mPhase Technologies Inc. (XDSL) Q1 2022 Earnings Call Transcript

mPhase Technologies Inc. (OTC:XDSL) Q1 2022 Earnings  Call dated Nov. 22, 2021

Corporate Participants:

Brian M. Prenoveau — Managing Director

Anshu Bhatnagar — Chief Executive Officer

Angelia Hrytsyshyn — Chief Financial Officer

Venkat Kodumudi — General Manager, Chief Operating Officer

Analysts:

Christopher Jarrous — Dunlap Equity — Analyst

Graham Price — Raymond James — Analyst

Cole Wilson — Private Investor — Analyst

Presentation:

Operator

Greetings, and welcome to the mPhase Technologies Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Brian Prenoveau. Thank you, Brian. You may begin.

Brian M. Prenoveau — Managing Director

Good afternoon, everyone, and welcome to mPhase Technologies Fiscal 2022 First Quarter Earnings Conference Call. As a reminder, the fiscal ’22 first quarter ended on September 30, 2021, so all figures presented for this period will reflect that end date. Today, we issued our fiscal 2022 Q1 financial results press release, which highlighted a number of financial results for the quarter. A copy of the press release is available on the Investor Relations section of our website and the completed financials are posted on EDGAR.

Before beginning our formal remarks, I’d like to remind listeners that today’s discussion may contain forward-looking statements that reflect management’s current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. mPhase does not undertake any obligation to update any forward-looking statements except as required.

At this point, I’m pleased to turn the call over to mPhase CEO, Anshu Bhatnagar. Please go ahead.

Anshu Bhatnagar — Chief Executive Officer

Thanks, Brian, and thank you for joining the call today. On today’s call, I’m going to cover some of the steps that we have taken to build the first-of-its-kind ecosystem in this space. I’m so excited to introduce our new CFO, Angelia Hrytsyshyn, who will briefly cover the quarter’s financials. Our COO, Venkat Kodumudi, will also join us to talk about a new platform that we’ll be launching.

Even though it’s been a short time since our last call, we have a lot of updates to cover today. We are positioning the Company to become a significant and unique player in the EV space in 2022. Our strategy is firmly focused on serving tomorrow’s green EV-centric economy. We’re building a company that leapfrogs the current thinking in EV to create an ecosystem that serves all of the layers of the emerging EV economy.

As a part of our corporate evolution, we will be changing our corporate name from mPhase to mPower. The reasons for the change are simple. mPhase reflected decades of R&D at the company that centered on telecommunications, battery and other physics-oriented hardware projects. After I took over in 2019, we switched the focus to software-based solutions that utilize primarily off-the-shelf hardware with the goal to create high-margin, recurring revenue streams. mPower reflects our commitment to build solutions that serve the EV economy, which will transform the way people travel and interact with retailers.

For those of you who are new to this story, mPower is an ecosystem built on EV charging stations, high-speed millimeter wave 5G, and consumer engagement software supplemented by proprietary travel software. Layered on top of this mobile experience, we’re also offering a marketplace with rewards and ESG compliance programs.

We will utilize the same OEM suppliers as industry leaders for our EV charging and 5G hardware, but a majority of our ecosystem software is built in-house. We can best be described as a SaaS EV-plus model, building services and functions that supplement the charging experience. As a result, our goal is to be more profitable and to have more revenue streams than any other EV player in the market today.

The changes in the automotive industry go beyond a change from gas to electric. It is also a change from solo[Phonetic] vehicles to one that functions as a part of an interconnected world of mobile consumers. When you think of it that way, your car has simply become your newest and most expensive mobile device. This transformation represents a multitude of challenges for any company connected to travel in any form, and that is where we come in.

We’re building our mPower platform to address the needs of every point of contact connected to EV adoption with services that help automotive companies, retailers, CPG companies and consumers in pursuit of a greener lifestyle. The net result is a cohesive, customizable ecosystem that can produce multiple revenue streams from a single physical location. At this stage, mPower is not a concept, but is based on tested verifiable technology. The rollout process just began in the second half of 2021, with rapid major expansion planned for 2022.

Last week, we announced the signing of 1,440 additional locations in addition to the 1,825 locations announced in the past few weeks. In just one month, we have tied down 3,265 locations in Virginia, Illinois and Florida. We are moving rapidly towards our goal of having 10,000 locations in multiple states in the very near future, with an additional 20,000 or more sites by the end of 2022.

In addition to corporate sites, we’re working with independent owner/operator sites across all types of businesses and major brands. This is a very overlooked group that has the most to lose during the EV transition. So our solution sets are being welcomed with open doors within this subset of store owners, a majority of whom are looking to participate in EV charging in some fashion.

To say this is a highly motivated prospect list would be an understatement. Our initial strategy is geared towards maximizing this exposure. First, we’re implementing pilot programs with selected high profile retailers, particularly in the quick serve restaurant, QSR, gas station, convenience store and similar travel-related businesses. We will start with recognizable leaders. Though in reality, nearly all major chains, even individual stores are potential future partners.

In terms of contracts with corporate partners, the sky is the limit for us and we have high confidence that we will be able to showcase mPower across the top tier of retailers, particularly in 2022 after we have multiple sites up and running. We believe mPower will play a key role in helping to shape the way that consumers shop, dine and fuel.

To give you an idea of the potential scale of this platform, a 242-store test of just one consumer engagement portion of the ecosystem resulted in more than 70,000 app downloads. We believe our adoption rate could be significantly higher as we roll out our full stack of incentives and features. Our newly-designed mPower app for Android and iOS should be live by Thanksgiving, so we are set for the next stage.

The second part of our strategy is to select early partners that can provide proof of concepts across different business categories. So we are working to start programs with gas stations, convenience stores, hotels, sports bars, restaurants, and some surprising chain venues that will be announced in the near future. Each of these business types will give us valuable use cases that will help us sell into these specific categories.

The use case path is very important in order to prove not just the viability of our platform, but also to highlight the customization potential for specific industry groups. For example, we’re currently working on supplemental gamification for a chain client that will layer on customer-specific features unique to their locations. We have the team of software engineers in-house to complete these kinds of tasks, so our value-add in software development differentiates us from many pure EV charging players. Due to contractual considerations, where we are at in our rollout cycle requires a bit more self than shareholders may like at this early stage, but the names attached to these projects will be revealed as we get closer to installing equipment in the ground in the coming months.

It is humbling to see the size and quantity of partners that are engaged with us to make our ecosystem a reality. One area that we’re very excited about is a utility sector where we’re working on partnerships with multiple major regional energy providers. In fact, in recent weeks, we have seen some major EV charging companies add telecommunications and other features to their offering. Data and connectivity will go hand-in-hand as this industry matures, so we intend to be perfectly positioned for that future.

To see industry leaders move forward with the functionality that we already have built into our platform is a strong validation of our strategy. As the world transitions from gasoline power to electric power, fuel itself will undergo a major consumer change. Simply put, electricity has no branding power, with the exception of source with green power such as solar being superior to fossil fuel or electricity. But regardless, the day will come when fuel will lose its branding potential; meaning, the brand will have to come from experience of fueling rather than the fuel itself. We are building our ecosystem to fully embrace the benefits of this change.

At this time, I’d like to introduce our new CFO, Angelia Hrytsyshyn, who was recently appointed Chief Financial Officer. We are thrilled to have Angelia on board because of her background is so well suited to the direction our business is headed. Not only does she have a great background in real estate management, but she also held important roles in Constellation, one of the largest utilities in the US. Her experience also includes SEC auditing for major corporations at PwC, as well as SEC reporting. We’re excited to have Angelia join the team as we begin our new growth phase.

Now, I’ll turn the call over to Angelia to provide some detail on our financials for fiscal Q1 2022.

Angelia Hrytsyshyn — Chief Financial Officer

Thanks, Anshu. Before I start, I want to thank everyone for the opportunity to be a part of this terrific growth story. I’m now on my 18th year in corporate finance. I’ve been lucky enough to hold positions that prepared me for a full cross-section of corporate functions, from complex long range planning to the day-to-day tasks familiar to all CPAs and CFOs. Having just started as CFO, I have that feeling you sometimes get just before takeoff, excitement and anticipation for the journey ahead. So let’s get started on the highlights of the quarter.

Because the company’s core business is under recurring contracts, our quarters during our initial revenue cycle have remained remarkably steady for nine straight quarters. So, the clear highlight of our fiscal 2022 first quarter was growth of 8.4% as we crossed the $8 million quarterly revenue threshold for the first time. Q1 revenue of $8.2 million marked an all-time record and showed progress over the $7.6 million we’ve reported in the same quarter last year. So this is a welcome start to our growth curve.

Importantly, after being static for many quarters, we are finally beginning to add new revenue to this core SaaS business, a trend we expect to continue in future quarters. We’re lucky to have this profitable base business because it gives us the freedom to pursue a greater level of R&D and development in much larger and faster growing segments in EV. We expect further growth in this base business in subsequent quarters. So this is a trend that will make our base revenue even stronger over time.

We have tremendous scale in our business model. So this modest revenue increase contributed to a significant 576 basis point increase in gross margin, which reached 31.6% in Q1 versus the 25.9% last year. Our goal is to continue layering on business that will eventually generate SaaS margins in excess of 50%. So this is a strong step in that direction.

One other key element that is very important in terms of our ability to qualify for future bank lines of credit involves our invoicing. Effective July 1, 2021, the company was able to begin invoicing through its largest consumers, US office. Therefore, some of our largest customer is US office, thereby making the US the primary geographic region. This change in invoicing is very important for a company of our size because lenders prefer US domiciled sources of revenue and receivable. This improves our ability to obtain high quality bank lines of credit and similar commercial lines that can significantly lower our cost of capital. One other item of importance to note because we use a channel partner in our core business. This revenue is listed at 100% concentrated in that single customer. However, that revenue actually comes from a more diverse set of end-user customers.

Since beginning this program 10 quarters ago, we had generated approximately $69 million in revenue. So this has established itself as a consistent revenue stream that will continue to improve. About 78% of our revenue was derived from subscriptions, 12% from service and support, and about 10% from application development and implementation. As we layer on new sources of EV revenue, this customer concentration will gradually dissipate, as we expect to have thousands of different paying customers by the same time next year.

Despite some fairly large non-cash charges in the quarter, we still managed to be modestly profitable, with net income of approximately $240,000. The company has been profitable in six of the last seven quarters, no small feat during a period of major product development. This was despite some very large changes this quarter tied to business development efforts, including amortization of debt discount, deferred financing costs and original issue discount totaling slightly more than $1 million, 224% higher than Q1 of the prior fiscal quarter.

One of the advantages of our operation is that we already have a strong team of engineering talent who were able to assign and complete projects as we need them, giving us added leverage without ballooning our R&D expense. We will be hiring additional professional staff, but have thus far been prudent in right-sizing our organization to match our growth expectations. As a result, our salary and benefits were actually 58% lower in Q1, totaling just over $217,000 compared to almost $520,000 the same time last year. While some of this improvement was from special items, our current expenses are enabling us to manage our cash well, and we bring on new — as we bring on new revenue stream.

Another line item in our financials that was significantly higher than last year rising about 300% was our G&A expense, which increased from about $246,000 in fiscal 2021 to just over $1 million in the most recent quarter. The increase is driven by the investments made to support the expected growth from the initiatives previously shared, such as growth from our SaaS and TaaS offerings. We finished the quarter with $1.8 million in cash, and our stockholders equity set a new record at $12.2 million qualifying us for a NASDAQ uplift without the necessary — the necessity for an equity raise. Overall, our financial condition continues to improve as our prospects for growth accelerate, greatly enhancing our status with potential partners.

At this time, I’d like to turn the call back to Anshu.

Anshu Bhatnagar — Chief Executive Officer

Thanks, Angelia. I would like to spend the last part of today’s call discussing some of the projects we are working on and what we expect to achieve over the next several quarters.

One area that I’m excited about is our fully developed plan to manage our ambitious expansion program. We have been working on this strategy since last year and during that time, we have assembled a tremendous number of external resources to make our expansion a success. We now have Top Tier suppliers engaged to provide our Level 2 and Level 3 equipment along with third-party support to fill in some necessary technology. We have already placed an order for many mPower branded Level 2 chargers, and a number of important pilots that represent a chain of thousands of potential locations. So the mPower EV charging rollout phase is underway in a big way. Depending upon third-party schedules, we intend to begin installing as soon as possible, as we already have sites selected.

Similarly, we are involved in a couple of important super sites and Level 3 projects that have the necessary equipment and support lined up for when those sites complete the engineering stage. As you can imagine, engineering takes longer for these sites due to the high energy usage.

In terms of site acquisition, we are in talks with many retail customers representing around 30,000 locations, and are also exploring pilots with several major quick serve restaurant chains. Some interested providers in the personal services space, hotel chain, gas station, grocery stores. Sufficed to say, our ecosystem is resonating at many different levels of mobile commerce.

Along with our own in-house technology, we also have aligned with other equipment and third-party software application companies to complete our technology requirements. Every new agreement or contract seems to open new doors for us, but we are lucky in the sense that we are beginning our growth curve at a point when the technology in this space is well developed. With the ability to choose from a very competitive landscape of OEM providers, we’re able to be nimble in picking suppliers with superior pricing and technology. So there are some real advantages to being a late bloomer following the creation of an industry.

We spoke last quarter about how forecasting is somewhat complicated at the moment because we don’t know which sites will implement our full EV 5G engagement stack until we complete site surveys. As a rule of thumb, under the current model, every mPower site will carry our engagement software and generate an average of around $50 in recurring revenue. About half of those sites will include 5G and generate an additional $50 per month. We expect about 15% of the locations will qualify for EV installation, representing a more variable rate of revenue. Each site will have an average of about four ports.

So to model out our revenue expectations over the next four quarters, we expect strong growth in all of our segments, beginning with our profitability of our core SaaS business, which we expect to grow at a 10% or better rate on top of its trailing 12-month revenue of $31.3 million.

The rollout of our mPower EV-centric business segment will add significant revenue in 2022 and become a source of consistent future growth. Using a conservative $600 contribution from each site during basic year one development, we expect our current list of sites to generate $2.3 million in annual recurring revenue. A subset of these sites could also generate an additional revenue, as we add new features to our platform or upgrade the mPower offering at suitable locations.

Using these same metrics, our pipeline of higher profitability site not yet announced represents an additional $18 million in annual mPower EV revenue. Counting potential supercharger sites currently in planning stage, we model our EV pipeline at more than $26 million in annual revenue. Adding together all sources, including growth of our existing SaaS business, we are modeling a pipeline of about $30 million in targeted recurring annual sales roughly double the current revenue. It should be noted that these figures do not include any contribution from 5G, where we still have several different paths in development.

In terms of the calendar, we expect to begin rolling out our engagement software by the end of 2021, our mPower charging stations by Q1 2022, our EV-plus 5G by Q3 2022, our EV-plus enhanced platform by Q3 2022 with additional features, and our supercharger sites in the second half of 2022. With tens of thousands of sites in our pipeline, tracking our progress will be pretty straightforward in the future quarters when modeling against these recurring metrics.

First revenue from each mPower site is highly predictable as majority of our revenue streams are expected to continue to be recurring in nature as we build out our ecosystem. I’m also very excited about a new marketplace platform that we’re about to launch.

To talk more about this, I would like to introduce our Chief Operating Officer, Venkat Kodumudi, to provide some detail on this exciting marketplace.

Venkat Kodumudi — General Manager, Chief Operating Officer

Thanks, Anshu. I want to spend a few minutes unveiling a brand new blockchain-based marketplace that we think will revolutionize the way green consumers are incentivized for practicing eco-friendly habits in their daily lives. So, I’m excited to give everyone an early look at the mPower token, which is a green token backed by the proven blockchain technology. We think this will be a great addition to our mPower ecosystem.

We approached the space with a goal to resolve multiple problems in the eco-incentive space. First, we look at ways for green consumers to participate in helping the world move more quickly towards an EV-centric future, regardless of current EV ownership. Many individuals want to have a bigger role in this movement. So, we’re giving them a digital path that is easily managed via any mobile device. At the same time, we look at how to integrate this noble pursuit into the corporate need for ESG programs and new ways to offset a company’s carbon footprint. Last but not the least, we also considered the needs of green product manufacturers in reaching these target markets.

Our solution was to design an mPower green token-based marketplace into an ecosystem that can bring all of these groups together and promote positive change that benefits different participants in the way that best suits their own needs. We are uniquely positioned to create this program because we expect to have a very large footprint of tens of thousands of mPower retailers in place relatively quickly over the next year.

Within our ecosystem, businesses can offset their carbon footprint by installing EV charging or buying tokens in the market to promote green practices. Markets of — I’m sorry, makers of truly green products can use our ecosystem to promote their products, and green consumers can get a little bit greener in a symbolic and literal way by earning tokens that can be redeemed for other products and services.

Under our program, we envision the creation of a green token economy where users can redeem these tokens at mPower sites for incentives, such as free charging, that are specific to their needs. We are excited by the idea that this type of token can help companies meet their ESG goals, which is more difficult than you might imagine for many firms, particularly those that are struggling to find on-site ways to reduce their carbon footprint. We already have companies that have agreed to be on our token marketplace and locations that want to participate in our ecosystem. So, the supply and demand characteristics of this program is already in place.

Built on top of an eco-friendly, standards-based distributed ledger platform, we also intend to interoperate between standards-based, eco-friendly distributed ledger platforms, such as Solana, Polygon, and Substrate for our green token. This is not just a concept at this stage, as we have the platform built and will be ready to launch the tokens soon.

Blockchain is a natural choice for the platform for a number of reasons starting with transparency. Like the farm-to-table supply chain concept introduced by Walmart, our solution can extend the rank the eco-friendly products sold in our marketplace, so we have a great deal of functionality that we can add after the launch. Blockchain also gives us the twin attributes of auditability as companies participating in the ESG are required to be audited, and blockchain is tamper-proof, and immutability, a key feature where data cannot be altered.

For those familiar with this space, you might be wondering why this kind of token versus utility coins? While utility coins are more appropriate for the type of the use case that we’re talking about, they cannot give us everything we need for our specific program. Utility tokens either have no value outside their closed ecosystem or they have a static value. This is due to the fact that the supply and demand are both controlled and finite. In our ecosystem, we have an EV charging platform to not only attract the green conscious customer, but also to drive traffic into stores where they normally might not shop.

In addition, the marketplace provides us the ability to drive supply and demand, creating intrinsic value for the token, which will be reflected in price changes over time. In that sense, this is not a company loyalty program, but a green loyalty program. We believe that this concept will generate considerable interest and give us some exciting inroads into collaborations that would not otherwise be possible.

Our revenue proposition could be very large, as retailers could buy credits or tokens, and uses [Phonetic] as part of their own incentive programs. So, for example, a new purchaser of an EV vehicle could be rewarded with a wallet of mPower tokens that could be spent at our member retailers simply based on the switch away from a gasoline powered vehicle. We have a long list of potential collaborators and collaborations in mind. This is just one of several programs that we have under development as part of our strategy to become a company identifying as a leader in green revolution in commerce and travel. Our theme is pretty simple; make a greener way of life easier, happier, and more productive. This is really the starting point of all our projects, and something we believe will distinguish our product offerings as our mPower ecosystem expands.

Now, I’d like to turn the call over back to Anshu for his remarks.

Anshu Bhatnagar — Chief Executive Officer

Thank you, Venkat. How exciting does this feature look? Our pipeline is full, our new revenue streams have already begun, and we see acceleration across all parts of our business. It took many months to get there, but we are finally beginning what we think will be a significant accelerating growth phase in one of the strongest sectors in tech.

At this time, I would like to open the call up for questions.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Chris Jarrous with Dunlap Equity. Please proceed with your question.

Christopher Jarrous — Dunlap Equity — Analyst

Yes, hi, Anshu. I just had a few questions here. It was great to see the SaaS — the core SaaS business get back to growth and it sounds like you’ve got a lot more ahead. I also noticed a nice uptick in gross margins for the quarter, should we expect that gross margin improvement to continue or is it going to level out here?

Anshu Bhatnagar — Chief Executive Officer

Hi, Chris. So great question. No, actually, we’re getting a lot of interest on our existing platform. And in fact, we’re actually expanding some of that offerings. So we can actually expect not only this to continue, but actually continue to see an increase of maybe as much as 10% per year in terms of growth in our existing business.

Christopher Jarrous — Dunlap Equity — Analyst

And the commensurate margin improvement on the gross margin side, that will continue to be [Speech Overlap]?

Anshu Bhatnagar — Chief Executive Officer

Yeah. That’s going to continue. I think the way our platform kind of works is, we have a fixed cost. So as our revenue increases, our margin increases; kind of reflected as you saw in that. So, our goal is to continue to be a SaaS company and our target of about 60% in gross margin. So, you’ll keep seeing that those margins increase to those levels.

Christopher Jarrous — Dunlap Equity — Analyst

Okay, that’s great. [Technical Issues] When is the first app going to be installed as well the first charging station?

Anshu Bhatnagar — Chief Executive Officer

So, yes. So, we actually have — historically, our apps were inside the retail — the customers apps, right. We’re kind of built-in integrated in there. Our own apps, our mPower branded apps are — should be — before Thanksgiving, they’ll be available for download. I think iOS is already — sorry, Android is already available. iOS is taking a little bit longer, but before Thanksgiving we should have that available. And we’re just rolling out as we speak in all these locations. So, I would say the first, call it, the next quarter, we’ll start to seeing revenue from our own app, start as early as next quarter. And I would say probably the following quarter, we will start seeing Level 2 chargers installed, and we’ll start seeing revenue from that. And then, as towards the latter half of 2022, probably the Level 3 chargers will be in place. We already have projects and interest in that. It just takes permitting and everything else. And also there is a backorder on some of the equipment, so all that process takes a little bit longer on the Level 3s

Christopher Jarrous — Dunlap Equity — Analyst

Okay. Fantastic. And I just wanted to make sure I understood something. So you’ve got 3,000 plus locations already signed. You mentioned the press release something like 27,000 pipeline. From a revenue standpoint, the base — bare minimum, one of those sites is going to generate is $50 in app revenue a month, which, because of software issues, very high revenue. And then from there, some will get the 5G, another $50 of probably not as high revenue but still high revenue, and then, charging on top of that. So at a bare minimum, from $50 a month of very high margin software revenue for each site, plus whatever else you could bring on top of that?

Anshu Bhatnagar — Chief Executive Officer

That’s correct. Yes. So that’s going to be sort of at bare minimum, and we expect, as I mentioned in my prepared remarks that we expect a large chunk of those to about 15% to get EV charging on those sites. That’s kind of what we’re estimating, and each one of those sites to have at least four ports. I mean, some are looking at as many as 18 ports, but we’re just kind of averaging about four ports per location.

Christopher Jarrous — Dunlap Equity — Analyst

And how many did you say you thought would get the 5G? Like better [Speech Overlap]?

Anshu Bhatnagar — Chief Executive Officer

Yes. I mean, we’re thinking it’s going to be as high as 50%. Just about everyone we talk to is actually very interested, it might be even higher than that. But we’re sort of estimating about 50% and again, this would be building a sort of CBRS network that we’ll be building. And because we’re — the way we’re rolling out our strategy in terms of the density of a particular location, we can actually create a connected private CBRS network and be able to offer services outside that retail location, which again, will make, one, our app that much more stickier where people will not want to delete our app off their phones, but more importantly, we can offer services to other revenue streams that we can generate by monetizing that network.

Christopher Jarrous — Dunlap Equity — Analyst

Okay. Is this something you’re focused on for QSR? I understand they are buying the highest need. They are desperate for solutions right now to help them in their transition. But is this app kind of focused on QSR, or do you think you can go horizontally across all retail?

Anshu Bhatnagar — Chief Executive Officer

Yes — no, no, we’re actually focused across all retail. I think QSR was just kind of the low hanging fruit, but we’re actually in talks with full service restaurants, hotels. As I said, gas station convenience store. We’re also in talks with grocery stores, big box grocery stores, as well as other retail locations from — that are — things that you typically won’t think of, but — so yeah, we’re really excited. We think that this opportunity is tremendous. I think — the sort of total market here is in the billions of dollars, right. Just in charging as things are moving. So we’re excited to be able to capture a good portion of that is kind of what we’re hoping.

Christopher Jarrous — Dunlap Equity — Analyst

Okay. That’s great. Thank you. I really appreciate the update and good luck with everything.

Anshu Bhatnagar — Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from Graham Price with Raymond James. Please proceed with your question.

Graham Price — Raymond James — Analyst

Hey, good afternoon, and thank you for taking my questions. The first one I had with regards to the Virginia sites that you announced a couple of days ago. Could you talk about the breakdown perhaps between convenience stores and gas stations and restaurants that you mentioned?

Anshu Bhatnagar — Chief Executive Officer

Yeah. On those locations, I don’t have the exact breakdown in front of me right now, but it is predominantly broken up in terms of convenience stores. I would say a majority of those are convenience stores and gas stations. I would say probably a little higher on the convenience store side, and there’s some restaurant chains and hotels as well.

Graham Price — Raymond James — Analyst

Got it. Understood. And when you think about, I guess, the recurring revenue profile for each of those types of sites, how do you think about that?

Anshu Bhatnagar — Chief Executive Officer

Yeah. So each site is actually at minimum looking at our engagement platform, and that’s something that they’re very interested in. We’re also kind of launching this, as Venkat kind of brought on, this new marketplace, which essentially allows us to not only connect the customer with the retail location, but also incorporate new brands as well. And so that’s something that we’re very excited about and that will bring in sort of additional revenue streams as that continues.

But at minimum, is that engagement platform — just about everyone we had spoken to is interested in 5G connectivity as well. A lot of that has to do with — there is a lot of site work that needs to get done to make that happen. So, we’re still estimating maybe about 50% is kind of the back of the envelope calculation for us that will qualify for that, but that will be an additional recurring revenue stream that we’ll be getting from there.

Graham Price — Raymond James — Analyst

Got it. Understood. And then my follow-up, just wanted to get your thoughts, maybe just for the longer term, but your thoughts around international expansion and how that might look.

Anshu Bhatnagar — Chief Executive Officer

Yeah. So we do get a lot of interest in — especially out of Europe and Asia, especially in India. So that’s something that we are keeping an eye on. It’s not something we’re looking to enter immediately just because we want to get our base, which is the U.S. down. But we do see a lot of interest there. And especially, as I mentioned, out of Europe and India, just a lot of demand there for EV charging.

And even like in China, we had conversations with a few companies there and who reached out to us because they liked the platform, right? They liked what we’re doing here. But again, that’s not a market we want to enter today, but it is something we’re keeping an eye on.

Graham Price — Raymond James — Analyst

Understood. Thank you very much.

Anshu Bhatnagar — Chief Executive Officer

Thank you.

Operator

Thank you. Our next question will come from Cole Wilson[Phonetic], private investor. Please proceed with your question.

Cole Wilson — Private Investor — Analyst

Yeah. Thank you. So, on the — so what we expect, it should be roughly the first quarter is mainly just going to be the consumer engagement revenue. Is that pretty correct on that as far as the…

Anshu Bhatnagar — Chief Executive Officer

Yeah. Hi, Cole. Yeah, so next quarter, you’re talking about Q2, our next quarter?

Cole Wilson — Private Investor — Analyst

Yeah.

Anshu Bhatnagar — Chief Executive Officer

Yeah, yeah, yeah. So next quarter, you’ll start seeing not only our existing recurring revenue that we — but also in addition to that, you’ll start seeing revenue around our consumer engagement platform as we roll that out by next quarter, and the following quarter you’ll start seeing more EV revenue from charging.

Cole Wilson — Private Investor — Analyst

All right. The 3,000 locations that we roughly have right now, is that a conservative number to what we can expect growth per month? Or is that a high number, a low number or an average number?

Anshu Bhatnagar — Chief Executive Officer

Yeah. No, I think we should be — at least for some time, we’ll be growing at a pretty — we have a huge pipeline. As I mentioned, we’re looking — we’re targeting at about 30,000 locations. And our sort of first goal is 10,000, which I expect some time — I would say in the near term. And then by end of 2022, my goal is at least to get to 20,000 locations.

Cole Wilson — Private Investor — Analyst

Nice. 5G municipal contracts, are those still in progress?

Anshu Bhatnagar — Chief Executive Officer

Yes, they are. They are very much in progress. And I think what’s unique about the way we’re doing it is because we already have locations which is always tough for someone to come in and because if they are coming in from the 5G side, they would have to either sign leases or use government facilities to set up the private networks. Because we already have this in place, we almost can start offering services to governments fairly quickly. So that’s something we’re working on as well. But as far as our current forecast, we haven’t really accounted for that revenue at this point.

Cole Wilson — Private Investor — Analyst

Understand, understand. I guess that comes down to — I guess, I see on the — today’s press release, I see that you had kind of touch down on an uplist. I know that’s probably a lot of concern with people as far as — how close to the term do you think you might be looking at that? And obviously, what the plans are to possibly get some more brand awareness out there for us?

Anshu Bhatnagar — Chief Executive Officer

Yeah. No, absolutely. I think that’s something we’re definitely mindful of. We feel that there is a lot of wins that we still have that we can announce. And at the same time, we qualify for an uplist, but we want to do it strategically and we want to make sure it makes sense for all shareholders. And so that’s something we’re kind of looking at. We’re hoping to get analyst coverage prior to that. And so that way, the story you can be sort of heard a lot more, and hopefully our market cap reflects the true value of the Company which it currently does not.

Cole Wilson — Private Investor — Analyst

Absolutely. Okay. I appreciate it, sir. Thank you very much.

Anshu Bhatnagar — Chief Executive Officer

Thank you.

Operator

Thank you. That is all the time we have allotted for questions today. I would like to turn the call back over to Anshu Bhatnagar for any closing remarks.

Anshu Bhatnagar — Chief Executive Officer

Well, thank you, everyone, for joining today. We covered a quite a few topics today, but I hope you leave today’s call with a better understanding of how carefully we have planned for the EV-centric future that is inevitable. We are very excited about the work that we have done to prepare for this future, and look forward to showcasing those efforts over the next few quarters.

Thank you, again, for taking the time to listen to the mPower story today.

Operator

[Operator Closing Remarks]