Good day and welcome to the Energous Corporation Third Quarter 2022 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matt Sullivan, Investor Relations. Please go ahead.

Thank you, Wisnabe and welcome everyone. Before we begin, I would like to remind participants 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 revision to the forward-looking statements contained herein or elsewhere to reflect changes in 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’d like to turn the call over to Cesar Johnston, CEO of Energous. Please go ahead, Cesar.

Thanks, Matt. Good afternoon and welcome to the Energous 2022 third quarter conference call. Joining me today is Bill Mannina, our acting Chief Financial Officer. I am pleased to report that in the third quarter of 2022, Energous delivered just over 10% year-over-year quarterly revenue growth, while continuing to improve our bottom line, driven by the demand and fulfillment of orders for our WattUp PowerBridges. This is a strong indicator of the increasing demand for our wireless power network solutions as you will now hear. In the third quarter 2022, we made substantial progress. Firstly, we announced the first two retail deployments of Energous WattUp PowerBridges through our partnership with Flagship and Wiliot. These retail deployments, both in Australia successfully demonstrate the installation of multiple WattUp PowerBridges in an active harvesting wireless power transfer network, safely energized in thousands of Wiliot IoT Pixels without the need of batteries and under the software control of Flagship. The installation provides retailers with in-store merchandise and customer dynamics tracking data. These installations perfectly showcase the suitability of the WattUp technology system capabilities for new potential adjacent markets, enabling energized rooms where power can be harvested by IoT devices, eliminating the need for batteries or power cables. In the third quarter 2022, we also announced FCC approval for our 15 WattUp PowerBridge, increasing regulatory approved distance and power levels for wireless power transfer. In addition, we further announced regulatory approvals for our WattUp PowerBridge in Australia and New Zealand complementing our approvals in the U.S., Canada, EU, UK, India and China. Our continued progress in the last 9 months time span highlights our strong technical and business leadership for IoT wireless power transfer at a distance. These regulatory achievements combined with an IP portfolio of over 200 granted patents position Energous as a leader…

Thanks, Caesar. Earlier today, we issued our Q3 earnings press release announcing the operating and financial results for our fiscal 2022 third quarter ended September 30. For the third quarter, we recognized approximately $223,000 in revenue, a decrease of 4% compared to approximately $233,000 in the prior quarter and an 11% increase compared to approximately $201,000 in the same quarter of last year. Cost of revenue for Q3 was approximately $420,000, an increase of $149,000 over the prior quarter, which was due to product sales making up a larger percentage of our revenue in Q3 and also an inventory write-down. We did not report any cost of revenue in Q3 of 2021. Total GAAP cost and expenses for the third quarter totaled $6.3 million, approximately $1 million lower than the total costs and expenses of last quarter, which was mainly due to an approximately $600,000 decrease in severance expense and a $300,000 decrease in R&D expense due mainly to decreases in recruiting expense and chip design expense. Compared to the third quarter of last year, total GAAP cost and expenses was approximately $6.3 million lower, which was mainly due to a $4 million decrease in severance expense, a $1.9 million decrease in R&D due primarily to an approximately $900,000 decrease in stock comp expense, and a $450,000 decrease in payroll expense and also a decrease of approximately $800,000 in sales and marketing due primarily to an approximately $450,000 decrease in stock comp expense and a $200,000 decrease in payroll expense. Year-to-date, our total GAAP cost and expenses was $21 million, approximately $11.5 million lower than the $32.5 million of Q3 year-to-date GAAP expense in fiscal 2021, a decrease of just under 36%. The decrease year-over-year was primarily due to an approximately $6.2 million decrease in stock comp expense, a $3.4…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Suji Desilva with ROTH Capital. Please go ahead.

Hi Cesar. Hi Bill. Congrats on the progress here. So, maybe we can talk about the geographies, you added Australia and now you have several geographies, which are the geographies, Cesar, are you most – have the best near-term opportunity and most excited about, top two or three out of those near-term?

Sure. So, we have certifications in the U.S., EU, UK, India, China, Canada, and now New Zealand and Australia. Certainly, from what we have communicated so far, we have two deployments in Australia. So, that makes us very excited. And the reality is that we have made that very public now. As far as the market, certainly the U.S. and UK are large markets that we are looking into where there is definitely a lot of interest. We actually are one of those few companies, if not the only one to – that also owns certification in China. And China has opportunities to that we are looking into.

Okay. Cesar thanks. That’s helpful. And then now that you have some stores under your belt a couple of months with flagship in Australia. Can you talk about what you might – what might be the dollar content out there for Energous per store and how we should think about that as these pilot – these proof of concepts turn into pilots and then eventual production?

So, we have not discussed any specific costs here. But what we can talk about is the fact that some of these stores are in the order of, let’s say, 15,000 square feet or so. And the capabilities of our devices are deployed somewhere between 10 meters to 15 meters, when you place those in the ceiling. And if there is a need to complement the coverage and penetration of the signals into lower levels of tracking, then we can also spread those transmitters around the store somewhere in shelves and other places, right. So, we are talking about tens of devices, right. So, you can do your math here, given the numbers that I have given you. So, you can place transmitters every 10 meters or so, right. So, I will leave that up to you. And then once you have that, what you have is you have thousands of really devices, IoT pixels, that you can actually now support. So, we have not commented on specific pricing on this, but be able just to give you a high level idea. We are not any more expensive than access points for WiFi, which are commercially available today. So, we are in that price range.

Okay. Very helpful. Okay. And then maybe for Bill, can you talk about the inventory write-down Bill? What was the nature of that? And what kind of products it was?

It wasn’t lower of cost of market adjustment, it’s just dealing with the products we are selling now with transmitters.

Okay. And then lastly, again, for Bill, the R&D came down sequentially. And you talked about it a little bit in the prepared remarks. But is the new sustainable sort of level the 3Q level or whether sort of chip tape-outs or things like that that might make the stay in the level higher than the 26 for the quarter non-GAAP?

Yes. There are fluctuations there. This just happened to be just a low quarter in terms of some activity and headcount. And we will still have variability there.

Okay. That was helpful. Thanks guys.

Thank you, Suji.

[Operator Instructions] The next question comes from Jon Hickman with Ladenburg Thalmann. Please go ahead.

Hi. Cesar, can you hear me? Okay.

Yes. Hi Jon. How are you? Yes.

Hi. Could you elaborate a little bit like what’s going to happen with your, I guess the market development before we really start to see dozens of deployments where revenues could really take off, what’s the gating factor here?

Sure. So, we have some revenue, though it’s not as large as we would like to have it at this point in time. But we are working on basically a process by which we will get to deployment. At this point in time, we are starting with engagements in the PoC level, proof of concept level. And as customers go and do that proof of concept, they will probably add more of those deployments in their different stores, right. And as they take time to evaluate, not just our technology, Energous technology, but also the software that comes in place. I would say, typically over perhaps nine months to a year, they should work on putting together a plan for further expansion and final deployment. At that point in time as these grows, there is also a number of other potential PoCs or potential customers that get our evaluation kits, right. And as they evaluate that, you will see a number of them in the queue and as that comes together, that’s when it will happen.

So, can you tell us how many people are the proof – how many accounts are proof-of-concept?

At this point in time, we have been able to publicly release two retailers in Australia.

Oh, you consider those guys proof of concept?

I would say further than proof of concept, I would say second level of proof concept, yes. The fact is that the system is being now deployed at least in one store. So, I would say, call it a close to a production level, but I would say they need to go and stop further and get this level of satisfaction that they would expect before they move any further.

Okay. Thanks.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Cesar Johnston, CEO for any closing remarks. End of Q&A:

Thank you. We are grateful for the continued support from our shareholders and the stakeholders. This quarter in particular, saw a substantial progress in many facets of our business, including regulatory certifications, partnership progress, technology deployments, and company of operational efficiency. Energous remains steadfast in its commitment to the development of wireless power networks for the IoT industry. In summary, we have achieved the majority of the short-term and long-term goals we have set out for 2022. And we have done that in only nine months, so crossing [ph] our expectations. On the next quarter call, we will detail our plans for 2023 including both short and long-term objectives with a keen focus on increasing deployments, which will in turn help to drive top line growth in the New Year. We thank you for your support and we look forward to updating you on the company’s progress on our next quarterly call.

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