Good day and welcome to the Energous First Quarter 2017 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Laurie Berman, Investor Relations for Energous. Please go ahead.

Thank you Allison and welcome everybody. Before we begin, I would like to remind everyone that during today’s call the company will make forward-looking statements. These statements whether in prepared remarks or during the Q&A session are subject to inherent risks and uncertainties that are detailed in the company’s filings with the Securities and Exchange Commission. Except as otherwise required by federal securities laws, Energous disclaims any obligation or undertaking to publicly release updates or revisions to the forward-looking statements contained herein or elsewhere to reflect changes and expectations with regards to those events, conditions, and circumstances. Also please note that during this call Energous will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today’s press release, which is posted on the company’s website. Now, I would like to turn the call over to Steve Rizzone, CEO of Energous. Please go ahead, Steve.

Thank you, Laurie. I would like to welcome everyone to the Energous first quarter 2017 conference call and update. Joining me today is Brian Sereda, our Chief Financial Officer. I will start with some remarks regarding the company’s operational progress since our last call. Brian will then review the financial results for the first quarter of 2017. I will then close with some final comments before opening the session for questions. Regarding the operational status and progress of the company it is first important to note that the Energous WattUp technology is ready for commercial deployment. Beyond additional engineering required to meet changes in specifications for some of our early adopter customers, the WattUp technology development is complete. Specifically, development of our core WattUp silicon chips is complete. Manufacturing qualification of both the transmitter and receiver chips is complete for near field and progressing from mid-field and farfield. The qualification of the DA 4100 chip will be completed in time to ship to customers on schedule. Transfer of the fabrication and supply chain processes to Dialog is complete and the system is now in place to take orders and ship significant quantities of chipsets. Wafer inventories are available from the foundry to fulfill orders with 35 days to 45 days from receipt. Development of the enabling software comment to both near field and mid-field applications is complete. Development of the initial and mid-field hardware reference designs is complete. The core mid-field and near field antenna designs are complete, however, as noted above, some developments remain to modify antenna designs to meet changes in specifications for some of our early adopter customers in the final stage of design and integration. While a factor in the release schedules of these products the designs are near completion. Regulatory certification for near field applications…

Thanks Steve. As you saw at the close of market today, we issued a press release announcing our operating and financial results for the first quarter of fiscal 2017 ended March 31. In-line with our expectations for the first quarter that we discussed on our last call just eight weeks ago on March 8, we recognized approximately $575,000 in engineering services revenues. This compares with approximately $130,000 in the prior fourth quarter and $136,000 in the first quarter of last year. As in previous quarters, revenue was recognized against progress and achievement of certain strategic customer engineering milestones. Furthermore, as we have previously discussed in our quarterly calls, the nature of our deliverables is complex involving the development of groundbreaking RF-based wireless power transport technology. The project deliverables span more than one quarter and are cautiously being modified as our customers adjust specifications requirements Although we believe we are on track to drive higher engineering services and chip based revenues in the second half of this year, the timing and recognition of both could be impacted by additional or new requirements to meet our customer's unique commercialization plans. Moving to expenses, our first-quarter total GAAP operating expense was $13.1 million, a decrease of $1.6 million over the fourth quarter's total expense of $14.7 million and an increase of $2.2 million over Q1 2016’s $10.9 million. On a quarterly basis, the decrease was mainly due to lower chip development cost in engineering and lower stock compensation expense. The year-over-year GAAP expense increase was due to approximately $1.2 million of added headcount-related expenses, additional stock compensation of $1.6 million, and approximately $200,000 of additional marketing-related expenses. Year-over-year we have grown our workforce by almost 40% to 72 people, adding critical hires in areas of R&D, and customer facing engineering. Our GAAP operating…

Thank you, Brian. Before we turn the call over to the operator for questions, I would like to spend a few minutes and comment on our revenue rollout strategy. It is our expectation that 2017 will be the pivotal year for the company to cross the bridge from development to commercialization thereby shifting the topics of our quarterly calls from progress against milestones to revenue forecast and EBITDA growth. As the number of integration projects continue to expand and move through the process from prototype to mass production, our view of the revenue rollout is becoming clear. In 2017, our goal is to create a beachhead focusing on smaller, early adopter market opportunities with short product cycles, as well as top tier market leaders in each of our targeted markets. The early adopter opportunities will buy chipsets and generate revenue in 2017. While the larger opportunities with longer product cycles will be the primary revenue drivers in 2018. In 2018, we expect to fully ramp volumes as shipments to the consumer from our tier 1 opportunities continue to come online and we get the benefit of partial year volume purchases. We also expect to continue to add additional tier 1 and tier 2 opportunities to the customer funnel. In 2019, we expect to see the hockey stick effect in revenues based on a full-year of shipments to high volume tier 1 opportunities, as well as the effects of an expanded customer funnel pumping through new opportunities at an accelerated rate. With this go to market strategy as a backdrop, given the facts that the interest in our technology and the expansion of our customer funnel continues to increase at a rapid pace. The development of the core technology, which will support all three planned iterations of transmitters is essentially complete. The first orders and shipments of WattUp chipsets are at hand. Our progress with our key strategic partners continues to advance and our execution is on track. We continue to believe the development of a WattUp enabled ecosystem equivalent to Wi-Fi is achievable as is our goal of building a very relevant and a very valuable company. I will now turn the session over to the operator for questions. Operator?

Thank you. [Operator Instructions] And our first question will come from William Gibson of Roth Capital. Please go ahead.

Hi, Steve. You mentioned that the next or delayed installments from last year and milestones if this year will be significant, I know we were talking seven figures last year, can we assume that this year?

I think all that we're prepared to say on that is that we expect to see the revenue from engineering services increase year-over-year. As I said, we are going to talk about in any level of detail, our strategic partnership, we are receiving engineering services from multiple customers right now and those will all be captured in our balance and income statement, so again our forecast is that we will see significant increases in engineering services revenue year-to-year and beyond that we really can't get into any detail.

Okay, thank you.

And our next question will come from Ilya Grozovsky with National Securities. Please go ahead.

Oh great, thanks guys. Just a couple of housekeeping items, you had mentioned that the R&D effort is going to be ramped up, you’ve hired, sounds like a lot more engineers is that reflected in the March numbers or is that something we should look forward to end the June numbers when you report them, the costs?

First of all let's be clear, the shape of our company is shifting as is the resource. And our resource focus is moving from core development to outbound customer interface. Virtually all of our new hires are customer facing and they are associated with application engineering, and how that works within our organization, as you are aware we have a partnership with Dialog where we essentially call on customers together. They provide the sales front-end and we provide the application engineering support back end, it’s a partnership. And so the engineering associated with the increase as I said is all customer facing and it’s reflecting in the numbers that we presented.

So, going, the numbers for the June quarter should be commensurate with the March quarter?

I think the numbers should be - I think we still continue to shift our resources from core development to outbound customer facing and marketing and customer support. As I mentioned earlier, the bulk of our core development is complete. We have a long-term vision and we have a roadmap and so obviously we still have a great amount of engineering work to do, but our major focus now is really on revenue and customer expansion in the funnel and to that end the resources we shifted from core development over to the customer facing application engineer.

Okay got it, and then for Brian, the current quarter cash burn, what you think it looks like?

I think it will be in line with our current burn rate. We are now between 9 million and 10 million a quarter depending again on where we are with any additional chip development work, and just to add a little bit on the last question you had Ilya we don't expect to be ramping headcount up significantly, just want to make that clear. We feel critical mass in all of the key years and will be adding selectively based on skill set requirements, customer requirements et cetera. So, we don't expect expenses to be bouncing around significantly and you like to think we have got a core base of expense and it will fluctuate up and down again based on the cyclicality for chip development.

Okay, and then my final question is given the - what you just said about the 9, 10 roughly burn and then you had about 21 million in cash at the end of March, kind of just walk me through the roadmap relative to the cash?

Well first of all we have made a lot of progress as Steve has highlighted. We are managing our business accordingly. We are hedged down bent on pushing the company to start shipping products in the second half of the year. We’ve got 21.5 million, 21.4 million at the end of the first quarter. And we're also very fortunate. We’re going to do in terms of our relationships with strategic partners. We're going to do what’s right for the shareholders, employees and stakeholders of the company and if needed we will take advantage of those relationships, but we are managing the company with the resources we’ve got and planning for success accordingly.

Great, thank you very much.

Our next question will come from Lou Basenese with Disruptive Tech Research. Please go ahead.

Congrats on the progress. I listen to the Dialog earnings call, they mentioned your partnership and featured you guys on Slide 9 as part of their strategic approach to wireless charging, just was curious if you could talk more specifically how you are working with them directly to implement that vision?

So we have a, I think a very tightly coupled relationship. That relationship extends to two primary functions, one is the sales function and the other is the operational function. So, we have turned over basically all of the front-end sales activity to the dialogue sales organization. There are a number of reasons for this. One is that we share a common account and prospect base, and so the dialogue sales organization, which is a very professional organization, a very experienced organization already has significant deep contacts based on positive experiences in all of the customers that we will look to engage with. So it only made natural sense for them to take the lead. Of course we want to be partners in this and so in each opportunity we provide an application engineer or we do the engineering support, we do all of the prototyping, we work with the engineering group to integrate the technology. If there is any kind of customer engineering required, we do the custom engineering. So they are - as I said, we have formed a very effective team with them taking the sales lead and us taking the support lead, and we are doing essentially a pincer moment on these customer opportunities and so they are working from one direction and we are working in another, and then we are joining in the middle to elevate the customer through the sales funnel process. The second, I think element of our relationship is in operations. As we’ve mentioned in the past, we have turned over our back-end operations to Dialog. So our responsibility and our primary expertise is to develop the technology, especially the silicon associated with the technology. We take the silicon all the way through design and preliminary qualification. At that point it’s then turned over to Dialog to complete final qualification, and then they actually have the wafers and all of the orders for WattUp silicon will go through Dialog, will be processed through Dialog, will be shipped from the fabrication facility via Dialog to our customers. Dialog takes responsibility for all of the inventories. Dialog takes responsibility for any RMA's or any returns on the chips. We’ve also been able to leverage their sales force, databases, and their back-end operational processes, and so - again it’s a very tightly coupled relationship. It’s allowed us to capitalize on their strength and it allows us to focus on ours and as I said earlier, we believe that it is going to be very good for both companies and allow us to really capitalize effectively on this growing opportunity in wireless charging.

That's helpful. Just one follow-up if I may, given that backdrop, I mean it seems like it'd be fair to consider them a proxy for what’s going on with your largest customer, since they are handling all the production and back-end stuff, would it be safe to assume we’d see changes in networking capital on inventory levels, ahead of any major rollouts?

Hard to comment on that one. I don't think we would want to speculate as to when they would start investing in inventories and so forth. We will leave that to their marketing and sales force and planning rollouts for the combined customers.

Okay, fair enough.

I think it is safe to say that they do have capacity, again they have tremendous relationship with the foundries. They ship hundreds of millions if not billions of chips a year and so they have more than enough capacity, more than enough vapor allocated to deal with capacities that we may contribute. So availability is really not an issue and I think as our combined sales opportunities grow that they will be able to integrate those effectively into their forecasting and fabrication processes.

Okay. And then just on the FCC process, just maybe some clarification, some have tried to suggest it is more like a binary event, but the way that you’ve characterized it sounds like there is some meaningful back and forth with possibly some confirmation and progress along the way, could you provide some just more color around that and how that process grows?

Well keep in mind that the FCC does not do any testing or that is not their function, they authorize certain laboratories to perform the certification and testing process. We’ve engaged with one of those laboratories, and as I said, we are pretty far down the line in the actual testing itself. We do have I think a very thorough understanding of what needs to be tested and the methodology for testing it and we are working with the TCB or Telecommunication Certification Body to go through that process, now that is not directly with the FCC, the TCP works directly with the FCC on that.

Okay, thanks, congrats on the progress again.

Thank you.

And our next question will come from Brett Conrad with Longboard Capital. Please go ahead.

Hi guys, great quarter, thank you. Just one question on, can you comment on any specific particular products we are going to see in Q4 coming out or in CES and you want to highlight our can highlight?

I think that what we can speak to be beyond the announcements that have already been made, you know we have talked about Chipolo and the Bluetooth tracker, we’ve talked about SK Telesis and hearing aids, and so the, you can expect to see, I thing product rollouts along those lines. We are very, very much focused with his initial set of customers on small form factor and IOT devices in conjunction with our advanced transmitter. We are also working very diligently to get the first mid-size transmitter released before the end of the year. That’s a challenge considering all of them, not only the development integration issues, but the regulatory issues also, but we still feel that we have an opportunity to complete that. So, again this will be in small form factor and IOT devices where we have significant advantages over the inductive solutions and it will also be focusing on the first mid-field applications, which will be lower power smaller form factor, mid-size or desktop opportunities.

Great, and just one question about mid-field and the potential for it, is it going to be possible to have one transmitter and have a faster charge when the devices are closer to it and then obviously it triple charges as you get quite a bit farther away, but is there any specific engineering to do around that or do you see that as a useful kind of implementation of your technology?

Well I think there is two ways to answer that question. First of all with the mid-field technology, again it is completely safe and you will be able to wear a device and have it charged within the charging radius. The closer you are to the transmitter, the more power you receive and so there is an impact on charging time from that perspective. At the same time of course we have the opportunity and I think a number of our customers are looking for contact-based solutions that may provide greater power and the ability to go back and forth between a contact and a true wire free solution, all with the same receiving device because again compatibility is the key element here, that all of our receivers are by definition compatible with all three iterations of our transmitters, near field, mid-field and farfield. I think also what’s important here to understand is that in discussions with our - especially our mid-field customers there is an absolute belief in the element of paradigms shift, where the idea is that with these devices the expectation is that they will be continually topping of these devices as opposed to charging. Now you may see a situation where somebody will want to run in and charge quickly and perhaps drop their device on a contact base solution or alternatively come in and be sitting on their desk, and while that device is either near them or on their person be continually topped off, and so, again the key here is the ecosystem build out, they element of compatibility and the flexibility in charging associated with the broad spectrum of the WattUp technology.

Okay, very good, thank you. That’s my last question.

Ladies and gentlemen, this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Steven Rizzone for any closing remarks.

We’d like to thank you all for your attention and your continued support. As I said earlier, we believe that we continue to make very, very significant progress, the 2017 is shaping up as a pivotal year, we are on target with the expectations that we set at the beginning of the year the last conference call. We expect to deliver on those expectations. We expect to begin to see significant revenues from chipsets, as well as from engineering services, all positioning for increased revenues in 2018 and a total breakout year in 2019. So, thank you very much, and we look forward to speaking to you in about three months.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.