Crown Electrokinetics Corp.

only mode. A question and answer session will follow management's remarks. This conference call is being recorded. A replay of today's call will be available on the investor relations section of Crown's website and will remain posted there for the next 30 days. I will now hand the call over to Henrik Dabrowski for introductions and the reading of the safe harbor statement. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to Crown's earnings call. for the second quarter of 2022. With us today on today's call are Doug Croxall, Crown's Chief Executive Officer and Chairman, and Joel Crox, Chief Financial Officer. Before we begin, I would like to remind you that today's calls contain certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended. Words such as may, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company. including those set forth in the risk factors section of the company's quarterly report on form thank you for the second quarter 2022 filed with the SEC. Copies of these documents are available on the SEC's website at www.sec.gov. Actual results may differ materially from those expressed or implied at such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law. Now at this time, it is my pleasure to introduce Doug Croxall, CEO and Chairman of Crown. Mr. Croxall, please go ahead.

Thank you, Henrik. I'd like to thank everyone for joining us today on our earnings call. I'm going to start by giving a business and operational update. After that, Joel, our CFO, will review the highlights of our financial results. And then if there are any questions, we're happy to take those at the end of the presentation. Just to review, Crown's mission is to provide an affordable smart glass solution to the commercial real estate market that will enable its customers to reduce energy expenses and, in turn, lower carbon emissions. Our first product is called Smart Window Insert, powered by Dynamic Tint, an affordable solar-powered insert which does not require hard wiring and can be easily installed into the interior side of existing windows in commercial office buildings. Crown's dynamic tint is a pigment-based thin film that is based on our proprietary and patent-protected electrokinetic technology. At Crown, we recognize that windows in commercial buildings are inefficient insulators, causing HVAC systems to use unnecessary amounts of energy leading to increased energy spend and excessive carbon emissions. Crown Smart Window Insert easily installs into a building's existing window frame, leaving the existing window intact. This transforms a building's single pane window into an energy efficient dual pane smart window. Once installed, our insert is powered by a solar strip, eliminating the need to have each smart window insert hardwired into the existing electrical system of the building. Brown's smart window insert absorbs sunlight, thereby reducing the amount of HVAC usage, leading to lower electricity costs and smaller carbon footprint. Crown's insert also provides an insulative benefit by effectively adding a second pane to the building's existing single pane, allowing heat and air conditioning to stay in the building more efficiently. The commercial building sector is under increasing pressure from shareholders, tenants, and regulators to reduce HVAC energy consumption and reduce carbon emissions. As the only smart glass retrofit product in the market, Crown Smart Window Insert is priced comparatively to high-end window blinds. We operate in two manufacturing facilities in Corvallis and Salem, Oregon, and we expect to deliver our first product in the coming months. Moving to the customer update, I am very pleased to announce that we have received two purchase orders for our Smart Window Inserts. from Hudson Pacific Properties. The smart window inserts will be delivered after Crown's first generation production line comes into operation in the coming months. The inserts will be deployed in two of Hudson's buildings located in the San Francisco Bay Area. The purchase orders from Hudson for our smart window insert are a confirmation of years of hard work by the entire team at Crown and represents a critical milestone in Crown's evolution. As part of Crown's commitment to its vision, we're actively working to become a key ESG supplier to the U.S.-based office buildings by helping them retrofit the legacy infrastructure and assets to be environmentally responsible and energy efficient. This vision continues to be supported by legislative initiatives at both the federal and local levels. The recently announced Inflation Reduction Act will expand the tax incentives for retrofitted energy improvements and has also now made them available to our REIT customers, further enhancing Crown's already significant value proposition. Other legislation, such as New York City's Local Law 97, which targets a 40% reduction in building energy use levels by 2030, is compelling REITs to rapidly upgrade their building envelopes or face material annual fines. In response, REITs are seeking to avoid these penalties and meet this mandate as cost-efficiently and with as little disruption to the tenants as possible. Crown Smart Window Insert solves for both of these conditions highly effectively. To this end, we are assessing a number of new retrofit locations with other prospective REIT customers in our sales pipeline and hope to have further announcements in the coming quarters. Financing. The last few months have been some of the most difficult in recent memory for our economy and our capital markets. I'm pleased to announce that despite these headwinds, Crown has successfully closed on equity raises, which are required for Crown's access to debt financing. and the execution of our manufacturing plans. On July 20, we announced an underwritten public offering of $1 million of common stock at 80 cents per share. And I must highlight that this offering did not include any warrants. Additionally, on July 26, we announced a further 1.1 million funding through a Series D preferred stock round, which was convertible into common stock and an above market price. As I mentioned, these direct equity investments are necessary for Crown to have access to the debt financing, which we first discussed in our last earnings call. As an update, about a month ago, Crown entered into a second term sheet for debt funding, and we are now actively pursuing both debt funding opportunities. While we had hoped to have the debt funding closed by this earnings call, We can say that we're making good progress on both paths, ensuring a higher likelihood that Crown will have the best possible terms for its debt capital. As communicated in previous earnings calls, access to non-dilutive debt financing is especially important as it will enable us to complete the planned production lines, have sufficient working capital through the end of 2023, and allow us to start delivering installation of smart window inserts to our customers. The value of our intellectual property was instrumental to support the debt financing. Crown's independent IP valuation indicated combined patent and trade secret fair market value of approximately $94 million. The proceeds from both future debt financing and recent equity financing will allow us to build our new roll-to-roll lines, enabling Crown to produce film at any length and at widths ranging from 12 inches to 72 inches. Once the new lines are producing at capacity, Crown expects Smart Window Insert annualized revenues of approximately $220 million and EBITDA of $40 million. Moving to product development. In our earnings call, we provided an update on our current product delivery status. I'll provide a brief update for the benefit of our new shareholders. This fall, we will be manufacturing and delivering our first generation smart window insert. That insert will be comprised of 12-inch strips of our dynamic tint film. Crown's insert will have the following capabilities. Our insert will have a solar strip that's facing the exterior of the building, capturing sunlight to charge a lithium ion battery. The lithium ion battery will be the power source that allows the user to transition the film from clear to dark on demand. Each office that has our inserts will have a handheld controller that allows the occupant of the office to easily control the insert. Each insert will be gathering performance and usage data, and we'll be communicating that to Crown for monitoring the performance of our inserts. Our inserts are easily installed and will not require any fasteners. Each insert is powered by the solar strip attached to the exterior side of the insert, making our product highly sustainable and not requiring any hard wiring to the building's electrical system. Our second-generation product will incorporate a single piece of dynamic tint, replacing the 12-inch strips. We expect that new features will be incorporated into the second generation of our smart window insert, potentially including the following upgrades. increased data gathering, including but not limited to external weather information, amount of sunlight, internal temperatures, placement of the sun during the day, and product use patterns. The second-generation insert will have an accompanying app that will allow the user to control the insert via a smart device in addition to the existing handheld controller. We expect that we'll be able to produce significantly more second-generation inserts as compared to the limited run of the first generation insert. Production facility status. I receive requests that I oftentimes to explain the difference between current production line and the future production lines. For the benefit of all shareholders today, I'm going to describe the difference between the current and the planned production evolution. Crown currently produces dynamic tint film on our proto production tool in our Corvallis facility. We will be producing our film in this facility in limited quantities. This method has allowed us to test our production processes as well as develop our generation 1.0 smart windows insert. Our Corvallis production line will produce six and 12 inch strips of dynamic tint for application on our Gen 1 smart window insert. Initially, our smart window inserts are expected to be produced in a limited run to fulfill orders of early customers, like Hudson. With customer feedback on performance, design, usage of our first-gen smart window insert, we will iterate and develop our second-generation smart window insert. We then expect to transition production to our new roll-to-roll production lines capable of manufacturing film with the varying widths that will allow Crown to meet the vast majority of demand from the U.S. office building retrofit market. To close, I want to reiterate just how excited we are to have crossed another major milestone with the execution of Crown's first purchase orders, and in the coming weeks and months, also expect to have closed our debt capital financing, have our first generation production lines up and running, and start shipping product to our customers. I'll now hand the call over to Joel, who will take you through the financials. Joel?