10-Q

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


☐	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.

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.

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.

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	)		(127,198	)
Net cash used in investing activities		(97,242	)		(127,198	)
Cash flows from financing activities:
Net proceeds from an ATM offering		3,557,549			–
Net proceeds from a sale of common stock and warrant issuance		2,677,191			–
Proceeds from contributions to employee stock purchase plan		70,162			249,705
Net cash provided by financing activities		6,304,902			249,705
Net decrease in cash and cash equivalents		(9,708,634	)		(18,715,946	)
Cash and cash equivalents - beginning		26,287,293			49,071,414
Cash and cash equivalents - ending	$	16,578,659		$