What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-13 · 124 added, 193 removed, 90 unchanged (78% of the section changed)

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We undertake no obligation to publicly update any of our forward-looking statements, whether as a result of new information, future developments or otherwise.

We have developed scalable, over-the-air Wireless Power Network (“WPN”) technology that integrates advanced semiconductor chipsets, software controls, hardware designs, and antenna systems to enable radio frequency (“RF”)-based charging for ambient Internet of Things (“ambient 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.

With a patent portfolio exceeding 250 patents, our solutions support both near-field and at-a-distance wireless charging, supplying power at multiple levels across varying distances, as well as expertise in advanced receiver technology.

By enabling continuous wireless power transmission, our transmitter and receiver technologies facilitate the use of battery-free ambient 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.

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

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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 its 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.

In the second quarter of 2025, the Company introduced its battery-free e-Sense tag and e-Compass software platform, establishing the first end-to-end wireless power platform for the ambient IoT.

Recent Developments

On September 11, 2025, we raised net proceeds of $4.5 million from a registered direct offering and concurrent exercise of our 2023 and 2024 warrants where we issued 120,000 shares of common stock, 465,347 pre-funded warrants and 585,347 warrants.

Critical Accounting Policies and Estimates

Use of Estimates.

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

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

Although we believe that management’s 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.

Going Concern.

Accounting Standards Codification (“ASC”) 205-40 “Presentation of Financial Statements - Going Concern,” requires management to assess our ability to continue as a going concern.

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 and second quarters 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.

Determining the extent to which conditions or events raise substantial doubt about our ability to continue as a going concern requires significant judgment and estimation by us.

Our significant estimates related to this analysis may include identifying business factors used in the forecasted financial results and liquidity.

We believe that the estimated values used in our going concern analysis are based on reasonable assumptions.

However, such assumptions are inherently uncertain and actual results could differ materially from those estimates.

We account 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 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.

Revenue Recognition.

We follow ASC 606, “Revenue from Contracts with Customers” (“Topic 606”).

In accordance with Topic 606, we recognize revenue using the following five-step approach:

Identify the contract with the customer.

Identify the performance obligations in the contract.

Determine the transaction price of the contract.

Allocate the transaction price to the performance obligations of the contract.

Recognize revenue when or as the performance obligations are satisfied.

Our 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.

We record revenue associated with the sales of products, such as PowerBridge transmitter systems, and with product development projects that we enter into with certain customers.

For the sales of products, we generally record revenue upon shipment of the products.

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

The achievement of a milestone is dependent on our performance obligation and requires acceptance by the customer.

We recognize 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 our effort or the value of the deliverable and is nonrefundable.

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

During the three months ended September 30, 2025, management believes there have been no significant changes to the items that we disclosed within our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Impact of Current Global Economic Conditions on Our Business

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

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.

Results of Operations

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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.

Comparison of Three Months Ended September 30, 2025 and 2024

The following table sets forth selected Condensed Statements of Operations data (in thousands):

For the three months ended September 30,

Cost of revenue

Gross profit (loss)

Operating expenses:

Research and development

Sales and marketing

General and administrative

Severance expense

Total operating expenses

Loss from operations

Other income, net:

Change in fair value of warrant liability

Interest income, net

Total other income, net

During the three months ended September 30, 2025 and 2024, we recorded revenue of $1.3 million and $0.2 million, respectively.

The 453% year over year increase is primarily due to the expansion of commercial applications with multinational enterprise retailers, including two Fortune 10 companies, 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.

Costs and Expenses and Loss from Operations.

Costs and expenses are made up of cost of revenue, research and development, sales and marketing, general and administrative and severance expenses.

Loss from operations for the three months ended September 30, 2025 and 2024 was $2.2 million and $3.6 million, respectively.

Cost of Revenue:

For the three months ended September 30,

Cost of revenue

Percent of total revenue

Cost of revenue was $0.8 million and $0.3 million, respectively, for the three months ended September 30, 2025 and 2024.

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

With the ramp up of our volume manufacturing during 2025 and other strategic efforts made to optimize operations, product margins improved significantly, transitioning from a gross loss in 2024 of $76,000 to a gross profit in 2025 of approximately $0.5 million, representing a 703% year over year improvement in gross profit for the same quarter last year.

Research and Development Costs:

For the three months ended September 30,

Research and development

Percent of total revenue

Research and development (“R&D”) costs were $0.9 million and $1.5 million, respectively, for the three months ended September 30, 2025 and 2024.

The decrease of $0.6 million is primarily due to a $0.5 million decrease in payroll costs from a lower headcount within the R&D department.

Sales and Marketing Costs:

For the three months ended September 30,

Sales and marketing

Percent of total revenue

Sales and marketing costs for the three months ended September 30, 2025 and 2024 were $0.5 million and $0.7 million, respectively.

The decrease of $0.2 million is primarily due to a $0.1 million decrease in stock-based compensation and a $0.1 million decrease in consulting fees.

General and Administrative Expenses:

For the three months ended September 30,

General and administrative

Percent of total revenue

General and administrative costs for the three months ended September 30, 2025 and 2024 were $1.2 million and $1.3 million, respectively.

The overall change was relatively flat.

A $0.1 million increase in compensation and a $0.1 million increase in stock registration and transfer expenses were offset by a $0.2 million decrease in legal fees for patent and general corporate matters.

Severance Expense:

For the three months ended September 30,

Severance expense

Percent of total revenue

Severance expense for the three months ended September 30, 2025 and 2024 was $8,000 and $0.1 million, respectively.

Severance expense for both the three months ended September 30, 2025 and 2024 was related to separation with certain non-executive employees.

Other income, net:

For the three months ended September 30,

Change in fair value of warrant liability

Interest income, net

Total other income, net

Other expense resulting from the change in fair value of the warrant liability was $10,000 for the three months ended September 30, 2025, compared to $0.2 million in income for the three months ended September 30, 2024.

As of September 30, 2025, the 2023 Warrants were fully exercised, eliminating the related warrant liability.

Net interest income for the three months ended September 30, 2025 was $88,000, as we earned approximately $99,000 in interest from our money market account, partially offset by approximately $11,000 in interest expense from a short-term loan that was paid off on July 7, 2025.

Interest income for the three months ended September 30, 2024 was $10,000 from interest earned on our money market account.

As a result of the above, net loss for the three months ended September 30, 2025 was $2.1 million as compared to $3.4 million for the three months ended September 30, 2024.

Comparison of Nine Months Ended September 30, 2025 and 2024

Comparison of Three Months Ended March 31, 2026 and 2025

The following table sets forth selected Condensed Statements of Operations data (in thousands):

For the nine months ended September 30,

For the three months ended March 31,

Cost of revenue

Gross profit (loss)

Operating expenses:

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Loss from operations

Other income, net:

Other income (expense), net:

Change in fair value of warrant liability

Interest income, net

Loss on retirement of property and equipment

Interest income (expense), net

Total other income, net

During the nine months ended September 30, 2025 and 2024, we recorded revenue of $2.6 million and $0.3 million, respectively.

The 662% year over year increase is primarily due to the expansion of commercial applications with multinational enterprise retailers, including two Fortune 10 companies, 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 AWS Partner Network.

During the three months ended March 31, 2026 and 2025, we recorded revenue of $3.1 million and $0.3 million, respectively.

The 799% period-over-period increase is primarily due to the expansion of commercial deployments with multinational enterprise retailers, including two Fortune 10 companies, deploying our WPN technology in connection with their infrastructure modernization initiatives as well as large scale proof-of-concept deployments with enterprise customers referred through the Company’s participation in the Amazon Web Services (“AWS”) Partner Network and other channel partners.

Costs and Expenses and Loss from Operations.

Costs and expenses are made up of cost of revenue, research and development, sales and marketing, general and administrative, severance expense and expenses from the abandoned financing transaction.

Loss from operations for the nine months ended September 30, 2025 and 2024 was $8.6 million and $14.9 million, respectively.

Costs and expenses are made up of cost of revenue, research and development, sales and marketing, general and administrative and severance expenses.

Loss from operations for the three months ended March 31, 2026 and 2025 was $1.8 million and $3.6 million, respectively.

Cost of Revenue:

For the nine months ended September 30,

For the three months ended March 31,

Cost of revenue

Percent of total revenue

Cost of revenue was $1.7 million and $0.5 million, respectively, for the nine months ended September 30, 2025 and 2024.

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 the first nine months of 2025 and other strategic efforts made to optimize operations, product margins improved significantly, transitioning from a gross loss in 2024 of $0.2 million to a gross profit in 2025 of approximately $0.9 million, representing a 551% year over year improvement in gross profit.

Cost of revenue was $2.0 million and $0.3 million, respectively, for the three months ended March 31, 2026 and 2025, respectively.

The increase is primarily due to higher sales volume of PowerBridge Pro transmitters that were shipped during the first quarter of 2026.

With the ramp up of our volume manufacturing during 2025 and early 2026 and other strategic efforts made to optimize operations, product margins improved significantly, transitioning from a gross profit in the first quarter 2025 of $0.1 million to a gross profit in the first quarter 2026 of approximately $1.1 million, representing a 1,077% year over year improvement in gross profit for the same quarter last year.

Research and Development Costs:

For the nine months ended September 30,

For the three months ended March 31,

Research and development

Percent of total revenue

Research and development costs were $3.2 million and $6.0 million, respectively, for the nine months ended September 30, 2025 and 2024.

The decrease of $2.8 million is primarily due to a $1.7 million decrease in compensation, consisting of a $1.5 million decrease in payroll costs from a lower headcount within the R&D department and a $0.2 million decrease in stock-based compensation, a $0.8 million decrease in engineering components, circuit boards and third-party software and a $0.1 million decrease in software maintenance.

Research and development (“R&D”) costs were $1.0 million and $1.2 million, respectively, for the three months ended March 31, 2026 and 2025.

The decrease of $0.2 million is primarily due to a $0.1 million decrease in third party services and a $0.1 million decrease in payroll costs.

Sales and Marketing Costs:

For the nine months ended September 30,

For the three months ended March 31,

Sales and marketing

Percent of total revenue

Sales and marketing costs for the nine months ended September 30, 2025 and 2024 were $1.8 million and $2.4 million, respectively.

The decrease of $0.6 million is primarily due to a $0.4 million decrease in public relations, consulting and recruiting fees, a $0.1 million decrease in marketing, promotional and tradeshow expenses and a $0.1 million decrease in stock-based compensation.

General and Administrative Expenses:

For the nine months ended September 30,

Sales and marketing costs for both the three months ended March 31, 2026 and 2025 were $0.5 million and $0.6 million, respectively.

The decrease is primarily due to a $0.1 million decrease in consulting fees.

General and Administrative Costs:

For the three months ended March 31,

General and administrative

Percent of total revenue

General and administrative costs for the nine months ended September 30, 2025 and 2024 were $3.4 million and $5.0 million, respectively.

The decrease of $1.6 million is primarily due to a $0.9 million decrease in legal fees, a $0.3 million decrease in annual meeting-related expenses, a $0.3 million decrease in consulting, investor relations, recruiting and third-party services, a $0.2 million decrease in insurance premiums and a $0.1 million decrease in stock-based compensation, partially offset by a $0.2 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.

General and administrative costs for the three months ended March 31, 2026 and 2025 were $1.4 million and $0.9 million, respectively.

The increase of $0.5 million was primarily due to $0.1 million increase in compensation from the achievement of 2026 Bonus Plan metrics, a $0.3 million increase in legal fees, and a $0.1 million increase in stock registration and transfer expenses, partially offset by a $0.1 million decrease in office rent and facility expenses.

Severance Expense:

For the nine months ended September 30,

For the three months ended March 31,

Severance expense

Percent of total revenue

Severance expense for the nine months ended September 30, 2025 and 2024 was $0.4 million and $1.4 million, respectively.

Severance expense for the nine months ended September 30, 2025 was related to separation with certain non-executive employees.

The severance expense for the nine months ended September 30, 2024 was primarily due to the departure of our former CEO during 2024 for which $1.2 million in severance expense was recorded.

Severance expense for the three months ended March 31, 2025 of $0.4 million related to separation with certain non-executive employees.

There was no such expense for the three months ended March 31, 2026.

Expenses from Abandoned Financing Transaction:

For the nine months ended September 30,

For the three months ended March 31,

Expenses from abandoned financing transaction

Percent of total revenue

Expenses related to our abandoned financing transaction were $0.7 million for the nine months ended September 30, 2025, primarily attributable to our decision to terminate the previously announced convertible preferred equity offering under Regulation A.

There was no such expense during the nine months ended September 30, 2024.

Expenses from the abandoned financing transaction was $0.7 million for the three months ended March 31, 2025, primarily attributable to our decision not to pursue the convertible preferred equity offering under Regulation A.

This decision was made because we were able to secure less dilutive financing through our ATM Program at a lower cost of capital.

There was no such expense for the three months ended March 31, 2026.

Other Income, net:

For the nine months ended September 30,

For the three months ended March 31,

Change in fair value of warrant liability

Interest income, net

Loss on retirement of property and equipment

Total other income, net

Other income resulting from the change in fair value of the warrant liability was $0.3 million for the nine months ended September 30, 2025, consistent with $0.4 million for the nine months ended September 30, 2024.

As of September 30, 2025, the 2023 Warrants were fully exercised, eliminating the related warrant liability.

Net interest income for the nine months ended September 30, 2025 was $59,000, as we earned $353,000 in interest income from our money market account, partially offset by $294,000 in interest expense from a short-term loan.

Interest income for the nine months ended September 30, 2024 was $219,000 from interest earned on our money market account, offset by $4,000 in interest expense.

As a result of the above, net loss for the nine months ended September 30, 2025 was $8.3 million as compared to $14.3 million for the nine months ended September 30, 2024.

Other expense resulting from the change in fair value of the warrant liability was $0.3 million for the three months ended March 31, 2025.

On September 10, 2025, the 2023 Warrants were fully exercised, eliminating the related warrant liability.

As of both December 31, 2025 and March 31, 2026, we no longer have warrants classified as a liability on our balance sheet.

Net interest income for the three months ended March 31, 2026 was $0.2 million from interest earned in our money market account.

Net interest expense for the three months ended March 31, 2025 was approximately $22,000 from short-term loan interest expense of $187,000, partially offset by interest income of $165,000 earned in our money market account.

As a result of the above, net loss for the three months ended March 31, 2026 was $1.7 million as compared to $3.4 million for the three months ended March 31, 2025.

Critical Accounting Policies and Estimates

Use of Estimates.

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 management’s 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.

Going Concern .

Accounting Standards Codification (“ASC”) 205-40 Presentation of Financial Statements - Going Concern , requires management to assess our ability to continue as a going concern.

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.

Determining the extent to which conditions or events raise substantial doubt about our ability to continue as a going concern requires significant judgment and estimation by us.

Our significant estimates related to this analysis may include identifying business factors used in the forecasted financial results and liquidity.

We believe that the estimated values used in our going concern analysis are based on reasonable assumptions.

However, such assumptions are inherently uncertain, and actual results could differ materially from those estimates.

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.

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 received.

Revenue Recognition.

We follow ASC 606, “Revenue from Contracts with Customers” (“Topic 606”).

In accordance with Topic 606, we recognize revenue using the following five-step approach:

Identify the contract with the customer.

Identify the performance obligations in the contract.

Determine the transaction price of the contract.

Allocate the transaction price to the performance obligations of the contract.

Recognize revenue when or as the performance obligations are satisfied.

Our 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.

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.

The achievement of a milestone is dependent on our performance obligation and requires acceptance by the customer.

We recognize 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 our effort or the value of the deliverable and is nonrefundable.

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

During the three months ended March 31, 2026, management believes there have been no significant changes to the items that we disclosed within our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Liquidity and Capital Resources

During the three months ended March 31, 2026 and 2025, we recorded revenue of $3.1 million and $0.3 million, respectively.

We incurred a net loss of $1.7 million and $3.4 million for the three months ended March 31, 2026 and 2025, respectively.

Net cash used in operating activities was $5.6 million and $4.7 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had cash on hand of $36.6 million.

Based upon our cash on hand as of March 31, 2026 and anticipated collection of accounts receivable, we are currently meeting our liquidity requirements.

In accordance with ASC 205-40, Presentation of Financial Statements—Going Concern , management has evaluated whether conditions or events, considered in the aggregate, raise questions about our ability to continue as a going concern within one year after the date the financial statements are issued.

Based on current operating levels and existing cash balances, management believes that we have sufficient liquidity to fund operations for at least the next twelve months

As we gain traction in the market with our new technology and continues 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, as adoption of this emerging technology by enterprise customers may take longer than expected.

Accordingly, we may decide to pursue additional financing, which could include offerings of equity or debt securities, bank financing, 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 we would find acceptable, or at all.

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

The market for products using our technology is broad and evolving, so our 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.

Operating Activities - During the three months ended March 31, 2026, cash flows used in operating activities were $5.6 million, consisting of a net loss of $1.7 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.1 million (principally stock-based compensation of $50,000 and depreciation and amortization of $34,000), a $2.7 million increase in prepaid expenses and other current assets, a $1.3 million decrease in accrued expenses, a $0.2 million increase in accounts receivable, a $0.1 million decrease in operating lease liabilities, a $0.1 million increase in other assets and a $47,000 decrease in accounts payable, partially offset by a $0.3 million decrease in inventory, a $0.1 million decrease in right-of-use lease assets and a $0.1 million increase in deferred revenue.

During the three months ended March 31, 2025, cash flows used in operating activities were $4.7 million, consisting of a net loss of $3.4 million, plus adjustments to reconcile net loss to net cash used in operating activities aggregating $0.1 million (principally change in fair value of warrant liability of $0.3 million, partially offset by stock-based compensation of $0.1 million and depreciation and amortization and amortization of short-term loan fees totaling approximately $0.1 million), a $0.6 million decrease in accounts payable, a $0.5 million decrease in accrued expenses, a $0.2 million increase in accounts receivable, a $0.2 million decrease in operating lease liabilities and a $0.1 million increase in inventory, partially offset by a $0.3 million decrease in operating lease right-of-use assets, a $0.1 million decrease in prepaid expenses and other current assets and a $0.1 million increase in accrued severance.

Investing Activities - During the three months ended March 31, 2026 and 2025, cash flows used in investing activities were $38,000 and $21,000, respectively.

A small amount of hardware and equipment was purchased during each period.

Financing Activities - During the three months ended March 31, 2026, cash flows provided by financing activities were $31.8 million, which primarily consisted of $31.9 million in net proceeds from the sale of shares of our common stock under the ATM Program, partially offset by $0.1 million in repayments of financed insurance.

During the three months ended March 31, 2025, cash flows provided by financing activities were $13.4 million, which primarily consisted of $13.8 million in net proceeds from the sale of shares of our common stock under the ATM Program, partially offset by $0.3 million in repayments of a short-term loan and $0.1 million in repayments of financed insurance.

Fundraising Activities

ATM Offering Program

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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 (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 $3.1 million (net of commissions and other related offering expenses of approximately $0.3 million).

Among other adjustments since June 2024, on February 13, 2025, the Company filed a prospectus supplement for the issuance and sale of an additional $80.0 million in shares of common stock under the ATM Program, which ATM capacity was subsequently reduced to up to $70.0 million in shares of common stock on September 10, 2025.

During the three months ended September 30, 2025, we sold 232,989 shares of our common stock under the ATM Program for net proceeds of approximately $2.4 million (net of commissions and other related offering expenses of approximately $0.1 million).

During the nine months ended September 30, 2025, we sold 1,082,875 shares of our common stock under the ATM Program for net proceeds of approximately $18.2 million (net of commissions and other related offering expenses of approximately $1.2 million).

As of September 30, 2025, approximately $64.7 million in shares of common stock remained available for issuance under the ATM Program, subject to availability of authorized shares.

On February 13, 2025, the Company filed a prospectus supplement for the issuance and sale of an additional $80.0 million in shares of common stock under the ATM Program, which ATM capacity was subsequently reduced to up to $70.0 million in shares of common stock on September 10, 2025.

During the three months ended March 31, 2026, we sold 3,299,728 shares of our common stock under the ATM Program for net proceeds of approximately $31.9 million (net of commissions and other related offering expenses of approximately $1.0 million).

As of March 31, 2026, approximately $31.7 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 is being 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 Warrant, as applicable.

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.

As of March 31, 2026, no 2025 Pre-Funded Warrants and 585,347 2025 Warrants were outstanding.

The 2025 Offering closed on September 11, 2025.

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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.

As of March 31, 2026, the Registered Direct Offering Placement Agent Warrants were still outstanding.

Warrant Inducement Offering

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”).

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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 Original Warrants.

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.

As of March 31, 2026, the New Warrant Shares were still outstanding.

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 paid off all outstanding amounts owed to the Lender.

There are no further obligations under the Amended Loan Agreement.

As of September 30, 2025, no balance was owed under the “Amended Loan Agreement.”

Liquidity and Capital Resources

During the nine months ended September 30, 2025 and 2024, we recorded revenue of $2.6 million and $0.3 million, respectively.

We incurred net losses of $8.3 million and $14.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Net cash used in operating activities was $10.0 million and $14.9 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had cash and cash equivalents of $12.9 million.

We are currently meeting our liquidity requirements through the proceeds of the ATM Program (as defined above) that raised net proceeds of $18.2 million during the nine months ended September 30, 2025, a sale of stock, pre-funded warrants and warrants that raised net proceeds of $4.1 million during the nine months ended September 30, 2025 and the exercises of 2023 Warrants and 2024 warrants that raised net proceeds of $0.4 million during the nine months ended September 30, 2025.

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.

Accordingly, we expect 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 we would find acceptable, or at all.

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 operations and strategic plans.

Based on current operating levels and further cost reductions implemented during the first nine months of 2025, the Company believes it has sufficient cash on hand and access to capital to fund operations for the next 12 months.

Operating Activities - During the nine months ended September 30, 2025, cash flows used in operating activities were $10.0 million, consisting of a net loss of $8.3 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.2 million (principally stock-based compensation of $0.2 million, depreciation and amortization of $0.1 million and accrued interest and amortization of short-term loan financing fees of approximately $0.1 million, partially offset by a change in fair value of warrant liability of $0.3 million), a $1.2 million increase in accounts receivable, a $0.7 million increase in inventory, a $0.6 million decrease in accounts payable and a $0.4 million decrease in operating lease liabilities, partially offset by a $0.5 million decrease in right-of-use assets, a $0.4 million increase in accrued expenses and a $0.1 million decrease in prepaid expenses and other current assets.

During the nine months ended September 30, 2024, cash flows used in operating activities were $14.9 million, consisting of a net loss of $14.3 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.4 million (principally stock-based compensation of $0.7 million and depreciation and amortization of $0.1 million, partially offset by a change in fair value of warrant liability of $0.4 million), a $0.3 million decrease in accounts payable, a $0.3 million decrease in accrued expenses, a $0.3 million increase in inventory and a $0.1 million decrease in accrued severance.

Investing Activities - During the nine months ended September 30, 2025 and 2024, cash flows used in investing activities were $43,000 and $0.1 million, respectively.

A small amount of hardware and equipment was purchased during each period.

Financing Activities - During the nine months ended September 30, 2025, cash flows provided by financing activities were $21.6 million, which primarily consisted of $18.2 million in net proceeds from the sale of shares of our common stock under the ATM Program, $4.1 million in net proceeds from the sale of stock, pre-funded warrants 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 $0.2 million in repayments of financed insurance.

During the nine months ended September 30, 2024, cash flows provided by financing activities were $2.5 million, which primarily consisted of $1.8 million in net proceeds from a registered direct offering that included the sale of common stock, pre-funded warrants and warrants and $0.8 million in net proceeds from the sale of shares of our common stock under the ATM Program.

As of March 31, 2026, the Concurrent Warrant Exercise Transaction Placement Agent Warrants were still outstanding.

Quantitative and Qualitative Disclosure About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis