UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
COMMISSION FILE NUMBER
ENERGOUS CORPORATION
(Exact name of registrant as specified in its charter)
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(State of incorporation) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive office) (Zip code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 10, 2023, there were
ENERGOUS CORPORATION
FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 2023
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Energous Corporation
CONDENSED BALANCE SHEETS
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As of |
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March 31, 2023 |
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December 31, 2022 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Accrued severance expense |
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Warrant liability |
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– |
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Operating lease liabilities, current portion |
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Deferred revenue |
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Total current liabilities |
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Operating lease liabilities, long-term portion |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred Stock, $ |
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Common Stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed financial statements.
3
Energous Corporation
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
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For the Three Months Ended March 31, |
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2023 |
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2022 |
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Revenue |
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$ |
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$ |
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Costs and expenses: |
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Cost of revenue |
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Research and development |
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Sales and marketing |
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General and administrative |
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Total costs and expenses |
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Loss from operations |
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Other (expense) income: |
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Offering costs related to warrant liability |
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– |
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Interest income |
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Total other (expense) income |
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Net loss |
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$ |
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$ |
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Basic and diluted loss per common share |
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$ |
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$ |
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Weighted average shares outstanding, basic and diluted |
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The accompanying notes are an integral part of these condensed financial statements.
4
Energous Corporation
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
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Common Stock |
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Additional Paid-in |
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Accumulated |
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Total Stockholders' |
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Shares |
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Amount |
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Capital |
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Deficit |
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Equity |
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Balance at January 1, 2023 |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation - options |
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– |
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– |
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– |
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Stock-based compensation - restricted stock units ("RSUs") |
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– |
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– |
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– |
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Stock-based compensation - employee stock purchase plan ("ESPP") |
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– |
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– |
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– |
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Issuance of shares for RSUs |
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– |
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– |
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Proceeds from contributions to the ESPP |
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– |
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– |
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– |
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Issuance of shares in an at-the-market ("ATM") placement, net of $68,637 in issuance costs |
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– |
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Issuance of shares in a sale of common stock, net of $3,166,139 in issuance costs and fair value of a liability warrant |
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– |
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Net loss |
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– |
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– |
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– |
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Balance at March 31, 2023 (unaudited) |
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$ |
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$ |
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$ |
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$ |
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Common Stock |
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Additional Paid-in |
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Accumulated |
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Total Stockholders' |
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Shares |
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Amount |
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Capital |
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Deficit |
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Equity |
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Balance at January 1, 2022 |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation - options |
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– |
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– |
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– |
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Stock-based compensation - RSUs |
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– |
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– |
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– |
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Stock-based compensation - ESPP |
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– |
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– |
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– |
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Issuance of shares for RSUs |
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– |
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– |
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Proceeds from contributions to the ESPP |
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– |
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– |
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– |
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Net loss |
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– |
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– |
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– |
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( |
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Balance at March 31, 2022 (unaudited) |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed financial statements.
5
Energous Corporation
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
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For the Three Months Ended March 31, |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net loss |
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$ |
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$ |
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Adjustments to reconcile net loss to: |
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Net cash used in operating activities: |
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Depreciation and amortization |
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Stock based compensation |
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Changes in operating lease right-of-use assets |
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Inventory net realizable adjustment |
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– |
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Bad debt expense |
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– |
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Offering costs allocated to warrants |
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– |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Inventory |
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( |
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Prepaid expenses and other current assets |
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Accounts payable |
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( |
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Accrued expenses |
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( |
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( |
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Accrued severance expense |
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( |
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( |
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Operating lease liabilities |
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( |
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Deferred revenue |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchases of property and equipment |
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– |
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( |
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Net cash used in investing activities |
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– |
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Cash flows from financing activities: |
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Net proceeds from an ATM offering |
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– |
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Net proceeds from a sale of common stock and warrant issuance |
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– |
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Proceeds from contributions to employee stock purchase plan |
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Net cash provided by financing activities |
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Net increase (decrease) in cash and cash equivalents |
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( |
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Cash and cash equivalents – beginning |
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Cash and cash equivalents – ending |
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$ |
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$ |
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Supplemental disclosure of non-cash investing and financing activities: |
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Common stock issued for RSUs |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed financial statements.
6
Note 1 - Business Organization, Nature of Operations
Energous Corporation (the “Company”) was incorporated in Delaware on October 30, 2012. The Company has developed its WattUp® wireless power technology, consisting of proprietary semiconductor chipsets, software controls, hardware designs and antennas, that enables radio frequency (“RF”) based charging for electronic devices. The WattUp technology has a broad spectrum of capabilities, including near-field wireless charging and at-a-distance wireless charging at various distances. The Company believes its proprietary WattUp technologies are well suited for many applications, including building and home automation, electronic shelf labels, industrial IoT sensors, surface and implanted medical devices, tracking devices, hearables, wearables, consumer electronics and public safety applications. Potential future applications include smartphones, commercial and industrial robotics, as well as automotive solutions and other devices with charging requirements that would otherwise require battery replacement or a wired power connection.
Note 2 – Liquidity and Management Plans
During the three months ended March 31, 2023 and 2022, the Company recorded revenue of $
As of March 31, 2023, the Company had cash and cash equivalents of $
Research and development of new technologies is by its nature unpredictable. Although the Company intends to continue its research and development activities, there can be no assurance that its available resources and revenue generated from its business operations will be sufficient to sustain its operations. Accordingly, the Company expects to pursue additional financing, which could include offerings of equity or debt securities, bank financings, commercial agreements with customers or strategic partners, and other alternatives, depending upon market conditions. There is no assurance that such financing will be available on terms that the Company would find acceptable, or at all.
The market for products using the Company’s technology is broad and evolving, but remains nascent and unproven, so the Company’s success is dependent upon many factors, including customer acceptance of its existing products, technical feasibility of future products, regulatory approvals, the development of complementary technologies, competition and global market fluctuations.
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, 2022 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 30, 2023. The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2022 audited financial statements.
Use of Estimates
The preparation of financial statements in conformity with US GAAP 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.
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Note 3 – Summary of Significant Accounting Policies, continued
The Company’s significant estimates and assumptions include the valuation of stock-based compensation instruments, recognition of revenue, inventory valuation, fair value of warrant liabilities and the valuation allowance on deferred tax assets. 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.
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.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each reporting period.
Offering costs associated with warrants classified as liabilities are expensed as incurred and are presented as offering cost related to warrant liability in the statement of operations. Offering costs associated with the sale of warrants classified as equity are charged against proceeds.
Fair Value
The Company follows ASC 820, Fair Value Measurements (“ASC 820”), which establishes a common definition of fair value to be applied when US GAAP requires the use of fair value, establishes a framework for measuring fair value, and requires certain disclosure about such fair value measurements.
ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
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Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities to which the Company has access at a measurement date. |
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Level 2: Observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
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Level 3: Unobservable inputs for which little or no market data exists and for which the Company must develop its own assumptions regarding the assumptions that market participants would use in pricing the asset or liability, including assumptions regarding risk. |
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Note 3 – Summary of Significant Accounting Policies, continued
Because of the uncertainties inherent in the valuation of assets or liabilities for which there are no observable inputs, those estimated fair values may differ significantly from the values that may have been used had a ready market for the assets or liabilities existed.
The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses, other current assets, and accounts payable & accrued expenses, are an approximate of their fair values because of the short maturity of these instruments. The Company’s derivative liabilities recognized at fair value on a recurring basis are a level 3 measurement (see Note 8 – Fair Value Measurement).
Revenue Recognition
The Company follows Accounting Standards Codification (“ASC”) 606, "Revenue from Contracts with Customers" (“Topic 606”).
In accordance with Topic 606, the Company recognizes revenue using the following five-step approach:
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Identify the contract with a customer. |
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Identify the performance obligations in the contract. |
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Determine the transaction price of the contract. |
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Allocate the transaction price to the performance obligations in the contract. |
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Recognize revenue when or as the performance obligations are satisfied. |
The Company’s revenue consists of its single segment of wireless charging system solutions. The wireless charging system revenue consists of revenue from product development projects and production-level systems. During the three months ended March 31, 2023 and 2022, the Company recognized $
The Company records revenue associated with product development projects that it enters into with certain customers. In general, these product development projects are complex, and the Company does not have certainty about its ability to achieve the project milestones. The achievement of a milestone is dependent on the Company’s performance obligation and requires acceptance by the customer. The Company recognizes this revenue at the point in time at which the performance obligation is met. The payment associated with achieving the performance obligation 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 product development projects in research and development expense, in the periods such expenses were incurred.
Inventory
The Company follows ASC 330, Inventory (“Topic 330”) to account for its inventory, which includes finished goods ready for sale, work in process and raw materials, at the lower of cost or net realizable value. Net realizable value is calculated at the end of each reporting period and adjustment, if needed, is made.
Research and Development
Research and development expenses are charged to operations as incurred. For internally developed patents, all patent costs are expensed as incurred as research and development expense. Patent application costs, which are 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 $
Stock-Based Compensation
The Company accounts for equity instruments issued to employees, board members and contractors in accordance with accounting guidance that requires awards to be recorded at their fair value on the date of grant and amortized over the vesting period of the award. The Company amortizes 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.
9
Note 3 – Summary of Significant Accounting Policies, continued
Under the ESPP, employees may purchase a limited number of shares of the Company’s common stock at a
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 March 31, 2023,
Net Loss 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), the vesting of restricted stock units (“RSUs”) and performance stock units (“PSUs”) and the enrollment of employees in the ESPP.
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For the Three Months Ended March 31, |
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2023 |
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2022 |
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Warrants issued to investors |
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Options to purchase common stock |
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RSUs |
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Total potentially dilutive securities |
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Leases
The Company determines if an arrangement is a lease at the inception of the arrangement. The Company applies the short-term lease recognition exemption and recognizes lease payments in profit or loss at lease commencement for facility or equipment leases that have a lease term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities.
ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are measured and recorded at the later of the adoption date, January 1, 2019, or the service commencement date based on the present value of lease payments over the lease term. The Company uses the implicit interest rate when readily determinable; however, most leases do not establish an implicit rate, so the Company uses an estimate of the incremental borrowing rate based on the information available at the time of measurement. Lease expense for lease payments is recognized on a straight-line basis over the lease term. See Note 4 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.
Management’s Evaluation of Subsequent Events
The Company evaluates events that have occurred after the balance sheet date of March 31, 2023, through the date which the financial statements are available to be issued.
10
Note 4 – Commitments and Contingencies
Operating Leases
San Jose Lease
On May 20, 2022, the Company signed a lease amendment to the existing lease for its office space at its corporate headquarters in San Jose, California, extending the term of the lease for an additional
Costa Mesa Lease
On September 22, 2021, the Company signed a new lease for office space for its engineers based in Costa Mesa, California. Per the lease, the lease commencement date is October 1, 2021 and the expiration date is September 30, 2023. The Company did not have control of the new office space until October 2021, at which time the Company recorded a new ROU lease asset of $
Operating Lease Commitments
The Company follows ASC 842, Leases, (“Topic 842”) and recognizes the required ROU assets and operating lease liabilities on its balance sheet. The Company anticipates having future total lease payments of $
A reconciliation of undiscounted cash flows to lease liabilities recognized as of March 31, 2023 is as follows:
|
|
Amount |
|
|
|
|
(unaudited) |
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
Total future lease payments |
|
|
|
|
Present value discount (2.9% weighted average) |
|
|
( |
) |
Total operating lease liabilities |
|
$ |
|
|
Hosted Design Software Agreement
In June 2021, the Company entered into an electronic design automation software in a hosted environment license agreement with a term of under which the Company is required to remit quarterly payments of approximately $
Litigations, Claims, and Assessments
The Company is from time to time involved in various disputes, claims, liens and litigation matters arising in the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company's combined financial position, results of operations or cash flows.
MBO Bonus Plan
On March 15, 2018, the Company’s Board of Directors (“Board”), on the recommendation of the Board’s Compensation Committee (“Compensation Committee”), approved the Energous Corporation MBO Bonus Plan (“Bonus Plan”) for executive officers of the Company. To be eligible to receive a bonus under the Bonus Plan, an executive officer must be continuously employed throughout the applicable performance period, and in good standing, and achieve the performance objectives selected by the Compensation Committee.
11
Note 4 – Commitments and Contingencies, continued
Under the Bonus Plan, the Compensation Committee is responsible for selecting the amounts of potential bonuses for executive officers, the performance metrics used to determine whether any such bonuses will be paid and determining whether those performance metrics have been achieved.
During the three months ended March 31, 2023 and 2022, the Company recorded $
Severance and Change in Control Agreement
On March 15, 2018, the Compensation Committee approved a form of Severance and Change in Control Agreement (“Severance Agreement”) that the Company may enter into with executive officers (each, an “Executive”).
Under the Severance Agreement, if an Executive is terminated in a qualifying change in control termination, the Company agrees to pay the Executive six to 12 months of that Executive’s monthly base salary. If an Executive elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) the Company will pay the full amount of the Executive’s premiums under the Company’s health, dental and vision plans, including coverage for the Executive’s eligible dependents, for the six to 12 month period following the Executive’s termination.
Executive Employee Agreement – Cesar Johnston
On December 9, 2021, the Company announced that Cesar Johnston had been appointed as the Company’s Chief Executive Officer. In connection with Mr. Johnston’s appointment as Chief Executive Officer, the Company and Mr. Johnston executed an offer letter dated as of December 6, 2021.
Under the terms of his offer letter, Mr. Johnston will receive an annual base salary of $
Also pursuant to the terms of his offer letter, Mr. Johnston is eligible for (a) an additional equity award in the amount of
12
Note 4 – Commitments and Contingencies, continued
In connection with Mr. Johnston’s appointment as Chief Executive Officer, the Company and Mr. Johnston additionally entered into an amended and restated severance and change in control agreement, dated as of December 6, 2021. In the event of a termination that is not a change-in-control qualifying termination, Mr. Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to
Mr. Johnston’s agreement additionally provides that, in the event of a change-in-control qualifying termination, Mr. Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to
Mr. Johnston is also eligible to receive all customary and usual benefits generally available to senior executives of the Company.
Executive Transition 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 former President and Chief Executive Officer (“Employment Agreement”).
The Employment Agreement effective as of
On July 9, 2021, the Company announced that Stephen R. Rizzone had retired from his position as the Company’s President and Chief Executive Officer and as a member of the Board.
In connection with Mr. Rizzone’s retirement, the Company and Mr. Rizzone entered into an Executive Transition Agreement (the “Separation Agreement”), providing for continued employment through August 31, 2021. Upon his termination of employment, the Separation Agreement provides severance payments and benefits to Mr. Rizzone consistent with the terms of his existing employment agreement with the Company, including without limitation: compensation-based payments of $
As of March 31, 2023, the Company had unpaid accrued severance expense of $
Executive Transition Agreement – Neeraj Sahejpal
On April 29, 2022, the Company announced the departure of Neeraj Sahejpal, former Senior Vice President of Marketing and Business Development, effective April 30, 2022. Pursuant to the terms of Mr. Sahejpal’s severance and change of control agreement with the Company, Mr. Sahejpal received payments and benefits including compensation equal to twelve months of Mr. Sahejpal’s then-current salary of $
13
Note 4 – Commitments and Contingencies, continued
As of March 31, 2023, the Company had
Strategic Alliance Agreement
In November 2016, the Company and Dialog Semiconductor plc (“Dialog”), a related party (see Note 7—Related Party Transactions), entered into a Strategic Alliance Agreement (“Alliance Agreement”) for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (“Licensed Products”). Pursuant to the terms of the Alliance Agreement, the Company agreed to engage Dialog as the exclusive supplier of the Licensed Products for specified fields of use, subject to certain exceptions (the “Company Exclusivity Requirement”). Dialog agreed to not distribute, sell or work with any third party to develop any competing products without the Company’s approval. In addition, both parties agreed on a revenue sharing arrangement and will collaborate on the commercialization of Licensed Products based on a mutually-agreed upon plan. Each party will retain all of its intellectual property.
The Alliance Agreement has an initial term of
On September 20, 2021, the Company was notified by Dialog, recently acquired by Renesas Electronics Corporation, that it was terminating the Alliance Agreement between the Company and Dialog. There is a wind down period included in the Alliance Agreement which will conclude in September 2024. During the wind down period, the Alliance Agreement’s terms will continue to apply to the Company’s products that are covered by certain existing customer relationships, except that the parties’ respective exclusivity rights have terminated (see Note 9 – Related Party Transactions for expenses incurred by the Company from Renesas Electronics Corporation).
Note 5 – Stockholders’ Equity
Authorized Capital
The holders of the Company’s common stock are entitled to
Financing
On September 15, 2020, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on September 24, 2020, and contains two prospectuses: a base prospectus, which covers the offering, issuance and sale by the Company of up to $
14
Note 5 – Stockholders’ Equity, continued
On October 4, 2021, the Company filed a prospectus supplement covering the offering, issuance and sale of up to an additional $
On November 15, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on December 16, 2021. This shelf registration statement allows the Company to sell, from time to time, any combination of debt or equity securities described in the registration statement up to aggregate proceeds of $
Common Stock Outstanding
Note 6 – Stock-Based Compensation
Equity Incentive Plans
2013 Equity Incentive Plan
Effective on June 16, 2021, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by
As of March 31, 2023,
2014 Non-Employee Equity Compensation Plan
Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the 2014 Non-Employee Equity Compensation Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by
As of March 31, 2023,
2015 Performance Share Unit Plan
Effective on June 16, 2021, the Company’s stockholders approved the amendment and restatement of the 2015 Performance Share Unit Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by
15
Note 6 – Stock-Based Compensation, continued
As of March 31, 2023,
2017 Equity Inducement Plan
On December 28, 2017, the Board approved the 2017 Equity Inducement Plan. Under the 2017 Equity Inducement Plan, the Board reserved
On July 20, 2022, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Equity Inducement Plan by
Employee Stock Purchase Plan
In April 2015, the Company’s Board approved the ESPP, under which
As of March 31, 2023,
Stock Option Activity
In February 2022, the Board granted our Chief Executive Officer
The Company estimated the fair value of stock options granted during the second quarter of 2022 using the Black-Scholes option pricing model.
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Three Months Ended June 30, 2022 |
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|
Stock price |
|
$ |
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|
Dividend yield |
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% |
|
Expected volatility |
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|
% |
|
Risk-free interest rate |
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% |
|
Expected life |
|
|
|
|
16
Note 6 – Stock-Based Compensation, continued
The following is a summary of the Company’s stock option activity during the three months ended March 31, 2023:
|
|
Number of Options |
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Weighted Average Exercise Price |
|
|
Weighted Average Remaining Life In Years |
|
|
Intrinsic Value |
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||||
Outstanding at January 1, 2023 |
|
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|
$ |
|
|
|
|
|
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|
$ |
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|
Granted |
|
|
|
|
|
|
|
|
|
|
– |
|
|
|
– |
|
Exercised |
|
|
|
|
|
|
|
|
|
|
– |
|
|
|
– |
|
Forfeited |
|
|
( |
) |
|
|
|
|
|
|
– |
|
|
|
– |
|
Outstanding at March 31, 2023 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
Exercisable at January 1, 2023 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
Vested |
|
|
|
|
|
|
|
|
|
|
– |
|
|
|
– |
|
Exercised |
|
|
|
|
|
|
|
|
|
|
– |
|
|
|
– |
|
Forfeited |
|
|
( |
) |
|
|
|
|
|
|
– |
|
|
|
– |
|
Exercisable at March 31, 2023 |
|
|
|
|
|
$ |
|
|
|
|
– |
|
|
$ |
|
|
As of March 31, 2023, the unamortized fair value of options was $
PSUs
PSUs are grants that vest upon the achievement of certain performance goals. The goals are commonly related to the Company’s revenue and achievement of sales and marketing goals.
On July 20, 2022, the Board granted the Company’s Chief Executive Officer, Cesar Johnston, up to
There was no PSU activity for the three months ended March 31, 2023 and 2022.
RSUs
During the three months ended March 31, 2023, the Compensation Committee granted various employees RSUs covering
During the three months ended March 31, 2023, the Compensation Committee granted various non-employees RSUs covering
During the three months ended March 31, 2023, the Compensation Committee granted various employees RSUs covering
17
Note 6 – Stock-Based Compensation, continued
As of March 31, 2023, the unamortized fair value of the RSUs was $
|
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Total |
|
|
Weighted Average Grant Date Fair Value |
|
||
Outstanding at January 1, 2023 |
|
|
|
|
|
$ |
|
|
RSUs granted |
|
|
|
|
|
|
|
|
RSUs forfeited |
|
|
( |
) |
|
|
|
|
RSUs vested |
|
|
( |
) |
|
|
|
|
Outstanding at March 31, 2023 |
|
|
|
|
|
$ |
|