A summary of what's in this article:
- Energous are doing their Q4 2018 earnings call from MWC 2 weeks later in February than usual
- They are likely to be running out of money by April without a further raise
- A $75m raise will not see them to profitability even under the marketing fantasies promoted
- Rumours of presence in the Galaxy S10 were false (shock) but boosted the stock price temporarily
- Adverts for the Delight PSAP are appearing, labelled 'Hearing Aid', violating FDA rules
- Specs indicate 20 to 50mW charging, probably at 2 to 5% efficiency max
- The PSAP might work for 10 hours after 4 hours charging, with 6 months of use
- Beaten in all specs by rechargeable hearing aids released in 2016
- The 20 Watt near field charging announced will IMO never be safe or meet FCC regulations, hence why it's shown in Europe
- The collaboration announced with vivo Global is "exploratory" and will IMO never amount to anything
- Such exploration with vG either violates the non-competes in the semi-mythical "Tier One" contract, that agreement has expired, or is not with a phone company as Energous often hint
My last coverage of Energous was during the Christmas/New Year week when they announced a "new product" that happened to be a rebadging of a previous release from 8 months prior. Now that aside, the key issue for Energous was that towards the end of Q3, they had just under $29m in the bank with $12.5m/quarter expenses, meaning they had 7 months operating capital, and that was 5 months ago... So with a capital raise essential, where does the company stand? It's been 5 months since the last quarterly earnings call (no, that doesn't add up) and since then they've done a rather flat CES, and then a mysterious "oh Energous will be in the Samsung S10" which pumped the shareprice a little. If any of you remember the same game with Apple over the last couple of years that never yielded a product, bonus points to you. Today saw a near 10% drop in the stock price as everyone realized they'd been had - again.
So with a desperate need for cash and no sales to speak of, what can Energous do? Cutting expenses will keep it going a little longer, but go too far and no-one believes you have a strong technological future. You have to have products and sales to justify a high share price. Just a reminder of what they said in the earnings call in February 2018.
We expect the first contact-based transmitters will be in the hands of the consumers in early 2018, followed by the first at-distance transmitters coming in late 2018, culminating in far-field transmitters coming to the market in 2019.
We're heads down focused on commercialization, and we believe that the $40 million is sufficient capital to get us to that point (profitability).
Yes, it's clear they were wrong in every single part of what they said there.
The main method that the company can use to raise is to issue more shares in the company (diluting existing shareholders) and sell to the market. The amount of dilution will depend on the raise, and the share price sold at, so it's in the company's interest to pump the stock as much as possible prior to a sale - I cover here a few of the tricks they do regarding that.
With $50m a year in expenses, the $75m sale they registered for last year will, at best, do them 18 months without further revenue - and there's no chance of significant revenue in that time without products. So, they have to give the idea that they will have significant product sales in 2018 and 2019 to support that, given the long-distance wireless charging is at least 18 months out (and IMO will never be released, it's pointless).
PSAP/Hearing Aids
Energous need to get products out there to keep the charade going, but also to release products will then allow them into the hands of the public who can actually test them and see how awful they really are. The company either has to admit delay again and risk the share price collapse, or release and definitively prove how little they have. One of the key products they've been hanging their hat on since the middle of last year has been hearing aids (or more precisely a PSAP - Personal Sound Amplification Product - since the term 'hearing aid' is controlled by the FDA and they cannot sell claiming it is such without approval). Amazingly, there's now some information on this, and there is at least a listing on Alibaba that gives a price of up to $600, a release date of March 2019, and specs:
So a few points here - first of which is they are literally labeling it a hearing aid! It's written on the base unit and the specs reference hearing loss, so hardly any way to avoid breaking regulatory limits if it's sold in the US.
Next, we finally have some data on charging - 3 to 4 hours charging for 15 hours of use, using a Li-Ion battery. Great, now Li-Ion batteries are at 3.6 volts (regulated down to the standard 1.4v for your regular zinc-air hearing aid batteries), and they can't yet be made in the small hearing aid packages, so more like a size 13 package. (Hearing aid batteries come in 4 sizes, size 13 is the 3rd largest). Data here indicates that it's around 42 mAh 'effective capacity', compared to around 310 mAh in a standard size 13 battery, barely 15%. Interestingly this site also indicates that there's around a 30% reduction in capacity after 6 months of daily charging. It's going to be annoying charging for 3 to 4 hours for 10 hours of use, and remember because these are Li-Ion they are sealed in the package for safety.
Most hearing aids draw around 2mA, so at about 70% efficiency that gives around 15 hours of use, matching the numbers above. Now convert that to Watts, and 1.4 volts and 42 mAh means around 60mWh, and at 3 hours to charge, that's about 20 mW charging. Ouch - even if I were generous and said 3.6 volts that's 150 mWh so 50 mW charging. If that's the standard charger that emits 1 Watt, it's around 2 to 5% efficiency. If that's the best Energous can do with their receiver chips, it's somewhat embarrassing even for them. Sad for a company that only a few years ago claimed it could send power to phones at over 12 feet and up to 4 Watts.
I'm also not sure how this product can be sold, in the US at least. Where's the FCC ID for the transmitter and receiver? A search of the FCC system shows no new IDs for those companies. Any regulatory approval for other countries?
Of course, they may be timing the 'release' of this product until after a share sale, and that miraculously it never makes it to market...
Now is this a revolutionary product that will delight users? Nope. Here's Signia's Cellion, with rechargable batteries, a docking station with inductive charging, and claims 50 mAh, 1500+ recharges, 7 hours of use on a 30 minute charge, 24+ hours of use on a full charge, and announced in 2016. (And, unlike PSAPS, these are hearing aids). So well done Energous, you fail to match every specification on a near 3 year old product.
Now is this a revolutionary product that will delight users? Nope. Here's Signia's Cellion, with rechargable batteries, a docking station with inductive charging, and claims 50 mAh, 1500+ recharges, 7 hours of use on a 30 minute charge, 24+ hours of use on a full charge, and announced in 2016. (And, unlike PSAPS, these are hearing aids). So well done Energous, you fail to match every specification on a near 3 year old product.
20 Watt Near Field Charging
Energous are at the Mobile World Congress and today apparently demonstrated their 20 Watt Near Field charging. Now I about fell off my chair when I read that - if you look at their 2018 near field approval, it shows 1 Watt transmitted and sitting at the SAR safety limit, while recommending no-one remain within 10 centimeters of the product in operation. And they go to 20 Watts? There's a reason they are showing in Europe, and it's because the FCC would have a fit it they did that. I'm surprised the European regulators aren't all over that (if anyone knows EU regulations on the ~900 MHz band, please contribute). The only way I could see this being safe is if they put it in a metal box and it only worked with the lid closed. The old joke about putting your iPhone in the microwave to charge it is one step closer to reality...
Think these guys aren't averse to putting an unshielded microwave out there? Here's Mark Hopgood, senior director of strategic marketing for power-chip manufacturer Dialog Semiconductor, who invested in and make the chips for Energous:
“We have some customers doing this. If you have proof there is nothing between the charger and the receiver, you can turn it up to something more like microwave oven levels.”
I need to go look up OSHA rules on RF exposure now.
Regardless, IMO this will never come to fruition as a product for consumers. It's not safe, and will never meet regulatory compliance. It's just another way to fool people without any in-depth understanding of the technology. Is this why they delayed the earnings call, so they could show off something that will never meet FCC compliance in another country? Anything to push that stock price up.
A Phone Company!
Finally, Energous announce they'll be in a phone.
Energous Corporation the developer of WattUp, a revolutionary wireless charging 2.0 technology, today announced a collaboration with vivo Global, a leading Chinese technology company, to explore integrating WattUp into smartphone designs that charge wirelessly over-the-air.
“We are excited to announce a collaboration with vivo, a top 6 global smartphone manufacturer, to explore the use of our WattUp wireless charging 2.0 technology,” said Stephen R. Rizzone
Well, no. They announce a "collaboration" with vivo Global, to "explore the use of WattUp", so basically nothing. One of my earliest articles on Energous was how they use carefully worded announcements to let the reader make inferences that aren't in fact there. Like everything Energous, it will utterly fail to meet the expectations set, other than to boost the stock price temporarily.
Further, don't Energous often make reference to a "Tier One" vendor contract (often intimating that it's Apple) that have restrictions on who they can work with? If so, then the Tier One agreement is no longer in place, or the Tier One isn't a phone company. Either way, not good for Energous!
Earnings Call
The Q4 2018 earnings call will be this Wednesday 27th, in the morning US time (5.30am Pacific) as the executive team is at MWC. I'm looking forward to how they spin all this, I'm always amazed by the true genius (and shamelessness) of Energous in how they keep this thing going. It has to end one day, but they seem to be able to get blood out of a stone better than anyone.
(Repeating the seemingly obligatory statement - I have no financial position, short or long, in Energous or any related company. Nor have I ever had any such positions.)
