Energous Corporation (NASDAQ:WATT)
Q1 2014 Earnings Conference Call
May 14, 2014 11:00 AM ET
Matt Hayden – IR
Stephen Rizzone – President, Chairman and CEO
George Holmes – VP, Sales and Marketing
Thomas Iwanski – Interim CFO
Patrick Lin – Primarius Capital
Good morning. Thank you very much for joining us today for Energous Corporation First Quarter Update Call. Joining us the call are Mr. Stephen R Rizzone, President and Chief Executive Officer; George Holmes, VP of Sales and Marketing and Thomas Iwanski, Chief Financial Officer. Our press release detailing the quarterly update was published this morning and is available on the Company’s website at www.energous.com. After management’s prepared comments, we will open up the floor for your questions. We also have incorporated that will come over via webcast. In addition, we would encourage you to visit the Company’s website for further information about our technology, IP portfolio team and to view the WattUp demonstration videos.
Before we get underway, I’d like to schedule and to take noted the Safe Harbor paragraph that appears at the end of the financial results issued this morning. Any forward-looking statement that we make speak only as of the date made are subject to inherent risks and uncertainties including those described in our recent filed registration statement on Form S-1 and subsequent filed quarterly reports and should not be unduly rely upon. Except as otherwise required by federal securities laws, we disclaim any obligation undertaking to publicly release any updates or revisions to forward-looking statements contained herein or elsewhere to reflect changes in expectations with regard to changes in events, conditions or circumstances.
At this time, I’d like to turn the call over to Mr. Rizzone. The floor is yours.
Thank you, Matt. Good morning everyone. I’d like to add my welcome to our first quarterly update. Before we move into the body of our remarks, I would like to thank our initial shareholders who supported us on our recent IPO. Thanks to you. The IPL was very successful and we now have the capital necessary to execute on our vision of building up predictable and a valuable business that really disrupt the current thinking on wire-free power.
For many of you listening in today, this will be the first time we have had the opportunity to talk to you about Energous and our plans for the future. As a result, I think we like to take the next 25 minutes or so to discuss our technology, our product development plan, our business model, the competitive environments and our go-to-market strategy, basically, where we are today, where we are going and how best to track our progress along the way.
As Matt noted that, joining me today are two of my partners, George Holmes, who is our Senior Vice President of Sales and Marketing and Tom Iwanski, our CFO. Before we get started, let each of us provide you some background on ourselves. For my part, Energous is my 9th CEO or Executive Chairman opportunity.
I’ve had eight liquidity transactions totaling just under $5 billion in returned shareholder value. I come up to the rank in sales and marketing of high tech companies like Timeplex, Bridge Communications and 3form. And I got my first CEO opportunity in 1995 at Netvantage, which was the networking company and Tom and I worked together there. Netvantage was followed shortly thereafter by Ortel in 2000 we will I met George.
I’ve run both public and private companies in a broad range of technologies, including starts with semiconductors, optical components, networking, enterprise software, IP telephony and storage media. I believe I bring an experienced leadership and a history of company growth, strategic planning, execution and value appreciation to the table.
So, that’s enough about me. George, I’ll turn to you.
Thanks, Steve. Well, I began like in early 80s in finance and operations before moving into telecom equipment as a sales guy. I started with Telecom Solutions which became Symmetricom. I built a worldwide sales presence and then I moved into some at Level One Communications. I grew sales from $25 million to over $150 million revenue. From there I moved into Optical Components at Ortel, where I joined Steve and we turned that company around and then sold to Lucent in the late 90s.
After the sales to Lucent, I ran North American sales for Lucent microelectronics about 85% of the worldwide revenue. From there I did a number of start-ups, two of which were in the widest power arena, before transitioning into Solar where I ran sales for to the company based in Austin. Before joining teams here in October, most relevant to my career as it relates to this opportunity is my time at Lucent when we built, the early days of the Wi-Fi infrastructure, selling components into that space as well as systems and infrastructure equipment.
Additionally, I’ve done two wireless power companies both PowerCast and Pure Energy, which gave me great deal of market knowledge.
Tom, let me hand it over to you.
Thank you, George. For me, Energous is my 11th CFO opportunity. As an officer, I directed for a total of seven public companies. Prior to this, I had almost 10 years of audit experience working for KPMG.
During my career, I worked with over 65 companies. During that time, I raised over $150 million and had liquidity transactions exceeding $400 million in the aggregate. I have an active CPA license. I’ve significant technology industry experience including semiconductors, traditionally consumer product experience. I practice full disclosure of company information and look forward to what the executive team will accomplish. More detailed information about me is available on LinkedIn. Back, to you Steve.
Thank you, Tom. One of our key team members, Michael Leabman, who is our Founder and CTO could not be with us today. He is on plan to Europe, but he does send his regard. As you can see Michael presents the technology on our website www.energous.com. Michael is certainly a key member of our team and I want to give a little bit about his background because it is very, very important and relevant to the Company. His background is very unique. After graduating from MIT in computer science and electrical engineering, he received his bachelor and master degree.
Michael then went onto work with the Defense Department designing complex and antenna array. He founded first sort up PureWave which is the successful LTE and WiMAX company. Michael left PureWave and founded his second company TruePath which is a very successful today that has multiple technologies that delivers Wi-Fi 50 miles of shore to crew ship. The combined background of antenna array is signal installation, tracking Wi-Fi and the complex algorithm associated with these technologies. They really set the basis for the highly disruptive technology that Michael invented for Energous. I think, again, if you look at our website, you can get detail on all of it. But let’s go ahead and talk about Energous.
As I mentioned earlier, our mission is to build a predictable, highly-valued business that disrupt the current thinking on wireless power and is viewed as game changer. There are some key words there. First of all, to be successful, we are going to be predictable. We understand that for the first two years, we are not going to have EBITDA and earnings growth that you would expect from a public company. So, to track that, you’re really going to have to be able to watch our progress and our operation plan and our strategic partnerships. And so, predictability is a key element for us.
We believe we can build a very valuable business, because we have the technology that disrupt the current thinking on wireless power and we really believe gain that Energous can be a game changer. We believe the solution to finally deliver on the promise the wire-free power.
Our WattUp technology delivers power at a distance that is completely mobile and software controlled. We believe that, this is exactly what the consumer has been waiting for and that it addresses a major pain point at all. We’re going to transform what is today a very active charging process where the consumer continually monitors the charge status of their portable devices and in some point in time, they seek out a power outlets or a charging station to meet that needs.
With our WattUp technology, this is very active process is going to become passive. Consumers will be charging their devices when they walk into a room, when the devices are in their pockets, on the desks or sitting on front sit of their car. In short, our WattUp technology is going to completely transform the way consumers use electricity. We believe we can affect paradigm change that faster adoption of our technology along the same lines and to the same extent as Wi-Fi.
We want and expect WattUp to become a ubiquitous solution. The WattUp technology is very scalable. We could be targeting a number of markets and opportunities, but we’ve decided there are three spots, it’s going to be 10 watts or less. George can go into this in more detail when we talk about our developments of the ecosystem, but we expect our additional pocket market penetration will be in the cellphones and cellphone accessory and variables market.
We have adopted a licensing model, which will allow us to focus our resources effectively and with the highest return on investment. Energous will develop technology, intellectual property, and engineering reference designs that will enable our strategic partners to incorporate our WattUp technology in consumer facing products that they develop in market. This will allow us to quickly scale as consumer adoption accelerate.
Our first reference designs are due out later this year. These will enable transmitters built by our early adopters and strategic partners to send six watts of received power to up to 24 devices simultaneously in space 15 feet from the transmitter or along radius, 30 feet in diameter; again six watts of received power. This is power converted and is actually going into the device. For up to 25 devices simultaneously, 15 feet from the transmitter or along a 30 feet radius.
The average power received will be in the two watts neighborhood depending on the distance from the transmitter, and two very important elements. You will have full roaming capabilities, so the receiver recharge anywhere within this radius and can be charged while moving in the radio and it’s all under software control.
Now one of the questions we often get asked surrounds the safety of the WattUp technology and the SEC regulatory approval. Safety is a key element of our technology and I want to make that very, very clear. It is a key element of our technology. We’ve just began the regulatory approval process which is the major priority for us and we will continue to report our progress in follow-on conference calls and in public announcements.
To let you know, we’re going to go through FCC Part 15 and Part 18 testing. We’re also going to do the STAR testing and CEC or California Energy Commission testing. The latter two are really not requirements but we are going to go ahead and do these tests because we want to enable our strategic partners.
Again our strategic partners are the ones that are going to have the image and will project the technology to the consumer. So, we want to enable them and we believe that this will also ease faster adoption. If you are buying a cellphone from Samsung or a variable from Fitbit, you have the belief that it is safe technology, and so again we will leverage our strategic partners going forward as it relates to safety and regulatory requirements.
It’s important to note that, our 3D energy pockets use the same unlicensed ISM bands as Wi-Fi. It operates in the same band. We also operate at 1.5 watt, which is similar to energy that is omitted when your cellphone is in operation. And again, it is just data points but we believe that we will successfully complete the FCC regulatory approvals and both the STAR and CEC testing within the coming months.
As we noted in our public announcement this morning, Energous is going to continue to invest in the expansion of its IP patent portfolio to develop defensible barriers to competition. To-date, we filed 50 patents surrounding WattUp technology, 13 since the IPO and we believe that we will have over 100 patents file within the next 12 months. Again, we will continue to invest on an ongoing basis and believe that intellectual property will be one of the core values of the Company.
With respect to our business roadmap, our initial were developed with discrete component. In order to meet our power, footprint and cost requirements, the technology that’s been incorporated into separate transmitter and receiver ASICs. We took down both of the transmitter in receive ASICs and we expect to receive our first transmitter chips pack next week and our first receiver ASIC pack in early July. The intent is to take these components and to begin the formal regulatory approval processes as well as develop the reference designs that will enable our strategic partners to have demonstrable, prototypical products available for public viewing at the CES show in 2015. This is a major milestone for us and we’re looking to work with early adopters with our reference design.
So at CES in January of next year, we are going to be able to demonstrate, again very early stage in prototypical product, but it demonstrates the technology incorporated into third-party and the third-party product. We believe that we will have actual consumer product in the market in the third quarter of 2015 and as a result we should start to see our royalties flow in the fourth quarter of 2015.
To give you some background and overview to our business and our business strategy, I am going to turn the question now over to George, who will give you some visibility into the development, the large ecosystem, our strategic partners and the competitive landscape. George?
Thank you, Steve. I’ll just spend a few minutes now on our go-to-market strategy and competition. Our goal is to enable wire-free power much in the way Wi-Fi enables wireless data. Much like the early adopters and innovators in Wi-Fi, we need to be very focused and we are going to be carefully selecting our initial target markets. We’re building components and chips further that technology. We’re partnering with leading market product companies and creating a reference design to reduce our partners risk to enable early adoption and we’re going to be validating these applications with aftermarket accessories in the early days.
For our initial target markets, we’ve been systematically identifying those markets, identifying well over 50 early potential markets. We’ve narrowed that to 15 markets that we believe had near-term opportunity and prioritized as Steve noted the smartphone, smartphone accessories and variables.
As we look at our ecosystem development, we look at everything from the semiconductor companies all the way through to the consumers. Obviously this new technology, we need to educate the consumer on the market opportunity and what the viability is of this technology. We are doing that through partnership with the broadband service providers, the cellular service providers and big box retail. We have ongoing relationships with all three segments. We are working with them to help them understand what this technology can do today and what it can’t do in the future.
We are closely working specifically with the OEMS and ODS, identifying heat market opportunities where we can deliver this technology into the market very quickly. And then we’re also working with the semiconductor and chipset manufacturers and we want to further drive costs down and make the deployment of this technology ubiquitous. One of the processes we used to engage customers is to identify strategic partners.
Once we’ve identified strategic partners, work with them to very quickly enter into a memorandum of understanding, through that memorandum of understanding, we will work together to deeply understand the technology, how our technology fits with their product. Assuming we get that well, we will move into a joint development agreement. We will identify specific products we’re going to joint develop together.
As we announced earlier this morning, we have signed four MOUs one of those MOUs is currently transitioned to a JDA and we’re moving forward with a development of the product who we expect to show in CES in 2015.
I want to spend a few minutes on the competitive landscape, as we look at the competition in this market, clearly there are companies that have been in the market doing what they call wireless power. There are four key segments in that space. There is your standard radio frequency, there is the inductive math, there is magnetic resonance and then there is what we believe we’re doing which is 3D pocketforming that allow for tremendous amount of utility.
If we look at the different segments, the typical radio frequency solutions are low power, they’re short distance and they’re not yet commercially buyable. As we look at the inductive math, there is three competitive consortiums PMA, GE and A4WP causing a relatively disjointed marketed today. The problem with those solutions is that they don’t provide a lot of utility to the consumer. They have one-to-one targeting solution they require you to be connected. There’s no mobility, as I said limited utility.
Recently magnetic resonance has come into play. Magnetic resonance is all similar to inductive and that it is connected does have a limited mobility, very near field types of applications. It does also have the expanded capability one-to-many, then there is the conducted math. Conducted math are one-to-many, higher-power, yet the technology is not currently viable.
Then we have what we’re doing at Energous, 3D pocketforming. As Steve described, three key elements that we believe add tremendous utility to our technology, power resistance, multiple devices under charge over 24 and the ability to roam while charging, all of which we believe puts us strategically in the best position to buy the greatest utility to consumers. Steve?
Thanks George. Tom, a few financial comments?
Thank you. In April, we completed our IPO, raising a net of $24.8 million. Our stock commenced trading on March 28, but we didn’t have closed the transaction until April 2nd that is why the IPO cash proceeds are now reflected on the balance sheet for the first quarter ended March 31, 2014.
Our proceeds will be utilized as Steve said for product research and development, reference design and product certification. We’re building out our patent profile in addition paying the cost for sales and marketing and traditional G&A expenses. All notes outstanding at accrued interest were converted IPO closing to approximately $1.9 million common shares, which eliminated our debt and gives us a clean balance sheet going forward. These notes and accrued interest along with options and warrants create a several non-cash charges, which led to our reported GAAP loss of $31 million.
Included in this number was a $28 million charge for the change in market value of derivative liabilities, a $500,000 charge were stock-based compensation expense and $1 million in interest expense. By converting the notes and accrued interest to common stock, any future non-cash expenses listed in the note will have been eliminated making our income statement much cleaner going forward.
For the first quarter, the company incurred $2 million in operating expenses which consisted of approximately $900,000 in R&D, $700,000 in G&A and $400,000 in marketing expenses. There is $2 million included, $500,000 in non-cash stock-based expenses. The Company reported an adjusted EBITDA non-GAAP disclosure of loss of $1.5 million for the first quarter of 2014. Please see our disclosed information on the press release and the filing pertains to non-GAAP financial measures.
I want to quickly walk through our current capital structure post IPO, as the share count on financial statements is also not relevant to what it is today. The Company currently has approximately $9.4 million outstanding and approximately 2.7 million warrants and options outstanding. These warrants and options create non-cash losses and gains on a quarterly basis as a public share price moves relative to the underwriting strike spot prices. The flow consists of $4.6 million shares and the shares converted from the notes have a six months lock up from the date of the IPO.
Thank you very much and let me go back to Steve.
Thank you, Tom. We would like to thank you for your participation today. We believe that Energous has all of the necessary tools and capabilities to build a highly disruptive game changing company. The market opportunity is real now. The consumer wants to be free from tethering. They want a true wire-free charging solution. They want a solution that has high utility and brings the element of power at a distance with full mobility. We have a technology to capitalize on this opportunity.
Our technology is highly scalable, it’s developed, it’s real and it’s a matter of the cycle not invention to commercialize it. We have a very significant first-to-market opportunity. We’re not sticking our heads in the sand and believe we’ll be the only wire-free power company out there, but we certainly are the one today that has a significant time to market advantage and a clear field going forward in the immediate future that we intend to take maximum benefit of. Time is very-very important to us and we believe that we get our solution out into the market place that there will be significant social media drive behind it, the consumer will be pushing it and this will accelerate adoption of the technology.
There’s a lot of momentum surrounding Energous and the technology is extremely strong and it’s building. We anticipate a number of strategic partnership announcements in the coming months because there are a number of consumer facing companies that understand that this problem needs to be solved and that we’re in the best position to solve it.
We’ve got a very, very experienced management team that have history of execution and building value, and thanks to our investors we have the capital, the proceeds from the IPO and the private placement that give us 18 to 24 months of runway, which is sufficient time in our minds to gain solid traction and solidify our position as the market leader.
We look forward to continuing to update you on our progress and we will change the way the consumer uses electricity and charges their mobile devices. Thank you very much and I’m going to turn the session now back over to Matt. Matt?
Thanks, Steve. Kevin, could you open the call please, so we can take questions from the participants. Thank you.
Thank you sir. (Operator Instructions). The first question comes from [Inaudible]. Please go ahead.
Good morning. You can hear me, okay, great. Yeah, just wondering in terms of the different versions of ASICs you guys are making. What version will be way to be embedded in say a cellphone version one, two or three?
So when it comes to embedding into a cellphone, we are currently engaged with a number of the cellphone manufacturers. They will be having approximately to look at the different versions and technology. When we believe we get to commercial viability is in the first half of the next year. So, that’s when we think the cellphone manufacturers will have the opportunities start taking those ships that are coming online here in the last fourth quarter and actually doing a valuations to integrate them into devices. And as you may know, when you were doing an OEM solution 12 to 18 months is about a typical as to relate the designing process.
I’d also made a couple comments on that there’s a couple of different way for us to gain traction in the cellphone market. They have the ODMs and OEMs that provide a significant proportion of the component for cellphones and as George mentioned earlier, we are actively engaged with those potential strategic partners. There is also what we believe is the incorporation of the technology into semiconductors into the Bluetooth chips and the power amplifiers and this is another area where we have already begun significant discussions.
Our RTL fit very, very nicely into anyone of these components. It will add to any of the components and ultimately we see that as the final form of ubiquity. So, there is a number of directions into the cellphone market and we are engaged in all of them in terms of building out the ecosystem.
As we mentioned earlier, getting into the market is the most important thing for us right now, time is critical and so the decisions that we have made surrounding cellphone accessories and variables is the most expeditious way to get the technology into the market place, get the consumer to see it and understand it and again to begin to drive a basis of adoption support. Ultimately, we do see this in the cellphones but again this is a period of time and we will continue to progress through various markets getting to that point.
Okay, great. And so, something like headphones sounds like it’s also when you say Bluetooth headphone which is probably not more popular if you’re going to them all the time would be a possible product rollout as well in over the course of the next 18 months, 24 months or something.
Yeah. I think we could sit around a table and develop 50 applications for the technology in a 10 session fashion. It’s just no broad. So, what’s important for us to gain is to focus and to demonstrate the viability of the technology in the consumer hands and again this gets back to the time to market decisions that we have made. But the applications in the market are broad and large.
Okay, great. Do you see this 15 feet radius, will that expand overtime or say in the next 24 months as you go into development pretty much say the same or does it get a little bit wider?
I think that really depends on our strategic partners, their view of the product that they want to release and the consumer. As I mentioned earlier, the technology is extremely scalable. We could be sending more power at greater distance. It would have a larger footprint and will cost more or we can scale it down to a very, very small transmitter incorporate it into a variable. So the capabilities are very, very scalable and they are really going to be driven by the strategic partners, the product that they want to incorporate and the consumer.
Okay, thanks. One just quick question in terms of the number of stock options and warrants seems like there was a quite a few issues. Now, what can we expect going to future in terms of option adding more dilution probably in let’s say a couple of years?
Well, I think certainly the options are the fundamental driver for current employees and new employees and I think that options will be required to attract the top engineers, sales, marketing professionals that we look to bring into the Company. We don’t anticipate a large company for say but we do want to continue along the lines that we have bringing very, very experienced and very senior people and to do that it’s a function of equity. So, stock options will continue to be a major element for the employee base going forward.
Okay. Thank you.
Thank you. The next question comes from [inaudible]. Please go ahead.
Hi, Steve. Hi, George.
Two quickly questions. On the MOUs, I know you can reveal the identity outside of Hanbit. Can you at least give us a breakdown in terms of target markets or whether they’re on the receive or transmit side or both?
Right now, off the four MOUs we have signed one is both, the other three are on the transmit side.
Great, and then just part of my question, I just want to on the FCC safety approvals, I am assuming these are being done in parallel going after all four of them, is that right? And then also is that one that we should expect for the other?
This is a process. FCC Part 15 is very specific. There is a very detailed respect to it. It can be done by a third-party lab and it will likely be the first regulatory approval that we will obtain. FCC Part 18 is what less well defined and it really related to use cases. And so, you have to spend time with the SEC to understand their position on the technology and develop use cases around any consensus they may have. This is a longer process. How long, we really won’t know until we fully engage with them.
As I mentioned earlier, we are doing the preliminary work now, but the formal work won’t start until we have the ASICs incorporated because we need to be testing the technology that ultimately will be incorporated in consumer facing products. And so, the current work we are doing now with our desecrate technology is giving us a basis of information. We have engaged a number of labs to assist this.
We have also engaged very, very experienced consultants who have worked with FCC along the same lines as the regulatory requirements that we have. The product testing and the CEC testing will be done in parallel and as I said we’re quite confident that we will be able to pass those requirements.
Okay, great. Best of luck guys.
Thank you. The next question comes from Patrick Lin with Primarius Capital. Please go ahead.
Patrick Lin – Primarius Capital
Hi, good morning. I have two quick questions here. One is, can you give us perhaps a range of what the initial selling price or the price points might be? And also secondly, once the volume ramps up what you think the effect might be on the prices for the products at that point?
Let me answer that question specifically as it relates to cellphone accessories and our standard consumer transmitter. As we look at that and with our different OEM and ODM partners, part of the end-market price will be determined on their brand and how they want to position it. Most of the companies were talking to or benchmarking the best thermostat is kind of the utility that they’re trying to provide.
So, that plus or minus $300 price point as initial market entry price point on the transmitter is where they are looking. And then on the receiver, as we are integrating into battery back pack, as you may know, battery back pack sell from about $75 to $125 depending on the brand. And the partners that we are looking at are looking at not having to change that price point by integrating our technology. They will create a secondary offering with a smaller battery and wireless power integrated.
So they will basically have two offerings one with the larger battery low wireless power in their same price point as well as the wireless enabled solution as well. So, the receiver side $75 to $125 on the transmit side plus or minus $300.
Patrick Lin – Primarius Capital
And just a quick follow-up in terms of potential licensing deals, can you may be provide some color as what type of deals you might be looking for and looking to sign?
We can’t really give much detail now because we’re in the early stages. What I think we can tell you is that each deal will have some unique elements to it. They will be royalty based. We do not see a significant upfront royalties coming out of any of the licensing opportunities that we’re talking about because they are more backend performance oriented.
So as product is sold, we will see the revenue stream. We do see these as annuities because once engaged with the strategic partner, we can continue to expand within the product portfolio of that partner. So we’re building flexible and excuse me – George you want to comment on that?
Yeah. I mean, maybe just talking real quick. There are two fundamental types of licenses that we’re looking at. One as Steve described earlier, there are two go-to-market strategies in any of these markets one of which is working with the semiconductor companies in which case we’ll license our RTL to them they will integrate our RTL into their chip and create an integrated solution.
The second is where we’ll be actually allowing our partners to buy chips from our fabs that will have a license associated with it. So, two different fundamental licenses, one is straight technology license, one is technology plus a chip. Those are the two core go-to-market that we have with the early adopters.
Patrick Lin – Primarius Capital
Terrific. Thank you and congrats on the successful IPO.
Thank you. The next question comes from [inaudible]. Please go ahead.
Yes. Good morning. Thanks for taking the questions. Two quick questions. One on the market and before I get to that, just an understanding how your milestones are going to be achieved in possibly communicated to the new public audience here over the next 12 to 18 months? Obviously, it’s got some on the joint development side and also on the regulatory side, if you could get into a little bit more detail, which one do you expect to come sooner?
I think that we will see a series of strategic partnership announcements and I think those will continue for the next 18 months. I think we’ll announce the receiving of the ASICs and the conversions of those ASICs into product divergence of the technology. I think we’ll talk about the first commercial reference design that are made available to our strategic partner and the regulatory approvals and those will come in phases.
As I said, I think that you can expect FCC Part 15 to come before Part 18 that we will do in parallel with those STAR and CEC. I can’t give you a real timeline here because we’re not that deep into it, but clearly over the next 12 months we want to complete all of these regulatory milestones.
Superb. Thanks, Steve. That’s a good answer. George, a quick question for you on the market. It sounds like you’ve got a really deep background in understanding this wireless market place. Right now, how large is the pad-based recharging market is? I think some products commercialize out there, do you know some of the annual sales of those?
No. I mean, not by our customer per say. We’ve done a lot of work with IHS, so we kind of understand kind of what their analysis looks like. They’ve just published a 2014 world market for wireless power. The 2013 number was a bit mimic, the market was projected to be almost a $1 billion a couple of years ago in 2013 and it was a little bit under a $100 million, so little over a million units sold. 2015, a 1.5 billion now and 2017 is 7.5 billion.
A couple of things that are happening here though that, I think is key to note, wireless power as it’s been currently marketed, it’s been out there for about five years. I think one of the things that we see and as we have evaluated this market quite thoroughly and frankly as we evaluated joining the Company is, we really want to understand where the market was and where the potential was and whether OEMs and ODMs really saw the potential today. They still do. The challenge they have is there is not a lot of utility in a connected solution.
A consumer having a pad-based charging solution is a little bit better than having a bunch of wall works but it really doesn’t capitalize on mobility. And in last 15 years, we’ve gone from a very connected market to a very mobile market and people expect that from their power. So in order to capitalize on this market potential, we believe that mobility is going to be key and which is why we think we’re very well positioned. Does that answer your question?
Yeah. Certainly, George. It sounds like the reported statistics are based on those, there is older line in solutions?
Yeah. I mean, because up until our market entry, there’s been basically science projects out there and disconnected powering solutions. There have been some very large government funded programs that have done some big transmitters that are $10 million transmitters, $4 million receivers and they control a kilowatt at a mile, but we’re not putting that in our backyard. And so, short of having something that’s very expensive, we don’t see a lot of utility in the truly wire-free solution that are out there today until the advent of this technology.
One of the things that we’ve done is, Steve has been able to attract a very key Board member to our team. His name is Bob Griffin. Bob is the Principal at Griffin International. Griffin actually does all the merchandising for Big Box Retail, Best Buy, Wal-Mart and the Apple stores. So, we get a great deal of insight of what’s happening in that space, and he’s also the ones that we used to gain access to those delivery vehicles to the consumer.
So as I said earlier, in our part of our go-to-market strategy, we’re very focused on making sure we have a keen eye on what the consumer that wants and doesn’t want what they’re seeing great utility in which is what gives us a lot of confidence in our ability to penetrate the market with the solution we’re developing. Does that help?
It helps a lot. One last question. Steve, may be this is for you or anyone comment please. As you’re just getting started on kind of building up your team, got a great capital raise and a neat market opportunity here, do you think you’re going to be doing this – the real question is where do you think your year-end headcounts to end up are you going to carving out teams of other players that are developing similar solutions because this is a pretty specific skill set that you’re looking for or are you just trying to go and trying to get kind of the best of breed one-by-one?
Again one of the strengths of the team that we have in places is that, we’ve done this before. We’ve built out the company, and so we put together pretty effective operating plan for the next 18 months. And I think we have a real good idea of the types of individuals that we’re going to be bringing on board, and they’re fundamentally engineers and developers. I think what you’re going to expect to see the Company north of 30 people in the next 12 months.
The vast majority of those 20 some plus would be in the engineering department arranged around four core disciplines, software, RF and technology and ASICs. And so we believe that we have a very special opportunity here and so we’re looking to really get the best of breed development challenge in each of these disciplines.
Again, I don’t think we’re going to have a large company per say. I don’t think we need that and we’re going to be very cost conscious and until our market expansion developed. So, we’ll keep focused work with our initial early adopters with a clear objective of the demonstrable product at CES in 2015 and then as we gain traction with those partners, we’ll begin to expand with additional partners and move in main markets.
Great. Thanks very much guys.
Thank you. There appears to be no further questions. I will now hand it back over to Matt for closing remarks.
Thanks Kent and we like to thank everyone again for taking their time to join the call. Management will be out at a few upcoming conferences including Mark in the New York and the LED Micro in LA in early June and if you have an interest in scheduling the call and or meeting with in person, you can feel free to contact me directly. All those details are on the bottom of the press release. Thanks so much and look forward to talk to you in our next call in a few months.
Thank you. This concludes our conference call for today. Thank you for participating. You may now disconnect.
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