Energous Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

Stock Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 5 – Stock Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

In December 2013 the Company’s board and stockholders approved the “2013 Equity Incentive Plan”, providing for the issuance of equity based instruments covering up to an initial total of 1,042,167 shares of common stock. Effective on March 27, 2014, the aggregate total shares which may be issued under the 2013 Equity Incentive Plan were increased to 2,335,967, as described below.

Effective on March 10, 2014, the Company’s board of directors and stockholders approved the First Amendment to the 2013 Equity Incentive Plan which provided for an increase in the aggregate number of shares of common stock that may be issued pursuant to the Plan to equal 18% of the total number of shares of common stock outstanding immediately following the completion of the IPO (assuming for this purpose the issuance of all shares issuable under the Company’s equity plans, the conversion into common stock of all outstanding securities that are convertible by their terms into common stock and the exercise of all options and warrants exercisable for shares of common stock and including shares and warrants issued to the underwriters for such IPO upon exercise of its over-allotment options).

As of March 31, 2015, 244,135 shares of common stock remain eligible to be issued through equity based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

On March 6, 2014, the Company’s board of directors and stockholders approved the 2014 Non-Employee Equity Compensation Plan for the issuance of equity based instruments covering up to 250,000 shares of common stock to directors and other non-employees.

As of March 31, 2015, 188,537 shares of common stock remains eligible to be issued through equity based instruments under the 2014 Non-Employee Equity Compensation Plan.

Stock Option Award Activity

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2015:

							Weighted
			Weighted		Weighted		Average
			Average		Average		Remaining
	Number of		Exercise		Grant Date		Life In		Intrinsic
	Options		Price		Fair Value		Years		Value
Outstanding at January 1, 2015		1,607,075	$	4.41	$	2.47		9.0	$	-
Granted		-		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-		-
Outstanding at March 31, 2015		1,607,075	$	4.41	$	2.47		8.9	$	8,089,568

Exercisable at January 1, 2015		550,298	$	4.33	$	2.41		9.1	$	-
Vested		103,787		4.61		-		-		-
Exercised		-		-		-		-		-
Forfeited		-		-		-		-		-
Exercisable at March 31, 2015		654,085	$	4.37	$	2.44		8.9	$	3,314,780

The following table presents information related to stock options outstanding and exercisable at March 31, 2015:

Options Outstanding				Options Exercisable
Exercise Price		Outstanding Number of Options		Weighted Average Remaining Life In Years		Exercisable Number of Options

$	1.68		275,689		8.7		103,383
	2.49		326,754		8.8		129,777
	3.63		51,958		8.9		51,958
	4.99		99,214		9.0		39,063
	6.00		853,460		9.0		329,904
			1,607,075		8.9		654,085

As of March 31, 2015, the unamortized value of options held by employees was $2,356,330. As of March 31, 2015, the unamortized portion will be expensed over a weighted average period of 2.48 years.

Restricted Stock Units (“RSUs”)

On August 14, 2014, the compensation committee of the board of directors granted two inducement RSU awards to Cesar Johnston, the Company’s Senior Vice President of Engineering. Under the first award, Mr. Johnston has the right to receive 100,000 shares of the Company’s common stock and this award vests over four years beginning on the first anniversary of his employment start date of July 14, 2014. In addition, Mr. Johnston was granted 20,000 performance based RSU awards. On February 26, 2015, the compensation committee of the board of directors determined that Mr. Johnston had successfully met all conditions provided for in the performance based RSU award. The RSU’s had an aggregate grant date fair value of $1,356,000 based upon the fair value of the Company’s common stock on the date of grant. The awards granted vest over four years beginning on the first anniversary of the employee’s date of hire. Pursuant to the terms of the awards, the unvested shares terminate upon separation from the Company.

On January 2, 2015, the compensation committee of the board of directors granted to various directors, RSUs under which the holders have the right to receive 17,576 shares of the Company’s common stock. The awards granted vest fully on the first anniversary of the grant date.

On January 22, 2015, the compensation committee of the board of directors granted to various employees and consultants, RSUs under which the holders have the right to receive 54,500 shares of the Company’s common stock. The awards granted were vested on the date of grant.

On February 26, 2015, the compensation committee of the board of directors granted to two employees RSUs under which the holders have the right to receive 6,800 shares of the Company’s common stock. The awards granted were vested on the date of grant.

On February 26, 2015, the compensation committee of the board of directors granted to Mr. Rizzone, the Company’s Chief Executive Officer, RSUs under which Mr. Rizzone has the right to receive 246,226 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of grant.

On February 26, 2015, the compensation committee of the board of directors granted to a member of the advisory board RSUs under which the holder has the right to receive 5,071 shares. The award vests 12.5% on March 31, 2015 and then an additional 12.5% on each three month anniversary thereafter until fully vested.

The Company accounts for RSUs granted to consultants using the accounting guidance included in ASC 505-50 “Equity-Based Payments to Non-Employees” (“ASC 505-50”). In accordance with ASC 505-50, the Company estimates the fair value of the unvested portion of the RSU award each reporting period using the closing price of the Company’s common stock.

At March 31, 2015, the unamortized value of the RSUs was $8,223,004. The unamortized amount will be expensed over a weighted average period of 3.44 years. A summary of the activity related to RSUs for the three months ended March 31, 2015 is presented below:

	Total	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015	733,628	$	10.49
RSUs granted	330,173	$	9.89
RSUs forfeited	(58,522)	$	8.66
Shares of common stock issued in exchange for RSUs	(42,470)	$	12.08
Outstanding at March 31, 2015	962,809	$	10.33

Vested at January 1, 2015	6,349	$	9.94
RSUs vested	130,772	$	11.15
RSUs forfeited	-	$	-
Shares of common stock issued in exchange for RSUs	(42,470)	$	12.08
Vested at March 31, 2015	94,651	$	10.65

Stock-Based Compensation Expense

The following tables summarize total stock-based compensation costs recognized for the three months ended March 31, 2015 and 2014:

	Three Months Ended March 31,
	2015		2014
Stock options	$	259,515	$	431,095
RSUs		1,333,875		-
IR warrants		85,831		61,028
Total	$	1,679,221	$	492,123

The total amount of stock-based compensation was reflected within the statements of operations as:

	Three Months Ended March 31,
	2015		2014
Research and development	$	1,034,318	$	143,767
General and administrative		443,647		337,382
Sales and marketing		201,256		10,974
Total	$	1,679,221	$	492,123

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details