Okay. Welcome, everybody. We appreciate your coming out to hear our story. My name is Jon Hickman. I'm with Ladenburg Thalmann. I'm the analyst that writes on this company. This is Energous. The symbol is W-A-T-T. Very clever, WATT. And with me today I have Mallorie Burak and- Giampaolo Marino. We have the CEO and the chief technical Strategy Officer. Is that what you call yourself? Yeah. Yes. Yeah. Okay. With that, we're assuming that you're here because you know a little bit about the company, and we're going to try and delve deeper into the nuts and bolts. I have a couple of questions that I'm going to ask, hopefully, you've brought a question or two that you might want to ask the management team. With that, we'll get started. Forward-looking statements, you can't hold me to anything. Yeah. Okay. We're required to show you all that. Yeah. Anyway, just to get started, Mallorie's going to give us a little five-minute intro. Go ahead. I think everybody's aware that over the years, operations of large enterprises, Fortune 500 and larger, become increasingly complex. There's more assets to track, more items that are subject to maybe spoilage for perishable goods, product diversion, possibly theft or loss of inventory. That has created for industries a $1.85 trillion problem. Energous, being a pioneer in over-the-air wireless power technology, we have a patent portfolio in excess of 300 patents in the wireless power and receiving technologies. We solve that problem. With the emergence of ambient IoT and being able to introduce a scalable solution for large enterprises, we can create a wireless power network using battery-free sensors and our wireless power transmitters and our e-Compass platform, which sort of aggregates all the data. Thank you, for these enterprises, being able to track real-time data and have real-time visibility into their operations and supply chain creates meaningful savings for the companies. There's a large appeal to adopt this emerging technology. Thank you, Mallorie. I think there is two important words here that it's good to remember. The first one is $1.85 trillion problem, which we are addressing, and the second one is visibility. Visibility. It's very important. This is what customers are paying for today, for visibility across their entire supply chain, their entire infrastructure. What we mean by that is, really put a pulse on an asset the moment it leaves a warehouse to the moment it reaches the store. Customer wants to know exactly how that asset is traveling across, right? Because if they don't, the moment they lose the pulse on that asset is when the problem basically happen and when they lose money. How do we do this? How do we basically enable visibility across all these industries? Very simple. You'll see here from this block diagram, at the physical layer, we call the physical AI layer. We have our e-Sense tags, which are basically very small tags like these that get associated with asset. These tags are basically harvesting energy from our network first and foremost, right? They receive RF energy. They're able to operate without batteries, and I'll tell you why without batteries is important. It's not just the cost of the battery. That's nothing. What they do is they harvest energy, they generate data. They generate basically data in terms of, "Hey, I'm here. This is my position." If you're monitoring temperature, "Here's my temperature." If you're monitoring perishable, "Here are my temperature, humidity." They'll give you all sorts of very relevant data based on what the asset is. They transmit the data back into our network. Our network basically is comprised of devices like this. Nothing different than an AP access point that you see like in every warehouse, enterprise infrastructure. AP generates Wi-Fi. What we do here, we generate RF power, and then we receive data. We just don't give power, we also receive data. We are the conduit of data from the physical layer, which is the sense or the sensor, all the way to the cloud, which is basically e-Compass, and this is what Mallorie was talking about. That is that data management platform that we have built on top to aggregate all that data and basically ensure that we provide the customers meaningful data that they can ingest, understand, or how to run their operation. Very, very, very simple. Mallorie, can you go to the next slide? Why we win. I'm sure, I don't know if you guys have heard or you're familiar with the term ambient IoT. If not, basically ambient IoT is basically sort of like a carve-out of IoT where now you're using sensory elements everywhere to basically generate data and to sort of create a digital twin of asset that you're basically tagging. Why we win is because we are establishing a power infrastructure within ambient IoT that is scalable and reliable, and that's what you need. Every new technology needs reliability and scalability. If you don't have any of these two, you're done. That's what we do, and this is why we're winning. In essence, our network enables really scalability, and it enables basically power to be propagated in the air. When I say power and scalability, these tags basically can operate from a distance up to 15, 25 ft from the transmitter. We have scalability in terms of range. When you look at basically this slide right here, I know it's a little bit busy, but here we're sort of comparing technology like RFID versus ambient IoT. The difference is in an RFID, which is a passive technology, you sort of have asset tracking in a very periodic way. I scan a tag and an RFID tag, I get a reading, then that tag goes dormant. I don't know what is happening. Whereas with ambient IoT, the tag is always on, is always alive. It's always giving you a piece of information, okay? That's basically is the change of the game. This goes back to real-time visibility that we have been discussing. The last column, when you see Energous, it's very important because not only you have real-time continuous data, you're now through the network, we are starting basically to delineate engineering zone that are enabling customers to understand exactly how the assets are traveling across their supply chain, whether they are in a staging area, pre-staging area, whether they are leaving the dock. We can basically sort of know all that. We don't require any sort of a maintenance or any sort of manuality. Everything is automated. The data flow is in a very automated way, so we are not requiring anybody to be on the floor scanning things and getting data. Absolutely not. The tag will generate the data. Reliability up to 99%. I'll go back. Why not the battery, right? We don't really care about the battery. The problem with the battery is if you take a battery and you put a battery in this tag, and you start generating pings or data every five second, this tag would probably last you two months. Right? Two months. Now imagine you want to deploy millions of these guys. You can't just replace it every two months. It's a problem that is not going to scale for customers. We are eliminating the battery out of the equation, and we're enabling basically this tag to generate data every five seconds. Right? Again, every five seconds, now we're talking about real-time. Versus if I had a battery, I would be basically bounded by a limited power budget that maybe will enable me to generate data every five minutes. That's not real-time asset tracking. That's not real-time visibility. That's periodic asset tracking. I'm still bounded by the $1.85 trillion problem that I'm not solving. I can only solve this problem if I give you visibility every five second or less. We're capable of doing so today, and that's the reason why we're solving a lot of the issues that customers across retail, supply chain, logistics, manufacturing operations are having, because it's the same problem across. Jon, follow up? Yes. On that note, could you, Mallorie or Giampaolo, could you tell us why there are tags out there that just take in ambient power? Yeah. They don't require your PowerBridge. Why doesn't that really work? Basically, Sorry, Mallorie. That's okay. Because basically, if you're relying on a network or power network that is not ours, then you don't have scalability, because that tag cannot harvest energy more than a meter away or let's say three feet away. Every three feet, I need to have some sort of access point that enables the tag to harvest energy. It's not scalable because that means that. The tag can't send power back or can't send data back, correct? The tag doesn't have the power to send the data all the way up into the cloud. It's impossible. You can only do so when you have a reliable wireless power network infrastructure in the likes of what we are building. That's why that infrastructure is very important because it gives you scalability and it gives you range. Okay, my next question is, for those of you who might not know this, one of the major products or solutions that WATT is solving is the cold chain, people that are tracking perishable merchandise. Can you explain a little bit why the WATT solution is so important in the cold chain arena? Yeah. I think it's a great question. I think, again, the fact that we're monitoring temperature, we're monitoring humidity. It's very important for everything that is perishable. Sometimes what we see, what we have noticed is a lot of our customers, especially some of the Fortune 10 that we're dealing with today, they have pallets of cold chain, pallets of food. Sometimes because they are not capable or able to understand exactly the condition in which that pallet is, meaning temperature, sometimes let's say you have a pallet of meat that is sitting in a warehouse or in a staging area at 35 degrees Celsius, or 80 degrees Fahrenheit. You have five minutes before you have to basically discard that entire pallet. Five minutes of operating at that temperature or staying at that temperature before basically you have to isolate that pallet and say, "You know what? It's not good enough anymore. We have to isolate it because there is problems." It goes back to, again, what we do and what we monitor, and it goes back to real-time visibility and asset tracking. Once you have this device that is on that pallet, now they know that if there is a problem, hey, there's this pallet of meat that is sitting in a pre-staging area, has been here for 35 seconds, it had been here for one minute. You got to intervene right now before it's too late, before you have to discard the entire thing. Just to add to what Giampaolo said, we have a competitive advantage because our technology, our hardware, can operate at -30 degrees Celsius, and our competitors can't. That differentiates us and has gotten us into accounts. We have some QSRs that we're doing large-scale pilots with. For grocery especially too, being able to put the transmitters and have the tags operating in a very cold environment is very important to the visibility and monitoring, and that's where we thrive. Okay. Now I want to ask you about, for those of you who might not know, WATT has two major customers, and I will mention their names because I'm not part of the company. They work with Amazon and Walmart, and they have other deployments. Can you talk about the feedback you're getting from your customers, what they're saying to you, what they really like, what maybe they don't like? Are they expanding with you? Talk about the feedback. I'm not mentioning customer names. What's an example of what's most common? It's basically monitoring assets as they travel across their supply chain. We are focusing on food or perishable, for instance. We monitor everything that is perishable. We monitor everything that goes from a grocery distribution center all the way to the store, right? Or we monitor assets, high-value asset, mid-value assets. Asset that, for instance, they need to be tracked because they can disappear. Imagine if you have a pallet of iPhones that you have to ship from a warehouse into a store. That's a lot of money, right? The customer really needs to have a pulse on that asset, and they want to know exactly to the second where everything is. Is the asset in the staging area? Has it been loaded to the right trailer, right? Sometimes assets get loaded to trailers that are going to a completely different store, right? I think, this whole concept of visibility, and this is exactly what Mallorie was mentioning, what I was mentioning, visibility is very important because customers today are paying for visibility. Any other questions from the audience? Go ahead. Yeah. Just trying to understand better the work with some of these big retailers are going RFID as well. It sounds like your product is more suited more of a pallet just one of them are probably going cold storage, that sort of passive. I know it's not actively tracking, but it's a question of signal, just want to get back and- Yeah yes. It's a great question. It's a really great question. We love RFID. I think RFID as a technology has really established the foundational layer across many different industry of supply chain or asset tracking, right? What we do, we layer intelligence and automation on top of RFID, right? We do that basically with this technology. Also, RFID is a passive technology, right? You constantly need manual scanning to receive a piece of information. When I'm done scanning, even in a cold environment, RFID can survive in a cold environment. Again, you need to scan the tag to receive a piece of information. The moment that you are done scanning, then the tag goes back to sleep, and you don't know what is happening to that asset, right? RFID is great, but again, we're talking about periodic asset tracking, right? Here, we're talking about real-time asset tracking, and that is the difference between the two technology, which combined together, right, is the change of game that a lot of the customers out there are looking for. You're kind of sitting on a pallet. Like your iPhone is not sitting on a pallet. Today, we're sitting on a pallet, absolutely. I think as we become much more efficient manufacturing this tag and really reducing costs, eventually we will become, or we will get to tag single items as well, right? Today, we are on a pallet, or we're focusing on items that might have a greater value. You're not going to put this thing on a $1 asset or a $5 asset. It doesn't make any sense, right? You sort of want to aggregate this tag with something that is of a greater value. Giampaolo, you are really tag agnostic. Yes. If somebody wanted to use a $0.05 tag, you could still get power or data from that tag. Completely. Again, Mallorie can expand on that, but we are tag agnostic. Obviously, we have our own tags. On the data, our platform aggregates multiple inputs from different tag, and that also includes RFID, right? At the end of the day, when you start deploying with a customer, you can't just say, "Well, I can give you data that is related to what I do with my technology." You kind of have to say, "Well, this is my data, but also let me aggregate all the other data that you're generating so that I can give you much more meaningful information to run your operation. And just- Go ahead just to add some context, too, when Jon mentioned we are tag agnostic, we do partner with companies that have a battery-free tag that goes at the item level. It's a much lower cost tag because when you think about Fortune 10 companies, they have millions and millions and millions of items that flow through their operations. Especially for higher cost business units where they're dealing with higher cost items, having visibility into tracking at the item level is also important. With our tags, having this full ecosystem to be able to provide, for us, it's nice, and for our customers, it's nice to have one vendor that they're working with that supplies not only the visibility but the entire network. We have the transmitters, the battery-free tags, our e-Compass software platform, and that creates, for us as a company, a recurring revenue stream, which is very important for us to have a more predictable revenue base upon which we can continue to build. Oh. Go ahead. Yes. A question on the tags. Are these tags currently reusable? Would they have to reconfigure a supply chain to move back and forth? Yes. And then, did you have any kind of revenue growth? You said you're more focused on that side of that dynamic. Correct? Could you talk about that? Yeah. The first question, yes. These are basically tags that are fully reusable or repurposable. Let's say this tag gets associated to an asset. Once the asset is at the end of the journey, then we'll reconfigure the tag to be reassociated with a new asset. We'll basically generate just a new ID. In terms of recurring revenue, you're absolutely right. It's obviously at the SaaS level. It's at the platform level where we can generate recurring revenue. Let's don't discard the hardware. Because people think, well, you're deploying with these customers now. The hardware is basically once you're deploying within the infrastructure, the hardware is pretty much limited to a certain number. No. As we deploy and as we learn what the technology can do, there is always more and more use cases that the customer want to deploy with, which basically adds more and more hardware on top of that equation. Your gross margins roughly are about 35%. Yeah. Growth is phenomenal. Your OpEx has been declining, $2.9 million. It sounds like you would be profitable very soon. Is that am I off on that? Maybe I should answer that. What? Do you want me to answer that? We think that they get profitable on a quarterly basis somewhere around $6 million, $6.5 m illion in revenues. Is your OpEx level at baseline or is that lower? I think from an OpEx perspective, we're sort of at the baseline. We've been, for the past two and a half years, going on multiple tracks. One is the company is 14 years old and pivoted strategies to enterprise applications about three years ago, it's an emerging technology. Getting market adoption from two Fortune 10 customers is not trivial, in parallel, we had to turn the company around as well. Thank you for noticing. We did cut a significant amount of cost out of the company. We've now had our fifth consecutive quarter of revenue growth, we are working toward profitability and cash flow break even. That being said, the market environment right now, while we're highly focused on continuing the consecutive revenue growth, we are dealing with the supply chain dynamics, the company had been cash constrained for a long time. In Q1, we raised $31 million, which put us in a much stronger position, a much better, more strengthened balance sheet that's enabling us to, number one, we brought up a U.S. contract manufacturer, so we not only increased capacity to a second CM, we also are now uniquely positioned to get U.S. government sector business where they require that the product be manufactured in the U.S. We're implementing all these strategic initiatives and while we're focusing on revenue growth and profitability, we're also investing in the future and dealing with some of the investment and I guess margin issues that may come up as you start to navigate supply chain and put yourself in a position to get ahead of the procurement and the lead times and basically get yourself in a better position to have some safety stock and things like that. We have one minute left. Go ahead. Can you touch on the regulatory drivers in the U.S., in the E.U.? Yeah, absolutely. Our product are fully FCC certified here in the U.S., and they're also European certified. The latest product is this guy right here. This is a 2-watt conductive PowerBridge. I more meant regulatory from the EU requiring supply chains. Oh. Oh Well, in terms of supply chain, meaning like component supply chain or? Or like. Like FSMA. like yeah, where they Oh, yeah. Yeah. Yeah, absolutely. Obviously in U.S., you are familiar with FSMA, right? FSMA is a very stringent requirement that is coming down, which basically requires traceability. Especially across cold chain environment. That particular requirement is also existing in Europe. What is actually coming in Europe is, I believe around 2027, 2028, is that coin cell batteries are going to have to be eliminated out of sensors. No more coin cells. Coin cells are batteries that you cannot repurpose anymore. Once they die, they die. You sort of have to discard those into the environment. That opens up a great window of opportunity also for something like that, which operates without a battery. What's your booth number? 408. We're out of time, but you can stop by booth 408, and management will be around. Thank you so much.