Greetings, welcome to Crown Electrokinetics' Fiscal 2022 first quarter earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Ms. Allison Soss, Investor Relations. Thank you, ma'am. You may begin. Thank you, operator. Good morning, everyone, and welcome to Crown's Fiscal 2022 first quarter conference call. With us on today's call are Doug Croxall, Crown's Chief Executive Officer and Chairman; Joel Krutz, Chief Financial Officer; and Eddie Kovalik, President and Chief Operating Officer. Before we begin, I would like to remind you that today's call contains certain forward-looking statements from our management made with the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as may, should, projects, expects, intends, plans, believe, 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 factor section of the company's annual report on Form 10-K for the fiscal year ending March 31st, 2021, 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 by 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. Doug, please go ahead. Thanks, Allison. Number one, I apologize for the late start. There was some confusion with the call-in number, hopefully everyone who wanted to dial in was able to dial in. This is our first earnings call, typically, when public companies do earnings calls, a lot of them are recorded. All of them are scripted. Ours is scripted. I'm looking at eight pages of prepared remarks. At times you'll hear me read the remarks, other times you'll hear me just kind of go ad lib. I don't like to do things recorded. I like to make it very genuine and authentic, this is going to be that earnings call. I'm going to spend a little bit of time talking about who Crown is, our history, what we intend to do with our smart glass, which will allow buildings to reduce energy costs. Afterwards, Joel's going to go through some of the financial numbers from our 10-Q. What is Crown? Crown's a smart glass technology company. We invented and patented the technology. It's a pigment-based thin film, which allows new and existing windows to dynamically control the level of tint, therefore, the amount of light that passes through a window. By controlling the amount of light that passes through a window, our technology actually reduces the need for electricity to power air conditioning, in turn, lowering our customers' operating costs. We believe that our technology lowers customers' operating costs in colder climates as well. Not just air conditioning, but also heating. In addition, and more importantly, Crown's technology lowers carbon emissions for our customers. Technology focused on smart glass or the smart glass market has been around for years, for over two decades, and there's been billions of dollars of capital that has been invested in these technologies. Yet these technologies have fallen short of what the market demands and what the market can afford. Crown's first product will be an insert. Instead of applying our film directly to an existing office window, we will apply our film to an insert that will easily, and without any fasteners, fit with an existing window frame. It'll be placed on the inside of an external office window. Our retrofit DynamicTint insert, that's the name of the product, is unique to the smart glass industry. Unlike any competing solutions, which require existing glass windows to be replaced, our energy-saving smart glass insert can be deployed as an aftermarket retrofit product. Our DynamicTint insert is the only affordable smart glass product for the commercial building market. We believe our DynamicTint film has many additional applications and market opportunities. As our primary benefit is energy savings, that translates to not only cost savings, but also a reduction in carbon emissions. Our technology is solar powered, eliminating the need to hardwire into a building's electrical system. We talk about this a lot. This is a major point. All the other smart glass technologies are high voltage, high wattage, and require direct connection to the electrical system. Ours does not. With a focus on ubiquity, Crown's technology can be manufactured cheaply with abundant and inexpensive materials, allowing for an affordable solution for the commercial building market. Today, with a robust intellectual property portfolio, Crown's Electrokinetic technology can quickly transition from clear to dark in seconds, and it's the only technology that is color neutral and black. Our story begins in 2007, when Hewlett-Packard started to develop Electrokinetic technology. In 2015, HP Labs, which is their R&D division, divested the assets, both the intellectual property portfolio and the R&D lab, including the production and the expert team of engineers. In 2017, we entered into development agreements with one of the largest thin film manufacturers and one of the largest glass manufacturers. The purpose of those agreements was to have Crown develop its Electrokinetic technology to be deployed on sunroofs in the automotive industry. However, we've continued to meet with glass manufacturers, chemical and film manufacturers of residential windows, skylights, front doors, and garage door manufacturers, all with the purpose of finding the best first market to deploy our technology. We were looking for the best product-market fit. In early 2020, Crown met with Hudson Pacific Properties, and we quickly realized that commercial office buildings represented the largest and the most immediate market opportunity for our technology. Hudson became an investor in Crown, and we've been working together to deploy our technology within their portfolio of office buildings. In early 2021, we successfully completed a $21.5 million capital raise with a simultaneous listing on Nasdaq Capital Market to begin trading under the ticker CRKN. We completed our purchase of critical intellectual property assets from HP, and these milestones are key steps in Crown's strategy to bringing our technology to market with our first product, DynamicTint smart glass insert. Now I want to take a little bit of time to talk about what we call customer discovery. At Crown, our customers are the most important relationship that we have. We're obsessive about our customers, and we will deliver a product that meets their needs and solves their problems. For that reason, we're taking the time to speak to as many commercial property owners as possible. We call this customer discovery. The purpose of customer discovery at Crown is to generate a first-generation product that will squarely meet their needs. We call this our minimal viable product. Instead of taking our technology and creating a product and hoping that the market will buy it, we're actually meeting with our customers, going through a very long Q&A process, which is a very iterative process, to design a product with our technology that they will pay for. Crown's MVP and first-generation product is called the DynamicTint smart glass insert. The insert will be affixed to the inside of an existing window frame of an office, eliminating the need to replace the existing windows of a building. This allows Crown to address the large market of existing buildings that are in need of an affordable and easy-to-install solution. While our DynamicTint inserts can also be used in new construction, our initial target market is retrofitting existing commercial office buildings. Crown's customer discovery process requires that senior management spend significant time with prospective customers in our target market. In so doing, we've learned that our customers are focused on achieving a compelling ROI for any technologies implemented in their buildings. In deploying new solutions, the two primary goals of commercial property owners are reducing their carbon emissions and reducing their operating costs. Our ongoing testing of the impact that our inserts have on HVAC usage supports that we can help building owners achieve both these goals. We recently announced the results of our initial field test, which was conducted from our offices on the 22nd floor of an L.A. office building, where Crown's patented EK technology was rendered into window inserts and then placed over single-pane windows. By blocking out a significant amount of the heat generated by sunlight, the simulation data indicated that an office building could reduce the operating cost of an HVAC system. This data from this field test suggests that our inserts can reduce energy costs of office buildings by approximately 26%. We believe 26% is just the baseline, which we expect to improve upon in our second field test, which is expected to be completed in approximately 90 days. At scale, such a reduction in HVAC usage can also help lower carbon emissions, all while reducing glare, improving tenant comfort, and eliminating the need for window blinds. We're working on a number of our prospective customers to innovate a new ownership model, allowing them to enter into long-term leases for our inserts, thereby avoiding the high CapEx associated with adopting and implementing new technology and greatly lowering and easing their cost of entry. This business model innovation is enabled by the fact that our inserts are solar powered, eliminating the need to hardwire the inserts to a power source. This, in turn, allows our inserts to be easily installed and removed rather than permanently installed with fasteners. Crown is flexible, and we will allow our customers to purchase DynamicTint inserts if desired. We are working on other customer-defined features to include in our MVP and, more importantly, future generations of our product, driven by our close working relationship with our target customer base. As previously stated, DynamicTint can quickly transition between clear and dark in seconds, allowing our customers to control the insert in real time. Crown's smart glass insert is a fully self-contained device that uses the sun's energy to power the transition between clear and dark, again, eliminating the need to hardwire into a building's electrical system. Office building windows are inefficient insulators, causing unnecessary use of HVAC systems, driving higher energy costs and greater carbon emissions. Crown's DynamicTint inserts are designed to solve both of these problems for our customers. There is an enormous opportunity for Crown to deploy DynamicTint inserts to office buildings and help reduce energy costs. According to the study by University of Michigan on commercial buildings, there is approximately 5.6 million commercial buildings in the United States alone. Any long-term successful product needs to demonstrate an attractive ROI for its customer. The ROI should be based on meaningful and quantifiable cost savings, not theoretical benefits that cannot be tracked to dollars saved. Crown believes that the building owner's ROI, based on an affordable DynamicTint insert and the energy saved by deploying our insert, will not only allow building owners to reduce their energy costs, but also allow them to reduce their carbon emissions. By providing a product that reduces energy costs and lowers carbon emissions, Crown believes it is in a unique position to re-segment the smart glass market with an affordable retrofit insert, sold or leased to existing building owners. All right. We're going to switch focus to manufacturing strategy. For those of you who have been listening to us since January, you'll know that our initial strategy was to rely on industry partners that were already in the roll-to-roll thin film production industry to assist us in manufacturing our electrokinetic film. Over the recent months, we've pivoted away from that strategy. We've developed our own manufacturing capabilities on our own production tooling, and in so doing, we have determined that we do not need to rely on outside partners to be successful in producing our electrokinetic film. By initially keeping production in-house, we can achieve a quicker go-to-market strategy, better economics, with more control over our final product and our intellectual property. Our film is currently manufactured in Corvallis, Oregon, at Crown's facility using an industry-standard roll-to-roll embossing tool. We currently can emboss film at 6 in width and are working on expanding to 12 in width at any length. It's certainly the length for our commercial building product. Through our customer discovery process, we have determined that 6 in and 12 in film is sufficient for our early adopter customers. This is a big deal. Originally, we thought we'd have to get to 5 m in order to serve the commercial building market. That is not the case. Over time, we will expand both our production capabilities and the web width of our electrokinetic film to provide more choices to our customer base. In addition to expanding our current production facility, we've been adding many talented professionals to our quickly growing team of engineers. By bringing manufacturing in-house, we will be able to sell more DynamicTint inserts sooner and control the timing and scaling of our production capabilities. All right. Let's talk about talent acquisition. I'd now like to focus on our incredibly talented and growing team. Crown's founding team of experts are the same team of experts that were spearheading the development of our Electrokinetic technology while at HP. With the best development team in place, we've made key hires to scale our business. Starting with our executive leadership, we welcome Eddie Kovalik as President and Chief Operating Officer, and Kai Sato as Co-President and Chief Marketing Officer. Ed brings an extensive history of running companies, having held numerous leadership and founder roles, in addition to his considerable engagements as a corporate director. Kai has helped to build companies across a range of industries. He has a tremendous experience, not only guiding innovative new technologies to market, but also empowering a company's unique culture. During the most recent quarter, we appointed Joel Krutz as the new Chief Financial Officer. Joel brings extensive expertise across strategic financial functions and operations, where he built and optimized financial infrastructure. Our team is growing. In recent weeks, we've added nine new hires in manufacturing, engineering, process development, software development, product development, and marketing. We're excited by the superb talent coming to Crown at this key time in our company's growth. While Crown continued to add talented employees to the company, we believe we have our core team assembled for our next phase of growth. While Crown is not the first smart glass technology in the market, we believe it's the most affordable with a compelling ROI for our customers. Crown is re-segmenting the smart glass market with our DynamicTint insert. Unlike competing dimmable glass solutions, our product does not require replacement of existing windows, nor does it require a connection to the electrical system of the building. The self-contained nature of our insert allows for a quick and easy installation. Crown is the only smart glass product available for lease, providing flexibility for our customers in their buying decision. While competing solutions are primarily targeting new construction, our DynamicTint insert will be the only smart glass product available for retrofit, giving Crown access to a large sustainable market of existing office buildings in the U.S., and eventually, across the planet. While other smart glass solutions might be able to reduce energy costs and carbon emissions for new buildings, Crown's insert can do so at an affordable price for all buildings. All right. Looking ahead, we're committed to bringing our smart glass insert to the market as soon as possible. We're continuing to work with our prospective customers using the preliminary data to gain a deep understanding of the impact of our technology and what that can have on our customers' sustainability initiatives and cost-saving initiatives. Obviously, there are many factors that Crown does not control, we are targeting the first quarter of 2022 for our first product shipment. Let me restate that. We are targeting Q1 of calendar 2022 for our first product shipment. With signed contracts preceding that. As we move closer to first product shipment, we will update our investors with any progress. We are well positioned in our growth phase to penetrate the smart glass market with our inserts. We believe our differentiated product will appeal to a very large customer base who are actively looking to improve energy savings and emission reductions. I will now pass the call over to Joel. Thank you, Doug, and good morning, everyone. Today, I'll review our fiscal 2022 first quarter financial results. Crown's net loss was $5.4 million for the quarter ended June 30, 2021. This compares to a $10.5 million net loss for the same quarter in 2020. With Crown still pre-revenue, the main driver of this net loss is SG&A expense of $5 million, of which non-cash stock-based compensation is $2.6 million. R&D expenses were $0.4 million for the June quarter, compared to $1.4 million for the 2020 June quarter. The decrease of $1 million is mainly due to lower stock-based compensation related to employee and officer grants awarded last year. SG&A expenses of $5 million were $2.9 million lower year-on-year, with the decrease due primarily to lower stock-based compensation expenses of $4.6 million, partially offset by compensation increases of $0.7 million, and an additional $0.7 million of consulting and professional fees. Our other expenses were nominal for the quarter as compared to $1.2 million incurred for the same quarter last year. This decrease is primarily due to reductions in our interest expense following the conversion of all convertible debt notes at the end of fiscal 2021. As of June 30th, 2021, our cash and cash equivalents were $12.5 million, and working capital was $11.9 million. Net cash used in the quarter for operating activities was $2.7 million, which consisted of our net loss of $5.4 million, adjusted for non-cash expenses of $2.6 million related to stock-based compensation expense. That concludes our prepared remarks. We now would like to open the call for questions. Operator, if you could please go ahead. Our first question comes to the line of Gerry Sweeney with ROTH Capital Partners. You may proceed with your question. Hey, Doug and Joel. Thanks for taking my call. Hey, Gerry. How you doing? Good. I wanted to ask you a little bit about, obviously, the customer discovery process. I'm very excited about it and the main driver of some of the shifting in strategy. Curious if you could maybe tell us how many REITs you spoke with and maybe provide a little bit more nuance or detail on some of the feedback they provided you with your current manufacturing availability, i.e., the 6 in and 1 foot. Yeah. We have approximately, I think our target is around 50 different REITs. We're about 24, 30 in. Obviously, we have 1 REIT in particular who's an investor and been very strategic in guiding us through this process. Part of the customer discovery process is to set up hypotheses on what we think the customers might want from the technology, what the benefits are, what their problem is. One of the reasons we shifted from the automotive market to the commercial building market was the difference between a nice-to-have product and a must-have product. Our film, about every four days, this topic will come up amongst stakeholders and shareholders and employees and other customers where they'll say, "I thought you were going after the automotive market." We still will, having our film on the sunroof of a car is a nice to have. It's nice. It's convenient. It allows for a quick transition between clear and dark for the person or the occupants of a vehicle. It's not a must-have. It's not a seat belt or an airbag or a brake line. In the commercial building world, it's a must-have. Lowering their energy costs, and more importantly, reducing their carbon emissions is a must-do activity. As we went through that process with commercial building owners, one of the things we discovered is that our assumption, our hypothesis, that our insert would have to have a single piece of film was actually wrong. The majority of the prospective customers have told us that their preference is 6 in or 12 in strips that will be controlled individually. If the building owner or the occupants in the office wants to tint the top half of the insert, they would be able to do that. If they wanted to tint one of the strips. They would be able to do that. That optionality is something that our prospective customers are looking for, which means producing film at 6 in and 12 in widths is really important. As a matter of fact, if we could only make the film at a 7 m width, we'd be in a different position. It just so happens that we are able to make it at 6 in, and imminently soon, 12 in. That customer discovery process is a really interesting process. Again, we have this great technology, what is the right market? What market is a must-have versus a nice-to-have? What is the exact product that the customers are willing to buy, or lease, in our case? It's an iterative process. Every day, we're speaking to prospective customers, and we're learning more, and we're taking that information back to the product development team and to the engineering team so that we can make a product that we know a customer will buy. Got it. That's helpful. Just speaking about manufacturing, you and I have talked quite a bit about this, and you have the roll-to-roll technology. You have the master drum, I think in a 6 in, and then eventually, rather soon, a 12 in width. Can you provide a little bit more detail on how you use the master drum, how that fits into manufacturing capacity, and what your potential capacity is today and then down the road, whether it be six months, nine months, 12 months, so we can get an idea of how much capacity you do have? Yeah. There's a couple of questions in there. The first was on mastering. Yeah. Just for those, and Gerry's right, we speak a lot more than I do with a lot of the other investors, just to try to bring everyone up to speed, one of the things that we must do when we make our film is emboss a very small design on our proprietary resin. That design is a cellular structure with walls and wells. It's that structure that hides or holds our nano-sized particles of pigment. When that pigment is aligned in a well, it's a bunch of really small spheres that are stacked on top of each other, which makes it invisible to the human eye. When we reverse the polarity of our film, that pigment is pushed out of the well and into a walled area, so there's uniformity and dispersion of the pigment. That process of embossing that design is done with what we call a master. We have a 6 in master, and we're working on building the 12 in master, and then we will eventually build a wider master. The master is the cylinder, effectively, that imprints or embosses that image in the resin. That's what Gerry means by mastering. It's a critical path that we have. We've achieved that path at 6 in. There's no reason to believe we will not be successful at 12 in and any width above that. It's a process. We're in the middle of that. We're towards the end of the 12 in process, frankly, and should have something imminently. As it relates to manufacturing capacity, Gerry, we are very comfortable that with the current capacity that we have, we would exceed the projections that have been put out into the market. We're learning a lot about what we're able to do. As a baseline, we're really comfortable with what we have and what our throughput is. We're discovering new ways to expand that without significant additional capital cost. I know the thing on everyone's mind. I'll just address the elephant in the room, "Oh my God, they're going to do their own manufacturing. They're going to have to go raise $1 billion to do it." We actually won't have to raise $1 billion. We have a production tool that can produce film that we can sell. That capital expenditure has already occurred. Doesn't mean there won't be some more in the future, but it'll be small, not large. When we do try or do decide to expand, which is a good thing, right? That means we have a lot of orders that want our product. We think that the market will be open to that and that we'll have a much higher share price than what we might have today. As far as capacity, we're pretty comfortable with what we have, certainly to fulfill the immediate demand. One of these REITs is 100, 150 buildings. We'll get to our capacity rather quickly, but we're comfortable with what we have. Got it. That's helpful. You put out some very specific timelines, which I think everyone appreciates. The MVP product Q1 of calendar 2022, obviously there would be some contracts or orders before that. Any major hurdles that we should be looking at to achieve these results? Obviously, we just spoke about CapEx capacity, et cetera, anything else that we should be aware of? It's you know what you know, you know what you don't know, and you don't know what you don't know, and it's the last category that always gets people. At this point, we don't see anything that is a hurdle that we don't know how to get over. We just brought in eight absolute men and women that are total studs, and the progress that they've made in a very short amount of time in order to achieve the MVP, in order to achieve contracts and product delivery, it's really awe-inspiring. I know that it's not obvious because everyone who's an investor isn't working with these people or with the core team on a daily basis, but I am. So, things that we thought were hurdles two months ago, we've overcome. Things that we thought would be hurdles two months ago, we have a great plan to overcome. I don't see anything that's going to stand in the way. Obviously, some resurgence in COVID, supply lines are a little whacked everywhere. They're not for us right now. Things like that that we don't control could certainly change the timeline. Right now, we're marching very quickly to Q1 2022. Got it. The final question would be, insert assembly. That's not going to necessarily be a Crown effort, is it? Is that going to be outsourced? We have a couple of great partners on the insert assembly process right now, and so there's no reason to believe that we can't rely on one or both and potentially supplement that with some internal activity as well. Of all the things that we have to worry about, that's the easiest one. Got it. I will jump back in line. Thanks. Thanks, Gerry. Our next question comes to the line of Jim McIlree with Dawson James. You may proceed with your question. Yeah, thanks. Good morning. Doug, you talked about testing prior to purchase orders or minimum viable products. I'm curious if you think you're going to need to test for new customers for each new building. I'm trying to understand how that testing rolls out as the product rolls out, again, across different buildings and across different customers. For instance, you talked about you tested on a single-pane window. What happens when you go to buildings that have double panes or Low-E or any other type of window? Yeah. Jim, it's a great question. As a matter of fact, I don't think we will. We haven't had those requests. The test that we did here is actually in our office. We have two offices, one that is southeast facing and one that is southwest facing, which gives us access to the sun from sunup to sunset, I should say. The field testing that we did was because all of the lab testing and calculations that you can do with data on a spreadsheet, it's great, but you really want to understand the field testing, and we've discovered a lot about HVAC systems, for example, and the different energy draw that different HVAC units might have. It was very important for us to understand from a field test and empirical data standpoint what the results would be. We're thrilled with the results. We are redesigning, and have already done the redesign, and are now making new inserts that we will test again, as I mentioned previously in our prepared remarks. We're pretty bullish on what those tests are going to be, just based on what we already know and what we know the new design should encapsulate. As far as will we have to do this for every customer, I don't think so, but we're certainly willing to do it. One of the things that we actually have done is that the Berkeley National Lab has a fenestration database of just about every window, every piece of glass, every type of frame, every type of Low-E coating or glazing, every type of glass. We can take the characteristics of our technology and incorporate that with any building. We can take any building. We will know the number of windows, the type of glass, the type of frame, the type of coating, their HVAC system, the location of the building, the time of the year that we're doing the analysis, and we can incorporate our technology in that calculation and provide a building owner with an approximate, a pretty narrow window, frankly, a narrow range of what the energy savings and the carbon reduction would be for that particular building. We can do that for one building. We can do it across a number of buildings in a given city. We can do it for an entire REIT's portfolio, frankly. We have those capabilities. From a sales and marketing standpoint, it's going to be very useful because you're right. It's not practical to think that we're going to do a field test in every single building that we're going to deploy our technology. We just simply won't have to do that. I would like to say every building is slightly different. They certainly have different HVAC systems even within the building, and every building has different types of glass. The vast majority of the office buildings that we're talking to, and I mean 90% or greater, are single-pane windows. A lot that don't have low-E because the building was built prior to low-E being available. If we do our testing with a dual pane versus a single pane, we'll see even greater results in the energy savings. It's not known. I'd love to sit here and say, "Yeah, we won't have to do it for every building." It's unlikely that we will. More importantly, we'll have the access to the fenestration database to provide that information to the building owners about how their building, what the performance would be with our insert in their building based on the very specifics of that building. That's helpful. Thank you. When you think about how this product gets rolled out, have you concluded yet if this is a product that's most likely to be for, and now I'm just making stuff up, buildings greater than seven stories tall, or mostly for windows that face southeast or something like that? Has that level of detail been determined yet? No. A window is a window, whether you're a three-story, seven-story, or 25-story building. It's still a window that is very inefficient. The problem that we're solving, Jim, is that we're solving for inefficient windows, and there's a lot of them out there. It's a pretty big problem, and it's a must-have problem. Building owners are in a precarious position. Buildings require a lot of energy. They absorb and consume a lot of energy in our market, and they produce a lot of carbon. Anything that a building owner can do to save money and lower their carbon emission, we think they're going to do, they think they're going to do. I don't think there's necessarily a correlation between the number of stories that a building has and the adoption of our product. We don't see that at this point. Okay, lastly, you talked about signed contracts preceding the first product shipment. Does that mean that you do not have a signed contract right now? If we had signed contracts, that would be a material event. We will certainly announce that when that happens. Okay. Okay, fantastic. Needless to say, we're in active discussions to that end. Right. Understood. All right. Thanks a lot. Appreciate it. Our next question. Okay. Comes from the line of Mike Shlisky with D.A. Davidson. You may proceed with your question. Yes. Hello. Good morning, guys. Hey, Mike. I want to just talk about some of the capital needs going forward. You had mentioned that you shouldn't need any kind of a range of capital to build any kind of new facility. That's great to hear. Is there any large investment that has to be made in either warehouse, supply chain, quality control, et cetera? Are those areas, the investments that are going to be anything of size going forward, or is that all easily funded with what you have on hand today? Yeah. For those of you who don't know, Corvallis, Oregon, is the headquarters of HP's printer division. It's a pretty large campus, approximately 11 buildings, some of which are still active with HP operations, a couple of which are more dormant, I guess, is the best way to say it. Then the building that we're in, which has about probably around a dozen other tech lab type startup companies. There's space in the building we're in. There's a couple of other buildings that literally are sitting empty. We have kind of, if you will, ready-made space. As far as CapEx in order to move forward, we'll have small, but nothing great. We've got ample opportunity for expansion without having to build anything or raise additional capital. To that end, the other elephant in the room is, oh my god, they're burning cash so quickly. Well, we're a growing company. We're developing a product. We're developing a customer base. We have over 12 months worth of capital at our disposal. We are not going to go raise money at prices in this range, and we're going to continue with our customer discovery process, and we will have contracts and we will ship product, and the market will react accordingly. We're comfortable with what we have. No major capital expenditures necessary to build or ship our product. Got it. That's great color, Doug. I also want to just get a feel for what are the immediate next steps here. You've completed this test with the single REIT. Is there at least a contract on their desk? When we heard from you earlier in the summer, I think you said there was a second company that may have a contract also on their desk. Has at least the number of contracts on people's desks increased from here since the test was over, or is that over the next couple of weeks or months here? I think the better way to think about it is that we're in iterative and active discussions with our prospective customers in helping them understand the benefits that our product has, both from an energy savings, cost savings, and carbon reduction. Those conversations imminently lead to contracts, which will lead to product being shipped. I don't want to put a number on the number of active conversations, but the product and the technology's been well-received. From a next steps, kind of the most important things, getting the product built and getting the product sold are obviously two of the more important milestones that the market would identify with. Internally, we have a number of smaller milestones that lead us to that, but we're in a great place. We're never been in a better spot, actually. That's huge. That's great. Thanks so much. I'll leave it there. Our next question comes to the line of Jeffrey Campbell with Alliance Global Partners. You may proceed with your question. Hi, Doug, congratulations on the progression. Thank you. I'll limit myself to two questions. The first one regards the must-have versus the nice-to-have part of your conversation. I'm wondering if you're noticing any kind of correlation between the REITs or the end customers who are showing a lot of interest in your product and the regulatory environment in which they operate in. In this case, I'm thinking of something like LL99 in New York City, where there's a regulatory framework in place where large buildings are going to get penalized if they don't get their emissions down to a certain threshold. While we can assume that this type of regulatory environment is going to proliferate over time, it's not clear to me how many large urban areas are quite that draconian at this point. Just wondered if you could give us a little bit of color on your thinking on regulation versus interest in the product. Yeah, that's a great question. A lot of the questions that we ask our prospective customers obviously have to do with motivation and what's motivating them as a potential buyer of our insert. The obvious thing to look at is government, whether it's local, state, federal, and the regulatory pressure that those agencies can have on building owners. While it's true that New York State and City are pretty progressive in some of the requirements that they have, you'd be surprised by the answers by some of the building owners. I think the largest motivation comes from just the fact that building owners want to do the right thing. I will say this. If we had a product that didn't have an ROI but lowered carbon, I'm not sure we'd be successful with it. We would be to some extent, a small extent, but I think that's a niche opportunity. When you have something that can lower carbon emissions and save money and not have a huge CapEx to get involved, i.e., our leasing business model, we think we hit on all cylinders. The motivating force behind why a building owner makes a decision, first and foremost, it's profit driven. They're for-profit entities, and they have fiduciary duties to their board and their shareholders. They have social duties, if you will, to the rest of the world. You have to hit both of those. You have to have the ability to sell something to them that allows them to save money, and you have to have the ability for them to save carbon. If you can provide that solution, then the motivating factor is really profit driven and climate reduction driven, not regulatory driven. As a matter of fact, I think a lot of the building owners have stated that their board of directors, their shareholders, many of which now have ESG charters themselves, as well as tenants that are climate focused, are really the motivating factors behind doing something with our product. It doesn't hurt to have regulatory agencies pushing the envelope as well. Right. No, that's very helpful. I appreciate that. My other question is with regard to the leasing that you've mentioned several times, just kind of wondering what sort of financial framework are you looking to maybe third parties or how you're planning on building out the financing portion of the lease business? Yeah. Obviously, if you lease something, you're going to receive money over a period of time as opposed to upfront. That begets the question, well, how are you going to pay for your inventory? We have a balance sheet that will allow us to initially start with the leasing program. We do have a number of REITs who've said, "Hey, we want to start off buying, and then we will migrate to leasing." Some have started off saying, "Hey, I only want to lease." Some have said, "Hey, I only want to buy." It'll be a combination between insert sold for cash upfront versus insert lease. We also have had discussions with a number of different potential warehouse lines to handle that as well. Again, all good problems to have. When that happens, that means we have signed contracts. When we sign a contract, it's typically going to mean more than just one building. Just as a quick follow-up to that, will there be any kind of variance in pricing for the units based on whether they're bought upfront or they're leased? Could you say that question one more time? I didn't hear that. I'm sorry. I'm just wondering, will there be any variance in how you might price the product to the customers based on whether they buy upfront or they lease? Sure. On the lease side, the MSRP of the product is similar. However, as with any lease, there's going to be a residual value, which the customer will be able to pay at maturity of the lease to own it. The total ownership costs in the lease model over the entire life of the lease, assuming that the product is purchased at maturity of the lease, will be marginally higher than an upfront purchase. Okay. Yeah, that makes sense. Thanks again for answering my questions. Got it. Our next question comes from the line of Bob Levitt with D. E. Shaw. You may proceed with your question. Doug, you say your baseline savings is 26%. Can you tell us what percentage of, or an estimate of the percentage of a building's operating cost is energy for HVAC? Perhaps more helpful, what are the typical savings for a building with $1 million in annual operating costs by implementing your product solution? Yep. Bob, that's a great question. The answers are very specific to those buildings and what their actual expense dollars are. From a standpoint of energy savings and what that translates to, it's a pretty compelling ROI. We're in the range. One of the questions we ask all of our prospective customers, "What does the payback period have to be to implement technologies like ours?" We're within the target payback period and ROI, which is comforting for us to know, frankly, and that's at a percent that we think we will improve upon with new design and new materials in our next generation insert, first. Second, if you look at a P&L of a REIT, I believe the largest expense are taxes, the second, energy costs, and HVAC being a majority of that. It's a impactful savings for a building owner. What that translates to on an actual dollar basis is somewhat difficult to peg because different buildings in different locations with different energy costs. It's impossible for us to do it from the outside, but from the inside, the help that we've received from some of our prospective customers still keeps us in line with what their ROI and payback numbers need to be. Thank you. You're welcome. Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Doug Croxall for closing remarks. Obviously I love talking about Crown, our team and our progress and our future aspirations. I also like speaking to our shareholders, I welcome any and all feedback. I know that everyone has been waiting for us to get out on the investor relations front. Just to let you know, we have three conferences. I think they're all virtual at this point. We have one on Wednesday of this week, which you should have received already a press release and/or a notice for. It's the Benzinga Reopening Stocks Summit. We have a September 9th Investor Conference with Colliers, we have a September 13th Conference with H.C. Wainwright, as well as an October 6th Conference with the team at Raymond James, as well as an October 21 Conference with Dawson James in Florida. Five activities over the course of the next 90 days, if you will, to continue to drive the message to the market. With that, I welcome any and all feedback, and I look forward to talking to everyone soon and certainly at our next investor call, which will be sometime in mid-November. Thank you. Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time. Bye.