Or is that something you would cover on your next earnings call as well? Any insight there would be helpful.

No, yes. You know, as I mentioned before, there is some seasonality. Usually, the first quarter is never indicative of how the rest of the year is going to be because of all the different holidays and everything that happens. So the first quarter is just everybody gearing up for future business. So this year, we haven't had any big decline. It is less than we had last year at the same time, but it's not indicative of the future because we're getting a lot more RFQ activity than we ever did before.

Excellent. Okay. I think that's it for me. Great results, guys. And I look forward to the next earnings call as well when you provide your outlook. Thanks, Fawad.

Thanks, Jack.

The next question comes from Richard Greulich from REG Capital Advisors. Please go ahead.

Thank you. So, if you could refresh my memory, did the revenue payout that occurred, was that at the end of it, so it's just for ‘21 and ’22? Is there anymore continuing into ‘23?

Louisa, I think go ahead with that?

No, that revenue earnout was based on 2021 and 2022 revenue numbers for Spectrum only. The reason we have the earnout in 2022 was that Spectrum exceeded their sales numbers. So anything over $20 million, based on the purchase agreement, they got a revenue earnout. You will not see that in 2023. We're pretty much wrapped up with the Spectrum acquisition.

Great. Thank you.

You're welcome.

This concludes our question-and-answer session. I would like to turn the conference back over to Fawad Maqbool for any closing remarks.

Sorry. So operator, I actually have a couple of questions here submitted, so maybe we can go over those. So yes, I have a question here for you Fawad; could you take this? So does the company foresee maintaining or even improving upon the 46% gross margins you reported for the annual year in 2022?

Glad to share that information. Our recent improvement in the margins from 26.5% to 46% year-over-year was made possible through a strategic combination of several initiatives. First, we shifted our focus to high-margin products, which will help us increase our overall gross profit margin. Second, we developed in-house capabilities to assemble and test our products, which allowed us to maintain private control of our supply chain and thus reduce our costs. Finally, we have focused on maintaining a niche inventory of high-margin products through our semiconductor distribution arm Spectrum. We will continue to improve our margins. The main opportunity for us at the moment would come from increasing sales of higher-margin products, which we are focusing on strategically. All our products are now higher-margin products such as space, satellite, MMICs, and quantum computing. All those are very high margin, plus we do some very special jobs for our ground station customers. There are also high-margin products that no one else really can do, so we'll continue to focus on developing and promoting these products to our customers while maintaining our current initiatives to improve the margins at all times. At AmpliTech, we're always committed to pursuing sustainable growth while maintaining a strong focus on profitability. Does that answer your question?

Thanks for that, Fawad. I have a few more questions to read. You mentioned some markets, so what technology sectors are presenting exciting opportunities? Any thoughts on Quantum, AI, or similar areas?

We are experiencing significant RFQ activity in various areas, and our low noise amplifiers are essential components in these systems. They facilitate Quantum computing, which is crucial for qubits, as well as artificial intelligence in communication, data, and wireless data transfer. We also have numerous opportunities in Quantum, AI, 5G, and satellite communication industries that are very promising for the company.

Got it. Thanks for that one. Okay, here's another one. If there's a perception among management that the company is undervalued or insider purchases and/or share buyback is being considered?

No, we don't think that's an effective use of our capital at this time. We believe that we are focusing and using that capital to grow our existing technology and our product base and support our customers’ increasing demands. So using the capital for buybacks right now is not really in our strategic focus.

Okay, great. Maybe I can do one more here. So generally speaking, how has calendar Q1 gone? And is there an idea when we might be seeing the results?

Sorry, can you repeat that?

Okay. Generally speaking, how has calendar Q1 gone and when might we see the results?

Well, we've not released that right now to the public, and we can't comment on them yet, but we'll have a conference call scheduled. But as I said, mid-May to go over the Q1 results.

Okay. Yes, I think we are good on questions for now. So yes, thanks again for everyone who sent in those questions. If any further questions, feel free to reach out to our investors' email, and we will be happy to get back to you and answer as soon as possible. And, yes, thanks a lot for taking the time to answer those.

All right. Thanks everyone for joining our call today to hear about the progress we've made and the plan we have to further our company's mission of providing the communications systems of tomorrow today. We look forward to updating you further with our Q1 financial results in mid-May 2023. As always, we welcome the opportunity to speak directly with interested investors and meet at conferences and other IR events. Should you have any questions or wish to schedule a call with management, please contact our Communications Director, who's contact information is listed at the bottom of our press releases.

This concludes our conference call today. Thank you. You may now disconnect your lines.