What changed in this filing

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Item 1. Business

2023-03-30 compared with 2022-03-23 · 41 added, 87 removed, 150 unchanged (46% of the section changed)

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This includes near field and at-a-distance wireless charging with multiple power levels at various distances.

We believe our WattUp technologies will help facilitate the deployment of the growing IoT applications.

According to the recent report of the International Data Corporation, or the IDC, titled “Worldwide Global DataSphere IoT Device and Data Forecast, 2021–2025,” the IoT market is forecasted to grow to 39.3 billion devices by 2025.

The initial IoT applications that we are targeting are in the area of RF tags and electronic shelf labeling (“ESL”) for retail, industrial and healthcare markets.

We believe our WattUp technologies will help facilitate the deployment of the growing universe of Internet of Things (“IoT”) applications.

According to the International Data Corporation (IDC) August 2022 Market Forecast, the IoT market is forecasted to grow to approximately $1.1 trillion in spending by 2026.

The initial IoT applications that we are targeting are in the areas of RF tags, electronic shelf labeling (“ESL”) and IoT sensors for the retail, industrial, healthcare and smart home/office markets.

We believe our technology is innovative in its approach, in that we are developing solutions that charge electronic devices using RF.

To-date, we have developed multiple transmitters and receivers, including prototypes as well as partner production designs.

The transmitters vary based on form factor, power specifications and frequencies, while the receivers support a myriad of applications including Bluetooth tracking tags, IoT sensors, ESLs, beacons, stock management devices, security cameras, handheld devices, smart automation, wearables, hearables, and more.

The transmitters vary based on form factor, power specifications and frequencies, while the receivers are designed to support a myriad of wireless charging applications including Bluetooth tracking tags, IoT sensors, ESLs, beacons, stock management devices, security cameras, handheld devices, smart automation, wearables and hearables.

The first end product featuring our technology entered the market in 2019.

We started shipping our first at-a-distance WattUp PowerBridge enabled transmitters for commercial IoT applications in the fourth quarter of 2021, and we expect additional WattUp-enabled products to be announced as we move our business forward.

In December 2017, we announced the Federal Communications Commission , or the FCC certification of our first-generation WattUp Mid Field transmitter, which simultaneously powers multiple devices at a distanc e of up to three feet.

This transmitter underwent rigorous, multi-month testing to verify that it met consumer safety and regulatory requirements.

We believe this was the first certification of a Part 18 FCC-approved non-contact wireless charging transmitter, and that it establishes engineering design precedents that can streamline future regulatory approvals for our technology and for our customers’ end-products that employ our technology.

In addition, in December 2021, we received FCC certification for unlimited distance charging.

Our technology solution consists principally of transmitter controller integrated circuits, or ICs, power amplifier ICs and receiver ICs, as well as novel antenna designs, application prototypes and proprietary software algorithms.

We submitted our first IC design for wafer fabrication in 2013 and since then have developed subsequent generations of transmitter and receiver ICs, antenna designs, and software algorithms.

We have endeavored to optimize our technology by reducing size and cost, while at the same time increasing performance which enables our designs to be integrated into a broad range of devices.

We have developed a “building block” approach that allows us to scale our product implementations by combining multiple transmitter building blocks or multiple receiver building blocks to meet the power, distance, size and cost requirements of customer applications requirements.

Our technology is readily scalable because the same ICs that are used for contact-based charging can be used for distance-based charging solutions.

We have developed two classes of chip solutions, a CMOS-based technology focused on low cost, small footprint and low power (1 watt) and a GaAs/GaN-based technology capable of delivering higher power (greater than 1 watt) with greater efficiency.

We intend to continue to invest in improving product performance, efficiency, cost-performance, integration, regulatory approval and miniaturization as required to reach multiple markets and expand the power-at-a-distance ecosystem, while maintaining a technology lead on potential competitors.

We sell evaluation kits to potential customers of our technology, to allow their respective engineering and product management departments to test and evaluate the technology.

Our customers’ product development, technology integration and product introduction cycles occur over multiple quarters and generally span a period of more than a year to two years and can elapse before first evaluation and final shipment of the customer’s product.

Once our customers begin to sell products to end customers that incorporate our technology, we would expect the commercialization cycle to shorten over time as the technology matures and market acceptance grows.

We maintain the rights to all intellectual property in our technology.

We have implemented a comprehensive intellectual property strategy and are continuing to pursue patent protection for all key innovations.

As of December 31, 2021, the Energous IP portfolio contained over 200 awarded patents in the United States, which are organized along five (5) critical paths to implementation that we believe a competitor may have to navigate to commercialize WPT technology.

The paths are:

Processing Algorithms, Antenna Designs, Transmitter and Receiver ASICs, Other Software Controls (e.g., Bluetooth â Management and Hardware (e.g., Board Layout).

In addition to the inventions covered by these patents, we have also identified specific inventions that we believe are novel and patentable.

We intend to file for patent protection for the most valuable of these, and for other inventions that we expect to develop.

This is a significant annual expense, and we continually monitor the costs and benefits of each patent application and pursue and maintain those that we believe are most protective for our business and expand our core value.

Our seasoned management team has both private and public company experience, as well as relevant industry experience.

In addition, our team consists of key engineering talents in the areas of IC development, antenna development, hardware, software and firmware engineering as well as integration and testing, which will allow us to continue to expand our technology and intellectual property and to meet our customers’ support requirements.

In November 2016 we entered into a Strategic Alliance Agreement with Dialog Semiconductor plc (“Dialog”), an industry leader in Bluetooth low energy semiconductors and power management semiconductors.

In conjunction with the Strategic Alliance Agreement, Dialog was the exclusive distributor of our integrated circuit (“IC”) products and provided sales and chip operations support to customers on a global basis.

On September 20, 2021, we were notified by Dialog, that it was recently acquired by Renesas Electronics Corporation and that it was terminating the Strategic Alliance Agreement, or the Alliance Agreement, between us and Dialog.

The Alliance Agreement allows for a transition and separation period which will conclude in or prior to September 2024.

During the wind down period, the Alliance Agreement’s terms will continue to apply to the Company’s products that are covered by certain existing customer relationships, except that the parties’ respective exclusivity rights have terminated.

As a result of the termination, we have been developing our own internal capabilities, as well as developing a network of contract manufacturers.

Our common stock is quoted on The Nasdaq Stock Market under the symbol “WATT”.

Our common stock is quoted on The Nasdaq Capital Market under the symbol “WATT”.

We were incorporated in Delaware in 2012.

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Our website can be accessed at www.energous.com.

The information contained on, or that may be obtained from our website, is not, and shall not be deemed to be, part of this Annual Report on Form 10-K.

The information contained on, or that may be obtained from our website, is not, and shall not be deemed to be, part of this Report.

Our Business Strategy

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We endeavor to:

Build multiple ICs to advance the technology;

Develop, license and manufacture a complete Transmitter solution to enable WPN growth;

Build multiple integrated circuits (“ICs”) to advance our technology;

Develop, license and manufacture a complete transmitter solution to enable wireless power network growth;

Develop reference designs to reduce early adopter risks, enable easier integration at lower costs and foster adoption;

Continue to build additional value by converging networking, power and data to provide smarter vertical solution in retail, industrial and healthcare through our WattUp PowerBridge products designed for powering next generation IoT.

First target applications include electronic shelf labels (ESLs) and RF tags;

Continue to build additional value by converging networking, power and data to provide smarter vertical solutions in the retail, industrial, healthcare and smart/home office markets through our WattUp PowerBridge products designed for powering next generation IoT.

First target applications include RF tags, ESLs and IoT sensors;

Partner with leading technology and systems companies;

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Develop and execute on a strategy to gain global regulatory approval for ubiquitous unlimited distance charging;

Support the AirFuel™ Alliance (AFA) that is expected to lead to a qualification process to ensure compatibility of our WattUp technology across vendors and develop a common user experience at the application level.

Support the AirFuel™ Alliance (AFA), which recently announced that AirFuel RF, the radio frequency-based wireless charging technology from AirFuel Alliance, is now an industry standard, underpinning the compatibility of our WattUp technology across vendors and develop a common user experience at the application level.

For our technology to become a ubiquitous solution for charging at-a-distance, we intend to pursue an ecosystem strategy for our technology, engaging not only potential customers for our transmitter, receiver and power amplifier IC’s but also their upstream and downstream value chain partners.

We intend to capitalize on our first-to-market advantage and prioritize protection of our intellectual property portfolio, as we believe this strategy will make it less likely that a competing platform will be able to gain a solid foothold in the RF-based wireless charging market and compete with our technology in a meaningful way.

To engage with potential customers of the WattUp IC’s, we offer the Developer Kits consisting of a transmitter and a receiver along with the enabling software to allow potential strategic partners to test the technology in their labs.

To engage with potential customers of the WattUp IC’s, we offer the Evaluation Kits consisting of a transmitter and a receiver along with the enabling software to allow potential strategic partners to test the technology in their labs.

The kits form a base “building block” component that is scalable to meet the needs of specific applications.

We are developing processes and support capabilities to assist potential customers as they evaluate the technology and develop specific designs to incorporate it.

To validate our technology, we originally sought out customers that were smaller, more nimble early adopters with relatively short product cycles and the ability to ship fully integrated WattUp enabled devices to the consumer as quickly as possible.

To validate our technology, we originally sought out customers that were smaller, more nimble early adopters with relatively short product cycles , with the aim of ship ping fully integrated WattUp enabled devices to the consumer as quickly as possible.

At the same time, we began to engage with larger, top tier customers with the ability to ship WattUp enabled consumer and IoT devices in mass quantities.

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Since we are developing a new electronics charging paradigm, we expect many operational details of our strategy to continue to evolve as our technology matures, engineering breakthroughs occur and new partner collaborations are formed.

Impact of COVID-19 on Our Business

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic.

The pandemic continues to affect the United States and the world.

We are monitoring the ongoing effects of COVID-19 (including continued outbreaks) and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on our operations, financial position, cash flows, inventory, supply chains, global regulatory approvals, purchasing trends, customer payments, and the industry in general, in addition to the impact on our employees.

The COVID-19 pandemic has delayed adoption of our technology by potential customers who have experienced workforce and supply chain disruptions, and who continue to evaluate their future prospects and business models, including partnerships with us.

Further delays in this or other products could result from the ongoing pandemic.

These changes are due in part to changes in how business is conducted as a result of the pandemic, including state executive orders, local shelter-in-place orders, government-imposed quarantines and work-from-home policies in China, the United States, and elsewhere around the world.

We have implemented moderated work-from-home policies for our employees that will likely be in place through the end of 2022 and possibly longer.

The effects of state executive orders, local shelter-in-place orders, government-imposed quarantines and our work-from-home policies could negatively impact productivity, disrupt our research and development or other operations, and delay the planned launch of our customers’ new products that incorporate our technology, the magnitude of which will depend, in part, on the length and severity of the continuing restrictions and other limitations on our ability to conduct our business in the ordinary course.

Several vaccines have been approved for use since the fourth quarter of 2020, with vaccination rates increasing over 2021 and through early 2022.

Several new variants of COVID-19 have emerged, and were reported by health authorities to be more transmissible than other earlier variants.

Vaccines approved to date have lower efficacy in combating the transmission of some of these new variants, though vaccines appear to protect against severe illness.

Due to the continuing developments and fluidity of this situation, the magnitude and duration of the pandemic and its impact on our operations and liquidity, mainly due to supply chain shortages, are still uncertain as of the date of this report.

Impact of Current Global Economic Conditions on Our Business

Uncertainty in the global economy presents significant risks to our business.

We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including as a result of inflation and rising interest rates, geopolitical factors, including the ongoing conflict between Russia and Ukraine and the responses thereto, supply chain disruptions and the remaining effects of the COVID-19 pandemic.

We are closely monitoring the impact of these factors on all aspects of our business, including their impact on our operations, financial position, cash flows, inventory, supply chains, global regulatory approvals, purchasing trends, customer payments, and the industry in general, in addition to the impact on our employees.

We believe that the COVID-19 pandemic delayed adoption of our technology by potential customers who have experienced workforce and supply chain disruptions, and who continue to evaluate their future prospects and business models, including partnerships with us.

Further delays in the adoption of our current or future products could result from the ongoing pandemic and other macroeconomic events.

At times, certain of our outsourcing partners, component suppliers and logistical service providers have experienced disruptions, resulting in supply shortages that have affected and may continue to affect our sales.

Similar disruptions could occur in the future.

Our Technology

The WattUp® technology enables wireless charging at contact as well as charging over the air, depending on application.

Our WattUp® technology enables wireless charging ranging from contact-based applications to at-a-distance applications, which charge over the air.

An award-winning, RF-based, scalable technology, WattUp transforms the way electronic devices are charged and powered.

WattUp® differs from older, rigid wireless charging systems because it supports charging in a variety of ways depending on the device and application.

Figure 1 below shows the current IC product line for Energous:

Our small form factor antennas and one transmitter to many receivers capabilities represent significant advantages over RF-beamforming transmitters, which are larger, and higher cost WPT implementations.

Our current generation ICs have significantly reduced the size and cost of both transmitter technology and our receiver technology, and products under development are designed to further reduce size and cost.

In addition, our ICs are designed for both lower-power and higher-power applications, efficiency and faster synchronization, while working within the constraints of multiple international regulatory environments.

In 2021 we began to leverage the growing ecosystem of investments made by a number of IoT leaders.

While participating at the CES 2022, we demonstrated the world’s first IoT Wireless power network connecting Juniper Mist WiFi Access Points to multiple WattUp PowerBridge transmitters at 1W and 5W.

In 2022 we continued to leverage the growing ecosystem of investments made by a number of IoT leaders.

While participating at the CES 2023, we demonstrated the world’s first smart football in partnership with Catapult.

We also demonstrated the world’s first battery-free CO2 sensor in partnership with Sensirion and a full battery-free sensor for lighting application targeting vertical farming in partnership with ams Osram.

We also upgraded our IoT Wireless power network connecting Juniper Mist WiFi Access Points to multiple WattUp PowerBridge transmitters at 1W and 5W.

We showed charging receiver device interoperability by simultaneously powering RF tags from Wiliot controlled by their Sensing as a Service Cloud Software, ESL tags using e-Peas devices, an IoT Device using Atmosic’s BLE chips, and network edge computing, driven by Syntiant’s Artificial Intelligence voice recognition technology all of which were managed by WattUp Software .

Figure 2 below shows the block diagram for our 1W WattUp PowerBridge Transmitter

In 2020, we released our WattUp PowerHub Developer Kit, which enables manufacturers to easily integrate charging-over-the-air technology into their products such as smart speakers, gaming consoles, access points and other devices to enable over-the-air charging of devices such as fitness bands, smartwatches, hearables, smart glasses, medical devices and more.

Figure 3 below shows the WattUp PowerHub

In 2016, we introduced our WattUp Near Field Transmitter Technology and a small form factor receiver, which were developed as a result of our efforts to reduce cost and size.

This contact-based charging solution, for which we have received FCC approval, allowed for low power charging at up to five millimeters.

In 2017, we announced a higher-power version of our WattUp Near Field Transmitter technology, with the ability to charge on contact at levels of up to 10 watts.

In February 2019, we announced that our latest WattUp Near Field High Power transmitter technology supports up to 20 watts of charging power.

Due to its low cost and small size, the miniature transmitter can be bundled in-box with WattUp-enabled receiver devices, replacing alternative charging solutions like power adapters and charging cables.

We expect adoption of our low cost, portable charging solution for receiver devices to continue to advance.

Our Competition

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To our knowledge, almost all consumer electronics equipped with a rechargeable battery come bundled with a charging method, such as a power cord.

Studies indicate that consumers prefer wire-free, or untethered, charging solutions such as our WattUp technology.

We believe the advantages of our WattUp technology including size, cost, mobility, foreign object detection and portability coupled with the unique

capability to charge devices both on contact as well as at-a-distance in a fully compatible ecosystem will foster broad adoption of the technology over time.

We believe the advantages of our WattUp technology including size, cost, mobility, foreign object detection and portability coupled with the unique capability to charge devices both on contact as well as at-a-distance in a fully compatible ecosystem will foster broad adoption of the technology over time.

A variety of wireless charging technologies are on the market or under development today.

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This technology uses coils that range in size depending on the power levels being transmitted.

It has the ability to transmit power at distances up to ~11 inches (30cm) which can be increased with the use of resonance repeaters It also has more flexibility of placement than Magnetic.

It has the ability to transmit power at distances up to ~11 inches (30cm) which can be increased with the use of resonance repeaters It also has more flexibility of placement than magnetic induction.

Energy Harvesting.

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Transmitters are devices that broadcast RF energy that can be accessed by WattUp-enabled receivers in consumer electronics.

We believe our transmitter technology will be developed and released in three basic categories:

We believe our transmitter target market can be divided into three distinct applications for our technology:

Stand-alone transmitters that are either sold independently or bundled as part of a pairing with WattUp-enabled receiver devices;

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Initially these transmitters will be one-to-one (one transmitter to one receiver), with future versions being single transmitters for multiple receivers.

WattUp Mid Field Transmitter

We expect that transmitters using our WattUp Mid Field technology, which we refer to as the WattUp PowerHub, will be geared to consumer desktop and industrial and medical markets and for charging at a range of a few centimeters to one meter.

We also intend for the WattUp PowerHub transmitters to have tracking ability to support mobile applications and multiple receiving devices.

WattUp PowerHub transmitters may include small transmitters designed to power industrial, medical, consumer electronics and IoT devices.

The same technology may also be integrated into third party devices such as smart speakers, computer monitors, nightstand consumer electronics, accessories such as low voltage portable battery chargers and integrated automotive applications, as well as additional industrial, medical, and public safety applications.

WattUp Far Field Transmitters:

Transmitters based on WattUp Far Field technology, which we refer to as the WattUp PowerBridge, are expected to provide low power charging for multiple devices with the capability of extending the range through the deployment of multiple WattUp PowerBridges.

We expect that WattUp PowerBridge transmitters will have the ability to broadcast wireless power creating a sphere of power within which WattUp enabled receiving devices can be charged.

WattUp PowerBridge transmitters may play a significant role in the charging low power IoT devices in fixed locations – such as electronic shelf labels, RF tags, security cameras and sensors.

We expect that WattUp PowerBridge transmitters will have the ability to broadcast wireless power to WattUp enabled receiving devices for charging.

WattUp PowerBridge transmitters may play a significant role in the charging of low power IoT devices– such as ESLs, RF tags, security cameras and IoT sensors.

Transmitters Integrated into Third Party Devices:

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Smart Home, Medical, Industrial, and other Sensors

Electronic shelf labels

Logistics and asset tracking tags and sensors

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We have implemented an aggressive intellectual property strategy and are continuing to pursue patent protection for new innovations.

As of March 10, 2022, the Energous IP portfolio contained over 200 issued patents organized along five (5) critical paths to implementation that we believe a competitor may have to navigate to commercialize WPT technology.

As of March 10, 2023, the Energous IP portfolio contained over 200 issued patents organized along five (5) critical paths to implementation that we believe a competitor may have to navigate to commercialize wireless power technology.

The paths are:

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Digital Transmission System for Bluetooth 2.4 GHz

In 2021, we announced completion of the regulatory process for our WattUp PowerBridge wireless charging technology in US, Canada, Europe and India, for unlimited distance wireless charging.

As of March 10, 2022, products integrating WattUp® technology had received international regulatory approvals in 112 countries.

RF Wireless Charger 918MHz

Digital Transmission System for Bluetooth/Zigbee 2.4 GHz

RF Wireless Charger 918MHz

Digital Transmission System for Bluetooth 2.4 GHz

As of December 31, 2022, we announced completion of the regulatory process for our WattUp PowerBridge wireless charging technology in US, Canada, Europe,India, China, UK, Korea, Australia and New Zealand, for unlimited distance wireless charging.

As of March 20, 2023, products integrating WattUp® technology had received international regulatory approvals over 110 countries.

Manufacturing

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Our management and employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.

The industrial markets for which we are involved have minimal seasonal impact.

The consumer markets for the commercial products that we anticipate our technology can be used in vary in their seasonal impact.

The industrial markets in which we are involved have minimal seasonal impact.

The consumer markets for the commercial products that we anticipate our technology can be used in, including the markets in which we currently have proof of concept deployments, vary in their seasonal impact.

Overall, we do not foresee a material seasonal impact to our revenue at this time.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business