UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

(Mark One)

 

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

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015

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)

 

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 þ   No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes þ   No ¨

 

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

 

Large accelerated filer  ¨  Accelerated filer  ¨
    
Non-accelerated filer  þ (Do not check if smaller reporting company)  Smaller reporting company  ¨

 

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

 

As of November 10, 2015, there were 13,183,006 shares of our Common Stock, par value $0.00001 per share, outstanding.

 

 

 

 

ENERGOUS CORPORATION

FORM 10-Q

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015

 

 

INDEX

 

PART I - FINANCIAL INFORMATION 1
   
Item 1.  Financial Statements 1
   
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations 22
   
Item 3.  Quantitative and Qualitative Disclosure About Market Risk 26
   
Item 4.  Controls and Procedures 26
   
PART II – OTHER INFORMATION 27
   
Item 1.  Legal Proceedings 27
   
Item 1A.  Risk Factors 27
   
Item 2.  Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities 27
   
Item 3.  Defaults Upon Senior Securities 27
   
Item 4.  Mine Safety Disclosures. 27
   
Item 5.  Other Information 27
   
Item 6.  Exhibits 27

 

 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

  

Energous Corporation

CONDENSED BALANCE SHEETS

 

   As of 
   September 30, 2015   December 31, 2014 
ASSETS  (unaudited)     
Current assets:          
Cash and cash equivalents  $15,510,189   $31,494,592 
Accounts receivable   2,000,000    - 
Prepaid expenses and other current assets   568,818    416,580 
Prepaid rent, current   80,784    80,784 
Total current assets   18,159,791    31,991,956 
           
Property and equipment, net   1,630,416    1,515,299 
Prepaid rent, non-current   238,432    299,020 
Other assets   38,931    22,648 
Total assets  $20,067,570   $33,828,923 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Accounts payable  $1,774,602   $1,716,011 
Accrued expenses   987,294    792,349 
Total current liabilities   2,761,896    2,508,360 
           
Commitments and contingencies          
           
Stockholders’ equity          
Preferred Stock, $0.00001 par value, 10,000,000 shares authorized at September 30, 2015          
and December 31, 2014;  no shares issued or outstanding   -    - 
Common Stock, $0.00001 par value, 50,000,000 shares authorized at  September 30, 2015          
and December 31, 2014;  13,154,948 and 12,781,502 shares          
issued and outstanding at September 30, 2015 and December 31, 2014, respectively.   131    127 
Additional paid-in capital   87,128,543    82,465,914 
Accumulated deficit   (69,823,000)   (51,145,478)
Total stockholders’ equity   17,305,674    31,320,563 
Total liabilities and stockholders’ equity  $20,067,570   $33,828,923 

 

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

 1 

 

 

Energous Corporation

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

   For the Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2015   2014   2015   2014 
                 
Revenue  $2,075,000   $-   $2,500,000   $- 
                     
Operating expenses:                    
Research and development   4,758,590    3,699,057    13,008,190    6,184,762 
Sales and marketing   767,762    809,333    2,518,114    2,036,793 
General and administrative   2,156,965    1,322,048    5,663,583    3,124,439 
Total operating expenses   7,683,317    5,830,438    21,189,887    11,345,994 
                     
Loss from operations   (5,608,317)   (5,830,438)   (18,689,887)   (11,345,994)
                     
Other income (expense):                    
Change in fair value of derivative liabilities   -    -    -    (26,265,177)
Interest income (expense), net   2,656    5,258    12,365    (1,029,479)
Loss on retirement of fixed assets   -    (22,818)   -    (22,818)
Gain on debt extinguishment   -    -    -    2,084,368 
Total   2,656    (17,560)   12,365    (25,233,106)
                     
Net loss  $(5,605,661)  $(5,847,998)  $(18,677,522)  $(36,579,100)
                     
Basic and diluted loss per common share  $(0.43)  $(0.62)  $(1.45)  $(5.08)
                     
Weighted average shares outstanding, basic and diluted   13,018,494    9,458,359    12,907,893    7,203,642 

 

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

 2 

 

 

Energous Corporation

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

 

   Common Stock   Additional
Paid-in
   Accumulated    Total
Stockholders'
 
   Shares   Amount   Capital   Deficit   Equity 
                     
Balance at January 1, 2015   12,781,502   $127   $82,465,914   $(51,145,478)  $31,320,563 
                          
Issuance of shares for services   15,000    -    147,900    -    147,900 
                          
Stock-based compensation - stock options   -    -    724,708    -    724,708 
                          
Stock-based compensation - IR warrants   -    -    85,831    -    85,831 
                          
Stock-based compensation - restricted stock units ("RSUs")   -    -    3,145,520    -    3,145,520 
                          
Stock-based compensation - employee stock purchase plan ("ESPP")   -    -    29,967    -    29,967 
                          
Stock-based compensation - performance share units ("PSUs")   -    -    320,409    -    320,409 
                          
Issuance of shares for RSUs   236,297    3    (3)   -    - 
                          
Issuance of shares for PSUs   1,072    -    -    -    - 
                          
Exercise of stock options   10,392    -    25,876    -    25,876 
                          
Disgorgement on account of short swing profit   -    -    12,611    -    12,611 
                          
Cashless exercise of warrants   110,685    1    (1)   -    - 
                          
Proceeds from contributions to the ESPP   -    -    169,811    -    169,811 
                          
Net loss   -    -    -    (18,677,522)   (18,677,522)
                          
Balance, September 30, 2015 (unaudited)   13,154,948   $131   $87,128,543   $(69,823,000)  $17,305,674 

 

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

 3 

 

 

Energous Corporation

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   For the Nine Months Ended September 30, 
   2015   2014 
Cash flows from operating activities:          
Net loss  $(18,677,522)  $(36,579,100)
Adjustments to reconcile net loss to:          
Net cash used in operating activities:          
Depreciation and amortization   617,517    196,898 
Stock based compensation   4,306,435    1,659,404 
Amortization of debt discount   -    964,851 
Gain on conversion of notes payable and accrued interest   -    (2,084,368)
Change in fair market value of derivative liabilities   -    26,265,177 
Loss on retirement of fixed assets   -    22,818 
Amortization of prepaid rent from stock issuance to landlord   60,588    - 
Changes in operating assets and liabilities:          
Accounts receivable   (2,000,000)     
Prepaid expenses and other current assets   (4,338)   (152,477)
Other assets   (16,283)   (1,610)
Accounts payable   58,591    1,128,076 
Accrued expenses   194,945    89,361 
Deferred revenue   -    - 
Net cash used in operating activities   (15,460,067)   (8,490,970)
           
Cash flows used in investing activities:          
Purchases of property and equipment   (732,634)   (815,500)
Net cash used in investing activities   (732,634)   (815,500)

 

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

 

 4 

 

 

Energous Corporation

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   For the Nine Months Ended September 30, 
   2015   2014 
Cash flows from financing activities:          
Proceeds from IPO, net of underwriter's discount and          
offering expenses   -    24,872,170 
Proceeds from the sale of stock to strategic investor, net   -    900,000 
Sale of Warrant to IPO underwriter   -    1,000 
Proceeds from the exercise of stock options   25,876    - 
Proceeds from contributions to employee stock purchase plan   169,811      
Proceeds from the disgorgement of short-swing profit   12,611    - 
Net cash provided by financing activities   208,298    25,773,170 
           
Net (decrease) increase in cash and cash equivalents   (15,984,403)   16,466,700 
Cash and cash equivalents - beginning   31,494,592    1,953,780 
Cash and cash equivalents - ending  $15,510,189   $18,420,480 
           
Supplemental disclosure of non-cash financing activities:          
Decrease in deferred offering costs charged to the IPO  $-   $88,319 
Common stock issued upon conversion of notes payable          
and accrued interest payable  $-   $26,790,177 
Increase in additional paid in capital upon extinguishment          
of derivative liability for warrants  $-   $5,752,000 
Common stock issued to landlord for tenant improvement          
of $100,000 and prepaid rent of $400,000  $-   $500,000 
Increase in accrued expenses for the purchase of          
property and equipment  $-   $413,498 
Common stock issued for services  $147,900   $- 

 

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

 5 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 1 - Business Organization, Nature of Operations

 

Energous Corporation (the “Company”) was incorporated in Delaware on October 30, 2012. The Company is developing WattUp, a wire-free charging technology that provides power at a distance for electronic devices that can be mobile and under full software control. The Company’s ultimate goal is to license our WattUp technology to consumer product companies, silicon manufacturers, wireless data router manufacturers and other commercial partners. The Company believes that its proprietary technology can potentially be used to wirelessly charge a variety of devices, including smart phones, tablets, e-book readers, wearables, sensors, cameras, keyboards, mice, remote controls, rechargeable lights and any other similar devices requiring less than 10 watts.

 

The Company is developing solutions that enable wire-free transmission of energy from one or multiple transmitter(s) to multiple receivers connected to or integrated into electronic devices, at distances of up to fifteen (15) feet in a radius or in a circular charging envelope of up to thirty (30) feet. The Company has developed multiple prototype systems consisting of either a single or multiple transmitter (s) in various forms and sizes, multiple smart phone receiver cases, various other forms of receiving devices and management software to demonstrate the technology.

 

Note 2 – Liquidity and Management Plans

 

During the three and nine months ended September 30, 2015, the Company has recorded revenue of $2,075,000 and $2,500,000, respectively. The Company incurred a net loss of $18,677,522 and $36,579,100 for the nine months ended September 30, 2015 and 2014, respectively. Net cash used in operating activities was $15,460,067 and $8,490,970 for the nine months ended September 30, 2015 and 2014, respectively. Since inception, the Company has met its liquidity requirements principally through the private placement of convertible notes, the sale of its common stock in a registered initial public offering, the sale of its common stock to a strategic investor, the issuance of its common stock to the Company’s landlord to reduce its monthly base rent obligation and pay for certain tenant improvements, the sale of common stock in a December 2014 secondary offering and payments received under product development projects entered into with a customer.

 

As of September 30, 2015, the Company had cash on hand of $15,510,189. In April 2014, the Company completed its IPO of 4,600,000 shares of common stock through which the Company raised net proceeds of approximately $24.8 million. In connection with the completion of the IPO, the Company’s outstanding convertible notes and interest accrued thereon were converted into 1,833,336 and 96,792 shares, respectively, of common stock, thus extinguishing the debt associated with the notes. On April 4, 2014, the Company issued 210,527 shares of common stock to a strategic investor upon the receipt of net proceeds of $900,000 ($300,000 received on March 27, 2014, $700,000 received on April 4, 2014 less $100,000 to MDB Capital Group as a commission). In December 2014, the Company completed a secondary offering of 3,285,714 shares of common stock through which the Company raised net proceeds of approximately $21.0 million. The Company expects that cash on hand as of September 30, 2015, together with anticipated revenues, will be sufficient to fund the Company’s operations into the fourth quarter of 2016.

 

 6 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 2 – Liquidity and Management Plans, continued

 

Research and development of new technologies is, by its nature, unpredictable.  Although the Company will undertake development efforts with commercially reasonable diligence, there can be no assurance that its available resources including the net proceeds from the Company’s IPO, secondary offering, and strategic investor financing will be sufficient to enable it to develop and obtain regulatory approval of its technology to the extent needed to create future revenues sufficient to sustain its operations.  The Company may choose to pursue additional financing, depending upon the market conditions, which could include follow-on equity offerings, debt financing, co-development agreements or other alternatives. Should the Company choose to pursue additional financing, there is no assurance that the Company would be able to do so on terms that it would find acceptable. On April 24, 2015, the Company filed a “shelf” registration statement on Form S-3, under which the Company may from time to time, sell any combination of debt or equity securities up to an aggregate of $75,000,000.

 

Note 3 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2014 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2015.  The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the December 31, 2014 audited financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements as well as the reported expenses during the reporting periods.

 

The Company’s significant estimates and assumptions include the valuation of the Company’s common stock, the valuation of stock-based compensation instruments, recognition of revenue, the useful lives of long-lived assets, and income tax expense. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates.

 

Reclassification

 

Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net loss.

 

Cash and Cash Equivalents

 

The Company considers all short-term, highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. The Company maintains cash balances that may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation limits. The Company maintains its cash deposits with major financial institutions.

 

 7 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 3 – Summary of Significant Accounting Policies, continued

 

Revenue Recognition

 

The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, services have been rendered, collection of the revenue is reasonably assured, and the fees are fixed or determinable.

 

The Company records revenue associated with product development projects that it enters into with certain customers.  In general, these projects are associated with complex technology development, and as such the Company does not have certainty about its ability to achieve the program milestones. Achievement of the milestone is dependent on our performance and the milestone typically needs to be accepted by the customer. The payment associated with achieving the milestone is generally commensurate with the Company’s effort or the value of the deliverable and is nonrefundable. The Company records the expenses related to these projects, generally included in research and development expense, in the periods incurred.

 

The Company also receives nonrefundable payments, typically at the beginning of a customer relationship, for which there are no milestones. The Company recognizes this revenue ratably over the initial engineering product development period. The Company records the expenses related to these projects, generally included in research and development expense, in the periods incurred.

 

Research and Development

 

Research and development expenses are charged to operations as incurred. For internally developed patents, all patent application costs are expensed as incurred as research and development expense. Patent application costs, generally legal costs, are expensed as research and development costs until such time as the future economic benefits of such patents become more certain. The Company incurred research and development costs of $4,758,590 and $3,699,057 for the three months ended September 30, 2015 and 2014, and $13,008,190 and $6,184,762 for the nine months ended September 30, 2015 and 2014, respectively.

 

Stock-Based Compensation

 

The Company accounts for equity instruments issued to employees in accordance with accounting guidance that requires awards to be recorded at their fair value on the date of grant and are amortized over the vesting period of the award. The Company recognizes compensation costs on a straight line basis over the requisite service period of the award, which is typically the vesting term of the equity instrument issued.

 

On April 10, 2015, the Company’s board of directors approved the Energous Corporation Employee Stock Purchase Plan (the “ESPP”), under which 600,000 shares of common stock were reserved for purchase by the Company’s employees, subject to approval by the stockholders. Under the plan, employees may purchase a limited number of shares of the Company’s common stock at a 15% discount from the lower of the closing market prices measured on the first and last days of each half-year period. The Company recognizes compensation expense for the fair value of the purchase options, as measured on the grant date.

 

Income Taxes

 

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of September 30, 2015, no liability for unrecognized tax benefits was required to be reported. The guidance also discusses the classification of related interest and penalties on income taxes. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the three and nine months ended September 30, 2015 and 2014.

 

 8 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 3 – Summary of Significant Accounting Policies, continued

 

Net (Loss) Income Per Common Share

 

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method) and the vesting of restricted stock units (“RSUs”) and performance stock units (“PSUs”) and the enrollment of employees in the ESPP. The computation of diluted loss per share excludes potentially dilutive securities of 4,834,690 and 3,060,301 for the three months ended September 30, 2015 and 2014, and 4,834,690 and 3,060,301 for the nine months ended September 30, 2015 and 2014, respectively, because their inclusion would be antidilutive.

 

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

 

   For the Three Months Ended
September 30,
   For the Nine Months Ended
September 30,
 
   2015   2014   2015   2014 
Consulting Warrant to purchase common stock   166,937    278,228    166,937    278,228 
Financing Warrant to purchase common stock   152,778    152,778    152,778    152,778 
IPO Warrants to purchase common stock   460,000    460,000    460,000    460,000 
IR Consulting Warrant   36,000    36,000    36,000    36,000 
IR Incentive Warrant   15,000    -    15,000    - 
Options to purchase common stock   1,588,851    1,671,235    1,588,851    1,671,235 
RSUs   1,174,990    462,060    1,174,990    462,060 
PSUs   1,213,173    -    1,213,173    - 
ESPP   26,961    -    26,961    - 
Total potentially dilutive securities   4,834,690    3,060,301    4,834,690    3,060,301 

 

 9 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 3 – Summary of Significant Accounting Policies, continued

 

Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers" (Topic 606), which supersedes the revenue recognition requirements in ASC Topic 605, "Revenue Recognition," and most industry-specific guidance. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The amendments in the ASU must be applied using one of two retrospective methods and are effective for annual and interim periods beginning after December 15, 2016. On July 9, 2015, the FASB modified ASU 2014-09 to be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. As modified, the FASB permits the adoption of the new revenue standard early, but not before the annual periods beginning after December 15, 2016. A public organization would apply the new revenue standard to all interim reporting periods within the year of adoption. The Company will evaluate the effects, if any, that adoption of this guidance will have on its financial statements.

 

In August 2014, FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This standard is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Under U.S. GAAP, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting.

 

The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, U.S. GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.

 

In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard would have on our condensed financial statements.

 

In August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015, which clarified the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. ASU 2015-15 should be adopted concurrent with the adoption of ASU 2015-03. The Company is currently evaluating the impact the adoption of these standards will have on its condensed financial statements.

 

 10 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 3 – Summary of Significant Accounting Policies, continued

 

Management’s Evaluation of Subsequent Events

 

The Company evaluates events that have occurred after the balance sheet date of September 30, 2015, through the date which the financial statements are issued.

 

Note 4 – Commitments and Contingencies

 

Investor Relations Agreements

 

Effective January 13, 2014, the Company entered into an agreement with a vendor (“IR Firm”) to provide investor relations services to the Company. Pursuant to the agreement, in addition to monthly cash compensation of $8,000 per month, on March 27, 2014 the Company issued to the IR firm a consulting warrant (“IR Consulting Warrant”) for the purchase of 36,000 shares of common stock. The IR Consulting Warrant has a strike price of $7.80, representing 130% of the IPO price. The IR Consulting Warrant had an initial catch up vesting equivalent to 3,000 shares per month of service, partial months to be prorated on a thirty (30) day basis, from the effective date of this agreement until March 27, 2014. Thereafter, the IR Consulting Warrant vested at a rate of 3,000 shares per month of service. On February 26, 2015, the Company issued to the IR Firm incentive warrants (“IR Incentive Warrants”) to purchase 15,000 shares of common stock with a strike price of $7.80 based upon certain qualified investors and/or institutional or brokerage firms having purchased at least $250,000 in value of the Company’s common shares at the IPO price or greater in the open market on or after the 46th day following March 27, 2014. All IR Incentive Warrants granted during a six month period will collectively vest at each six month anniversary. Both the IR Consulting Warrant and IR Incentive Warrants will have an expiration date four (4) years from the grant date. The shares underlying both the IR Consulting Warrant and the IR Incentive Warrants may be exercised on a cashless basis if at the time of exercise, such warrant shares have not been registered.

 

As of March 31, 2015, all 36,000 shares under the IR Consulting Warrant were vested. The Company incurred stock-based compensation expense of $0 and $39,410 for the three months ended September 30, 2015 and 2014, respectively, and $7,522 and $198,983 for the nine months ended September 30, 2015 and 2014, respectively, in connection with the IR Consulting Warrant, which was included in general and administrative expense.

 

On February 4, 2015, the Company entered into a six month consulting agreement with a consultant to provide the Company with investor relations services. Compensation under the agreement included the Company’s issuance on February 26, 2015, of 15,000 shares of common stock valued at $147,900 and monthly cash payments of $5,000. The total value of the common stock compensation was recorded as a prepaid expense and was being amortized over the six month contract period. The Company incurred amortization expense of $36,975 and $147,900 during the three and nine months ended September 30, 2015, which was included in general and administrative expense.

 

Operating Leases

 

On September 10, 2014, the Company entered into a Lease Agreement (the “Lease”) with Balzer Family Investments, L.P. (the “Landlord”) related to space located at Northpointe Business Center, 3590 North First Street, San Jose, California. The initial term of the lease is 60 months, with initial monthly base rent of $36,720 and the lease is subject to certain annual escalations as defined in the agreement. On October 1, 2014, the Company relocated its headquarters to this new location.  The Company issued to the Landlord 41,563 shares of the Company’s common stock valued at $500,000, of which $400,000 will be applied to reduce the Company’s monthly base rent obligation by $6,732 per month and of which $100,000 was for certain tenant improvements. The Company recorded $400,000 as prepaid rent on its balance sheet, which is being amortized over the term of the lease and recorded $100,000 as leasehold improvements.

 

 11 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 4 – Commitments and Contingencies, continued

 

Operating Leases, continued

 

On February 26, 2015, the Company entered into a sub-lease agreement for additional space in the San Jose area. The agreement has a term which expires on June 30, 2019 and an initial monthly rent of $6,109 per month. On August 25, 2015 the Company entered into an additional amended sub-lease agreement for additional space in San Jose, CA. The agreement has a term which expires on June 30, 2019 and an initial monthly rent of $4,314 per month. These leases are subject to certain annual escalations as defined in the agreements.

 

On July 9, 2015, the Company entered into a sub-lease agreement for additional space in Costa Mesa, CA. The agreement has a term which expires on September 30, 2017 and a monthly rent of $6,376 per month.

 

The future minimum lease payments for leased locations are as follows:

 

For the Years Ended December 31,  Amount 
2015 (Three Months)  $130,117 
2016   529,309 
2017   572,722 
2018   530,531 
2019   372,652 
Total  $2,135,331 

 

Development and Licensing Agreement

 

Effective January 28, 2015, the Company signed a development and licensing agreement with a consumer electronics company to embed WattUp wire-free charging receiver technology in various products including, but not limited to certain mobile consumer electronics and related accessories. During the development phase and through customer shipment of their first product, Energous will afford this customer an exclusive “time to market advantage” in the licensed product categories.

 

This development and licensing agreement contains both invention and development milestones that the Company will need to achieve during the next two years. Pursuant to the Agreement, on March 23, 2015, the Company received an initial non-refundable payment of $500,000, for which revenue of $75,000 and $500,000 was recognized during the three and nine months ended September 30, 2015. The agreement provides for additional amounts to be received by the Company based upon its achievement of certain milestones. During the three months ended September 30, 2015, the Company recognized revenue of $2,000,000 upon the achievement of milestones under the agreement. This $2,000,000 was recorded in accounts receivable at September 30, 2015, and was collected on October 21, 2015. During the three and nine months ended September 30, 2015, the Company recognized as revenue an aggregate of $2,075,000 and $2,500,000, respectively, under the agreement.

 

Effective April 3, 2015, the Company entered into an amendment of the development and license agreement with this consumer electronics company to include joint development of wire-free transmitter technology and technology license back to the Company. On June 5, 2015, the Company entered into a second amendment of the development and license agreement with this consumer electronics company to conform the agreement for technical changes in the product delivery milestones.

 

Hosted Design Solution Agreement

 

On June 25, 2015, the Company entered into a three year agreement to license electronic design automation software in a hosted environment. Pursuant to the agreement, under which services began July 13, 2015, the Company is required to remit quarterly payments in the amount of $100,568 with the last payment due March 30, 2018.

 

 12 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 4 – Commitments and Contingencies, continued

 

Amended Employee Agreement – Stephen Rizzone

 

On April 3, 2015, the Company entered into an Amended and Restated Executive Employment Agreement with Stephen R. Rizzone, the Company’s President and Chief Executive Officer (the “Employment Agreement”).

 

The Employment Agreement has an effective date of January 1, 2015 and an initial term of four years (the “Initial Employment Period”). The Employment Agreement provides for an annual base salary of $365,000, and Mr. Rizzone is eligible to receive quarterly cash bonuses with a total target amount equal to 100% of his base salary based upon achievement of performance-based objectives established by the Company’s board of directors.

 

Pursuant to Mr. Rizzone’s prior employment agreement, on December 12, 2013 Mr. Rizzone was granted a ten year option to purchase 275,689 shares of common stock at an exercise price of $1.68 vesting over four years in 48 monthly installments beginning October 1, 2013 (the “First Option”). Mr. Rizzone was also granted a second option award to purchase 496,546 shares of common stock at an exercise price of $6.00 (the “Second Option”). The Second Option vests over the same vesting schedule as the First Option.

 

Effective with the approval on May 21, 2015 by the Company’s stockholders of its new performance-based equity plan, the Employment Agreement provided and Mr. Rizzone received, a grant of 639,075 Performance Share Units (the “PSUs”). The PSUs, which represent the right to receive shares of common stock, shall be earned based on the Company’s achievement of market capitalization growth between the effective date of the Employment Agreement and the end of the Initial Employment Period. If the Company’s market capitalization is $100 million or less, no PSUs will be earned. If the Company reaches a market capitalization of $1.1 billion or more, 100% of the PSUs will be earned. For market capitalization between $100 million and $1.1 billion, the percentage of PSUs earned will be determined on a quarterly basis based on straight line interpolation. PSUs earned as of the end of a calendar quarter will be paid 50% immediately and 50% will be deferred until the end of the Initial Employment Period subject to Mr. Rizzone’s continued employment with the Company (See Note 6).

 

Mr. Rizzone is also eligible to receive all customary and usual benefits generally available to senior executives of the Company.

 

The Employment Agreement provides that if Mr. Rizzone’s employment is terminated due to his death or disability, if Mr. Rizzone’s employment is terminated by the Company without cause or if he resigns for good reason, twenty-five percent (25%) of the shares subject to the First Option and the Second Option shall immediately vest and become exercisable, he will have a period of one year post-termination to exercise the First Option and the Second Option, and if a Liquidation Event (as defined in the Employment Agreement) shall occur prior to the termination of the First Option and the Second Option, one hundred percent (100%) of the shares subject to the First Option and Second Option shall immediately vest and become exercisable effective immediately prior to the consummation of the Liquidation Event. In addition, any outstanding deferred PSUs shall be immediately vested and paid, but any remaining unearned portion of the PSUs shall immediately be canceled and forfeited.

 

 13 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 4 – Commitments and Contingencies, continued

 

Offer Letter – Brian Sereda

 

Effective July 13, 2015, the Company appointed Brian Sereda to serve as Vice President and Chief Financial Officer, replacing Interim Chief Financial Officer Howard Yeaton.

 

In connection with Mr. Sereda’s appointment as Vice President and Chief Financial Officer, the Company and Mr. Sereda executed an offer letter effective July 13, 2015 (the “Sereda Offer Letter”). Under the Sereda Offer Letter, Mr. Sereda will receive an annual base salary of $250,000 per year, and is eligible to earn an annual performance bonus of up to 75% of his then current base salary in accordance with performance objectives established by the Company’s independent compensation committee or the Board of Directors. In addition, under the Sereda Offer Letter and as an inducement to join the Company, Mr. Sereda received an inducement restricted stock unit award covering a total of 120,000 shares of common stock. This restricted stock unit award vests over a period of four years in four equal annual installments on July 13 of each of 2016, 2017, 2018 and 2019, subject to Mr. Sereda’s continued employment with the Company through each vesting date.

 

In the event Mr. Sereda is terminated without cause, he is entitled to (1) six months of his then-current base salary and (2) payment of COBRA premiums for up to six months. In the event of a liquidation event and termination of employment, except for cause, 100% of the inducement award shall immediately vest.

 

Note 5 – Stockholders’ Equity

 

Disgorgement of short swing profits

 

On April 11, 2015, $12,611 of proceeds was received from an officer of the Company who had purchased shares in the December 2014 secondary offering representing the disgorgement of a short swing profit on the officer’s April 2015 sale of the Company’s stock.

 

Filing of registration statement

 

On April 24, 2015, the Company filed a “shelf” registration statement on Form S-3, which became effective on April 30, 2015. The “shelf” registration statement allows the Company from time to time to sell any combination of debt or equity securities described in the registration statement up to aggregate proceeds of $75,000,000.

 

 14 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 6 – Stock Based Compensation

 

Equity Incentive Plans

 

2013 Equity Incentive Plan

 

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

 

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

 

As of September 30, 2015, 262,186 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

 

2014 Non-Employee Equity Compensation Plan

 

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

 

As of September 30, 2015, 146,383 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

 

2015 Performance Share Unit Plan

 

On April 10, 2015, the Company’s board of directors approved the Energous Corporation 2015 Performance Share Unit Plan (the “Performance Share Plan”), under which 1,310,104 shares of common stock became available for issuance as PSUs to a select group of employees and directors, subject to approval by the stockholders. On May 21, 2015 the Company’s stockholders approved the Performance Share Plan.

 

As of September 30, 2015, 95,859 shares of common stock remain eligible to be issued through equity based instruments under the Performance Share Unit Plan.

 

Employee Stock Purchase Plan

 

On April 10, 2015, the Company’s board of directors approved the ESPP, under which 600,000 shares of common stock have been reserved for purchase by the Company’s employees, subject to approval by the stockholders. On May 21, 2015, the Company’s stockholders approved the ESPP. Employees may designate an amount not less than 1% but not more than 10% of their annual compensation, but for not more than 7,500 shares during an offering period. An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of the option will be the lesser of 85% of the fair market of the common stock on the first business day of the offering period and 85% of the fair market value of the common stock on the applicable exercise date.

 

As of September 30, 2015, 600,000 shares of common stock remain eligible to be issued through equity based instruments under the ESPP. As of September 30, 2015, eligible employees have contributed $169,811 through payroll withholdings to the ESPP. Initial shares under the ESPP will be delivered in January 2016.

 

 15 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 6 – Stock Based Compensation, continued

 

Stock Option Award Activity

 

The following is a summary of the Company’s stock option activity during the nine months ended September 30, 2015:

 

   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Grant Date
Fair Value
   Weighted
Average
Remaining
Life In
Years
   Intrinsic
Value
 
Outstanding at January 1, 2015   1,607,075   $4.41   $2.46    9.0   $- 
Granted   -    -    -    -    - 
Exercised   (10,392)   2.49   1.42   -    - 
Forfeited   (7,832)   2.49   1.42   -    - 
Outstanding at September 30, 2015   1,588,851   $4.43   $2.48    8.4   $3,924,000 
                          
Exercisable at January 1, 2015   550,298   $4.33   $2.41    9.1   $- 
Vested   290,056    4.42    -    -    - 
Exercised   (10,392)   2.49   -    -    - 
Forfeited   -    -    -    -    - 
Exercisable at September 30, 2015   829,962   $4.38   $2.46    8.4   $2,064,000 

 

The following table presents information related to stock options outstanding and exercisable at September 30, 2015:

 

Options Outstanding   Options Exercisable 
Exercise Price   Outstanding
Number of Options
   Weighted Average
Remaining Life In
Years
   Exercisable Number of
Options
 
$1.68    275,689    8.2    137,845 
 2.49    308,530    8.3    156,457 
 3.63    51,958    8.4    51,958 
 4.99    99,214    8.5    49,088 
 6.00    853,460    8.5    434,614 
      1,588,851    8.4    829,962 

 

As of September 30, 2015, the unamortized value of options was $1,878,887. As of September 30, 2015, the unamortized portion will be expensed over a weighted average period of 2.0 years.

 

Restricted Stock Units (“RSUs”)

 

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

 

 16 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

 

Note 6 – Stock Based Compensation, continued

 

Restricted Stock Units (“RSUs”), continued

 

On January 2, 2015, the compensation committee of the board of directors granted to various directors, RSUs under which the holders have the right to receive an aggregate of 17,576 shares of the Company’s common stock. The awards granted vest fully on the first anniversary of the grant date. On June 23, 2015, one of the Company’s directors resigned and upon approval by the compensation committee of the board of directors, his RSU award of 4,394 shares became fully vested. Of the total amount of RSUs granted to directors on January 2, 2015, 13,182 remain unvested.

 

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

 

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

 

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

 

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

 

On May 21, 2015, the compensation committee of the board of directors granted to various employees and consultants inducement RSU awards under which the holders have the right to receive an aggregate of 205,081 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of hire.

 

On May 21, 2015, the compensation committee of the board of directors granted to Cesar Johnston, the Company’s Senior Vice President of Engineering, RSUs under which Mr. Johnston has the right to receive 1,500 shares of the Company’s common stock. This award was granted under the 2013 Equity Incentive Plan. The award granted vested fully on May 31, 2015.

 

On May 21, 2015, the compensation committee of the board of directors granted to two consultants RSUs under which the holders have the right to receive an aggregate of 7,042 shares of the Company’s common stock. These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted were fully vested on the date of grant.

 

On May 21, 2015, in connection with patent applications, the compensation committee of the board of directors granted to various employees RSUs under which the holders have the right to receive an aggregate of 6,300 shares of the Company’s common stock. These awards were granted under the 2013 Equity Incentive Plan. Of the awards granted, 2,100 RSUs become fully vested on December 29, 2015, 3,500 become fully vested on December 30, 2015 and 700 become fully vested on December 31, 2015.

 

 17 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 6 – Stock Based Compensation, continued

 

Restricted Stock Units (“RSUs”), continued

 

On May 21, 2015, the compensation committee of the board of directors granted to John Gaulding, director and chairman of the board, RSUs under the 2014 Non-Employee Equity Compensation Plan for which Mr. Gaulding has the right to receive 25,000 shares of the Company’s common stock. These shares were issued to Mr. Gaulding in connection with his role as an independent director and chairman of the Board of Directors. The award granted vests fully on January 1, 2016.

 

On May 21, 2015, the compensation committee of the board of directors accelerated the vesting of 13,074 previously issued RSUs, held by certain employees and consultants, to vest on April 30, 2015.

 

On July 1, 2015, the Company appointed Martin Cooper to the Board of Directors with a term expiring at the Company’s 2016 annual stockholders meeting. In connection with Mr. Cooper’s appointment to the Board, Mr. Cooper was issued RSUs under the Company’s 2014 Non-Employee Equity Compensation Plan covering a total of 5,061 shares of Company common stock that will vest in full on January 4, 2016.

 

On July 13, 2015, the Company appointed Brian Sereda Vice President and Chief Financial Officer. As an inducement to join the Company, Mr. Sereda received an inducement restricted stock unit award covering a total of 120,000 shares of common stock. The restricted stock unit award vests in four equal annual installments on July 13 of each of 2016, 2017, 2018 and 2019, subject to Mr. Sereda’s continued employment with the Company through each vesting date.

 

On August 20, 2015, the compensation committee of the board of directors granted to three consultants RSUs under which the holders have the right to receive an aggregate of 8,854 shares of the Company’s common stock (of which 1,416 were granted to Martin Cooper). These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted were fully vested on the date of grant.

 

During August 2015, the compensation committee of the board of directors granted to various employees inducement RSU awards under which the holders have the right to receive an aggregate of 74,992 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of hire.

 

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

 

At September 30, 2015, the unamortized value of the RSUs was $9,431,246. The unamortized amount will be expensed over a weighted average period of 3.1 years. A summary of the activity related to RSUs for the nine months ended September 30, 2015 is presented below:

 

   Total   Weighted
Average Grant
Date Fair Value
 
Outstanding at January 1, 2015   733,628   $10.49 
RSUs granted   784,003   $8.62 
RSUs forfeited   (106,344)  $9.74 
Shares of common stock issued in exchange for RSUs   (236,297)  $10.57 
Outstanding at September 30, 2015   1,174,990   $9.30 
           
Vested at January 1, 2015   6,349   $9.94 
RSUs vested   231,448   $10.57 
RSUs forfeited   -   $- 
Shares of common stock issued in exchange for RSUs   (236,297)  $10.57 
Vested at September 30, 2015   1,500   $7.94 
           

 

 

 18 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 6 – Stock Based Compensation, continued

 

Performance Share Units (“PSUs”)

 

Effective on May 21, 2015, the compensation committee of the board of directors granted to Stephan Rizzone PSUs under which Mr. Rizzone had the right to receive up to 639,075 shares of the Company’s common stock. The PSUs shall be earned based on the Company’s market capitalization growth (See Note 4).

 

On May 21, 2015, the compensation committee of the board of directors granted to its independent directors and executives, PSUs under which the holders have the right to receive up to 543,216 shares of the Company’s common stock. The PSUs shall be earned based on the Company’s achievement of market capitalization growth between the effective date of the Employment Agreement and the end of the Initial Employment Period. If the Company’s market capitalization is $100 million or less, no PSUs will be earned. If the Company reaches a market capitalization of $1.1 billion or more, 100% of the PSUs will be earned. For market capitalization between $100 million and $1.1 billion, the percentage of PSUs earned will be determined on a quarterly basis based on straight line interpolation.

 

On July 1, 2015, the Company appointed Martin Cooper to the Board of Directors with a term expiring at the Company’s 2016 annual stockholders meeting. In connection with Mr. Cooper’s appointment, he was granted PSUs under the Company’s 2015 Performance Share Unit Plan for which he is eligible to receive 31,954 shares of the Company’s common stock.

 

The Company determined that the PSUs were equity awards with both market and service conditions. The Company utilized a Monte Carlo simulation to determine the fair value of the market condition, as described above. Grantees of PSUs are required to be employed through December 31, 2018 in order to earn the entire award, if and when vested.

 

The fair value of the grant of PSUs to purchase a total of 1,214,245 shares of common stock was determined to be approximately $3,183,784, and is to be amortized over the service period of May 21, 2015 through December 31, 2018, on a straight-line basis. Amortization was $277,031 and $0 for the three months ended September 30, 2015 and 2014 and was $320,409 and $0 for the nine months ended September 30, 2015 and 2014, respectively.

 

At September 30, 2015, the unamortized value of the PSUs was approximately $2,863,375. The unamortized amount will be expensed over a weighted average period of 3.3 years. A summary of the activity related to PSUs for the nine months ended September 30, 2015 is presented below:

 

   Total   Weighted
Average Grant
Date Fair Value
 
Outstanding at January 1, 2015   -   $- 
PSUs granted   1,214,245   $2.62 
PSUs forfeited   -   $- 
Shares of common stock issued in exchange for PSUs   (1,072)  $2.62 
Outstanding at September 30, 2015   1,213,173   $2.62 
           
Vested at January 1, 2015   -   $- 
PSUs vested   1,072   $2.62 
PSUs forfeited   -   $- 
Shares of common stock issued in exchange for PSUs   (1,072)  $2.62 
Vested at September 30, 2015   -   $- 

 

 19 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 6 – Stock Based Compensation, continued

 

Employee Stock Purchase Plan (“ESPP”)

 

The initial offering period for the ESPP is July 1, 2015 through December 31, 2015. On July 1, 2015 employees enrolled in the ESPP agreed to have withheld up to approximately $339,623. If all participants exercised their option under the ESPP, approximately 53,921 shares would be issued in January 2016. Through September 30, 2015, employees have contributed an aggregate of $169,811. The first shares will be issued in January, 2015. As of September 30, 2015, 0 shares have been issued under this plan, with 600,000 shares reserved for future issuance.

 

The weighted-average grant-date fair value of the purchase option for each designated share purchased under this plan was approximately $2.46, which represents the fair value of the option, consisting of three main components: (i) the value of the discount on the enrollment date, (ii) the proportionate value of the call option for 85% of the stock and (iii) the proportionate value of the put option for 15% of the stock. The Company recognized compensation expense for the plan of $29,967 for both the three and nine months ended September 30, 2015.

 

The Company estimated the fair value of options granted during the nine months ended September 30, 2015 using the Black-Scholes option pricing model. The fair values of stock options granted were estimated using the following assumptions:

 

 

   Options Granted
During the Nine
Months Ended
September 30, 2015
 
Stock price  $7.41 
Dividend yield   0%
Expected volatility   65%
Risk-free interest rate   0.13%
Expected life   6 months 

 

 

Stock-Based Compensation Expense

 

The following tables summarize total stock-based compensation costs recognized for the three and nine months ended September 30, 2015 and 2014:

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2015   2014   2015   2014 
Stock options  $232,286   $325,634   $724,708   $1,070,939 
RSUs   968,385    381,856    3,145,520    389,482 
IR warrants   -    39,410    85,831    198,983 
PSUs   277,031    -    320,409    - 
ESPP   29,967    -    29,967    - 
Total  $1,507,669   $746,900   $4,306,435   $1,659,404 

 

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

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2015   2014   2015   2014 
Research and development  $582,320   $329,138   $2,116,631   $568,390 
General and administrative   739,842    165,228    1,673,427    657,738 
Sales and marketing   185,507    252,534    516,377    433,276 
Total  $1,507,669   $746,900   $4,306,435   $1,659,404 

 

 20 

ENERGOUS CORPORATION

Notes to Condensed Financial Statements

 

Note 7 – Related Party

 

On July 14, 2014, the Company’s Board of Directors appointed Howard Yeaton as the Company’s Interim Chief Financial Officer. On July 13, 2015, the Company appointed Brian Sereda as the Company’s Chief Financial Officer (See Note 4), replacing Interim Chief Financial Officer Howard Yeaton. Howard Yeaton is the Managing Principal of Financial Consulting Strategies LLC (“FCS”). During the three and nine months ended September 30, 2015, the Company incurred fees to FCS of $2,500 and $61,848 in connection with Mr. Yeaton’s services as Interim Chief Financial Officer and $28,405 and $67,751, respectively, for other financial advisory and accounting services provided by FCS.

 

Note 8 – Subsequent Events

 

On October 5, 2015, George B. Holmes resigned as Chief Commercial Officer of the Company. Mr. Holmes will provide consulting services to the Company pursuant to a six month consulting agreement pursuant to which he will receive consulting fees totaling $80,000. In connection with the consulting arrangement, Mr. Holmes was permitted to extend the exercise period for an option to purchase 80,201 shares of the Company’s common stock at an exercise price of $2.49 per share and an aggregate of 44,836 RSUs would be allowed to vest pursuant to their terms.

 

 

 21 

 

 

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

 

Forward-Looking Statements

 

As used in this Form 10-Q, unless the context otherwise requires the terms “we,” “us,” “our,” and “Energous” refer to Energous Corporation, a Delaware corporation. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “seek,” “intend,” “plan,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding proposed services, market opportunities and acceptance, expectations for revenues, cash flows and financial performance, intentions for the future and the anticipated results of our development efforts. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to develop a commercially feasible technology; receipt of necessary regulatory approval; our ability to find and maintain development partners, market acceptance of our technology, the amount and nature of competition in our industry; our ability to protect our intellectual property; and the other risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of this Quarterly Report on Form 10-Q and our previously filed Annual Report on Form 10-K. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

Overview

 

We are developing wire-free, software-controlled charging technology that provides power at a distance for electronic devices. Our ultimate goal is to license our WattUp™ technology to consumer product companies, silicon manufacturers, wireless data router manufacturers and other commercial partners to make wire-free charging affordable, ubiquitous and convenient. We believe there are a wide variety of potential uses for our proprietary technology, including smart phones, e-book readers, tablets, wearables, keyboards, mice, remote controls, rechargeable lights, the Internet of Things (or IOT), cylindrical batteries, toys, gaming consoles and any other devices, requiring less than 10 watts to charge.

 

We are developing solutions that enable wire-free transmission of energy from multiple transmitters to multiple receivers connected to or integrated into electronic devices, with a range of up to fifteen (15) feet in radius or in a circular charging envelope of up to thirty (30) feet. Our transmitters “pair” so that multiple transmitters can be connected to form a seamless network allowing WattUp enabled receivers to charge while the end user is moving from room-to-room. We have validated the technology in our laboratories and developed multiple prototype systems consisting of either a single or multiple transmitter(s) in various forms and sizes, multiple smartphone receiver cases, various other forms of receiving devices and management software to demonstrate the technology. In November 2015, Underwriters Laboratories, Inc. (UL) completed independent testing of our technology and demonstrated the following results, which exceeded our performance targets: (1) 4 watts delivered to a receiver at a distance of 0-5 feet; (2) 2 watts delivered to a receiver at a distance of 5-10 feet; and 1 watt delivered to a receiver at a distance of 10-15 feet.

 

Our technology solution consists principally of transmitter and receiver application specific integrated circuits, or ASICs, and novel antenna designs driven through innovative algorithms and software applications. We are developing multiple generations of transmitter and receiver ASICs, multiple antenna designs, as well as algorithms and software designs that we believe, in the aggregate, will optimize our technology by reducing size and cost, while increasing performance to a level that we believe will allow for our technology to be integrated into low-power devices (that we have defined as devices requiring less than 10 watts), thereby eliminating the need for a charging cord or pad to maintain a charge. We submitted our first ASIC design for wafer fabrication in November 2013. Since then, we have continued to improve on our ASIC developments and we expect to continue investing in this area. In October 2015, we began sampling what we believe is the world’s first radio frequency to direct current rectifier integrated circuit that is designed to power smaller wearable and IOT devices that require 10 watts or less to charge. This ASIC measures only 3mm x 3mm. We are also developing what we believe will be an enterprise class management and control system for our WattUp solution that will incorporate cloud-based network management as well as the necessary local interface and control for the transmitter and receiver.

 

 

 22 

 

 

We believe that if our development, regulatory and commercialization efforts are successful, our initial full-featured transmitter and receiver solutions will be able to simultaneously charge multiple mobile consumer electronic devices at varying charging levels, depending on the number of devices, with a range of up to fifteen (15) feet in radius or in a circular charging envelope of up to thirty (30) feet. Subsequent development efforts will focus on increasing the power delivery capability, increasing distance, enhancing the management and control solution and lowering overall system cost.

 

We have entered into a number of joint development agreements with potential strategic partners which provide for the exchange of technology and which serve to describe the integration of our technology into the strategic partners’ products. At the 2015 Consumer Electronics Show in January 2015, we demonstrated whole house charging coverage through the use of WattUp technology through multiple transmitters packaged in a variety of consumer-friendly form factors, including televisions, bed-side units, sound bars, wall units and speakers.

 

In 2015, we have focused on narrowing our research and development efforts with potential strategic partners whose goals, capabilities and commercialization potential opportunities most closely align with ours. In January 2015 we entered into a funded product development and licensing agreement with a tier 1 consumer electronics company to embed our receiver technology in various products including, but not limited to, mobile consumer electronics and certain related accessories. The agreement was subsequently expanded to include the integration of WattUp transmitter technology. During the development phase through the first customer shipment, we will afford this customer a time to market advantage in the licensed product categories. This agreement contains both invention and development milestones that will need to be met for the agreement to continue through to the licensing phase. During the third quarter of 2015, we completed a major development milestone under this agreement resulting in meaningful revenue recognition during the quarter.

 

With a goal of accelerating the initial time to commercialization into late 2016 or early 2017, we plan to enter into one or more additional joint development and licensing agreements for products outside our tier one partner’s licensed product categories (for example IOT devices, cylindrical batteries, toys, gaming consoles) in late 2015 or early 2016. These products are not expected to include our full-featured transmitter and receiver technology but instead are expected to involve products with lower power and/or range requirements.

 

We have pursued an aggressive intellectual property strategy to protect our propriety technology. As of September 30, 2015, we had in excess of 150 pending U.S. patent and provisional patent applications. In addition to the inventions covered by these patent applications, we have identified a significant number of additional specific inventions we believe may be novel and patentable. We intend to file for patent protection for the most valuable of these, as well as for other new inventions that we expect to develop. Our strategy is to continually monitor the costs and benefits of each patent application and pursue those that will best protect our business, such as in the area of directed power transmission, energy harvesting and network management. In the second half of 2015, the United States Patent and Trademark Office issued our first three patents and notified us of the allowance of three additional patents.

 

During the three and nine months ended September 30, 2015, we have recorded revenue of $2,075,000 and $2,500,000, respectively, and have incurred significant losses from operations since inception. We expect to continue to incur operating losses for the foreseeable future as we develop our technology.

 

Critical Accounting Policies and Estimates

 

Revenue Recognition

 

We recognize revenue when the following criteria have been met: persuasive evidence of an arrangement exists, services have been rendered, collection of the revenue is reasonably assured, and the fees are fixed or determinable.

 

We record revenue associated with product development projects that we enter into with certain customers.  In general, these projects are associated with complex technology development, and as such we do not have certainty about our ability to achieve the program milestones. Achievement of the milestone is dependent on our performance and the milestone typically needs to be accepted by the customer. The payment associated with achieving the milestone is generally commensurate with our effort or the value of the deliverable and is nonrefundable. We record the expenses related to these projects, generally included in research and development expense, in the periods incurred.

 

We also receive nonrefundable payments, typically at the beginning of a customer relationship, for which there are no milestones. We recognize this revenue ratably over the initial engineering product development period. We record the expenses related to these projects, generally included in research and development expense, in the periods incurred.

 

 23 

 

 

During the three and nine months ended September 30, 2015, we recorded revenue of $2,075,000 and $2,500,000, respectively. We recorded no revenue prior to 2015.

 

Results of Operations

 

Three Months Ended September 30, 2015 and 2014

 

Revenues.  During the three months ended September 30, 2015, we recorded revenue of $2,075,000. We recorded no revenue prior to 2015.

 

Operating Expenses and Loss from Operations.  Operating expenses are made up of research and development, general and administrative and marketing expenses. Loss from operations for the three months ended September 30, 2015 and 2014 were $5,608,317 and $5,830,438, respectively.

 

Research and Development Costs. Research and development costs include costs for developing our technology such as ASIC design costs, salaries, software and facility costs. Research and development costs for the three months ended September 30, 2015 and 2014 were $4,758,590 and $3,699,057, respectively. The increase in research and development costs of $1,059,533 is primarily due to a $1,426,094 increase in compensation (including an increase in stock-based compensation of $253,183) from a larger headcount within the department, a $116,219 increase in engineering software spending, a $131,985 increase in depreciation allocation and a $122,436 increase in office rent allocation, partially offset by a $647,512 decrease in consulting expenses as a result of consulting duties now being performed by employees and a $85,437 decrease in costs pertaining to patent filings.

 

General and Administrative Expenses. General and administrative expenses include costs for general and corporate functions, including facility fees, travel, telecommunications, insurance, professional fees, consulting fees and other overhead. General and administrative costs for the three months ended September 30, 2015 and 2014 were $2,156,965 and $1,322,048, respectively. The increase in general administrative costs of $834,917 is primarily due to an $872,372 increase in compensation, including an increase in stock-based compensation of $574,614, from increased headcount within the department.

 

Sales and Marketing Costs. Sales and marketing costs for the three months ended September 30, 2015 and 2014 were $767,762 and $809,333, respectively. The decrease in sales and marketing costs of $41,571 is primarily due to a decrease of $47,702 in consulting expenses as a result of employees handling duties formerly performed by consultants and a decrease of $45,833 in travel expenses, partially offset by a $17,902 increase in compensation.

  

Interest Income (Expense), Net. Interest income for the three months ended September 30, 2015 was $2,656 as compared to interest income, of $5,258 for the three months ended September 30, 2014. The change in interest income is primarily due to a lower average cash balance during the three months ended September 30, 2015.

 

Net Loss. As a result of the above, net loss for the three months ended September 30, 2015 was $5,605,661 as compared to $5,847,998 for the three months ended September 30, 2014.

 

Nine Months Ended September 30, 2015 and 2014

 

Revenues.  During the nine months ended September 30, 2015, we recorded revenue of $2,500,000, $2,000,000 of which was upon the achievement of milestones under a development and licensing agreement. We recorded no revenue prior to 2015.

 

Operating Expenses and Loss from Operations.  Operating expenses are made up of research and development, general and administrative and marketing expenses. Loss from operations for the nine months ended September 30, 2015 and 2014 was $18,689,887 and $11,345,994, respectively.

 

Research and Development Costs. Research and development costs include costs for developing our technology such as ASIC design costs, salaries, software and facility costs. Research and development costs for the nine months ended September 30, 2015 and 2014 were $13,008,190 and $6,184,762, respectively. The increase in engineering product development costs of $6,823,428 is primarily due to a $5,137,029 increase in compensation (including an increase in stock-based compensation of $1,548,242) from a larger headcount within the department, a $1,322,359 increase in spending on components, third party design and engineering supplies principally in support of ASIC development, a $415,433 increase in depreciation allocation, a $316,620 increase in office rent allocation and a $160,292 increase in software expenses primarily from increased expenditures on engineering software, partially offset by a $417,697 decrease in costs pertaining to patent filings and a decrease of $426,407 in consulting expenses as a result of employees now handling duties formerly performed by consultants.

 

 24 

 

 

General and Administrative Expenses. General and administrative expenses include costs for general and corporate functions, including facility fees, travel, telecommunications, insurance, professional fees, consulting fees and other overhead. General and administrative costs for the nine months ended September 30, 2015 and 2014 were $5,663,583 and $3,124,439, respectively. The increase in general and administrative expense of $2,539,144 is primarily due to a $1,650,347 increase in compensation, including stock-based compensation increase of $1,015,776, from increased headcount within the department and newly executed executive agreements in place during the current period, a $403,697 increase in legal, accounting and insurance costs primarily as a result of operating as a public company during the nine months ended September 30, 2015 and a $133,070 increase in consulting and outside information technology (IT) services, primarily as a result of increased outside IT services to support a larger staff and fees paid to members of the board of directors.

 

Sales and Marketing Costs. Sales and marketing costs for the nine months ended September 30, 2015 and 2014 were $2,518,114 and $2,036,793, respectively. The increase in sales and marketing costs of $481,321 is primarily due to increased compensation of $525,767, including increased stock-based compensation of $83,013, from an increased headcount within the department and an increase of $177,504 in trade show expenses primarily as a result of participating in the 2015 Consumer Electronics Show, partially offset by a $285,545 decrease in consulting expenses primarily as a result of employees handling duties formerly performed by consultants.

 

Change in Fair Value of Derivative Liabilities. Change in fair value of derivative liabilities for the nine months ended September 30, 2015 was $0 as compared to $26,265,177 for the nine months ended September 30, 2014, as the derivative liabilities were extinguished during the year ended December 31, 2014.

 

Interest Income (Expense), Net. Interest income for the nine months ended September 30, 2015 was $12,365 as compared to interest expense, net of $1,029,479 for the nine months ended September 30, 2014 and included amortization of debt discount of $0 and $964,851, respectively. The change in interest income (expense), net, resulted primarily from the reduction in interest on the convertible notes, including the amortization of debt discount. The related convertible notes were extinguished in April 2014 and accordingly there was no similar amortization during the nine months ended September 30, 2015.

 

Gain on Debt Extinguishment. Gain on debt extinguishment for the nine months ended September 30, 2015 was $0 as compared to $2,084,368 for the nine months ended September 30, 2014. The gain on debt extinguishment resulted from the conversion of the convertible notes and the related extinguishment of the notes, accrued interest payable and the derivative liability.

 

Net Loss. As a result of the above, net loss for the nine months ended September 30, 2015 was $18,677,522 as compared to $36,579,100 for the nine months ended September 30, 2014.

 

Liquidity and Capital Resources

 

During the three and nine months ended September 30, 2015, we recorded revenue of $2,075,000 and $2,500,000, respectively. We incurred a net loss of $18,677,522 and $36,579,100 for the nine months ended September 30, 2015 and 2014, respectively. Net cash used in operating activities was $15,460,067 and $8,490,970 for the nine months ended September 30, 2015 and 2014, respectively. Since inception, we have met our liquidity requirements principally through the private placement of convertible notes, the sale of our common stock in a registered initial public offering, the sale of our common stock to a strategic investor, the issuance of our common stock to the Company’s landlord to reduce its monthly base rent obligation and pay for certain tenant improvements, the sale of common stock in a December 2014 secondary offering and payments received under product development projects entered into with customers.

 

As of September 30, 2015, we had cash and cash equivalents of $15,510,189.

 

We believe our current cash on hand, together with anticipated payments received under product development projects entered into with customers, will be sufficient to fund our operations into the fourth quarter of 2016. However, we may require additional financing to fully implement our business plan, the ultimate goal of which is to license our technology to device manufacturers, wireless service providers and other commercial partners to make wire-free charging an affordable, ubiquitous and convenient service for end users. Potential financing sources could include follow-on equity offerings, debt financing, co-development agreements or other alternatives. Depending upon market conditions, we may choose to pursue additional financing to, among other reasons, accelerate our product development efforts, regulatory activities and business development and support functions with a view to capitalizing on the market opportunity we see for our wire-free charging technology. On April 24, 2015, we filed a “shelf” registration statement on Form S-3, under which we may from time to time, sell any combination of debt or equity securities up to an aggregate of $75,000,000.

 

 25 

 

 

During the nine months ended September 30, 2015, cash flows used in operating activities were $15,460,067, consisting of a net loss of $18,677,522, less non-cash expenses aggregating $4,984,540 (representing principally stock-based compensation of $4,306,435 and depreciation expense of $617,517), a $2,000,000 increase in accounts receivable and a $4,338 increase in prepaid expenses and other current assets, partially offset by an increase of $58,591 in accounts payable and an increase of $194,945 in accrued expenses. During the nine months ended September 30, 2014, cash flows used in operating activities were $8,490,970, consisting of a net loss of $36,579,100, offset by non-cash expenses of $27,024,780 and net changes in operating assets and liabilities of $1,063,350.

 

During the nine months ended September 30, 2015 and 2014, cash flows used in investing activities were $732,634 and $815,500, respectively. The cash used for the nine months ended September 30, 2015 consisted of the purchase of laboratory and computer equipment and software to accommodate newly hired employees and to support engineering services and testing performed for our customers.

 

During the nine months ended September 30, 2015, cash flows provided by financing activities were $208,298, which consisted of proceeds from contributions to the employee stock purchase program (“ESPP”), proceeds from the exercise of stock options and the disgorgement of profit from the sale of stock. During the nine months ended September 30, 2014, cash flows provided by financing activities were $25,773,170 and consisted principally of the net proceeds from our IPO of $24,872,170, and net proceeds of $900,000 from the sale of our common stock to a strategic investor.

 

Research and development of new technologies is, by its nature, unpredictable. Although we will undertake development efforts with commercially reasonable diligence, there can be no assurance that our available resources including the net proceeds from our public offerings will be sufficient to enable us to develop our technology to the extent needed to create future revenues to sustain our operations.

 

We cannot assure that our technology will be adopted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. Furthermore, since we have no committed source of financing, there can be no assurance that we will be able to raise capital as and when we need it to continue our operations.

 

Off Balance Sheet Transactions

 

We do not have any off-balance sheet transactions.

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the chief executive officer (“CEO”) and interim chief financial officer (“CFO”), of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) pursuant to Rule 13a-15(b) of the Exchange Act. Based on that evaluation, as of September 30, 2015, our management, including the CEO and CFO, concluded that our disclosure controls and procedures are effective for the purpose of providing reasonable assurance that the information required to be disclosed in the reports we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

 

 

 26 

 

 

Changes in Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial conditions. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.

 

Item 1A.  Risk Factors

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed under “Risk Factors” in our annual report on Form 10-K as filed with the Securities and Exchange Commission on March 30, 2015. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this report.

 

Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

 

Not applicable.

 

Item 3. Defaults Upon Senior Securities

 

Not applicable.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

Not applicable.

 

Item 6. Exhibits

 

The exhibits required to be filed as a part of this report are listed in the Exhibit Index.

 

 27 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

  ENERGOUS CORPORATION
  (Registrant)
        
        
Date: November 12, 2015 By:   /s/ Stephen R. Rizzone
     Name: Stephen R. Rizzone
     Title: President, Chief Executive Officer and Director
(Principal Executive Officer)
        
Date: November 12, 2015 By:   /s/ Brian Sereda
     Name: Brian Sereda
     Title: Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

 

 28 

 

 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

    
3.1  Second Amended and Restated Certificate of Incorporation of Energous Corporation (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-193522) filed on March 13, 2014)
3.2  Amendment No. 1 to the Second Amended and Restated Certificate of Incorporation of Energous Corporation (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q filed on May 14, 2014)
3.3  Amended and Restated Bylaws of Energous Corporation (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-193522) filed on March 13, 2014)
10.1  Brian Sereda Offer Letter (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 14, 2015)
31.1  Certification of Periodic Report by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2  Certification of Periodic Report by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1  Certification of Periodic Report by Chief Executive Officer and Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
101.INS  XBRL Instance Document (filed herewith)
101.SCH  XBRL Taxonomy Schema (filed herewith)
101.CAL  XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
101.DEF  XBRL Taxonomy Extension Definition Linkbase (filed herewith)
101.LAB  XBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PRE  XBRL Taxonomy Extension Presentation Linkbase (filed herewith)