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Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-02-27 · 100 added, 91 removed, 114 unchanged (63% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We have developed a scalable, over-the-air WPN technology that integrates advanced semiconductor chipsets, software controls, hardware designs, and antenna systems to enable RF-based charging for IoT devices.

Our WPN technology provides a comprehensive suite of capabilities designed to power the next generation of wireless energy networks, seamlessly delivering power and data across diverse, battery-free device ecosystems.

This innovation enhances operational visibility, control, and intelligent business automation.

Our solutions support both near-field and at-a-distance wireless charging, supplying power at multiple levels across varying distances.

By enabling continuous wireless power transmission, our transmitter and receiver technologies facilitate the use of battery-free IoT devices, transforming asset and inventory tracking across multiple industries.

Key applications include retail sensors, electronic shelf labels, asset trackers, air quality monitors, motion detectors, and other smart monitoring solutions.

We believe our technology represents a breakthrough in wireless power delivery, offering a differentiated approach to charging IoT devices via RF technology.

To date, we have developed and released multiple transmitter and receiver solutions, including prototypes and partner production designs.

Our transmitters vary in form factor, power specifications, and operating frequencies, while our receivers are engineered to support a wide range of wireless charging applications across multiple device categories.

We have developed scalable, over-the-air WPN technology that integrates advanced semiconductor chipsets, software controls, hardware designs, and antenna systems to enable RF-based charging for ambient IoT devices, transforming supply chain capabilities from limited tracking to overall business intelligence.

Our WPN technology consists of transmitter systems, receiver integrated circuits, and supporting software designed to deliver power and data to battery-free IoT devices across a range of operating distances and power levels.

These capabilities support applications that require continuous operation without wired power connections or periodic battery replacement.

With a patent portfolio exceeding 300 patents, our solutions support both near-field and at-a-distance wireless power transmission and include advanced receiver technology designed for use across multiple device categories.

Applications include retail sensors, ESLs, asset trackers, air quality monitors, motion detectors, and other monitoring solutions.

To date, we have developed and released multiple transmitter and battery-free receiver products.

Our transmitters vary in form factors, power specifications, and operating frequencies, and our receivers are designed to support a range of wireless power-enabled device applications, including:

Cold Chain, Asset Tracking, Medical IoT

Ambient IoT Sensors

Cold Chain, Logistics, Asset Tracking

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Retail and Industrial IoT

The first WPN-enabled end product featuring our technology entered the market in 2019.

In the fourth quarter of 2021, we commenced shipments of our first at-a-distance wireless PowerBridge transmitter systems for commercial IoT applications and proof-of-concept deployments.

The first WPN-enabled product featuring our technology entered the market in 2019.

In the fourth quarter of 2021, we commenced shipments of at-a-distance PowerBridge transmitter systems for commercial IoT applications and proof-of-concept deployments.

In the second quarter of 2025, we introduced the battery-free e-Sense tag and the e-Compass cloud-based software platform, which together supported the first end-to-end wireless power-enabled IoT device monitoring and management solution.

As we continue to innovate our technology applications, we anticipate the release of additional wireless power-enabled products.

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Uncertainty in the global economy presents significant risks to our business.

We are subject to continuing exposure relating to the current macroeconomic environment, including inflation and rising interest rates, geopolitical factors, including the ongoing conflict between Russia and Ukraine as well as in the Middle East and the responses thereto and supply chain disruptions.

We are closely monitoring the impact of these factors on all aspects of our business, including their impact on our operations, financial position, cash flows, inventory, supply chains, global regulatory approvals, purchasing trends, customer payments, and the industry in general, in addition to the impact on our employees.

We are subject to ongoing exposure related to the current macroeconomic environment, including inflation, rising interest rates, geopolitical factors such as the ongoing conflict between Russia and Ukraine, tensions between the United States and China as well as China and Taiwan, conflicts in the Middle East, and supply chain disruptions.

These conditions may affect various aspects of our business, including our operations, financial position, cash flow, inventory management, supply chains, global regulatory approvals, purchasing trends, customer payment patterns, and the broader industry environment, as well as our employees.

Critical Accounting Estimates and Policies

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In applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates.

Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate.

available from other outside sources, as appropriate.

Please see Note 3 to our financial statements for a more complete description of our significant accounting policies.

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The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S.

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.

Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates.

Although we believe that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made.

Although we believe that our 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.

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In accordance with this guidance, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

We have determined that there was substantial doubt about our ability to continue as a going concern, but it was alleviated based on financing received in 2025, as well as current operating levels and further cost reductions implemented in the first quarter of 2025.

We anticipate cash flows generated from operations and our cash and cash equivalents will be sufficient to meet our liquidity needs for at least the next 12 months.

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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.

Offering costs associated with the sale of warrants classified as equity are charged against proceeds received.

Revenue Recognition.

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The wireless charging system revenue consists of revenue from product development projects and production-level systems.

We record revenue associated with product development projects that we enter into with certain customers.

We record a majority of our revenue based on the shipment of products that we sell.

Generally, there is a five-day return policy on our shipment of products.

Additionally, we record revenue associated with product development projects that we enter into with certain customers.

In general, these product development projects are complex, and we do not have certainty about our ability to achieve the project milestones.

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Any deferred revenue is recognized upon achievement of the performance obligation or expiration of a support agreement.

We state inventory at the lower of cost, determined on a weighted average cost method, or net realizable value.

Net realizable value is calculated at the end of each reporting period and an adjustment, if needed, is made.

At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis.

Results of Operations

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Cost of revenue consists of direct materials, direct labor and overhead for our production-level wireless charging systems.

Research and development expenses include costs associated with our efforts to develop our technology, including personnel

compensation, consulting, engineering supplies and components, intellectual property costs, regulatory expense and general office expenses specifically related to the research and development department.

Sales and marketing expenses include costs associated with selling and marketing our technology to our customers, including personnel compensation, public relations, graphic design, tradeshow, engineering supplies utilized by the sales team and general office expenses specifically related to the sale and marketing department.

Research and development expenses include costs associated with our efforts to develop our technology, including personnel compensation, consulting, engineering supplies and components, regulatory expense and general office expenses specifically related to the research and development department.

General and administrative expenses include costs for general and corporate functions, including personnel compensation, facility fees, travel, telecommunications, insurance, professional fees, consulting fees, general office expenses, and other overhead.

For the Years Ended December 31, 2024 and 2023

Comparison of the Years Ended December 31, 2025 and 2024

The following table sets forth selected Condensed Statements of Operations data (in thousands) and such data as a percentage of revenue:

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Severance expense

Expenses from abandoned financing transaction

Total operating expenses

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Other income (expense), net:

Offering costs related to warrant liability

Change in fair value of warrant liability

Interest income, net

Loss on retirement of property and equipment

Loss on extinguishment of short-term debt

Other expense

Total other income (expense), net

Discount fees from accounts receivable factoring agreements

Total other income, net

During 2025 and 2024, we recorded revenue of $5.6 million and $0.8 million, respectively.

The increase in revenue in 2024 is primarily due to an increase in commercial sales of our PowerBridge transmitters, driven primarily by the delivery of transmitters to fulfill an initial order from a Fortune 10 retailer in the fourth quarter of 2024.

In contrast, revenue recorded for 2023 was primarily attributable to engineering services, integrated circuit sales, and PowerBridge transmitters for use in proofs of concept.

The 633% year over year increase is primarily due to the expansion of commercial applications with multinational enterprise retailers, including two Fortune 10 companies (one of which accounted for 85% of our 2025 revenue), deploying our WPN technology in connection with their infrastructure modernization initiatives as well as a proof-of-concept deployment with a Fortune 500 customer, referred through the Company’s participation in the Amazon Web Services (“AWS”) Partner Network.

Cost of Revenue:

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Cost of revenue was $3.6 million and $0.8 million, respectively, for 2025 and 2024.

The increase is primarily due to the cost of transmitters sold, as the initial sales of 2-watt PowerBridge transmitters that were shipped during 2024 were built in-house.

We believe the cost of producing these transmitters will decrease in future quarters, as we utilize a contract manufacturer to build in larger production volumes.

During 2023, revenue generated by transmitter sales represented a small percentage of the total revenue for that period, as the revenue for 2023 consisted mainly of non-recurring engineering fees for which the associated cost was included in research and development costs.

The increase is primarily due to higher sales volume of PowerBridge Pro transmitters that were shipped during 2025.

With the continued ramp up of our volume manufacturing during 2025 and other strategic efforts made to optimize operations, product margins improved significantly, transitioning from a gross profit in 2024 of $12,000 to a gross profit in 2025 of approximately $2.0 million.

Operating expenses and Loss from Operations.

Operating expenses are made up of research and development, sales and marketing, general and administrative, and severance expense.

Loss from operations was $18.4 million and $22.1 million, respectively, for 2024 and 2023.

Operating expenses are made up of research and development, sales and marketing, general and administrative, severance expense, and expenses from an abandoned financing transaction.

The loss from operations was $10.0 million and $18.4 million, respectively, for 2025 and 2024.

Research and Development Costs:

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Research and development costs for 2025 and 2024 were $4.1 million and $7.7 million, respectively.

The decrease of $2.5 million is primarily due to a $1.7 million decrease in employee compensation, consisting primarily of a $1.3 million decrease in personnel-related expenses and a $0.4 million decrease in stock-based compensation, a $0.2 million decrease in legal fees pertaining to patents, a $0.2 million decrease in software and maintenance costs, a $0.1 million decrease in test development costs, a $0.1 million decrease in consulting and third-party expenses and a $0.1 million decrease in travel and miscellaneous office expenses.

The decrease of $3.6 million is primarily due to a $2.0 million decrease in employee-related costs, consisting primarily of an approximately $1.9 million decrease in personnel-related expenses and a $0.2 million decrease in stock-based compensation, a $1.3 million decrease in engineering prototype related expenses, supplies, and software costs, and a $0.2 million decrease in miscellaneous office expenses.

Sales and Marketing Costs:

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Sales and marketing costs for 2025 and 2024 were $2.4 million and $3.1 million, respectively.

The decrease of $0.8 million is primarily due to a $0.8 million decrease in employee compensation, consisting of a $0.7 million decrease in personnel-related expenses due to a lower headcount within the department and a $0.1 million decrease in stock-based compensation, a $0.1 million decrease in tradeshow expense and a $0.1 million decrease in software, travel and miscellaneous office expenses, partially offset by a $0.2 million increase in consulting, third-party and public relations fees.

The decrease of $0.7 million is primarily due to a $0.5 million decrease in consulting, public relations, and recruiting fees, a $0.1 million decrease in marketing and tradeshow expenses, and a $0.1 million decrease in trademark and promotional expenses.

General and Administrative Costs:

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General and administrative costs for 2025 and 2024 were $4.5 million and $6.3 million, respectively.

The decrease of $1.6 million is primarily due to a $0.5 million decrease in stock-based compensation, a $0.5 million decrease in consulting and third-party service fees, a $0.4 million decrease in insurance premiums, a $0.2 million decrease in accounting and auditing fees, a $0.1 million decrease in legal fees, a $0.1 million decrease in computer software and support, a $0.1 million decrease in annual meeting costs and a $0.1 million decrease in travel and miscellaneous office expenses, partially offset by a $0.3 million increase in stock registration expense and a $0.1 million increase in public relations and investor relations expenses.

The decrease of $1.8 million is primarily due to a $0.6 million decrease in legal fees, a $0.4 million decrease in corporate expenses primarily related to stock registration and annual meeting fees, a $0.3 million decrease in consulting, investor relations fees, a $0.2 million decrease in office rent, a $0.2 million decrease in insurance premiums, a $0.1 million decrease in supplies, a $0.1 million decrease in recruiting costs, and a $0.1 million decrease in stock-based compensation, partially offset by a $0.3 million increase in payroll costs accrued as a result of key milestones achieved during 2025 under the 2025 Bonus Plan and higher employee benefit costs.

Severance Expense:

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Severance expense for 2025 and 2024 was $0.4 million and $1.4 million, respectively.

The increase of $1.0 million is primarily due to the departure of the former CEO during 2024 for which $1.2 million in severance expense was recorded, partially offset by $0.3 million in severance expense recorded during 2023 due to the departure of the former CFO.

Severance expense during 2025 was related to separations with certain non-executive employees.

Severance expense during 2024 was primarily due to the departure of our former CEO, representing approximately $1.2 million in recorded severance expense.

Expenses from Abandoned Financing Transaction:

For the year ended December 31,

Expenses from abandoned financing transaction

Percent of total revenue

Expenses related to our abandoned financing transaction were $0.7 million during 2025, primarily attributable to our decision to terminate and refund the previously announced convertible preferred equity offering under Regulation A.

There was no such expense during 2024.

Other income (expense), net:

For the year ended December 31,

Offering costs related to warrant liability

Change in fair value of warrant liability

Interest income, net

Loss on retirement of property and equipment

Loss on extinguishment of short-term debt

Other expense

Total other income (expense), net

Offering costs related to warrant liability were $0.6 million during 2023.

We did not incur such cost during 2024.

Other income resulting from the change in fair value of the warrant liability was $0.3 million during 2024 and $2.5 million during 2023.

Discount fees from accounts receivable factoring agreements

Total other income, net

Other income resulting from the change in fair value of the warrant liability was approximately $0.3 million in both 2024 and 2025.

The changes for both periods were due to a lower market value of our common stock.

Net interest income for 2024 was $0, as $0.2 million in interest income from our money market account, offset $0.2 million in interest expense from a short-term loan.

Interest income of $0.8 million during 2023 was from interest earned from our money market account.

As of December 31, 2025, the 2023 Warrants were fully exercised, eliminating the related warrant liability.

Net interest income for 2025 was $0.2 million and $0 for 2024.

During 2025, we earned $0.5 million in interest from our money market account, partially offset by $0.3 million in interest expense related to a short-term loan, originated in 2024 and paid off in 2025.

During 2024, we earned $0.2 million in interest from our money market account, offset by $0.2 million in interest expense from a short-term loan.

Loss on extinguishment of short-term debt was $0.2 million during 2024.

We did not incur such cost during 2025.

As a result of the factors described above, net loss for 2024 was $18.4 million, compared to $19.4 million for 2023.

As a result of the factors described above, the net loss for 2025 was $9.6 million, compared to $18.4 million for 2024.

ATM Offering Program

On June 21, 2024, we entered into the At the Market Offering Agreement with H.C.

Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which we could issue and sell of up to $3.45 million in shares of our common stock (as amended to date, the “ATM Program”).

During the year ended December 31, 2024, we sold 228,392 shares of our common stock under the ATM Program for net proceeds of approximately $3.2 million (net of commissions and other related offering expenses of approximately $0.3 million).

Among other adjustments since June 2024, we filed a prospectus supplement on February 13, 2025, providing for the issuance and sale of up to an additional $80.0 million of shares of common stock under the ATM Program.

The maximum capacity under this prospectus supplement was subsequently reduced to $70.0 million on September 10, 2025.

During the three months ended December 31, 2025, we sold 25,093 shares of our common stock under the ATM Program for net proceeds of approximately $0.1 million.

During the year ended December 31, 2025, we sold 555,155 shares of common stock pursuant to the February 2025 prospectus supplement, resulting in net proceeds of approximately $5.0 million (net of commissions and other related offering expenses of approximately $0.4 million).

In total, during the year ended December 31, 2025, we sold an aggregate of 1,107,968 shares of common stock under all prospectus supplements to the ATM Program for net proceeds of approximately $18.4 million (net of commissions and other related offering expenses of approximately $1.2 million).

As of December 31, 2025, approximately $64.6 million in shares of common stock remained available for issuance under the ATM Program, subject to availability of authorized shares.

2025 Offering

On September 10, 2025, we entered into a securities purchase agreement with an institutional investor (the “Investor”), providing for the issuance and sale, in a registered direct offering (the “2025 Offering”), of (i) 120,000 shares of our common stock, (ii) pre-funded warrants to purchase up to 465,347 shares of common stock (the “2025 Pre-Funded Warrants”), and (iii) warrants to purchase up to an aggregate of 585,347 shares of common stock (the “2025 Warrants”).

Each share of common stock and 2025 Pre-Funded Warrant was offered and sold together with an accompanying 2025 Warrant at a combined price of $7.92 per share of common stock or 2025 Pre-Funded Warrant and accompanying 2025 Warrant, as applicable.

Each 2025 Pre-Funded Warrant and 2025 Warrant is exercisable at any time on or after the date of issuance to purchase one share of common stock at a price of either $0.00001 per share, in the case of the 2025 Pre-Funded Warrants, or $7.79 per share, in the case of the 2025 Warrants.

The 2025 Pre-Funded Warrants expire when they are exercised in full and the 2025 Warrants expire five years from the date of issuance.

The 2025 Offering closed on September 11, 2025.

We received net proceeds of approximately $4.0 million from the 2025 Offering, after deducting placement agent fees and estimated offering expenses.

Additionally, pursuant to the Engagement Letter, dated as of July 9, 2024, as amended on December 20, 2024 and August 20, 2025 (the “Original Engagement Letter”), between the Company and Wainwright, and the Engagement Letter Joinder Agreement, dated as of September 10, 2025 (the “Joinder Agreement” and, together with the Original Engagement Letter, the “Engagement Letter”), by and among Energous, Wainwright and Rodman & Renshaw LLC (“Rodman & Renshaw” and, together with Wainwright, the “Placement Agents”), Energous, in connection with the closing of the 2025 Offering, agreed to issue to the Placement Agents or their respective designees warrants (the “Registered Direct Offering Placement Agent Warrants”) to purchase up to an aggregate of 40,974 shares of common stock.

The Registered Direct Offering Placement Agent Warrants have substantially the same terms as the 2025 Warrants, except the Registered Direct Offering Placement Agent Warrants are exercisable at any time on or after the date of issuance to purchase one share of common stock at a price of $9.90 per share and the Registered Direct Offering Placement Agent Warrants expire on September 10, 2030.

On September 10, 2025, in connection with the 2025 Offering, we entered into a letter agreement (the “Letter Agreement”) with the Investor for the immediate exercise of certain of our 2023 Warrants and 2024 Warrants to purchase an aggregate of 47,764 shares of common stock and having exercise prices of $6.7595 and $55.20 per share, respectively (the “Concurrent Warrant Exercise Transaction”).

The 2023 Warrants were exercised at the exercise price of $6.8845 and the 2024 Warrants were exercised at a reduced exercise price of $7.92 per share for aggregate gross proceeds to the Company of approximately $364,000.

As consideration for the exercise of the 2023 Warrants and 2024 Warrants for cash, we issued new unregistered warrants (the “New Warrants”) to purchase up to an aggregate of 47,764 shares of common stock at an exercise price of $7.79 per share (the “New Warrant Shares”).

The New Warrants are exercisable immediately upon issuance and will expire five years following the initial issuance date.

Except as described herein, the New Warrants are substantially similar to the 2023 Warrants and 2024 Warrants.

The closing of the Concurrent Warrant Exercise Transaction occurred on September 11, 2025.

Also pursuant to the Engagement Letter, Energous, in connection with the closing of the Concurrent Warrant Exercise Transaction, agreed to issue to the Placement Agents or their respective designees warrants (the “Concurrent Warrant Exercise Transaction Placement Agent Warrants”) to purchase up to an aggregate of 3,343 shares of Common Stock.

The Concurrent Warrant Exercise Transaction Placement Agent Warrants have substantially the same terms as the New Warrants, except the Concurrent Warrant Exercise Transaction Placement Agent Warrants are immediately exercisable to purchase one share of common stock at a price of $9.90 per share and the Concurrent Warrant Exercise Transaction Placement Agent Warrants expire on September 10, 2030.

Agile Subordinated Loan Agreement

Effective October 1, 2024, we entered into a subordinated business loan agreement (the “Original Loan Agreement”) with Agile Capital Funding, LLC and Agile Lending, LLC (collectively, the “Lender”), which provided for an initial term loan of $525,000, with the ability to receive additional term loans of up to $1.6 million, subject to certain conditions (such loans, the “Original Term Loan”).

Principal and interest on the Original Term Loan in the aggregate amount of $756,000 was to be repaid in weekly payments of $27,000 commencing on October 14, 2024 and fully repaid on or before the maturity date of April 21, 2025.

Effective November 5, 2024, we entered into an amended subordinated business loan agreement with the Lender (the “Amended Loan Agreement”) to refinance the Original Term Loan.

The Amended Loan Agreement provided for a new term loan of $997,000, with the ability to receive additional term loans of up to $1.6 million, subject to certain conditions (such new loans, the “New Term Loan”).

Principal and interest on the New Term Loan in the aggregate amount of $1,415,740 was repaid in weekly payments of approximately $39,000 and was fully repaid before the maturity date of July 17, 2025 on July 7, 2025.

The proceeds of the New Term Loan were used to repay in full the Original Term Loan, which had a settlement value of $648,000 on November 5, 2024.

The New Term Loan was expressly subordinated to our obligations on certain senior indebtedness of the Company as provided in the Amended Loan Agreement.

On July 7, 2025, we repaid all outstanding amounts owed to the lender under the Amended Loan Agreement.

As a result, the Company has no remaining obligations under the Amended Loan Agreement, and no amounts were outstanding as of December 31, 2025.

Liquidity and Capital Resources

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As of December 31, 2025, we had cash on hand of $10.4 million.

We are currently meeting our liquidity requirements through the proceeds of securities offerings in at-the-market (ATM) offerings that raised net proceeds of $3.2 million during 2024 and $13.4 million during 2025 through February 25, 2025, as well as through a short-term loan on which we have a payable balance due of approximately $0.8 million as of December 31, 2024.

As of February 25, 2025, the Company had $11.7 million in cash on hand.

Based on current operating levels and further cost reduction efforts implemented in the first quarter of 2025, we believe we have sufficient cash on hand to fund the next 12 months of operations.

We are currently meeting our liquidity requirements through the collection of accounts receivable and net proceeds of securities offerings through the at-the-market ATM Program.

As of March 23, 2026, cash on hand was $39.4 million.

Based on current operating levels and continuation of cost reduction efforts implemented during 2025, we believe we have sufficient cash on hand to fund the next 12 months of operations.

As we gain traction in the market with our new technology and continue to invest capital in transitioning and scaling the business from research and development of new technologies to commercial production, there can be no assurance that our available resources and revenue generated from our business operations will be sufficient to sustain our operations.

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If we are unsuccessful in implementing this plan, we will be required to make further cost and expense reductions or modifications to our on-going and strategic plans.

February 2024 Equity Offering

On February 15, 2024, we entered into a securities purchase agreement with an institutional investor, providing for the issuance and sale by us, in a registered direct offering (the “February 2024 Offering”), of (i) 570,000 shares of our common stock, (ii) pre-funded warrants to purchase up to 450,409 shares of common stock, and (iii) warrants to purchase up to an aggregate of 1,020,409 shares of common stock.

Each share of common stock and pre-funded warrant was offered and sold together with an accompanying warrant at a combined price of $1.96 per share of common stock or pre-funded warrant, as applicable.

The pre-funded warrants were

exercised at a price of $0.001 per share during April 2024.

The other warrants to purchase 1,020,409 shares of common stock are still outstanding and have an exercise price of $1.84 per share.

These warrants expire five years from the date of issuance.

We received net proceeds of approximately $1.8 million from the February 2024 Offering, after deducting placement agent fees and estimated offering expenses.

ATM Offering Program

On June 21, 2024, we entered into the At the Market Offering Agreement with H.C.

Wainwright & Co., LLC, as sales agent, pursuant to which we could issue and sell of up to $3.45 million in shares of our common stock (the “ATM Program”).

During the three months and year ended December 31, 2024, we sold 5,634,585 shares and 6,851,753 shares, respectively, of our common stock under the Current ATM Program for net proceeds of approximately $2.4 million and $3.1 million, respectively (net of commissions and other related offering expenses of approximately $0.1 million and $0.3 million, respectively).

After December 31, 2024, we settled sales of an additional 16,584,405 shares of our common stock for net proceeds of approximately $13.4 million (net of $0.7 million in commissions and issuance costs) under the ATM Program.

These sales settled between January 2, 2025 and February 12, 2025.

On February 13, 2025, we filed a prospectus supplement covering the offering, issuance and sale of an additional $80.0 million in shares of our common stock under the ATM Program.

Between February 21, 2025 and February 26, 2025, the Company settled sales of 252,040 shares of common stock for net proceeds of approximately $38,000 under the ATM Program pursuant to the prospectus supplement filed on February 13, 2025.

Agile Subordinated Loan Agreement

Principal and interest on the initial term loan in the aggregate amount of $756,000 was to be repaid in weekly payments of $27,000 commencing on October 14, 2024, and fully repaid on or before the maturity date of April 21, 2025.

The Term Loan would be expressly subordinated to our obligations on certain senior indebtedness as provided in the Original Loan Agreement.

Effective only upon the occurrence and continuance of an event of default under the Loan Agreement, we would grant the Lender a security interest in certain collateral, excluding intellectual property, of Energous Corporation as set forth in the Original Loan Agreement.

Effective November 5, 2024, we entered into an amended subordinated business loan agreement with the Lender (the “Amended Loan Agreement”) to refinance the Term Loan.

The Amended Loan Agreement provides for a new term loan of $997,000, with the ability to receive additional term loans of up to $1.6 million, subject to certain conditions (such new loans, the “New Term Loan”).

Principal and interest on the initial new term loan in the aggregate amount of $1,415,740 is to be repaid in weekly payments of approximately $39,000 and fully repaid on or before the maturity date of July 17, 2025.

The proceeds of the New Term Loan were allocated to cover the administrative fee of $48,000 and to repay in full the Term Loan as described above, which had a carrying amount of $429,000 and settlement value of $648,000 on November 5, 2024, and the remaining proceeds will be utilized for working capital.

The New Term Loan will be expressly subordinated to our obligations on certain senior indebtedness of the Company as provided in the Amended Loan Agreement.

The Amended Loan Agreement replaces the Original Loan Agreement and otherwise contains substantially the same terms as the Original Loan Agreement.

As of December 31, 2024, we had a short-term loan payable balance of approximately $0.8 million.

We recorded interest expense of approximately $0.2 million related to the Original Loan Agreement and the Amended Loan Agreement.

We recorded a loss on the extinguishment of debt of approximately $0.2 million related to the Original Loan Agreement.

The payment multiplier on the current loan is 1.42.

An administrative fee of $25,000 was paid on the Original Loan agreement and an administrative fee of $48,000 was paid on the Amended Loan Agreement.

Regulation A Offering

On October 11, 2024, we filed a Regulation A Offering Statement on Form 1-A with an offering of a maximum of 5,000,000 Units (the “Regulation A Offering”), with each Unit consisting of one share of Series A Convertible Preferred Stock (initially

convertible into two shares of common stock) and three common stock purchase warrants, two to each purchase one share of common stock at an exercise price of $1.50 per share and one to purchase one share of common stock at $2.00 per share, for an aggregate of 5,000,000 shares of Series A Convertible Preferred Stock (and 10,000,000 shares of common stock underlying the shares of Series A Convertible Preferred Stock) and warrants to purchase up to an aggregate of 10,000,000 shares of common stock at an exercise price of $1.50 per share and 5,000,000 shares of common stock at an exercise price of $2.00 per share, at an offering price of $1.50 per Unit, for a maximum offering amount of $7,500,000.

The Regulation A Offering Statement was qualified by the SEC on November 22, 2024.

As of December 31, 2024, no closings have occurred on the Regulation A Offering.

Our prepaid expense and other current assets balance as of December 31, 2024 includes $0.3 million in prepaid expenses related to the Regulation A Offering.

Operating Activities - During 2025, cash flows used in operating activities were $12.4 million, consisting of a net loss of $9.6 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.2 million (principally stock-based compensation of $0.3 million and depreciation and amortization expense of $0.1 million, partially offset by change in fair value of warrant liability of $0.3 million), a $2.9 million increase in accounts receivable, a $1.0 million increase in inventory, a $0.9 million decrease in accounts payable and a $0.5 million increase in operating lease liabilities, partially offset by a $1.0 million increase in accrued liabilities, a $0.7 million decrease in prepaid expenses and other current assets, net of other assets, and a $0.6 million increase in operating lease right-of-use assets.

During 2024, cash flows used in operating activities were $17.6 million, consisting of a net loss of $18.4 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $1.1 million (principally stock-based compensation of $0.8 million, depreciation and amortization expense of $0.2 million, loss on extinguishment of short-term debt of $0.2 million, issuance of common stock to consultant of $0.1 million and accrued interest of $0.1 million, partially offset by change in fair value of warrant liability of $0.3 million), a $0.5 million decrease in operating lease liabilities, a $0.2 million decrease in accrued expenses, a $0.1 million decrease in accrued severance expense and a $0.1 million increase in inventory, partially offset by $0.7 million decrease in operating lease right-of-use assets.

During 2023, cash flows used in operating activities were $19.3 million, consisting of a net loss of $19.4 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.1 million (principally stock-based compensation of $1.7 million, issuance costs allocated to warrant liability of $0.6 million, depreciation and amortization expense of $0.2 million and inventory net realizable adjustment of $0.2 million, partially offset by a decrease in fair value of the warrant liability of $2.5 million), a $0.7 million decrease in operating lease liabilities, a $0.5 million decrease in accrued expenses, a $0.5 million increase in inventory and a $0.3 million decrease in accrued severance, partially offset by a $1.0 million increase in accounts payable, a $0.7 decrease in operating lease right-of-use assets, a $0.3 million increase in prepaid expenses and other current assets and a $0.1 million decrease in accounts receivable.

During 2024 and 2023, cash flows used in investing activities were $0.1 million and $0.2 million, respectively.

The cash used in 2024 and 2023 was for the purchases of testing and computer equipment.

Investing Activities - During both 2025 and 2024, cash flows used in investing activities were $0.1 million.

The cash used in 2025 and 2024 was for the purchases of testing hardware and computer equipment.

Financing Activities - During 2025, cash flows provided by financing activities were $21.6 million, which primarily consisted of $18.4 million in net proceeds from the sale of shares of our common stock under the ATM Program, $4.0 million in net proceeds from the sale of stock and warrants and $0.4 million in proceeds from warrant exercises, partially offset by $0.9 million in repayments of a short-term loan and $0.3 million in repayments of financed insurance.

During 2024, cash flows provided by financing activities were $5.1 million, which primarily consisted of $3.2 million in net proceeds from the sale of shares of our common stock under the ATM Program, $1.8 million in net proceeds from a registered direct offering that included the sale of common stock, pre-funded warrants and warrants and net borrowings of $0.8 million from a short-term loan, partially offset by $0.3 million in repayments of financed insurance and $0.3 million in repayments of a short-term loan.

During 2023, cash flows provided by financing activities were $7.1 million, which consisted of $4.2 million in net proceeds from the sale of shares of our common stock under our prior at-the-market offering program, $2.7 million in net proceeds from the issuance and sale of common stock and warrants, $0.1 million in proceeds from a direct sale of common stock to the former Chief Executive Officer and $0.1 million in proceeds from the ESPP.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis