Good day and welcome to the Energous Corporation Fourth Quarter 2022 Financial Results. [Operator Instructions] I would now like to turn the conference over to Matt Sullivan, Investor Relations. Please go ahead.

Thank you, Dave 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 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 in expectations with regard 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 Cesar Johnston, CEO of Energous. Please go ahead, Cesar.

Thanks, Matt. Good afternoon and welcome to the Energous 2022 fourth quarter conference call. Joining me is Bill Mannina, our Acting Chief Financial Officer. Q4 2022 is an important quarter. It is the end of our fiscal year and the culmination of 12 months of significant accomplishments, which also sets the foundation of an exciting 2023 with strong partnerships and business momentum. Let’s begin this call by summarizing our 2022 highlights, followed by a discussion of specific achievements in Q4 2022. I will end this call with an overview of our direction and business goals for 2023. During the year 2022, we focused the company on our vision to be the leader in eliminating batteries and cables by unleashing the full potential of IoT through wireless-powered networks. Our main goal is to enable our customers with the technology elements and capability to build IoT wireless-powered networks. In 2022, we pivoted the company and our efforts to support applications for RF tax, electronic shelf labels and IoT sensors with a combined total addressable market of $280 billion according to IDC report data. Our target was to create new active energy harvesting IoT wireless-powered network ecosystems for these applications while adding value to our customers. Today, we are proud to report that our 2022 efforts have now resulted in multiple customers purchasing our evaluation kits to learn about our technology. But most important, we would like to report that at least 10 customers are now in the process of installing or have installed our IoT wireless-powered networks in proof-of-concept deployments across the retail, industrial, health care and automotive markets in three different regions, including the U.S., the European Union and Asia. These installations represent important first steps towards driving broader adoption of our technology in the marketplace. Our customers are well-respected leaders…

Thanks, Cesar. Earlier today, we issued our Q4 earnings release announcing the operating and financial results for our fiscal ‘22 fourth quarter and full year ended December 31. For the fourth quarter, we recognized approximately $179,000 in revenue, a decrease of 20% compared to approximately $223,000 in the prior quarter and a 21% decrease compared to approximately $225,000 in the same quarter of last year. On an annual basis for 2022, we recognized approximately $851,000 in revenue, an increase of 12.5% compared to approximately $750,000 in 2021. This increase was in line with our revenue guidance for 2022. Cost of revenue for Q4 was approximately $383,000, a decrease of $37,000 compared to the prior quarter. The Q4 cost of revenue included a small inventory write-down, which was similar to the write-down in Q3. We did not report any cost of revenue in Q4 of 2021. Total GAAP costs and expenses for the fourth quarter totaled $6.5 million, approximately $200,000 higher than the total cost and expenses of last quarter. The increase was mainly due to an approximately $165,000 increase in severance expense and a $140,000 increase in bonuses, which were partially offset by a $103,000 decrease in stock comp expense. Compared to the fourth quarter of last year, total GAAP costs and expenses were approximately $3.1 million lower, which was mainly due to a $2.3 million decrease in R&D due primarily to an approximately $1.5 million decrease in stock comp expense and a $390,000 decrease in payroll expense and also a decrease of approximately $1.4 million in sales and marketing, due primarily to an approximately $950,000 decrease in stock comp expense and a $230,000 decrease in payroll expense. For 2022, on an annual basis, our total GAAP cost and expenses was $27.5 million, approximately $14.7 million lower, and the $42.2…

[Operator Instructions] The first question comes from Suji Desilva with ROTH MKM. Please go ahead.

Hi Cesar. Hi Bill. Congrats on the progress to-date here. A question on the retail customers you have with your partners in Australia. What’s the update on the status of the pilots there? And what may be the timing of those pilots shifting into production rollouts or spreading across more stores?

Hi Suji. How are you? Thank you for your question. We continue supporting our partner in Australia. They are a very important partner. We continue finding further opportunities. I don’t – we don’t have an update on that yet today that I can share with you. But what I would like to add is that while we have those two, we just reported a total of 10 by this quarter. And what that means is that the interest of our technology out there, and by the way, that’s a 5x increase compared to those two that you just asked about.

Good. That’s great progress there. My second question is about the numerous partners you discussed in the press release and have highlighted through calendar ‘22. Maybe you could highlight for us maybe the one or two of those partners that has the best near-term opportunity to bring in business for Energous? I know they are all fairly interesting, but I am curious if any one or two stand out for the next 12 months.

It is hard to tell you one or two. What I would like to do maybe is look at the different markets, and each one of them offer their unique solutions to each particular market. So, if we look – as you remember, we have talked about three applications that we are focused on, RF-tags, ESL and sensors, right. So, potential important partners in the area of RF-tags, definitely, we work with Wiliot, right. And we have, as you know, deploying retail in Australia with them. So, that combination, that ecosystem, it’s important to us. And out of those 10 PoCs that we have mentioned so far, I would say the majority of them are in the retail area. So, that’s one particular area and one partner that’s important to us. Second one is in the area of electronic Electronic Shelf Labels. Our transmitters, our networks are required to have extreme low-power capabilities at the receive side. And there, in fact, we do have an evaluation kit that we sell today with our partner, e-peas. So, we see e-peas as an important partner as well as EINC [ph], who as you know, is a low-power display company, well known out there and leader on displays. And the third application happens to be sensors, and we are proud that we finally made that decision to move into sensors and most important partners there today that have already been announced, and by the way, demonstrated, which is important, the technology has been demonstrated at electronica as well as CES. It’s Sensirion, which is considered like the top two companies out there for sensors. And of course, ams OSRAM, a well-known name out there. And we are working with them with lighting applications. So, I would say each one of those is important, each one of their applications. But more than that, there is others behind that. And by the way, the ones that I have talked to you are effectively technology partners that allow us to build those ecosystems that now add value to customers. But also there are other potential partners that we work with that we are not at liberty today to disclose. And they are also system integration partners, customers – partners that are extremely close to customers and can take those ecosystem solutions that we have developed and get us closer to a potential PoC and towards production effectively and eventually generating revenue for the company.

Okay. And then my last question. Thanks for the guidance for ‘23 of revenue doubling. Can you talk about, perhaps of the 10 programs you have announced, how many of those might you expect to contribute roughly to the ‘23 revenues? Just to understand which ones are going to kind of hit revenues versus which ones will be further out? Thanks.

Hi Suji, it’s Bill. You just mentioned our guidance. Our guidance is year-over-year revenue growth of 20% or more.

20%. Sorry about that. So, in that growth in ‘23, how many of the 10 programs do you expect to contribute roughly, just to get a sense of how diversified broad there?

We are early in the development right now, and that is a function of the willingness and the need of the potential customers what – and it also varies depending on the customer, okay. And so let me give you an example. We already – today, we announced actually one of them in production, right. And that particular production happens to be an interesting deployment and in the hundreds of numbers. And that particular one was probably done, I would say within seven months to eight months, right. And just to give you a better answer to your question, perhaps, the fact that we are looking to a potential revenue growth weighted towards the second half of the year. That can give you a good idea of what we are expecting to see out of that. But reality is that while we have those plans, we continue to grow and work on more of those PoCs that eventually will become production, okay. But as we mature, we will be in a better position to give you more specifics about that – I think there with the year, yes.

Alright. Thanks.

This concludes our question-and-answer session. I would like to turn the conference back over to Cesar Johnston, Chief Executive Officer, for any closing remarks.

Thank you. Energous is leading the current IoT digital transformation through its advanced active energy harvesting IoT wireless-powered networks, allowing for ubiquitous deployment of smart IoT components without the needs of batteries or cables. 2022 was a year of important achievements that has now positioned us well into 2023. We will support and grow our ecosystem of partners and continue to identify new customer opportunities for IoT wireless-powered network installations, leading to ultimately increased revenue and cash flow generation for Energous. Thank you to all our shareholders, stakeholders and Energous team members for their support. And we look forward to updating you on the company progress on our next quarterly call.

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