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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

COMMISSION FILE NUMBER 001-36379

ENERGOUS CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

46-1318953

(State of incorporation)

 

(I.R.S. Employer Identification No.)

3590 North First Street, Suite 210, San Jose, CA 95134

(Address of principal executive office) (Zip code)

(408) 963-0200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.00001 par value

 

WATT

 

The Nasdaq Stock Market

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of November 9, 2023, there were 5,210,361 shares of our Common Stock, par value $0.00001 per share, outstanding.

 

 


 

ENERGOUS CORPORATION

FORM 10-Q

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

INDEX

 

PART I - FINANCIAL INFORMATION

 

3

 

 

 

Item 1. Financial Statements

 

3

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

 

 

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk

 

28

 

 

 

Item 4. Controls and Procedures

 

28

 

 

 

PART II – OTHER INFORMATION

 

29

 

 

 

Item 1. Legal Proceedings

 

29

 

 

 

Item 1A. Risk Factors

 

29

 

 

 

Item 2. Sales of Unregistered Securities; Use of Proceeds; and Issuer Purchases of Equity Securities

 

41

 

 

 

Item 3. Defaults Upon Senior Securities

 

41

 

 

 

Item 4. Mine Safety Disclosures

 

41

 

 

 

Item 5. Other Information

 

41

 

 

 

Item 6. Exhibits

 

41

 

 

 

 


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Energous Corporation

CONDENSED BALANCE SHEETS

 

 

 

As of

 

 

 

September 30, 2023

 

 

December 31, 2022

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

16,578,659

 

 

$

26,287,293

 

Accounts receivable, net

 

 

120,198

 

 

 

143,353

 

Inventory

 

 

199,616

 

 

 

105,821

 

Prepaid expenses and other current assets

 

 

896,253

 

 

 

827,551

 

Total current assets

 

 

17,794,726

 

 

 

27,364,018

 

 

 

 

 

 

 

Property and equipment, net

 

 

388,505

 

 

 

429,035

 

Operating lease right-of-use assets

 

 

1,411,930

 

 

 

1,959,869

 

Total assets

 

$

19,595,161

 

 

$

29,752,922

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

768,941

 

 

$

900,765

 

Accrued expenses

 

 

1,672,936

 

 

 

1,790,414

 

Accrued severance expense

 

 

202,946

 

 

 

416,516

 

Warrant liability

 

 

450,000

 

 

 

 

Operating lease liabilities, current portion

 

 

696,573

 

 

 

705,894

 

Deferred revenue

 

 

24,341

 

 

 

29,727

 

Total current liabilities

 

 

3,815,737

 

 

 

3,843,316

 

 

 

 

 

 

 

Operating lease liabilities, long-term portion

 

 

739,767

 

 

 

1,264,131

 

Total liabilities

 

 

4,555,504

 

 

 

5,107,447

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred Stock, $0.00001 par value, 10,000,000 shares authorized at September 30, 2023 and December 31, 2022; no shares issued or outstanding at September 30, 2023 and December 31, 2022.

 

 

 

 

 

 

Common Stock, $0.00001 par value, 200,000,000 shares authorized at September 30, 2023 and December 31, 2022; 5,046,994 and 3,947,267 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively.

 

 

925

 

 

 

789

 

Additional paid-in capital

 

 

392,476,298

 

 

 

387,319,985

 

Accumulated deficit

 

 

(377,437,566

)

 

 

(362,675,299

)

Total stockholders’ equity

 

 

15,039,657

 

 

 

24,645,475

 

Total liabilities and stockholders’ equity

 

$

19,595,161

 

 

$

29,752,922

 

 

The accompanying notes are an integral part of these condensed financial statements.

3


 

Energous Corporation

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

168,708

 

 

$

223,201

 

 

$

382,517

 

 

$

672,133

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

48,394

 

 

 

420,060

 

 

 

270,025

 

 

 

894,693

 

Research and development

 

 

2,460,123

 

 

 

2,885,830

 

 

 

8,418,779

 

 

 

9,622,886

 

Sales and marketing

 

 

774,141

 

 

 

1,093,640

 

 

 

3,074,163

 

 

 

3,865,322

 

General and administrative

 

 

1,698,380

 

 

 

1,931,386

 

 

 

5,763,811

 

 

 

5,983,845

 

Severance expense

 

 

269,109

 

 

 

 

 

 

359,419

 

 

 

633,444

 

Total costs and expenses

 

 

5,250,147

 

 

 

6,330,916

 

 

 

17,886,197

 

 

 

21,000,190

 

Loss from operations

 

 

(5,081,439

)

 

 

(6,107,715

)

 

 

(17,503,680

)

 

 

(20,328,057

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Offering costs related to warrant liability

 

 

 

 

 

 

 

 

(591,670

)

 

 

 

Change in fair value of warrant liability

 

 

788,000

 

 

 

 

 

 

2,685,000

 

 

 

 

Interest income

 

 

178,845

 

 

 

142,840

 

 

 

648,083

 

 

 

192,715

 

Total other income

 

 

966,845

 

 

 

142,840

 

 

 

2,741,413

 

 

 

192,715

 

Net loss

 

$

(4,114,594

)

 

$

(5,964,875

)

 

$

(14,762,267

)

 

$

(20,135,342

)

Basic and diluted loss per common share

 

$

(0.86

)

 

$

(1.54

)

 

$

(3.30

)

 

$

(5.21

)

Weighted average shares outstanding, basic and diluted

 

 

4,762,187

 

 

 

3,879,804

 

 

 

4,467,436

 

 

 

3,867,330

 

 

The accompanying notes are an integral part of these condensed financial statements.

4


 

Energous Corporation

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance at January 1, 2023

 

 

3,947,267

 

 

$

789

 

 

$

387,319,985

 

 

$

(362,675,299

)

 

$

24,645,475

 

Stock-based compensation - options

 

 

 

 

 

 

 

 

21,095

 

 

 

 

 

 

21,095

 

Stock-based compensation - restricted
   stock units ("RSUs")

 

 

 

 

 

 

 

 

476,242

 

 

 

 

 

 

476,242

 

Stock-based compensation - employee
   stock purchase plan ("ESPP")

 

 

 

 

 

 

 

 

24,740

 

 

 

 

 

 

24,740

 

Issuance of shares for RSUs

 

 

9,347

 

 

 

2

 

 

 

(2

)

 

 

 

 

 

 

Proceeds from contributions to the ESPP

 

 

 

 

 

 

 

 

65,134

 

 

 

 

 

 

65,134

 

Issuance of shares in an at-the-market ("ATM") placement, net of $68,637 in issuance costs

 

 

182,511

 

 

 

37

 

 

 

2,674,660

 

 

 

 

 

 

2,674,697

 

Issuance of shares in a sale of common stock, net of $3,166,139 in issuance costs and fair value of liability warrant

 

 

412,500

 

 

 

83

 

 

 

133,778

 

 

 

 

 

 

133,861

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(6,652,507

)

 

 

(6,652,507

)

Balance at March 31, 2023 (unaudited)

 

 

4,551,625

 

 

$

911

 

 

$

390,715,632

 

 

$

(369,327,806

)

 

$

21,388,737

 

Stock-based compensation - options

 

 

 

 

 

 

 

 

21,330

 

 

 

 

 

 

21,330

 

Stock-based compensation - RSUs

 

 

 

 

 

 

 

 

455,695

 

 

 

 

 

 

455,695

 

Stock-based compensation - performance
   share units ("PSUs")

 

 

 

 

 

 

 

 

10,601

 

 

 

 

 

 

10,601

 

Stock-based compensation - ESPP

 

 

 

 

 

 

 

 

16,267

 

 

 

 

 

 

16,267

 

Issuance of shares for RSUs

 

 

34,075

 

 

 

7

 

 

 

(7

)

 

 

 

 

 

 

Proceeds from contributions to the ESPP

 

 

16,341

 

 

 

3

 

 

 

1,532

 

 

 

 

 

 

1,535

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,995,166

)

 

 

(3,995,166

)

Balance at June 30, 2023 (unaudited)

 

 

4,602,041

 

 

$

921

 

 

$

391,221,050

 

 

$

(373,322,972

)

 

$

17,898,999

 

Stock-based compensation - options

 

 

 

 

 

 

 

 

21,564

 

 

 

 

 

 

21,564

 

Stock-based compensation - RSUs

 

 

 

 

 

 

 

 

341,443

 

 

 

 

 

 

341,443

 

Stock-based compensation - PSUs

 

 

 

 

 

 

 

 

4,488

 

 

 

 

 

 

4,488

 

Stock-based compensation - ESPP

 

 

 

 

 

 

 

 

1,412

 

 

 

 

 

 

1,412

 

Issuance of shares for RSUs

 

 

11,249

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from contributions to the ESPP

 

 

 

 

 

 

 

 

3,493

 

 

 

 

 

 

3,493

 

Cash in lieu of fractional shares from reverse stock split

 

 

(1,857

)

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares in an ATM placement, net of $94,218 in issuance costs

 

 

435,561

 

 

 

4

 

 

 

882,848

 

 

 

 

 

 

882,852

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,114,594

)

 

 

(4,114,594

)

Balance at September 30, 2023 (unaudited)

 

 

5,046,994

 

 

$

925

 

 

$

392,476,298

 

 

$

(377,437,566

)

 

$

15,039,657

 

 

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance at January 1, 2022

 

 

3,833,360

 

 

$

767

 

 

$

383,383,550

 

 

$

(336,400,039

)

 

$

46,984,278

 

Stock-based compensation - options

 

 

 

 

 

 

 

 

10,313

 

 

 

 

 

 

10,313

 

Stock-based compensation - RSUs

 

 

 

 

 

 

 

 

745,620

 

 

 

 

 

 

745,620

 

Stock-based compensation - ESPP

 

 

 

 

 

 

 

 

40,973

 

 

 

 

 

 

40,973

 

Issuance of shares for RSUs

 

 

19,396

 

 

 

4

 

 

 

(4

)

 

 

 

 

 

 

Proceeds from contributions to the ESPP

 

 

 

 

 

 

 

 

104,217

 

 

 

 

 

 

104,217

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(7,152,718

)

 

 

(7,152,718

)

Balance at March 31, 2022 (unaudited)

 

 

3,852,756

 

 

$

771

 

 

$

384,284,669

 

 

$

(343,552,757

)

 

$

40,732,683

 

Stock-based compensation - options

 

 

 

 

 

 

 

 

21,330

 

 

 

 

 

 

21,330

 

Stock-based compensation - RSUs

 

 

 

 

 

 

 

 

601,029

 

 

 

 

 

 

601,029

 

Stock-based compensation - ESPP

 

 

 

 

 

 

 

 

41,428

 

 

 

 

 

 

41,428

 

Issuance of shares for RSUs

 

 

10,791

 

 

 

2

 

 

 

(2

)

 

 

 

 

 

 

Proceeds from contributions to the ESPP

 

 

9,690

 

 

 

2

 

 

 

60,509

 

 

 

 

 

 

60,511

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(7,017,749

)

 

 

(7,017,749

)

Balance at June 30, 2022 (unaudited)

 

 

3,873,237

 

 

$

775

 

 

$

385,008,963

 

 

$

(350,570,506

)

 

$

34,439,232

 

Stock-based compensation - options

 

 

 

 

 

 

 

 

21,564

 

 

 

 

 

 

21,564

 

Stock-based compensation - RSUs

 

 

 

 

 

 

 

 

586,652

 

 

 

 

 

 

586,652

 

Stock-based compensation - PSUs

 

 

 

 

 

 

 

 

67,922

 

 

 

 

 

 

67,922

 

Stock-based compensation - ESPP

 

 

 

 

 

 

 

 

22,084

 

 

 

 

 

 

22,084

 

Issuance of shares for RSUs

 

 

12,895

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

Proceeds from contributions to the ESPP

 

 

 

 

 

 

 

 

84,977

 

 

 

 

 

 

84,977

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(5,964,875

)

 

 

(5,964,875

)

Balance at September 30, 2022 (unaudited)

 

 

3,886,132

 

 

$

778

 

 

$

385,792,159

 

 

$

(356,535,381

)

 

$

29,257,556

 

 

The accompanying notes are an integral part of these condensed financial statements.

5


 

Energous Corporation

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended
September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(14,762,267

)

 

$

(20,135,342

)

Adjustments to reconcile net loss to:

 

 

 

 

 

 

Net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

137,772

 

 

 

200,995

 

Stock based compensation

 

 

1,394,877

 

 

 

2,158,915

 

Changes in operating lease right-of-use assets

 

 

547,939

 

 

 

550,372

 

Inventory net realizable value adjustment

 

 

166,086

 

 

 

 

Bad debt expense

 

 

(12,500

)

 

 

30,000

 

Change in fair value of warrant liability

 

 

(2,685,000

)

 

 

 

Offering costs allocated to warrants

 

 

591,670

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

35,655

 

 

 

10,282

 

Inventory

 

 

(259,881

)

 

 

(164,426

)

Prepaid expenses and other current assets

 

 

(68,702

)

 

 

(230,368

)

Accounts payable

 

 

(131,824

)

 

 

(312,174

)

Accrued expenses

 

 

(117,478

)

 

 

924

 

Accrued severance expense

 

 

(213,570

)

 

 

(395,405

)

Operating lease liabilities

 

 

(533,685

)

 

 

(594,703

)

Deferred revenue

 

 

(5,386

)

 

 

42,477

 

Net cash used in operating activities

 

 

(15,916,294

)

 

 

(18,838,453

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(97,242

)

 

 

(