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Highlights And Changes For Energous 2016 10-K Released On 3.16.17

|Includes: Energous Corp. (WATT)

New to Energous (NASDAQ:WATT) 2016 10-k:

Working commercial prototypes:

  • We have developed working prototypes of commercial products that utilize our technology.

Partnership with Industrial Supply Company:

  • Effective May 27, 2016, the Company entered into an agreement with a commercial and industrial supply company, under which the Company will develop wire-free charging solutions. Under the first phase of the associated Statement of Work, the Company made certain deliverables for fees totaling $60,000. The first invoice for $30,000 was sent to the customer in June 2016 and revenue was initially deferred until completion of the first phase. The second invoice for $30,000 was issued upon successful completion of the first phase during September 2016 and revenue for the total fees of $60,000 was then recognized. In December 2016, the Company issued an invoice for $22,500 to this customer for the first installment of the second phase of this agreement. Revenue for this invoice has been deferred until completion of the second phase which is anticipated to occur during the first quarter of 2017.

Patent Challenge info:

  • Patent Validity Challenge In June 2016, Ossia Inc. filed two post grant review petitions with the U.S. Patent and Trademark Office ("PTO") requesting proceedings to challenge the validity of one of our issued patents. One of the post grant reviews was denied completely, and the other was terminated when the Company voluntarily cancelled two claims of the patent. There was no other material impact on the Company's intellectual property or patent portfolio as a result of these petitions.

Enough cash on hand through 1H of 2018:

  • We believe our current cash on hand, together with anticipated payments received under product development projects entered into with customers, will be sufficient to fund our operations into the second quarter of 2018

"Incentivize"

Employees/Management are very driven to increase stock price:

  • There are currently 2,052,223 restricted stock shares in queue for Energous employees = incentive to move stock price higher.
  • Energous management and certain board members are further incented to increase the stock price: Performance Share Units (PSUs) work as follows: "The PSUs originally issued during 2015 to certain board members and senior management shall be earned based on the Company's achievement of market capitalization growth between the effective date of the Employment Agreement and the end of the Initial Employment Period. If the Company's market capitalization is $100 million or less, no PSUs will be earned. If the Company reaches a market capitalization of $1.1 billion or more, 100% of the PSUs will be earned. For market capitalization between $100 million and $1.1 billion, the percentage of PSUs earned will be determined on a quarterly basis based on straight line interpolation."
  • Basically, this means: more $$ is earned by management for every penny that Energous' stock price moves higher, with the incentive capping out at ~$56.18.
  • Further details: Grantees of PSUs are required to be employed through December 31, 2018 in order to earn the entire award.
  • There are 1,153,617 PSUs outstanding.

Disclosure: I am/we are long WATT.