Energous Corporation

Good day and welcome to the Energist Corporation fourth quarter 2022 financial results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. I would now like to turn the conference over to Matt Sullivan, Investor Relations. Please go ahead. Matt?

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 Security and Exchange Commission. Except as otherwise required by federal laws, ENERGIST 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, ENERGIST 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 Energist. Please go ahead, Cesar.

Thanks, Matt. Good afternoon and welcome to the Energist 2022 fourth quarter conference call. Joining me is Bill Manina, 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 power 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 in our efforts to support applications for RF tags, 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 power 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 power networks in proof-of-concept deployments across the retail, industrial, healthcare, and automotive markets in three different regions, including the US, 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 across their respective business fields. As new customers decide to implement our technologies, their installation status progresses from proof of concept to proof of validation and ultimately to the final production phase. To give you an example, A proof of concept phase typically integrates up to 100 power bridges, while a proof of validation and a final production phase can include hundreds or even thousands of power bridges. Today, the majority of our customer applications are focused on IoT RF tags for asset tracking with at least one customer in the production phase. These are important accomplishments on two forms. They demonstrate our success in creating and enabling a new market. Second, they highlight the effective execution of our 2022 short-term and long-term goals that we share at the start of the year. I'll now provide an update of each of these goals. The first two 2022 short-term goals of fulfilling the delivery of one watt power bridges and identifying a beachhead for RF applications were accomplished. we have shipped thousands of our power bridges and now have at least 10 proof of concept and at least one production installation underway. The company is now positioned for expected revenue generation as our customers transition to the proof of validation and production phases during 2023. The third short-term goal was to develop an electronic shelf label or ESL end-to-end system which we have demonstrated in various conferences, including Electronica 2022 and CES 2023. Here, together with our partners, we focus on collaborating on delivering end-to-end systems to very large retail outlets that can offer significant volume potential for our power bridges. I will continue to keep you updated here as we progress with our partners and customers during the next quarters. With respect to our long-term goals for 2022, the first was to make wireless power network a standard, and that was finalized in December 2022, while the ITU's historic recommendation for 900 megahertz used for wireless power transfer was approved in October 2022, fulfilling our second long-term goal. wireless power networks are now fully recognized for the first time as an important emerging technology worldwide. The third long-term goal to certify wireless power networks without distance limitations was accomplished in August 2022 with our 15 watt power bridge FCC certification. Our EU certification for greater than one watt was accomplished earlier in the year. These efforts have positioned energies as the leader in IoT wireless power networks with certified capability to charge IoT devices at a distance around the globe. The fourth long-term goal is similar in status to the third short-term goal, and we will update your status as we make progress. The fifth and final long-term goal was achieved in Q3 2022 as we announced our support of sensor market applications with multiple partners and delivered sensor receiver demonstrations in Q4 2022. We announced a third IoT wireless power network application demonstrating indoor air quality and multispectral light sensor capabilities at multiple public conferences. On the financial side, on a full year 2022 basis, I'm happy to report that we deliver approximately 151,000 revenue demonstrating year-over-year growth over 2022 of 12.5% from these early programs while setting the stage for sustained longer-term growth through the balance of this decade. As our proof-of-concept customers move along the path to final production, This will translate into our power bridge programs and ultimately increase revenue and cash flow generation for energies. Additionally, we continue to prudently manage our OPEX, demonstrating a significant reduction over 2021 through a number of internal cost-cutting initiatives. Let's now move our discussion to update our Q4 2022 specific progress in q4 2022 we deliver approximately 179 000 in revenue and bill will cover this in more detail shortly we increased the number of our wireless power network proof of concept from two installations in australia which we announced in august and september 2022 respectively to now 10 customer proof-of-concept installations across multiple markets and across the world, with at least one customer in the production phase. This is a 5x increase in the number of important POC installations in just one quarter, and it demonstrates the growing customer interest and potential of our technologies. At Energes, we are constantly identifying and executing in the development of ecosystems based on IoT wireless power network technologies. Our strategy is to build IoT wireless power network ecosystems by complementing our technologies with unique technology partners to open up new applications and markets. Some examples here include a relationship with Catapult, a well-known sports performance analytics company based in Australia. In partnership with Catapult, we announced the American football of the future, which integrates an embedded tracker that charges wirelessly using our technology without sacrificing precision data or ball regulations. The new football reports the athletes and ball movements during the game in real time to the Catapult Cloud to track and analyze the results. The Catapult football is just one product example that benefits from our RF power transmission technology disrupting and advancing the sports performance industry. Additionally, as part of our new IoT sensor application ecosystem development, we unveil our new air quality CO2 receiver using a sensorium device. And we also announced our receiver sensor with multispectral light sensor capabilities in partnership with AMS Osram. Indoor air quality and light control are just a couple of IoT sensor examples that wireless power networks can support for smart home, smart office, industrial retail, and healthcare markets, enabling real-time control and efficiency improvement in the ongoing new IoT digital transformation. On the product and systems front, we have partnered with Sato Holdings Corporation, a Japanese global pioneer in auto-ID and labeling solutions to develop next-generation SmartStore dynamic inventory replenishment applications for IoT wireless power networks. As system partners, our aim is to improve overall efficiency of tracking and replenishment management for merchandises and retailers. Demonstrations of our combined solutions have been recently showcased at the National Retail Federation 2023 in New York, and at the Retail Japan 2023 trade shows. And finally, we announced a technology partnership with CapXX in Q4. CapXX is an Australian company that manufactures supercapacitors, which are energy storage devices that replace batteries and result in maintenance-free IoT receiver devices. We also partnered with NGK in Japan to introduce the use of lithium ion rechargeable batteries in our IoT receiver devices. Moving on to standardization. We supported and participated in the first industry standard to charge IoT devices over the air. This standard was developed by a global coalition of companies as members of the Air Fuel Alliance. We also participated in leading the process to develop the International Telecommunications Union, ITU, approval and recommendation for radio frequency-based wireless power transfer in the 900 megahertz band. ENERGY's IoT wireless power networks are now a standard-based technology transmitting power in the wireless transfer official 900 megahertz band for wireless power network deployment worldwide. In the regulatory arena, We announced the certification approval for unlimited wireless powered distance transmission in South Korea for our one watt power bridge transmitter. This effort expands the original reach of the NRGIS IoT wireless powered network global ecosystem. The certification in Korea compliments previously supported approvals in the US, Canada, European Union, UK, India, China, Australia, and New Zealand, and continues to position energies as the only IoT wireless power leader with certified technology worldwide. I would like to now turn to the current year and outline our 2023 goals. As such, our 2023 goals are as follows. Maintain our technical and growing market leadership through innovative IoT wireless power network product development. Number two, work closely with our power bridge production partners to optimize the cost and corresponding gross margin as we move to higher volume production. Number three, continue to identify key technology and system partners to expand our potential markets and facilitate access to new potential markets through our industry-leading technologies. Number four, move our current and future customers steadily along the path to commercialization from POC to proof of validation and then to full production. Number five, support the rollout of power bridge production ramps with our key customers and partners and achieve expected annual revenue growth over 2022. Given the assumptions, we currently anticipate year-over-year revenue growth of 20% or more, which will be weighted towards the second half of the year. In summary, 2022 was a transition year, and in particular, Q4 was a quarter of major achievements at Energes, making the end of a year centered on pivoting and refocusing the company in IoT wireless power networks. It was the result of finding the best intersection of our technology with our certifications and standards to support a growing IoT market across the smart home, smart office, industrial, retail, and healthcare markets. Throughout our organization, we firmly believe that we have now positioned energies as the leader in the emerging IoT wireless power network markets with tremendous value potential due to its proprietary semiconductor antenna and software products supporting multiple IoT markets. We now look forward to 2023 as the demand of our solutions grows and we support our customers to achieve success. I will now turn the call over to Bill.