Stock Based Compensation |
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
Note 6 – 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 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 2013 Equity Incentive 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).
Effective March 27, 2014, the aggregate total number of shares which may be issued under the 2013 Equity Incentive Plan was increased to 2,335,967.
Effective on May 19, 2016, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 2,150,000 shares, bringing the total number of approved shares to 4,485,967 under the 2013 Equity Incentive Plan.
As of March 31, 2017, 1,234,052 shares of common stock remain available 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.
Effective on May 19, 2016, the Company’s stockholders approved the amendment and restatement of the 2014 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 350,000 shares, bringing the total number of approved shares to 600,000 under the 2014 Non-Employee Equity Compensation Plan.
As of March 31, 2017, 301,055 shares of common stock remain available to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.
2015 Performance Share Unit Plan
On April 10, 2015, the Company’s board of directors approved the Energous Corporation 2015 Performance Share Unit Plan (the “Performance Share Plan”), under which 1,310,104 shares of common stock became available for issuance as PSUs to a select group of employees and directors, subject to approval by the stockholders. On May 21, 2015, the Company’s stockholders approved the Performance Share Plan.
As of March 31, 2017, 31,951 shares of common stock remain available to be issued through equity-based instruments under the Performance Share Unit Plan.
Employee Stock Purchase Plan
On April 10, 2015, the Company’s board of directors approved the ESPP, under which 600,000 shares of common stock have been reserved for purchase by the Company’s employees, subject to approval by the stockholders. On May 21, 2015, the Company’s stockholders approved the ESPP. Employees may designate an amount not less than 1% but not more than 10% of their annual compensation, but for not more than 7,500 shares during an offering period. An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of the option will be the lesser of 85% of the fair market of the common stock on the first business day of the offering period and 85% of the fair market value of the common stock on the applicable exercise date.
As of March 31, 2017, 468,621 shares of common stock remain available to be issued under the ESPP. As of March 31, 2017, employees have contributed $245,959 through payroll withholdings to the ESPP for the current eligibility period. Shares will be deemed delivered on June 30, 2017 for the current eligibility period.
Stock Option Award Activity
The following is a summary of the Company’s stock option activity during the three months ended March 31, 2017:
As of March 31, 2017, the unamortized value of options was $432,920. As of March 31, 2017, the unamortized portion will be expensed over a weighted average period of 0.6 years.
Restricted Stock Units (“RSUs”)
On February 23, 2017, the compensation committee of the board of directors (“Compensation Committee”) granted various directors RSUs under which the holders have the right to receive an aggregate 23,844 shares of the Company’s common stock. These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted vest fully on the first anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted John Gaulding, Director and Chairman of the Board, RSUs under the 2014 Non-Employee Equity Compensation Plan for which Mr. Gaulding has the right to receive 25,000 shares of the Company’s common stock. This award was issued to Mr. Gaulding in connection with his role as an independent director and chairman of the board of directors. The award granted vests fully on the first anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted employees inducement RSU awards under which the holders have the right to receive an aggregate 246,000 shares of the Company’s common stock. The awards vest over four years beginning on the anniversary of the employee hire dates.
On February 23, 2017, the Compensation Committee granted various employees RSU awards under the 2013 Equity Incentive Plan under which the holders have the right to receive an aggregate 136,300 shares of the Company’s common stock. The awards vest over four years beginning on the anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted various employees RSU awards under the 2013 Equity Incentive Plan under which the holders have the right to receive an aggregate 15,000 shares of the Company’s common stock. The awards vest 50% immediately, with the remaining 50% vesting on the anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted an employee an RSU award under the 2013 Equity Incentive Plan under which the holder has the right to receive an aggregate 20,000 shares of the Company’s common stock. The award vests 100% upon successful completion of a project which is expected to last no more than one year from the anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted Brian Sereda, Chief Financial Officer, two RSU awards under the 2013 Equity Incentive Plan. Under the first award, Mr. Sereda has the right to receive 5,000 shares of the Company’s common stock. The award vests 50% immediately, with the remaining 50% vesting on December 12, 2017. Under the second award, Mr. Sereda has the right to receive 30,000 shares of the Company’s common stock. The award vests over four years beginning on the anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted Neeraj Sahejpal, Senior Vice President of Product Marketing, two RSU awards under the 2013 Equity Incentive Plan. Under the first award, Mr. Sahejpal has the right to receive 7,500 shares of the Company’s common stock. The award vests 50% immediately, with the remaining 50% vesting on December 12, 2017. Under the second award, Mr. Sahejpal has the right to receive 30,000 shares of the Company’s common stock. The award vests over four years beginning on the anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted Michael Leabman, Chief Technology Officer, an RSU award under the 2013 Equity Incentive Plan under which Mr. Leabman has the right to receive 77,280 shares of the Company’s common stock. The award vests over four years beginning on the anniversary of the grant date.
On February 23, 2017, the Compensation Committee granted Cesar Johnston, Senior Vice President of Engineering, an RSU award under the 2013 Equity Incentive Plan under which Mr. Johnston has the right to receive 30,000 shares of the Company’s common stock. The award vests over four years beginning on the anniversary of the grant date.
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, 2017, the unamortized value of the RSUs was $27,239,595. The unamortized amount will be expensed over a weighted average period of 3.0 years. A summary of the activity related to RSUs for the three months ended March 31, 2017 is presented below:
Performance Share Units (“PSUs”)
Performance share units (“PSUs”) are grants that vest upon the achievement of certain performance goals. The goals are commonly related to the Company’s market capitalization or market share price of the common stock.
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.
The Company determined that the PSUs were equity awards with both market and service conditions. The Company utilized a Monte Carlo simulation to determine the fair value of the market condition, as described below. Grantees of PSUs are required to be employed through December 31, 2018 in order to earn the entire award, if and when vested. No PSUs were granted during the three months ended March 31, 2017.
The fair value of the grants of PSUs to purchase a total of 1,342,061 shares of common stock (including 1,278,153 PSUs granted under the 2015 Performance Share Unit Plan and 63,908 granted as an inducement) was determined to be approximately $3,218,000, and is amortized over the service period of May 21, 2015 through December 31, 2018, on a straight-line basis. On October 24, 2016, the Compensation Committee granted Mr. Rizzone a PSU award under the 2013 Equity Incentive Plan under which Mr. Rizzone has the right to receive 150,000 shares of the Company’s common stock. The shares of this award vest upon the Company’s stock price meeting specific targets. For the PSU award grant issued to Stephen Rizzone, Chief Executive Officer, a Monte Carlo simulation was used to determine the fair value at each of the five target prices of the Company’s common stock, using a market capitalization of $298,857,000, dividend yield of 0%, expected volatility of 75% and a risk-free interest rate of 0.66%. The fair value of the PSUs granted to Mr. Rizzone under the 2013 Equity Incentive Plan was determined to be $2,332,000, and is amortized over the estimated service period from October 24, 2016 through October 30, 2017. Amortization for all PSU awards was $613,860 and $214,465 for the three months ended March 31, 2017 and 2016, respectively. At March 31, 2017, the unamortized value of all PSUs was approximately $2,160,646. The unamortized amount will be expensed over a weighted average period of 1.4 years. A summary of the activity related to PSUs for the three months ended March 31, 2017 is presented below:
Deferred Stock Units (“DSUs”)
On January 4, 2016, the Compensation Committee granted to John Gaulding, Director and Chairman of the Board, DSUs under the 2014 Non-Employee Equity Compensation Plan for which Mr. Gaulding has the right to receive 14,953 shares of the Company’s common stock. These shares were issued to Mr. Gaulding in lieu of $125,000 of his anticipated compensation for his services on the board, including $75,000 worth of DSUs and $50,000 of his regular board stipends. The award granted vests fully on the first anniversary of the grant date. Amortization was $1,362 and $29,974 for the three months ended March 31, 2017 and 2016, respectively.
At March 31, 2017, the DSUs were fully amortized. A summary of the activity related to DSUs for the three months ended March 31, 2017 is presented below:
Employee Stock Purchase Plan (“ESPP”)
The current offering period began on January 1, 2017 and is scheduled to conclude on June 30, 2017. During the year ended December 31, 2016, there were two offering periods for the ESPP. The first offering period started on January 1, 2016 and concluded on June 30, 2016. The second offering period started on July 1, 2016 and concluded on December 31, 2016.
The weighted-average grant-date fair value of the purchase option for each designated share purchased under this plan was approximately $5.88 and $2.57 for the three months ended March 31, 2017 and 2016, respectively, which represents the fair value of the option, consisting of three main components: (i) the value of the discount on the enrollment date, (ii) the proportionate value of the call option for 85% of the stock and (iii) the proportionate value of the put option for 15% of the stock. The Company recognized compensation expense for the plan of $93,811 and $62,937 for the three months ended March 31, 2017 and 2016, respectively.
The Company estimated the fair value of options granted during the three months ended March 31, 2017 and 2016 using the Black-Scholes option pricing model. The fair values of stock options granted were estimated using the following assumptions:
Stock-Based Compensation Expense
The following tables summarize total stock-based compensation costs recognized for the three months ended March 31, 2017 and 2016:
The total amount of stock-based compensation was reflected within the statements of operations as:
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