Good day and welcome to the Energous Corporation Second Quarter 2014 Earnings Conference Call. Today's call is being recorded. At this time I would like to turn conference to over Mr. Matt Hayden from MZ Group. Please go ahead sir.

Thank you very much. Good morning and we would like to thank everyone for joining us today for Energous Corporation second quarter update call. Joining us are Mr. Stephen R. Rizzone, Chairman and CEO; George Holmes, SVP, Sales and Marketing; and Mr. Howard Yeaton, Interim CFO. The press release detailing the quarterly update crossed the wire this morning and is available on the company's website at energous.com. You can also find additional information on the company's technology, IP portfolio, and the management team. After management's prepared comments, we will open the floor for your questions. Before we get underway, I would like to ask everyone to take note of the Safe Harbor paragraph that appears at the end of the financial results issued this morning. Any forward-looking statements that we make speak only as of the date made thereof are subject to inherent risks and uncertainties including those described in our recent filed registration statement on Form S-1 and subsequent filed quarterly reports and should not be unduly rely upon. Except as otherwise required by federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to forward-looking statements contained herein or elsewhere to reflect the changes in expectations with regards to those events, conditions, and circumstances. At this time, I would like to turn the call over to Mr. Rizzone. Steve, the floor is yours.

Thank you, Matt and good morning everyone it's a beautiful day here in Boston. I would like to welcome you to our second quarter update call. This is our second conference call since our IPO, which we completed in March of this year. I first like to thank our shareholders who have supported us over the last several months. We are very cognizant of your support and we intend to honor your support by continuing to execute on our vision of building a predictable and a valuable business that truly disrupts the current thinking on wire-free power. We will be taking the next 25 minutes or so to reiterate the driving forces behind the need for the WattUp technology. Look at what we have accomplished, where we are today, and where we are going. As Matt noted I'm joined today by two of my partners George Holmes who is our Senior Vice President of Sales and Marketing; and our new Interim CFO Howard Yeaton. Most of you are familiar with my background as well as Georges, so I thought it would be a good idea if Howard provided a level of background for you. So with that let me turn it over to Howard. Howard?

Thank you, Stephen. Since 2003 I have been the Managing Principal of Financial Consulting Strategies, a firm serving emerging growth public companies with financial reporting support and other related strategic services. Prior to founding Financial Consulting Strategies, I served in various financial leadership positions for Konica and TECO Energy. I began my career with Deloitte and currently serve as the Director and Chairman of the Audit Committee for Stewardship Financial Corporation, a Community Bank. I have a BS in accounting from Florida State University and a Masters in Business Administration from University of Connecticut. I am very much honored to be a part of the Energous team. I will cover the financials in a few minutes. Stephen, back to you.

Thanks, Howard. We are very pleased to have Howard as part of our team and we're very confident in his ability to steward our financials as we continue to look to fill the CFO position on a permanent basis. For those of you on today's call that are new to understanding our technology, I would invite you to visit our website at www.energous.com where you can see our Founder and CTO Michael Leabman present this technology via a demo. It's really pretty cool and I would advise you to take a look at it, if you haven't seen the demo either on web or in person. As I noted in our press release this morning, Energous remains on track with each of our major technology and commercialization milestone. At the same time, since we are an early stage company, a pre-revenue company, and we are not in a position to report on earnings and EBITDA performance against which our shareholders can gage our progress, I believe that it's fundamentally incumbent upon management to provide a level of detail into our functional operations so that you can have a good understanding of our underlying progress. Let me start off by saying that given the fact that operationally speaking Energous is less than a year old, the company on balance had solid execution in Q2. Specifically, business development performed exceptionally well and is really driving and setting the pace for the company. I will let George Holmes who heads the function provide more detail but suffice to say the strategic partnerships that we've announced, coupled with those that are in various stages of closing in the next few months. These will enable us to meet our goals of getting a number of different variations of the WattUp enabled prototypical devices in front…

Thanks, Steve. As Steve described we have announced six new JDAs four that we've announced publicly, two that we wouldn't be disclosing based on the NDAs we have with those companies. As with any business, when you're building a business and new technology if you were solely focused on tier 1, it's like dancing with the element and we don't want to be squashed. So today we are very, very focused on tier 2 that had the ability to validate the technology working collaboratively with us. As I stated that we are focused on the tier 1 because we are and will be engaging with them over the course of the next several quarters. But what we're doing today is working with companies to help us validate the technology and be in a position bring it into the market and bring it into the market quickly. With that said, we have made announcements with the following companies since our last quarterly call Dong-Hwa, Pocons, Anymode and iPowerUp, let me tell you a little bit about those companies and why they are technically and strategically important to us. Dong-Hwa is the largest single battery supplier to the number two cell phone manufacturer in Korea and the three of the top five cell phone manufacturers in Japan. They are very technically and strategically important to us because they provide us entry points into those companies and has done so and introduced us on a number of different occasions that have not allowed us to create very meaningful discussions to take this technology into those partners. Pocons on the other hand is an ODM providing Wi-Fi routers to the largest single access point provider in Korea. We are working with them on a Wi-Fi power router for that marketplace. Anymode is a company…

Thank you, George. Our balance sheet as of June 30, 2014, fully reflects the completion on April 2 of our IPO in which we realized net proceeds of approximately $24.8 million and the simultaneous conversion of our debt into 1.9 million shares of common stock. From late June, we were able to modify certain terms under our May 2013 warrants, which allowed us to extinguish the last of our derivative liabilities. We reported our net income of $278,000 for the second quarter of 2014. The net income we reported for the quarter was solely on account of non-operating gains that we reported in connection with previously mentioned conversion of our debt to equity and the mark-to-market and extinguishment of our derivative liabilities. In our earnings release this morning we've reported as adjusted EBITDA a loss for the three months ended June 30, 2014 of approximately $3 million. We believe the as adjusted EBITDA provides useful information to investors by providing a more focused measure of operating results. To provide some more detail on our expenses, we spent $1.5 million and $2.5 million toward R&D for the three and six months ended June 30, 2014. Our G&A was $1.9 million and $3 million for the same three and six month periods. We have been expanding both our senior and development teams of engineers as we aggressively pursue our growth strategies. In terms of cash flows during the six months ended June 30, 2014, net cash used in operating activities was approximately $4.4 million; net cash used in investing activities was around $350,000, and net cash provided by financing activities brought in $25.7 million. The company ended June 30, 2014, with $23.million in cash and equivalents with no debt outstanding. We intend to use the proceeds from our IPO on research and development, product certifications, sales and marketing, facility relocation, and fixed asset acquisition. Steve, let me turn it back over to you again.

Thank you, Howard. We would like to thank all of those listening today for your participation. We look forward to continue to update you on our progress towards a true ubiquitous wire-free power solution. We are confidence that Energous has all the necessary tools and capabilities to build a highly disruptive game changing company. The fact is the market opportunity is well documented, it's well understood, and it's huge. The core technology is real, scalable, and only needs to be commercialized. WattUp has a clear first to market advantage. Interest in Energous is extremely strong and building. We anticipate a number of significant strategic partnership announcements in the coming month. Management is experienced and has a history of execution in building value. And thanks to our investors, we have the capital and sufficient run rate to gain solid traction and solidify our position as the market leader. George and I will be presenting today -- excuse me, tomorrow at the Oppenheimer 17th Annual Technology Internet and Communications Conference in Boston. In addition, I will be presenting at Drexel Telecom, Media & Technology Conference in New York City on September 3rd and 4th; and I will be meeting with investors while there. Thank you again. And I am going to turn the session back to the operator for some questions.

Thank you. (Operator Instructions). And we'll first go to Michael Staiger from ROTH Capital Partners.

Hey. Good morning. Can you guys hear me?

Good morning. We can hear you fine.

Hey. How are you doing? Looks like you guys are attracting a little bit of further ahead with your announcements. And may be previously I anticipated which looks like good news. On that front, is there anything you can -- is there any detail you can provide with some of the existing what's like Pocons and the Wi-Fi routers, where there may be in developments or is it too really to comment on that?

It's really too early to comment on that. Again, our focus is coalesce on having a prototypical devices for demonstration purposes at CES. And that's a very fluid schedule in terms of our reference designs and working with our strategic patterns to achieve that goal. George, do you want to add anything?

I mean all absolutely a valid point. I just happen to meet with them last week in Korea. And well, they are moving ahead and working with us to be in a position to demonstrate product to CES. Where they're at right now is they're very focused on their industrial design because they want to make sure that they have something that is very esthetically pleasing and they will fit into a room, both on the sealing or on your countertop. So that's really where they are focused right now and well pleased with the interceptive technology here in the next couple of months since they go to integrate the technology in that device. And they are making great stride. They've got some very exciting things that they are looking at doing from an industrial line perspective. Steve?

Mike, does that answer your question?

Yes. And then, just as a follow-up. Is there -- can you guys provide any more color regarding the plan and the timing of the FCC process? It sounds like you changed out a little bit of an improvement there. But can you give us any more color on it?

Well, again it's -- there is a number of moving pieces here. The -- as you know or as we've indicated, we'll look to be -- receive regulatory approval for FCC part 15 and part 18. We think that we should receive the FCC part 15 approval this year. And based on the nature of part 18, we think that will move into the next year before we receive that regulatory approval. The STAR testing and the CEC testing which is voluntary, but it's something we intend to do because it will further enable our strategic partners to provide a solid basis for consumer confidence. Those should also be completed in the 2014 time period. Again, it's -- the shift isn't major, it's just -- its -- we're approaching it just as you would a software development. The more upfront work and preparation you put into it, the better the product out in the back end. And that's how again we are approaching the whole situation with the FCC. We have amassed a very, very strong contingent of consultant. We have also brought on full time employees who have regulatory experience. And so we have amassed a very significant and experienced team to approach this very important milestone and are very, very confident that we will work our way through it in the timeframe that we announced.

(Operator Instructions). We'll now go to Brett Conrad from Longboard Capital.

Hi Steve. Hi George. Good morning. Just had a quick question on timelines. Given that you get the regulatory approval and from what I understand the U.S. is really the cornerstone to that. Being able to have U.S. approval, will that allow quicker approval in other country, is that pretty much still the case that you guys are seeing?

Yes. I mean the -- this is Steve. I mean, one of the things that we know for sure is when you have FCC approval here and UL approval, it's a cornerstone it's by no means the only thing you have to do when you're working in these other markets but it's kind of stepping off point because it's virtually accepted baseline. Clearly in each of the key markets that we're focused on there is some additional approval that we'll going through and we're already starting those partnerships. So for example in Korea and China two large markets that our partners are focused on we're already starting the process with our partners and their regulatory agencies to start getting prepared. And one of the things they look for only is what you're doing with UL and FCC and they all like a roadmap or like a plan and are in the process of iterating those plans with us as it relates to putting the aggregated plan together for the local markets.

Okay, okay and sounds perfect. And given that I guess you guys are thinking approvals are going to be possible by say summer next year if I kind of reading that right. Is that -- is then commercialization still looking, I know you can't tell everything because there is lot of moving parts but is personalization still looking kind of Q4 2015? Is that or --

Yes, that's the backwards timeline that we're working at. Again you're correct there is a lot of moving parts here. There is a lot of grabs between here in the green that we need to deal with. But our objective is to have the initial commercialized product in the market in time for Black Friday at the end of Thanksgiving Holiday. So that's the backward timeline that we're looking for. As far as the approval process we're very, very much aligned with our strategic partners and obviously there is a consistent and continuing ongoing communication as it relates to these process and this is not seen as any kind of barrier or a slowdown. We really don't need the approvals until the strategic partners go into the later stages of production and so the time is there but we want to again maintain our focus, develop our strategy, become infinitely familiar with the FCCs position on the technology, and then go in very much prepared and hopefully efficiently gain approval on both 15 and 18 STAR and CEC I'm not concerned about that. Those were just a matter of submittal.

And it appears there are no further questions. (Operator Instructions). Okay. Our question comes from Ben Padnos from DONE Ventures.

Good morning. Just wanted some comments just on competitive landscape, you said something to the effect your JDA partners and the folks that you're talking with take a view of the only viable, various names keep popping up in the press and I just love any commentary, any color you could give on general who else is out there, what other folks are saying, why we should have the level of confidence that Energous will be the go to company in this space?

Well, let me take that first and then I will hand it over to Steve, Ben and see if I can do a good job by trying to answer that question for you. The technologies been in marketplace today, wireless power technologies, really aren't wireless at all their connectorless charging solutions. They are the inductive solutions that have been in the market as Steve described for five years, they had virtually zero commercial success up into this point. You can't find them in big box retail yet you've heard a lot of big announcements. I mean there was a great big announcement about what PMA did with Starbucks in the Powermat Duracell aligned. There was the announcement that Intel put out about their higher power application using A4WP. I think, as Steve noted that it's really good that it's really good that as a rising tide all boats float that market awareness for wireless power is a good thing because it's had a black eye because of the lack of utilities that these solutions are provided up to this point. What our partners are telling us is that while the awareness is getting greater for the consumer, there really is still no product that actually delivers on the promise and the promise being that you have a mobile device and you charge it mobilly not tied to a pad, not tied to a connector, not tied to a wall wart. I mean there is a great advertisement out now by one of the big cell phone manufacturers about not being a wall hugger. That's the problem we're solving, we don't want to have wall wart, wall huggers, we don't want to have people that are looking for pad, want to have people that walk into a space and enjoy the mobility, the freedom to move around that thing we call roamisity that allows you to move around while you're charging your device. That's why we get the kind of feedback we get from these major OEMs, that's why we have a lot of tier 2 OEMs that are signed up already and that's why we think we're going to have great opportunities during the third and fourth quarters with some of these larger partners. Steve?

I would just like to add that as George said the pad-based technologies just have not gained any traction. And there is really no reason to assume that given the limited utility that they will with increased visibility. The consumers that are aware of these technologies just have not adopted them. You can't find any big box retailers anymore. So I'm really not concerned on a competitive basis with the mat-based technologies. I mean I do believe that there is an interesting market opportunity in the higher power arenas such as the mat that sit underneath desk and will power your PC. But again that's a stationary application. Our focus is 10 watts or less and our key is mobility. It's the ability to roam and to charge while roaming and again the added elements of software control and there really is nothing on the market that is commercially ready for prime time that solves that problem and really that will give the consumer what they're looking for. So well, I'm actually pleased with these announcements because they do add to the level of interest and attention to the problem. I'm confident that once the consumer becomes fully aware of the utility of our solution that they're going to accelerate and drive our ubiquity. And the only really thing I'm concerned about is what I don't know. This is a very, very significant problem. The market numbers that we have are huge. They're just off the tablet as I communicated with some of you we're tracking 14 markets and there is a trillion dollars of PAM just in these markets. So the numbers are silly. And so again from a competitive standpoint, I think our position is extremely strong and the best thing we can do is to capitalize on our first-to-market opportunity to solidify our relationships with key strategic partners to expand on our ubiquity approach following the Wi-Fi game plan and execute and we do that and we're going to be just fine.

Did that answer for you Ben?

Very helpful. Thanks guys.

And our final question will come from Bill Noble from William Noble.

You've talked in Investor Meetings and early on about other applications outside the cellphone market for wireless charging. Can you comment on that a little bit to what the plan is and strategy or is it too early?

Well again, I think that as I said all along, it's really important for us to focus. We could sit on a conference call here and in 30 minutes we can come up with 50 applications with a technology. And having done this a longtime, I know that the lack of focus kills companies. And so while there are a plethora of applications and opportunities that we could be focusing on and moving in a number of different directions, I think it's especially important for us to maintain a rock solid focus and get this technology in front of the consumer in the shortest time period possible. And the applications or the strategic partnerships that we've selected are quickest means to do that. We said that our wireless accessories and wearable are quick markets to enter into. They have short product cycles. They have very aggressive strategic partners. And again, this is the shortest route for us to get the technology in front of the consumer. And I think we focus on those. We execute on those and we start to build a basis of successful engagement then we'll start to bridge out as again as we demonstrate success in the core application that we've selected. But again that's a bit of a long answer. But the short answer is, right now we're just focused in keeping our heads down and will branch out eventually. But we want to have success with what we're doing at present time. George do you want to add? I'm sorry go ahead.

Just a PS stand -- well, assuming that you are successful in the cellphone market. Could you at least comment what the second ASIC pattern and application would be as far as another type market?

Well, let me -- Bill, let me -- this is George here. So let me kind of circle back just the -- just to make sure we get good clarity here. The smartphone market that we're addressing first, the smartphone accessory market, which is the basically battery backpack because that's -- it is point of entry. Smartphones is a longer time to market, its two to four years depending on which player that you're integrated with. However, it is -- there is a potential with some of the -- what were tier 1 players that are now tier 2 to more quickly. And we're working on those opportunities as we speak. These are companies that were named, handful named brands two to five years ago and we're in the top tier, but now have been planted by the two leading dominant suppliers and they're trying to get back in the table. But once you step past that, the markets that we're looking at are wearables because of the tremendous need in the wearable segment and the fact that the design timelines are relatively short. The wearable design timeline is 12 to 14 months from time they come up with the idea to time where there are pushing it into production, which is significantly shorter than some of these other devices. And the wearable is depending on how much you know about that market space. They have a real challenge with batteries. If you're looking at a high-end wearable like a watch, they last two to three days. If you're looking at something that's more of just a sensor that tracks your movement, that last a week. They don't provide the kind of utility that you need or you pay for when you buy these devices when you have to take…

Great. Does that answer your question?

Yes, sir. Thank you

It appears there are no further questions. I will turn the conference back over to Mr. Rizzone for closing remarks.

Well I would like to thank you again for your continued confidence in Energous and we look forward to update you on our progress. I think you hear a number of announcements from us in the coming months. We will look forward to continue to maintain a high profile in terms of industrial conferences and industrial meetings and so hopefully we will be able to meet a number of you in the coming months. As always we are a very transparent company. So we are available if there are questions or issues or comments feel free to reach out to any of us. And we look forward to speaking to you again at the end of next quarter. Thank you again. Good day.

This concludes today's presentation. Thank you for your participation.