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Energous and FCC Approval for Mid Range Device - What Does It Mean?

Six months ago wireless power company Energous claimed they'd have FCC approval for their at-distance charging, and I was highly skepti...

Saturday, May 12, 2018

More Energous Updates - Now trickle charging, 10Q shows a 9 month runway, FCC Chair promotion

A few brief Energous updates. There was a new article from Rhodri Marsden covering the technology area, and it was reasonably skeptical. The most interesting part for me was this quote from the Energous CEO:

Steve Rizzone, chief executive of Energous, responds by alluding to the lifestyle change mentioned by Bladen of Chargifi. “Mobile distance charging will not, for the foreseeable future, have charging power comparable to a wall socket,” he says. “But if you are continually topping off your mobile devices, you do not need to enable the same amount of power because charging happens continuously.”

So main points from here are 1) an admission they will not hit the multi-Watt charging rates and 2) that they are moving their public position to the "trickle charge" model where you don't charge the phone up, just try to halt or slow down the rate of battery decline. That's a pretty significant admission from a $500m market cap company - that everything they built the company on won't be happening "for the foreseeable future". A rational market would have seen a major price decline for their shares but for WATT, nothing. It's another indication this company's value is irrational - though that's not to say there won't be a lot of ups and downs, and money to be made and lost, before it finally hits zero.

Taking a look at the trickle charging claim - the FCC Part 18 data shows that maximum charge rate for a phone is around 100 mW at 50 cm from the transmitter, down to 30 mW at 90 cm. Ignoring RF to DC conversion loss, if you held your phone at exactly 50 cm away, square on to the transmitter, and didn't move it, you would extend the battery life from about 10 hours to 12 hours. At 90 centimeters you may add around 30 minutes if you are lucky. Don't hold it with your hand at the back of the phone though, or at an angle, you'll lose charging. This is me being nice to them with the numbers, realistically it makes no noticeable difference at all. Alternatively you could plug it in or place on a Qi charge pad and get back to 100% in an hour or so.

10Q
On the finances front, the 10Q was out for Energous, and it's not looking pretty for them. They had about $45m in the bank as of the end of March this year, with about $13.5m in per-quarter run rate. If that holds, they're out of cash in January, and by their own admission there are no significant products or revenue in that timeframe. Let's see how they either cut their expenses or persuade people to buy a few more tens of millions of dollars "worth" of stock.

Ajit Pai - Again
Once again the Chairman of the FCC, Ajit Pai, promoted Energous using the official FCC account. A reminder to everyone, this is a disgusting abuse of a public position for the private gain of his personal friends, and that's what we know about.
I took a little time to browse through Ajit Pai's Twitter feed and didn't see any other companies that got the benefit of his promotion.Did I miss any? I wonder what makes them so special to warrant this attention?

Tuesday, May 8, 2018

Webinar on Ultrasound in Public Places

For those who may be interested, the Acoustical Society of America will host a webinar on "Ultrasound and High Frequency Sound in Air in Public and Work Places: Applications‚ Devices and Effects" tomorrow, Wed May 9th 2018, 11:25 to 11:45am Pacific Time. If interested, the link to register is:


I have no participation in this, just listing as a PSA.

Monday, May 7, 2018

Theranos Updates - Loan defaults, layoffs, bankruptcy, and mega-rich families burning half a billion dollars.

Last month Theranos were back in the news, barely a few weeks after being admonished by the SEC for using lies and exaggeration to raise over $700 million from investors, this time for the CEO to announce that they were running out of cash and would likely have to close by the end of July. Approximately 100 employees will be let go in early June, leaving less than 25 who will most likely oversee a winding down of the company.

Theranos received a funding round last December, with a $100 million loan from Fortress Investment Group, which had many had been shocked to hear given the widespread knowledge of the company's difficulties. In my December article I pointed out things likely weren't as they seemed at first, and this was simply a predatory loan made in the knowledge that Theranos would in fact default, and that the lender would then take ownership of the company assets at firesale prices.

"So Fortress have arranged a deal where they don't have to put the full amount in up-front, but are still ahead of any other investor, get to own the only valuable part of the company if it goes wrong (the IP), and get discounted stock in the company if it, through some miracle, succeeds. With the right milestones and triggers, this could be a deal where Fortress win no matter what happens, and may actually come out better should Theranos fail. I wonder if Fortress have essentially arranged a deal to make sure that all the good parts are gone by the time everyone else reaches the bankruptcy auction.

Why would Theranos take such a deal? Well, because they have to choice - it's this or bankruptcy."

Well I'm feeling pretty smug right now, as that's exactly what looks to have happened. According to a letter Holmes wrote to shareholders (included at the bottom of this post, from Buzzfeed), despite having received $65 million from Fortress in December, they're about to miss a deadline for FDA approval on a device which will result in them not receiving the next tranche of $10 million. Most significantly though, should Theranos' bank balance drop below $3 million, they are in default of the terms of the Fortress loan, and the company predicts that will happen in July. According to Holmes:

Fortress would be entitled to control a foreclosure sale and/or monetization of the assets and to realize up to a three-times return on its investment (including, in addition to the amounts loaned by Fortress, the costs associated with Fortress’ monetization of the company’s assets). 

So Fortress get three times what they loaned, including whatever legal costs they have in extracting this money. A factor of three on the loan plus costs means they won't just get most of the company, they'll get all of it.

That $65 million gets Fortress around 1,175 patents (granted and applications) in the biotech space. They can sell them, licence them out, or use them to sue other successful biotech companies for payment. Given some large patent infringement payouts can result in 9 figure cheques, a single win like that will result in a great payday for Fortress.

It may not have even cost Fortress $65 million. I do wonder if they invested saying something like "This money cannot be used for legal expenses. It must be kept separate from all other cash and used only for salaries, facilities, and equipment." Knowing that Theranos had legal troubles they may have wanted to ensure the cash was not spent on that, and then set a stipulation that if the "other cash" account dropped below $3 million, the company essentially became theirs - regardless of how much of the investment was left. $65 million gone in basically 6 months, for a company of 125 people, is a monster burn rate. Even at a fully burdened cost of $400,000 per employee that's 'only' $25 million spent in 6 months. Facilities etc can be expensive, but not $40 million worth. In that case, Fortress would be owed $195 million (3*$65m), take the ~$40 million out the bank account that remains, then start picking the best $155 million of assets left (pretty much everything else) - making the cost of the whole company $25 million. Or maybe I'm just thinking too hard and Fortress didn't care, and just let them burn through it all with legal fees, thinking $65m was still a bargain.

Regardless, barring a miracle, Theranos are headed for default on their loan, and will end up being fully owned by Fortress. TheCEO amusingly asks for further investment to stave this off, but with the SEC judgement, and a skeleton staff, it's not going to happen. It will be interesting to see how Elizabeth Holmes does without the company to pay bills for her, such as for bodyguards, and with a likely criminal lawsuit coming. 

An Idiot and Their Money are Soon Parted
So who are the investors that Fortress jumped ahead of in their deal? Who put in the $700 million that got the company to this point? The Wall Street Journal recently published a list of major investors in Theranos, and it's now clear that the company was funded mostly by individual family investment vehicles, not traditional VC. Key investors were:
  • Walton Family $150 million
  • Rupert Murdoch $125 million
  • DeVos Family $100 million
  • Cox Family $100 million

So nearly half-a-billion dollars from four family investment groups, and they will probably see nothing back. (Murdoch already got out for a grand total of $4 million, a 97% loss). Pretty stunning, that. Now I'm going to bet on how much due diligence these companies did before investing, and I'm going with a number near zero. It was widely reported in March that when Theranos claimed revenues of over $100 million to investors, no audited accounts were provided, and investors failed to call a single supposed customer - and the actual revenue was $100,000. That's pretty basic due diligence that even the technically illiterate can understand. Think about the scrutiny you get when you go to the bank for a loan, and then realize that for $475 million no-one even picked up a phone and asked for a reference or a bank statement.

As for technical due diligence, they could have found a few well qualified scientists and executives in this area, and paid them a few thousand dollars each for technical and business evaluations. Total cost, less than 1% of the investment, but nope they couldn't do that either.

I've got no sympathy for them, they deserved to lose that money through their own carelessness - it's just frustrating that there are so many genuinely great companies out there that could work wonders on just a few million. That ~$500 million could have funded >100 hardware startups to a prototype/proof point, and made some genuinely useful advances - but the people that run those types of companies don't lie like Holmes, or exaggerate their technology, just to get a cheque signed (or, as in Holmes case, have well connected parents).

One bright side for Silicon Valley VCs, they can now say "See, wasn't us!", they really weren't the ones funding most of this decade's biggest fraud.

We'll definitely be hearing more about Theranos in the coming months, with the June layoffs, the July default, the inevitable bankruptcy and the possible criminal charges, but next up is John Carreyrou's book "Bad Blood". He's the WSJ journalist who broke the Theranos story, and his book is a history of the company, and will be out in two weeks (May 21st). My copy is on order, and looking forward to it. I fully expect a tale of insanity, greed, selfishness, and stupidity, and I'll review it as soon as I read it.







Holmes' Letter to Theranos Shareholders

April 10, 2018

Dear Theranos Stockholders,

We last wrote on December 22, 2017, shortly after closing a secured debt financing transaction with Fortress Investment Group. We said that the transaction provided us runway to continue work on the miniLab and to position the company for additional financing events—but acknowledged the narrow path forward.

Unfortunately, we are behind schedule on our first product milestone under the Fortress loan, and as a result will soon face a cash shortage. Below we detail our situation, apprise you of our options, and ask for your help as we continue to work to realize value for your investments. As we describe below, we are evaluating parallel paths, including potential investment terms that would provide a large stake in the company at what we believe to be a favorable price.
*****
The Fortress financing, which closed on December 11, 2017, provided Theranos with up to $100 million of liquidity, subject to product and operational milestones. The first funding tranche of $65 million gross was released at closing. The release of a second tranche of $10 million gross was contingent upon FDA approval or CE marking of the Zika assay for use on the miniLab. Achieving that milestone within the first half of 2018 was crucial to our business plan.

Development of the Zika assay has taken longer than anticipated. While the miniLab hardware and software have progressed steadily since we last wrote, we continue to face issues with the reliability of the Zika assay chemistry itself. As a result, timing for finalization of our FDA submission remains uncertain. We have raised with Fortress the possibility of releasing the second tranche of funding despite the lack of regulatory approval, but its willingness to do so is not assured and we understand that in any event it will likely depend on our securing additional commitments from our existing investors.

These developments leave the company in a difficult situation. Taking into account the substantial cost-cutting measures we are implementing today, including the reduction in force described below, our best current projections indicate that—absent further funding—our cash reserves will by the end of July fall below the $3 million minimum liquidity threshold required by the Fortress loan. Under the terms of our credit agreement with Fortress, our failure to maintain this minimum liquidity would constitute an event of default. Such an event of default, or other events of default that may accompany the company’s decreased liquidity, could precipitate an exercise of remedies by Fortress, including Fortress’ taking full control of our assets to satisfy the company’s obligations to Fortress. We expect that path would negatively impact the amounts, if any, available for distribution to our stockholders.

To avoid or delay a default under our credit agreement, we intend to take every step we can to preserve our remaining capital. Accordingly, today we provided notice, consistent with the WARN Act and other applicable law, to all but a small group of employees that their jobs will terminate in 60 days, on June 11, 2018. Difficult though that action is, we estimate that the associated cost savings will help conserve capital sufficient to fund our operations through approximately the end of July, without default under our credit agreement. After June 11, our remaining staff will consist primarily of financial, legal and administrative personnel alongside a core technical team, who will dedicate their efforts toward generating the maximum near-term return achievable for our stakeholders, likely through a sale of the company or its assets.

The most viable option that we have identified to forestall a near-term sale or a potential default under our credit agreement is further investment by one or more of you. In light of where we are, this is no easy ask. However, given your support of the company over the years, we wanted to provide this opportunity before we proceed too far down the current path.

Of course, even with new capital, the future of the company would remain highly uncertain. Nevertheless, additional investment may come with some meaningful benefits. A further investment could help protect your current one by providing the company time to continue developing the miniLab and/or to monetize its patent portfolio (subject to the terms and conditions of the Fortress loan). Further investment could also help us to avoid a sale for an uncertain amount—including a foreclosure sale following a liquidity-based default under the Fortress loan. Any such sale could significantly diminish the net realizable value of our assets. Moreover, in certain scenarios, Fortress would be entitled to control a foreclosure sale and/or monetization of the assets and to realize up to a three-times return on its investment (including, in addition to the amounts loaned by Fortress, the costs associated with Fortress’ monetization of the company’s assets). As a result, those scenarios would significantly reduce or eliminate any prospect of distributions to the company’s shareholders.

Our patent portfolio—which provided substantial support for the Fortress financing—contains more than 1,175 granted or pending patents worldwide. We believe our patents cover broad and important technologies, including: (i) the core technologies in the miniLab; (ii) technologies underlying point-of-care devices currently on the market and generating sizable revenue; and (iii) still-emerging technologies, such as an ingestible digital sensor that recently received regulatory approval for use in monitoring medication compliance. We also believe these patents have the potential not only to eventually protect the miniLab, should it receive FDA regulatory approvals, on the market, but also to support a licensing campaign that could generate significant additional revenues.

We have real progress to build on. Having rebuilt our quality system and implemented process-oriented safeguards for development and manufacturing, late last year we were granted a California Manufacturer’s License following an audit of our manufacturing facilities. Last month, representatives of a third-party notified body conducted an audit of our Quality System; we understand that the auditors will recommend issuance of the ISO 13485:2016 and MDSAP (Medical Device Single Audit Program) certification for the Theranos Quality System. We have also engaged a financial auditor, which expects to complete work on an audit of our 2017 financials by the end of June.

We recognize that the vision of distributed laboratory testing is what inspired many of you to invest, and we strongly believe that continuing our work toward that end could increase the near-term value of the company, and could provide the basis for building significant long-term value.

Although not yet set, the investment terms we are considering would provide a large stake in the company at a favorable price, in light of what we estimate is the intrinsic value of the company’s assets. We expect that new investment would take the form of a senior class of preferred stock, which would also feature substantial governance rights, allowing participating investors a significant role in steering the company forward.

Please note that if we offer new equity securities at a price per share less than the applicable conversion price of our existing series of preferred stock, the resulting anti-dilution adjustments could cause significant dilution to our existing stockholders. Such an offering would likely require the consent of the holders of a majority of our existing Series C-1B and Series C-2A Preferred Stock. The interests of these stockholders, who are senior to all other classes and series of stock with respect to payment upon a liquidation or deemed liquidation of the company, may differ from holders of other classes or series of our stock. Holders of Series C-1B and Series C-2A Preferred Stock should also be aware that their failure to participate in a financing having a purchase price of less than $5 per share would result in mandatory conversion of their shares into nonvoting Series C-1B* or Series C-2A* Preferred Stock.

Subject to our compliance with the preemptive rights of certain investors, we will offer this opportunity to all stockholders who are accredited investors within the meaning of Rule 501(a) under the Exchange Act of 1933, as amended. For any accredited investor who is interested in exploring it, we can provide a term sheet and are available to meet at any time. Irrespective of your future investment intent, we value your engagement as stockholders and welcome your questions and comments.
*****
This letter and its contents are confidential. We request that you not share or discuss this letter with others, except your attorneys, accountants and other advisors bound by confidentiality obligations. The unauthorized disclosure of this letter could violate the terms of agreements between you and the company, and could additionally depress the amount realizable upon a sale of our assets. This letter shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of our securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction or a valid exemption therefrom. Any offering that we conduct will be made only to accredited investors and only pursuant to definitive offering documents, including a disclosure package.

Thank you again for your support.

THERANOS, INC.
Elizabeth Holmes
Chairman and CEO

Saturday, May 5, 2018

Energous Updates

A few updates on Energous happenings from the last week or so. First up, Chris Brown of Aristides Capital gave a presentation at a conference, "Kase Learning: The Art, Pain and Opportunity of Short Selling". It is the best presentation covering everything that is wrong about Energous I have seen, and neatly summarizes a bunch of what I have been saying in this blog, in a way a lay person can understand. According to their SeekingAlpha page, Aristides Capital manage about $83 million in investments. Here are the "Take Home Messages" from this 34 page work of art:

"The people who do publicity and media relations for Energous have done an utterly brilliant job selling vaporware. Congratulations, Ajit Pai and others.

The “advance” upon which Energous was founded, “the pocket of RF energy,” is a fabrication, a “dazzle them with BS” way of saying “constructive interference,” and doesn’t solve any issues. The reasons we don’t transmit large amounts of RF through the air for power—safety limitations, equipment cost and size, and poor efficiency—are the same as they have been for decades.

Energous is a fraud, one which is burning a lot of cash and will run out of money. The company has no chance of making a commercially successful product. We expect the stock will go to $0."

A link to the full presentation is here.

I added the bold above as I'm glad to see more people covering the what I said in my second post on this blog, over two years ago: "In theory, it can be done in limited cases, but in practice cost and efficiency issues will likely render it impractical." 

So many of the individual pages of this presentation cover topics I have often spent hundreds of words to try to get across in posts, so it's a lesson for me in how to be succinct and effective in this area. I won't repeat them all but a few memorable quotes:

Energous Corporation: a worthless equity hyped to $500 million

CEO who lies bigly and often

#FAKENEWS – false & unskeptical media coverage

If you tell the same big lie often enough, many people will believe it

and my personal favorite as an engineer:

Very small numbers add together to make other very small numbers

CNBC covered this and asked the company for a response:

"Energous did not immediately respond to a request for comment."

Download the presentation and read it for yourself, I'm not doing it justice here.

Speaking of "Unskeptical Media Coverage"
There was also a new wireless power article "When will your phone charge wirelessly in your pocket? We asked an expert" on Digital Trends. It focused on Energous and Ossia, with a brief mention of Powercast, so was aimed squarely at the RF at-distance wireless charging market. I was interested to see the analysis from independent experts and a balanced and reasonable piece on the practical issues surrounding this tech. You're going to be amazed by who the experts are:
  • Hatam Zeine - Founder and CTO of Ossia
  • Gordon Bell - VP Marketing of Energous
  • Mark Hopgood - Snr Director Marketing/Strategy at Dialog Semiconductor (Energous Partner/Investor)
aaaaaand that's it. Every single person interviewed has a financial incentive to promote this technology, they are completely biased. Not even a token attempt here to speak to a university professor of electrical engineering, or get a counter viewpoint. Spend a few minutes Googling Energous and you'll find plenty of stories out there on the less savory side of at least Energous. Of course I'm pretty biased since I'm one of those drawing attention to that. Is this a puff piece that's essentially PR for the companies, or is it actually an attempt to inform the reader? If the former, it achieved that goal splendidly, if it's the latter then it's a major fail.

Now I've been harsh on tech journalists covering this topic in the past, and while it's not the ass-kiss fest that David Pogue exemplifies, or the embarrassingly weak coverage from Tom's Guide where they got the wool pulled over their eyes on what they were showing,  this is still another company PR piece masquerading as tech journalism. I'm not sure the author even realizes he's being used by these companies to whitewash their PR and give it a veneer of authenticity.

I was about to take apart the rest of the article, but in the end realized it's just more of the same of what I've written on other journalists. Instead I'll just make this one point - whenever I talk to journalists about Energous, I'm either asked if I have a financial interest or conflict of interest. When I post online I always get someone replying that I'm just a short-seller looking to make money, or am upset I'm losing money shorting the stock despite my repeated statements that I have no position on the company - I even had someone who owns a wireless power company demand that I declare my financial interests because I was, unlike him, clearly biased. Why do I get more scrutiny about my motivations than someone who is doing it for the money? Only answer I can think of - when someone isn't doing something for money, it confuses people. The idea that you're doing it simply "because it's the right thing to do" is utterly alien and therefore suspicious.

Energous' Financials
It was also time for Energous' quarterly financial results, and once again there were no surprises here - it's still a ~$500m company with $25,000 in quarterly services revenue and no sales. With cash in the bank and the current burn rate, they have 9, at best 12, months of operation left before further fundraising is needed. All talk of product delivery and profitability was once again pushed out into the future, as seems to happen every time. By their own admission, they can't get to revenue before they run out of money, let alone to enough sales to break even. No mention of Myant dropping WattUp from their Skiin product, you'd think given the big deal they made of that product announcement a few months ago that it would be important for investors to be told about that. A transcript of the earnings call can be found here. Oh, and they're also awarding themselves millions of dollars in equity because they're doing such a fantastic job.

Monday, April 9, 2018

Energous FCC Approval Shows Weakness of WattUp Technology

More Energous news today with the announcement of another FCC approval, this time the "unlimited power" Part 18 approval for their Near-Field, contact only, system. You may remember this from May last year when it was approved under Part 18 at 5.8 GHz for 1 Watt transmitted output, but this time approved at 900 MHz at a staggering new 1 Watt transmitted output. Accounting for conversion efficiencies, that might be enough to charge your phone in 10 to 20 hours! Apparently this is momentous news and so WATT shares leapt 25% in after hours trading, because... well for no reason other than this is a volatile stock that trades on hope and greed, not an actual product or profits.

Why was this approval needed? Well, Energous had been advertising the WattUp family, that what charges with the Near-Field device will also work with their upcoming Mid- and Far-Field systems. Unfortunately, they learned in summer 2017 that the FCC would not allow the Mid-Field system to pass Part 18 at 5.8 GHz, and so they scrambled to change it and go with ~900 MHz, the only other frequency band realistically open to them. It got them the approval, for a pitiful amount of power (30 to 100 mW) at a small distance (0.5 to 0.9 meters) and a safety cutoff below 0.5 meters, but broke the promised compatibility with the contact version - the frequencies were just different. 

Now, this new approval allows them to market the compatibility, and it will be quite a campaign, I can just imagine it: 

"Charge your phone on a pad in around a day, and then charge at a distance in ten times as long! (Warning, charging only valid at 0.5 to 0.9 meters, safety cutoff closer than 0.5 meters)".


If you want to look at the data for yourself, look here, then search for Energous under the Applicant Name, and look up the product 2ADNG-NF230 at 918 MHz. You can see that transmitted power is limited to 29 dBm (basically, just under 1 Watt), and they likely have some antenna gain to pretend it's closer to 3 Watts. While there are two antenna to try and ensure the device charges at any angle, only one is active at any time.


Like the Mid-Field system approved at Christmas, the Specific Absorption Rate (SAR, a safety limit) seems to be what stops them, and is around 0.864 W/kg. While the limit is 1.6 W/kg, with safety margins it is hard to go much higher. Basically, this is as much power as they are ever going to put out. Further, unlike the Mid-Field, the CEO cannot pretend that the charge rate can be increased by altering the safety zone - there is none. This is as good as it gets. (Yes, Unlimited Power Part 18 does mean "around 1 Watt max").

For comparison, the Qi standard is around 5 Watts, with a high power version at 15 Watts - Qi is the resonant inductive method you're most likely to have seen, and that Apple has essentially chosen for AirPower. USB cables charge at anywhere from around 5 Watts to 100 Watts (though practically most today are around 10 Watts).

So at less than 1 Watt it's easy to see why Myant dropped Energous from their product. It would likely be ~10x slower than the cheaper, simpler cable they look to be providing instead. As a partner of Energous, Myant would have known this was coming, but still dropped it from the lineup. If "waiting for compatibility with long range charging" was the excuse, then that's gone, as both Near and Mid versions are at ~900 MHz now. Myant could put in the 900 MHz contact charging into their product now, and switch to the at-distance chargers later. If a key partner isn't taking advantage of this feature, IMO that's a major warning flag that something is rotten in the WattUp portfolio.

As with the Mid-Field FCC approval documents, this data shows how impractical the WattUp charging technology is, and how it can't be scaled up from here. This won't stop the Energous fans from claiming another victory, that the stock price boost is a sign of impending greatness, however it's just another well timed news dump of practical insignificance that will goose the stock for a few days. Just one of the occasional bounces you can expect to see on the way down and enabling some to make a profit from the volatility, not the value. I continue to admire Energous for their ability to boost the stock price and keep the game going longer. I wonder when we'll be seeing the next set of insider stock sales...

So is this overnight addition of $100 million to the market cap indicative of great things to come? I'll leave you with this, another reminder of what the Energous CEO said almost 2.5 years ago in the Q3 2015 earnings call:

"Here is a brief summary of the results of the amount of actual power delivered to a device at varying distances with a single WattUp transmitter. Power received at zero to five feet measured 5.55 watts compared to our targeted performance of 4 watts. Power received at five to 10 feet measured 3.74 watts compared to our targeted performance of 2 watts and power received at 10 to 15 feet measured 1.06 watts compared to our targeted performance of 1 watt."

They can barely do 1 Watt when in contact in Q2 2018. Still believing they'll deliver an actual product?

(My regular reminder, I have no financial position in Energous, long or short, or any other wireless power company)

Friday, April 6, 2018

Myant Responds to Questions Over Dropping Energous

Yesterday I wrote a post indicating that Myant, a "hi-tech clothing company", looked to have dropped Energous wireless charging from their upcoming Fitbit-style-underwear product. Energous made a pretty big deal about the announcement at the end of last year and at CES this January, so it was an equally big deal to see that disappear. Today on Twitter, Alexandros Roussos responded with a comment straight from Myant on this:

First of all, thanks to Alexandros for getting this information straight from the company, there's a treasure trove of information just in those few lines. I have not confirmed this myself, and in the absence of an official statement from Myant, I'm going to take this statement as accurate, should that change or Myant clarify, I'll update accordingly.

Efficiency - Valid Excuse or Covering for Poor Performance?
First thing to note is a confirmation they've dropped the contact wireless charging. That's an "ouch" for Energous. Second is that the reason given is "charging efficiency" - which is a bizarre reason to give. Battery life is around 6 days, and likely around 0.5 Wh capacity, which means around 30 Wh per year, or ~0.4 cents per year of electricity at the average price of 12c/kWh at 100% efficiency. That means 4 cents per year at 10% efficiency, and 40 cents per year at 1% efficiency, for a product that's a few hundred dollars. This is not a reasonable excuse based on efficiency, so maybe they mean charge rate?

How long is someone prepared to wait for charging such a device? Well a Fitbit is around an hour, give or take, so it shouldn't be much more than that every 6 days. Energous claimed around 5 Watts or more charging for the contact system, which would easily charge a device like this in less than an hour. Does WattUp charge at lower rates than this for smaller devices? If someone had to wait 10+ hours for the charging, that would be a good reason to have to have 2 devices (Interestingly in their old package Myant included two trackers, while in the current package it looks like they sell only one. "Use two modules interchangeably for the full 24/7 experience" they say.) A slow charge rate would definitely make it questionable as a consumer product, and I think this is more likely what they mean by "charging efficiency".

It seems to me with this statement that Myant have confirmed that the Energous mini WattUp is not a viable solution for mobile electronics - the core market it's touted as being designed for. That's pretty damning for any product.

Incompatibility - Despite Energous PR Claims Otherwise
One of the very interesting things is that Myant claim that they want to "bring a product compatible with distant charging" which is ridiculous as that was touted as an an inbuilt major feature with the mini WattUp - use for contact charging now, then move to the at-distance charging with the same device in future. In-built future proofing! To quote from Energous' own press release:

"All WattUp-enabled products will support seamless transitioning from charging via Miniature WattUp transmitters, to future stationary in-room transmitters that will offer wire-free charging with mobility at a distance. The result will be a complete wireless charging eco-system."

Has that compatibility been broken? I do wonder if the recent change to 913 MHz for the mid-field system killed any hope of compatibility. (Yes, I know, I'm saying that a unavailable product is now incompatible with another product I'm saying will never be released, I get how ridiculous this is).

Have Myant inadvertently confirmed that the "WattUp eco-system compatibility" does not exist?

At Distance Charging Convenience
The last statement of the charging convenience of "at distance" is ridiculous. If the contact method is inefficient, by definition the at-distance method will be far worse - that's both basic physics and common sense. You won't lose "some" efficiency, you'll lose a lotEnergous' own numbers for their mid field system shows charge rates between 30 mW and around 100mW, so between 5 and 16 hours to charge, while standing in a small region around 50 centimeters on each side, always facing the transmitter. Yes, that's practical...

Maybe it's for just throwing on the nightstand and charging at-distance that way while you sleep - in that case it's no more convenient than contact charging, but a lot more inefficient!

Confirmation of Impracticality?
The response from Myant is welcome, to me it confirms that the WattUp has been dropped from the "flagship" Energous named customer, there is no replacement, that the contact based WattUp system is likely too inefficient (slow?) for most consumer electronics, and that the promoted inter-system compatibility does not exist. A few lines from Myant, and it says a lot to me about Energous' product overall.

Update:
A few minutes after posting, Alexandros made the following statement on Twitter, that there was some paraphrasing in his response. You should take that into account when reading this post, however I think the main points of the post still stand.

Wednesday, April 4, 2018

Has Myant Dropped Energous Wireless Charging?

Over the last two years I've covered Energous in some depth, pointing out what I believe are excessive claims as to performance and capabilities, based on things like "laws of physics" and "FCC regulations". The company has often said that products are merely 18 months away, and have done for at least 4 years, leading to many claiming that their technology would never see use in a real device. To silence critics, last November Energous announced their first product with "WattUp" charging technology - clothing from Myant. In the press release, Energous' CEO said:

"Myant is a market leader in delivering a textile computing platform and signature line of smart apparel and we are excited that our WattUp technology has been chosen to power their sensors. The ability of the WattUp technology to charge its receivers in a variety of different ways - depending on the specific product, its use case or simply user preference - is just one of several key differentiators we have secured within the wireless charging industry. By providing this technology to Myant, Energous is growing its ecosystem of WattUp-enabled products and helping usher in a new era of smart apparel."

(Now if you're wondering what this product actually is, it's pretty simple, it's a Fitbit-for-your-underwear. Interestingly it was then, and still is now, for "pre-order" only, you can't actually get your hands on this product yet.)

Most read this press release as "Myant is going to use our at-a-distance wireless charging in this product" and a stamp of approval from an actual company with products. What he actually said though, was that WattUp will be used - this is the marketing term that includes both their "ineffective at distance" charging as well as their completely separate "works only when in contact" version to confuse people. They can claim 5 Watts charging with WattUp, meaning their contact version (about the same as existing, prevalent, Qi based charging) while allowing people to assume they mean their not-available at-distance charging is used. That at-distance charging method can supposedly charge at around 100x slower, while needing a safety cutoff if you come with in 50 centimeters. They used this technique to bamboozle tech journalists at this year's CES, I reported on that here.

If you looked at Myant's website back during this announcement, you'd see graphics like this:


It's clear there's a wireless charger, that it's WattUp from Energous, and that wireless charging is a big selling point for them - such a big point that there's no wire included in the package. The Myant CEO , Tony Chahine, made a huge point about that this January in another press release:

"We created a transformational ambient interface through our SKIIN products. They provide bi-directional access to the human body for the purpose of connecting us to our loved ones and ourselves through IoT. It is important to me that advancements in innovation reach everyone, including the elderly, the sick and children. The seemingly simple action of plugging, unplugging and manually charging could alone be the very thing that will inhibit a user from benefiting from technology."

So a huge win for Energous and helped boost their stock price during their big announcements at CES this year, giving ammunition to their supporters to silence the critics, and helping Energous' insiders reap greater financial rewards as they began to sell significant amounts of their stock.

How's this wonder product looking now? A visit to the same Myant page today finds this:

As you can see, all reference to wireless charging is gone - nothing in the product package image, no major selling point. Worse than that, it's now "High-Speed Charging" that specifically says "plugin time", and the charging cable is clearly visible. Go to the press release page, and it's seemingly scrubbed of all reference to Energous or WattUp barring a single comment in one story. 

Myant look to have dropped Energous' wireless charging from their product, even the "in-contact" version Energous have been touting for some time. Why would Myant do this, especially when they have likely already accepted money for pre-orders based on the presence of wireless charging? It would be hard to do anything other than give a refund based on not-delivering as advertised, and is a situation most companies would avoid as much as they could. Did Myant announce the product without actually testing, or did later testing find flaws in WattUp that made it impractical and force a fall-back to the boring but 100% reliable wire method? If Myant knew all along it wasn't viable, then that's criminal on a number of fronts.

When did Energous know that they were being dropped from the product? I'm interested to see how they handle this in their next earnings call - maybe in the same way they handled the departure of the Founder/CTO in the last call, which was to simply ignore it completely.

I'm not surprised by this happening, I never expect to see a practical consumer product for sale using WattUp. Announcements like the Myant Skiin line make it appear there's a route to productization for the technology, and simply extends the game of boosting the stock price. Personally I doubt Energous want there to be a product out there, as it exposes the technology to the public for them to dissect and prove what it actually is - like the FCC approval data, it lets you see the man behind the curtain. Once that happens, the smoke-and-mirrors just doesn't work anymore.

So sorry everyone, no wireless charging of your undies!

(Thanks to Tako, @jjotwitt on Twitter, for spotting this)

A follow up to this article here.

Thursday, March 15, 2018

Theranos - Will VC Change Following SEC Charges?

Those of you following any tech news will have read the major announcement by the SEC yesterday, that charges Theranos, its founder/CEO Elizabeth Holmes, and former President Ramesh Balwhani with "massive fraud". To quote: 

"raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance."

While originally a darling of Silicon Valley and the media, Wall Street Journal's John Carreyrou exposed their fraud in 2015. This resulted in vehement denials from the company, threats of litigation, and vocal support from prominent valley investors such as Tim Draper. The announcement from the SEC vindicates Carreyrou, and highlights the value of high quality investigative journalism, along with publications that stand by their staff, to society.

Holmes has been stripped of much of her stock, barred from serving as an officer of a public company for 10 years, has to pay a $500,000 fine, and loses voting control of the company. Further, she cannot make any profit from the company until over $750 million has been returned to defrauded investors and shareholders. Holmes did not admit any wrongdoing and will not, from this complaint, face jailtime. Balwhani faces charges in federal court.

To summarize, for defrauding investors she will lose the financial benefit of that fraud, lose control of her company, pay a fine, but nothing more. The SEC pursues civil actions, while the Department of Justice pursues criminal charges, so jail time is still possible for jeopardizing the health of millions of patients with under-performing blood-tests that informed diagnoses and treatments, among other things. 

There's also no word on what this means for those directly impacted due to Theranos' aggressive legal tactics against those who raised the possibility of fraud. Tyler Schultz, the original whistleblower on the company, incurred over $400,000 in legal costs defending himself against what are now clearly valid claims of fraudulent behavior. It's a clear message to any potential whistleblowers out there - keep your mouth shut if you don't want a lifetime of debt to be the reward for your ethical behavior. Hopefully there is a civil suit coming from Mr Schulz that results in the company fully compensating him, and more, for these actions.

I've been writing extensively on Theranos since 2016, mainly to use them as a clear example of how the system of venture capital is in many ways broken - that the entrepreneur community is responding to incentives from those with money, the VCs, to tell them what they want to hear in return for that funding. While there are many ethical and diligent VCs, there are those who do not rise to those standards - and what they want to hear is not realistic development of a product that will produce a solid company and return them 5 to 10x investment in 5 years, but a 'disruptive' technology that will 'change the world' and get them 100x return in 2 years. Investors need to realize that by funding the most fantastical and improbable, that the realistic and viable are often crowded out and never see the light of day. There's millions of dollars at stake here, with a bias to reward those who paint the rosiest picture despite reality, so it's no surprise that those willing to push the limits of truth are found in high numbers. This final point was addressed head on by the SEC in their release:

“The Theranos story is an important lesson for Silicon Valley,” said Jina Choi, Director of the SEC’s San Francisco Regional Office.  “Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.”

If that wasn't a direct enough statement to Silicon Valley that they should be aware that small startups seeking to "fake it 'til they make it" are not too small to be of notice, they also made sure to say:

“The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.”

I had hoped that the Theranos story would result, finally, in Venture Capital taking a long hard look at itself and re-evaluating its model. In Theranos they would realize that the "Move Fast and Break Things" model that seemed to work in social media just cannot be applied to hardware, and healthcare in particular. That they would realize that yes, they were responsible for providing the system of rewards, and failing to provide a system of checks, that would encourage those willing to represent where they might be able to eventually go, as where they actually are. Is the attraction of investing in the next Uber, with all the questionable legal activities too, now something to be carefully considered, or is it a "no-brainer"?

Sarah Cone of Social Impact Capital Tweeted what I feel was the most appropriate response I have read:

I don’t need the companies I invest in to be perfect, but I do need them to be honest about where they are at. Confusion in the deck between where the company could be and where it’s at (happens often) gets an immediate pass. I want to invest in founders that I know can fundamentally see reality.

Which is exactly the behavior any VC should always have exhibited, and I was very glad to see. If I were a Limited Partner, one of the people who puts money into a Venture Capital fund and expects returns, it's the ethical and pragmatic behavior that I would expect.

What about other investors? Maya Kosoff of Vanity Fair spoke to multiple investors for their reaction. Some blamed the company, investors, and board members for not doing their job. One said that the temptations to cut corners and grow quickly were so large that may have led her astray, while another went further and explicitly said that investors were part of the problem.

“I actually think that the V.C. business model has changed and encourages this type of behavior."

While these investors all seemed to say there was a problem at least somewhere in the system, not one went one the record and would be named. Even when there is a statement from the federal agency charged with overseeing investment that there has been massive fraud, a reporter can't get an investor to put their name behind a bland statement like "This is a terrible black-eye for the industry and we should revisit our practices to ensure this never happens again".

Some were unhappy with the SEC action and were willing to put their name to that. Here's part of the reaction from Paul Kedrosky of SK Ventures, also on Twitter: 

"Many of the things the SEC is whinging about in its complaint will seem painfully familiar to any longtime startup investor or founder - did that! did that! did that! -- and everyone forgets them if you go bust, or you get bought/big.

I'm no Theranos/Holmes fan, but if the SEC is going to start banging startups for hubris and for getting their promise cart before their product horse, well ... let's just hope Steve Cohen does something wrong and distracts the SEC from startups first."

Now I have to wonder that if the federal government came in and enforced massive legal penalties on what I consider "standard operating procedure" of my industry, I might start taking a long hard look at my industry practices before saying it's just "whinging". Clearly this behavior is so endemic in the industry that even an egregious example can't make some sit-up and say "Maybe we should review our practices?". Moreover, I wouldn't be sitting admitting that I or any of my investments had been repeatedly guilty of committing many of the acts that had just been found illegal!

Kedrosky makes valid points that investors have a burden of due diligence (more, it's a fiduciary duty to their Limited Partners) and if they didn't do that, then more fool them. When pitching to investors in the past I have been prompted by them to increase my financial projections again and again until I literally told them "You know it's unrealistic, why are you telling me to say that?" and the answer was "It's not your job to tell me what's reasonable, I want to know what the biggest upside is, and then I'll decide". And they are right - it's up to them to do the due diligence, and decide the level of risk they are willing to take - but in part that due diligence depends on how much the startup is willing to 'exaggerate'. 

That "exaggeration" has been the norm for so long that it has moved from "painting the most positive picture facts allow" to "claiming what you wish were possible as the current baseline truth", and now it's simply accepted in the community. Like seeing an alcoholic waking after their latest blackout saying they'll never drink again, most sober people watching are skeptical. It seems that, at least in private, the investment community knows something went badly wrong here, but are some convincing themselves this was a 'one-off' and return to their old ways the next time someone offers them a 'drink'? 

And there is the problem - as long as there are "Ubers" out there, who, in the opinion of many, managed to use breaking the law to grow so quickly they could afford to fight the legal actions, there will be investors willing to put money in and turn a blind eye. Until there are criminal actions against board members, or VCs themselves, for failing in their fiduciary duty, I'm not sure there will be real significant reform. I hope I'm wrong.



Addendum: I'm going to add responses from other VCs to this as I find them. Searching online three days after the announcement, and either people are keeping their heads down, or my Google-fu is not what it used to be.

Here's Bilal Zuberi of Lux Capital:

"Big lesson SV can learn from Theranos: Don't peddle bullshit, and don't allow others to peddle bullshit. Don't lend credibility to people and ideas you know nothing about. And call out fraud when you see it."

Prominent Silicon Valley VC Tim Draper declined to comment to the press. Previously he had been a vocal supporter of Theranos, even as evidence mounted of "exaggeration". In 2016 he said:

"Taxi companies attacked Uber. Hotels attacked Airbnb. Car companies attacked Tesla. Telecoms attacked Skype. Fortunately for humanity, the transformative technologies made it through the attacks and we are all better off. They should be ashamed to try to take down this woman who is trying to do so much for health care. ... She should be hailed as a hero"


Monday, January 15, 2018

IoWTF?

I'm happy, because there's finally a chance for me to write about something other than Energous - in this case to return to the topic of "Things That Just Shouldn't Be". Previous recipients of this attention have been Juicero (the "Keurig for Juice") and June (a $1500 toaster oven). Today it's the turn of Sunflower by ShadeCraft - The World's First Robotic Shading System which you can now pre-order for delivery this fall.


Not content with just being a shade, this has everything you've always thought you needed when out on the deck in the sun. It's got lights in case the shade is a little too much, WiFi in case your phone lacks that kind of connectivity, speakers (Harmon-Kardon!), an app to control it in case your lazy ass can't stand up and move it,  security cameras to stop someone stealing your shade because they're jelly, solar power to keep it all going, and of course Artificial Intelligence in case you're too dumb to work out how to operate it. I'm surprised it doesn't mine bitcoins for you. Among any list of "first world problems", this product has to be pretty near the top of it.


I had missed the initial publicity for this product when apparently it was 'launched' at CES almost exactly one year ago. According to Crunchbase, the company was founded in March 2016, and received seed funding of $2 million in March 2017. So 9 months after founding, the company exhibited at CES to launch a product (concept only?), then raised its funding 3 months after that, and now a year after initial launch you can pre-order and get it in almost a year. 

If you have to have one of these beauties, I suggest you order it soon - you can get it today for the massively discounted price of $5,220. (Yes, Five thousand two hundred and twenty dollars) Don't wait, because at the end of the month it goes up to $6,900, followed by $7,800 in March, and $8,700 in April. Yes, nearly $9,000 for a garden shade with speakers, a camera, and WiFi. Oh, and an app.

What on earth is going on here? Even at $1000 each for speakers, camera, shade itself, motors, and solar panels you can't hit that number. Any good engineering project includes as one of the constraints a cost target, based on who the target market is. In this case, either that wasn't done, or the target market is people who have so much money they can just throw it away. Like trying to sell a juicer for $700, this is going to have a hard time - or maybe it's $8000 of pure profit and they're counting on only selling a few.

A clue as to what they may be thinking comes from looking at a previous product from the famed CEO/Founder, Armen Sevada Gharabegian. You've heard of him, of course - the designer of... The Maximillian Chair.


Want one of these gorgeous chairs? That'll be $25,000 please! And no wonder, as apparently it took him seven years to design. Don't worry though, you get a certificate of authenticity with it. So I'm going to go back to what I said earlier and say "This shade is for people with too much money."

Armen must be a talented guy as according to Crunchbase he's the only employee at Shadecraft. If he's not designing and building it himself, then that would mean that CES was used to raise interest in a then non-existent product on pretty sketches and mock-ups, to raise $2 million of seed, to pay outside design houses to get to a prototype, to put on pre-sale to get the money to build to deliver (or to show interest to raise another round). If so, it's a pretty nice way of bypassing a Kickstarter - though the designers should maybe have been given a little bit more of a cost constraint.

This will be interesting to see if the production, logistics, and other support costs have been properly factored into the pre-sale price, and the expected pre-sale volume predicted correctly. Get that wrong and you might end up with not enough orders to get manufacturing discounts you were counting on, or cover the unexpected costs and delays of hardware development. Kickstarter and other pre-sold hardware companies, such as Lily, have a long history of such 'ambitious' projects failing to deliver. Good luck to them.

It looks like they have grand ambitions and the sky is the limit for size - here's one of the images from a recent patent application. (Yes, a patent application for an internet connected umbrella).


If that's to scale, that's a pretty big shade. I wonder what that will cost?

Saturday, January 13, 2018

Tech Journalism Fail: Energous at CES

One of the reasons I write about Energous so much is that it's an ideal vehicle to show how tech journalism is manipulated by startups to give what are essentially Press Releases disguised as reporting. When you read most tech coverage you rarely see journalists speak to experts in the field, or press for deeper answers on questions, taking for granted statements from the company in question even when they have been shown to repeatedly be 'less than truthful'. 

In part it's understandable as some of these topics are just difficult to understand due to the technical complexity, giving leeway for the company to use 'smoke and mirrors' to bamboozle. PR companies ensure that exclusives and early previews only go to the reliably compliant (I'm looking at you, David Pogue), cutting out from future access anyone who asks difficult questions. Journalists are also under tight deadlines and the system encourages more, lower quality articles that get attention rather than a smaller number of less feel-good but very detailed and accurate pieces - essentially, journalists are responding to the incentives the system offers. That's one reason I try to support, with actual dollars, publications that allow long term detailed investigations such as John Carreyrou's expose of Theranos.

During this last week was CES, the Consumer Electronics Show, and Energous were using this to give private demos of their latest tech to a select few. My recent post on Energous tried to lay out some questions to help journalists at least try to probe past the marketing fluff, but from what I've seen of the CES coverage, it's clear I need to work on my blog exposure! Barron's had at least some questions over long term viability and Tiernan Ray is one of the very few to actually get an outside opinion, using a phrase I constantly bring up with wireless power - possible but not practical. The weakest that I've seen so far has been from Tom's Guide which I'm pretty sad about as in its early days Tom's Hardware was a go-to site for in-depth tech analysis. What I do like about it though is that there is a video of the tech on display, and gives us more insight into what's going on.

First of all, I suggest you go to the Tom's Guide site and watch the video through. (See, I told you the 'access based journalism' gets more hits!).

Basic Research Anyone?
First thing is that the journalist immediately sets the expectations by saying that the at-distance charging will "start showing up in products you will buy in about 12 to 18 months". Barring the fact that if you want to show up in mass-market products you have to have deals signed 12 to 18 months prior to the product actually appearing, apparently it was too hard to go an look back and see examples of Energous using a "time-to-carrot" of product 18 months out since at least early 2014. Why believe them this time, or at least mention that the company has a history of being wrong about their timing?

As an aside, why do journalists need to use adjectives when describing the technology such as 'cool'? If it's actually 'cool' then the reporting will show that without the need to lead readers so bluntly - but I do understand that the company PR people will love them for it.

The Demo
We then move to a demo charging devices - you can see the transmitting antenna underneath a monitor, with the keyboard and mouse sitting about 1 foot away. There's a statement that WattUp Mid-Field goes up to 250 mW, but apparently it's not worth saying "Hey Energous rep, show me something charging with this at 250 mW". Instead we see the keyboard receiving around 67 mW at close range, dropping to around 20 mW at 2 feet or so. This is a far cry from even the >100 mW at 50 cm that the CEO was claiming last week, or the "12 devices, 15 feet, 4 watts" from 2 years ago.

The keyboard is much bigger and should support ideally sized antenna, so why that low? Why the inconsistency? But you'd have to know the technical details and have done your homework to ask that. (I expect part of that is due to the antenna being horizontal - move the keyboard vertical and the number may have gone up. That would have been nice to see - if only someone had maybe suggested you do that...)

Perhaps someone might even have thought to ask:

"Hey, your FCC Approval says that it switches off and won't charge below 30 mW. Why am I seeing 20 mW here? Is this different than the FCC approved system?"

Next you have a 'cool' part of the tech where the transmitter can prioritize between the devices being charged, like a keyboard and a mouse. It's "sophisticated enough to support scheduling capability".  Isn't that cool and smart? No, no it isn't. The obvious question to ask here is:

"So you can barely charge at mW level, and can't even charge more than one device at a time?"

Everyone does realize that the marketing team just got a major technology limit spun positively as a feature, right?

Safety Last
Next comes safety. In the article Energous get to plant a direct PR quote without any questioning:

An Energous rep said that the company’s sub-gigahertz technology transmits at well below the SAR (specific absorption rate) for phones, and that its beam-forming technology is precise enough to direct energy only in the direction of the gadgets being powered.

Did anyone perhaps think to ask:

"Great - What value is SAR limited to and what are you transmitting at?"

or

"Awesome - can you show me some beam plots proving your highest power is exactly on the receiver?"

or perhaps even

"You say you target small "pockets" of energy - how big are they across?"

because it's not as if anyone has laid it out that they are basically at the SAR limit, the beamforming is so poor they can rarely get the highest power at the target, or that the 'pockets' are 50 centimeters across. And that's from the company's own data in the FCC report. Yes, I know that I'm a nobody blogger, but there are so many people that could have been called up, like a university electrical engineering prof, and just asked what should be looked for. Without asking anyone else who might know, this is just being a mouthpiece for Energous PR. I'm sure they are grateful for it.

That's not the worst part of the safety question though. It's an integral part of the Energous FCC approval, which even they themselves admit is required, that there is a safety system that shuts off when there is movement within 50 centimeters of the transmitter. The video makes it very clear that there is no such safety system here, so how about asking:

Your FCC approved system shuts off for 30 seconds when anyone is within 50 centimeters. I'm clearly in that range. Why is this still working? Am I exceeding consumer SAR limits right now?

This is not the system approved under FCC Part 18 (one hard-to-spot give-away to this is that the transmitter is a completely different shape) and I expected them to try this which is why I wrote out the question to ask which was:

"Are we, right now, operating under the same safety limits and other restrictions a consumer system would have to?"

It's not that hard to ask, and the answer would quite likely be "no" (or some mumbling) and then it would be a more interesting story! (Hint, the sign right in front of you literally says "This device has not been authorized as required by the rules of the Federal Communications Commission")

Anyway, it's not my health, so congratulations to the journalist for being brave enough to potentially put himself outside those limits for the sake of Energous' share price - sorry, I mean informing his readers.

More Power
That's enough about safety, after all who cares about that? Now we come to 'high power devices' like phones which you can charge at 7.5 Watts (7500 mW!). The same technology that can only charge a keyboard at 67 mW is suddenly charging 100 times higher. Cool! Except what is missed, and the Energous rep was very happy not to correct, is that the sign next to that demo says quite clearly "WattUp Near-Field High Power Demo" not the "WattUp Mid-Field Demo" just walked away from. This is completely different and now incompatible technology (0.9 GHz vs 5.8 GHz) and now gives readers the impression that the at-distance charging will work with phones at 7.5 Watts. 

Just because they use the same name, WattUp, doesn't make them compatible. If it were capable of that wouldn't they be charging the keyboard like that? This isn't a little difference, it's a factor of 100!

This is a basic failure to understand the products being reported on and quite literally misinforming readers to the benefit of Energous. 

See the power of branding and names like WattUp to cover multiple differing technologies? Awesome for confusing the rubes customers.

The phone, which is connected to the contact charging device by a USB cable, is then moved closer to the charging brick and apparently the charge rate increased. What? If distance was a factor, why have the cable? 

Here's the next thing missed. As the phone is moved we hear "it's up to 875 mW", while knocking the charging brick it's connected to off at an angle and away from the charging pads underneath the monitor base. Then there's a sudden cut in the video (at 1m 25s) where it's obvious the Energous rep stepped in and squared the brick up, and now it's charging at 3.57 W. So hey how about someone asking:

"Is this near-field technology so sensitive that knocking things slightly changes charge rates by a factor of 4?"

Perhaps it's worth asking because that's in direct contradiction to the Energous PR statement printed which was:

Energous says its solution allows for greater “rotational freedom” over coil based technologies.

Even when the video evidence contradicts them, some journalists still say what the company hands to them, unquestioned. It's a little clearer in the text, but the ambiguity the mistake introduces will be used by the company to their benefit.

Last techy questions to have asked here since this Near-Field demo also had the sign saying it wasn't FCC approved:

"Could any currently FCC approved devices charge at this rate?"

and

"And isn't this charging brick limited to 300 mW charging as-per the recent FCC Approval?"

But, again, that would have required homework, and an understanding of the difference between the two charging technologies that Energous call "WattUp".

But Their Products...
There are still some stubbornly skeptical people so at the end, it's clearly pointed out that WattUp is now in a product, so obviously it's real. Who wouldn't want underwear that needs charged? The tech is so awesome and cool that everyone is knocking on Energous' door, but of course who wants Apple to use you in their product, the real market is tighty-whities!

Saying that it's a WattUp receiver lets readers think that it will charge at a distance, when the FitBit-style tracker component actually needs removed and charged in contact with the near-field device. It's also only available as a pre-order which means it's not actually available as a product yet

Once again putting two different and currently incompatible technologies under the same brand name, WattUp, allows Energous to play reporters and get incorrect but favourable reporting.

Lastly, there's a mention of "Tier 1" device makers and that it will take time for Energous to get them into their devices. But haven't Energous been teasing their relationship with a "Tier 1" for years, letting everyone think it's Apple until it became clear last year that it wasn't? Who is it now then? I ask because they people who keep mentioning "Tier 1" are Energous themselves, as it gives them a sense of mystery and importance, and everyone obligingly just repeats what's said to them. It wouldn't be that those "Tier 1" comments came from an Energous rep or handout, would it?

It's a tough job to do right
It's perhaps unfair to pick on this one reporter, there are many weak regurgitations of Energous PR out there such as Digital Trends talking about the "awesome new wireless charging tech" but the video shown here just highlights how much more sophisticated company marketing is than most of the press reporting on them. They know exactly how to use marketing terms and change up demonstrations to misdirect and confuse, allowing beneficial errors to pass, and correct those not in their favour. Complex technology in particular gives great leeway for obfuscation and if there isn't someone with a tech background helping, then it's going to be more of a Press Release Laundering Service rather than actual reporting. But hey, it gets a lot of page views, right?

To summarize
At CES Energous showed off a Mid-Field Transmitter that did not meet FCC rules, and clearly differs from the Mid-Field Transmitter approved under Part 18. They also showed off Near-Field charging technology that hid multiple charging pads under a monitor, needs a large charging-brick that won't fit into a phone case and was not FCC approved, as well as a smaller Near-Field charging technology that charges much slower. All four different versions are called "WattUp" and work as designed - which is to confuse and make everyone think they're all the same thing, that way it's easier for journalists to give positive coverage rather than report on the complexity. Nicely done Energous marketing team!

Final note: As every time I post something on Energous I get accused of being in a short position and writing for financial gain in trying to drive the stock price down, I'll once again note that I have no financial stake here, either long or short. So many people find it hard to understand why I write these posts if not for money, and unfortunately there's nothing I can do to persuade them that other motivations do exist.