Greetings and welcome to DropCar Second Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Paul Commons, Chief Financial Officer for DropCar. Thank you, Mr. Commons, you may begin.

Thank you. Welcome and thank you for joining us. On today's call, we will review our second quarter June 30, 2018 financial results and provide a corporate update. Our update will include details of our business developments and prospects. The prepared remarks will be provided by Spencer Richardson, our CEO. Before turning the call over to Spencer, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. The words, anticipate, believe, estimate, expect, tend, will, guide, confidence, targets, projects, and other similar expressions typically are used to identify forward-looking statements. These forward-looking statements do not guarantee the future performance that may involve or are subject to risks, uncertainties and other factors that may affect DropCar's business, financial position, and other operating results, which include, but are not limited to, the risk factors and other qualifications contained in DropCar's filings with the SEC, to which your attention is directed. Therefore, actual outcomes and results may differ materially from what is expected or implied by these forward-looking statements. DropCar expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it's now my pleasure to turn the call over to Spencer Richardson, the Chief Executive Officer of DropCar. Spencer, please go ahead.

Thanks, Paul. Good afternoon and welcome to the call. To start with, I'm delighted to host DropCar investor call for the second quarter that ended on June 30th. This is DropCar first full operating quarter under the DCAR ticker. Today, we will not only look back at the past quarter, but perhaps, more importantly, we will share with you our strategic plans for the future, now that we have over a quarter million vehicle movement worth of earnings under our belt. First, let’s look back. DropCar’s enterprise B2B segment grew its revenue by 135% from $206,000 to $485,000 year-over-year for the first six months, driven by organic growth of existing enterprise customers and the on-boarding of new top-tier automotive partners, particularly in the car sharing segment. Also driving our growth in B2B has been the recent launch of our operations in San Francisco and Washington, D.C., which has deepened our relationship with the Tier One partner that we initially brought -- that initially brought us to these markets and has extended the surface area across which we can sell our technology and services. Moreover, in July, we announced the launch of our Mobility Cloud, a fully self-served SaaS version of the same logistics technology we have developed for our own B2B and B2C operations. In a nutshell, our Mobility Cloud platform gives any automotive-related business regardless of their geography the tools to track and optimize the movement of vehicles in real time as well as CRM tools for interacting with clients and launching consumer facing services. DropCar’s consumer B2C segment grew its revenue 133% from $1.32 million to $3.08 million year-over-year for the first six months, driven by increasing demand for by-the-hour personal driver services and consumer subscriptions. However, gross margins in the consumer subscriptions in their current form have…

[Operator Instructions]. Our first question comes from the line of Patrick Murphy with Maxim Group. Please proceed with your question.

Can you give us some color on the sales cycle for the Mobility Cloud? And how that’s actually trending so far?

Yes, surely. So given we recently announced our self-served SaaS logistics platform only few weeks ago, it is the a bit premature to give guidance on the number of sales in the pipeline. I’d say right now we are focused on getting it in the hands of the right type of clients, so we can continue to accelerate the learning curve of the technology and align ourselves with the budding influencers within next gen mobility. We are going to be excited to start announcing some of these partners soon. So one can kind of see the exciting things we are doing with the technology. Now, beyond that I would also mention that this cycle itself is in fact relatively quick given the fact that this is a plug and play technology. So just to give a little background, we have taken everything that we’ve learned and built into our own logistic software and made a fully DIY. So when we are going into sales scenarios, giving demos and so forth, we are actually pre-building scenarios where they can start managing our logistics day one. On traditional sales cycle, they can take anywhere from three months to nine months depending on the type of client. But even in an enterprise this is out-of-the-box useful for these guys. So we do see that having an impact on the speed and velocity that we can close deals at. We have already been seeing that. I’d also mention, these are obviously a much higher margin since we’re selling it through the technology. And again, all of our existing clients that we viewed historically in terms of our B2B managed services, so all the dealers, OEMs and so forth, all are using that technology. So we are feeling very good about it and I think we have got a lot of exciting things coming up.

Okay, great. And then as a follow-up sticking with the Mobility Cloud. Is this something we’re only going to be targeting the primary Tier One urban areas? Or is this something that you can see fitting into many different markets?

It’s a great question, many markets. I mean the beauty of that is, we can sell this into any geography and quite frankly while dealers and OEMs in the first vertical, to some sense it transcends given end user market. That’s some that we’ve talked with three companies about managing their trucks -- the trucking industry is interesting for instance. There is a broad application here because what we’re really doing is giving technology to operations -- fixed operations, lease and so forth to gain visibility into their operations, hold their drivers accountable, digitize all the movements that they're doing, we’re plugging in partners like Zendrive and others to help just build out the profile of their drivers and performance in addition to CRM tools. So all of these things we can be selling into the 20,000 plus dealers that we have already outlined as well as the fleet companies. I mean the comm leader in the world AT&T is a company where their fleet is an important part of their service delivery, there is no reason that we can’t sell our technology into them as well. And I would also mention that what we’re seeing in terms of our core market New York, San Francisco, Washington D.C. is there is a huge demand right now as well to fill in our managed services in addition to the SaaS. So while the Saas can be sold anywhere into a broad variety of clients, we are already seeing demand there, in the markets that we do have boots on the ground, we’re seeing strong demand for having that last mile logistic field support as I referenced earlier in the call. So for our core markets that we’re already in with boots on the ground, we do anticipate selling SaaS plus the managed services and then for markets outside we’re reaching out to people and we’re taking calls as well, given that is a out-of-the-box DIY logistics platform that really any of these organizations can be using day one.

[Operator Instructions]. Our next question comes from the line of Sam Prior, who is a Private Investor. Please proceed with your question.

Hello, everybody. My name is Sam Prior. Between my son and I, we have over a 160,000 shares, and one of the reasons I’ve got into this is because we had gone to Manhattan and we’ve used you’re app and it was fantastic and I said this got to be the next big -- it’s got to be Uber. And in the interim, since all this -- one of the bad thing is I speak to people and there are many, many people who have never heard of it. So my question is should you do any advertising? Number one. And number two, the company itself like today for example, you came out with fantastic move, I mean anybody reads it and heard what you said is great and yet the stock ended up down which makes no sense. So do you think you should get some analysts on your company also, like sort of a two tiered question?

Yes, I think first of all thank you, we definitely appreciate you using the service as well in addition to being an investor. We feel the same way quite frankly. We’ve been excited to deliver the service. We do anticipate growing it out. I think now that we’ve figured out using our data, using our experience the best way to serve clients on a go forward basis, September 1 forward, I think now we’re feeling very confident that investing in the market, whether it’s through advertising, channel partnerships and so forth, those are all great ways to expand on the current client base. I think I’m actually -- historically I’ve always said that I’m very excited by the fact that not everybody knows us yet. I think if we’d already penetrated the market and everybody was talking about us then we would have saturated the opportunity to some extent and the market we’re going after might be smaller than we initially thought. And what we see is every single day clients telling us exactly the same thing which is why is everybody not using DropCar yet. And so I think that’s a consistent question we get. It’s typically coming from people who used the service and loved it. So now that we’ve formulated consumer subscriptions in a way that we can feel confident that it’s generating positive gross margin for us on a go forward basis along with other services we have for consumers like Will which is wildly popular. We do anticipate extending the market, again not just in New York but other markets for consumer as well where the needs are fundamentals is the same city-to-city. I think in terms of advertising marketing on the SaaS side and our managed service side through B2B, that’s also something that…

The second part basically pertains sort of to the stock price which like let's say if I was an analyst and I read your reporting stuff like that and I’d tell people to invest because here is a new company that people can make money and like nobody talks about it, meaning there aren't any analysts really looking into your company. I mean basically can you comment also on the stock price, like it basically it’s an all time low and the company based on this, this would be another company, it should be at $3, $4 or even higher. So that part makes no sense either.

I mean I can completely agree with you here as well. I have some thoughts but let me pass it over to our VP of Investor Relations, Dan Gelbtuch.

To answer your question I think that we have been pouring over the model for the last six seven months and there has been a very big learning curve that we have been happy to have for as Spencer articulated. And I think right now that we have the model right, it’s a model that’s extremely flexible, it’s tailored for growth -- profitable growth with this tremendous operating leverage capabilities. I think now is the time when the story is right enough that we can actually go to the street and start really expanding the shareholder base by growing -- looking for institutions to invest in us and looking to get institutional coverage et cetera. So again the story is right now it’s -- I think it’s beautifully positioned right now for the street.

Yes, I’d just add to that as well. A lot of the decisions we made early on in the business was getting our foot in the door, with the OEMs, with the Tier One partners, building reputation for ourselves, showing that we can build technology for this space that can be relied on. I think the way I think about it now is, we’re not just with the foot in the door, we are around the corner and sitting in the conference room, whiteboarding with these guys now, getting deep into their operations, understanding what we can do in terms of partnerships. We’re also now -- there is a term that we used to have ‘loss leader’, right? We sell -- we want to bring on this to B2B contract because it’s a good logo, it’s good -- it keeps our foot in the door and so forth. That’s the time that we have now dropped from our dictionary, loss leader doesn’t exist for DropCar anymore. We’re not going to be in a guessing game and I think that's where we use our technology the most, dropping from our own model and say, well this is how we drop that term, this is how we make sure every single in B2B contract we take on, contributing to the gross margin. It’s how we make sure consumer services are delivered in a way that every single time we touch a car we’re regenerating revenue. We’re not playing the guessing game about bundled round trip. If people use their car more, that somehow gives us risk or if it’s a rainy day, what happens. I think de-risking as much as we can, the model, well it’s an important part of also having the confidence to go out and talk to the market…

Our next question comes from the line of Alan Chen with Columbia University. Please proceed with your question.

I’m both a customer and an investor and what I'm hearing from this call is really exciting from an investor perspective as we kind of -- as you kind of shift from the B2C and kind of push more towards the B2B market. As a customer though, over the past two weeks, I've been noticing a very significant kind of delays and as we are pushing -- as you are pushing towards away from the Steve service, my question is kind of over the next short-term, few weeks as a customer, where do you -- kind of how do you strategize those customers who currently have cars and who are kind of used to using the Steve service that’s ultimately going to reduce in-service and there has been a lot of wait times in drops -- drop deliveries and so how do you kind of in the short-term resolve those issues for the current customers who are used to this Steve service and who have really relied on the Steve service for the past several years?

It’s a great question. I definitely apologize if you have been inconvenient. As we did the transition over the next -- over the last couple of weeks, we did streamline the team as we prepared for just the higher margin opportunity and what we feel is a better fit service ultimately based on the surveys we have done with clients, client interviews. I just want to reiterate in terms of the September 1 forward plan, this was not us seeing a way of forward thinking exclusively from the perspective of hey how do we go, turn fees, our multi-subscription into a high margin business. This was also working directly with customers to see what do they want to see out of the service. So we see feel like where things are headed is very much kind of the marriage of what we feel is best for the company and the model and the market is likely to be excited about and we are excited about but also very much what the customers are telling us they want. So in terms of between now and the next couple of weeks, September 1, we are certainly doing everything we can. We’re streamlining and preparing to try to eliminate to the extent we can, delays and service disruptions, this is involving our scheduling system, making sure that we got drivers for certain peak moments, certain bottleneck. I think that it is a difficult balancing act. We try to communicate to clients, setting some expectation that we are in a moment of transition, by and large people have understood it and been interested in this new plan going forward. So what I’d say right now is try to bear with us. It is a transition, so there are going to be bumps in the road as we are doing it. We certainly care very much about every single one of our customers and we are working every single day and I mean the entire team every single day to try to identify ways that we can start to smooth things out during the peak -- really these moments where there is delays. One other thing I’d add is we have started letting people who are signing up for this Self-Park plan, get access to space as early and even though whoever opted into it, we’ve started offering them the ability to pickup and drop-off their vehicle, ecologic. So in critical moment where there is a delay, there is always the option to pick up the vehicle. I understand that depending on location that might not be the most desirable. But this is one of the other ways that we are trying to work with clients in the transition period, ensure that they variable to do what they need to do without us kind of damaging their weekends.

[Operator Instructions]. This is all the time we have for questions. I would like to hand the call back to management for closing comments.