What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-03-28 · 523 added, 432 removed, 324 unchanged (75% of the section changed)

1 unchanged sentence

Energous Corporation

INDEX TO FINANC IAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 207 )

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 688 )

Balance Sheets as of December 31, 2024 and 2023

Statements of Operations for the years ended December 31, 2024 and 2023

Statement of Changes in Stockholders’ Equity for the years ended December 31, 2023 and 2022

Statement of Changes in Stockholders’ Equity/(Deficit) for the years ended December 31, 2024 and 2023

Statements of Cash Flows for the years ended December 31, 2024 and 2023

Notes to Financial Statements

REPORT OF INDEPENDENT REGI STERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Energous Corporation

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Energous Corporation (a Delaware corporation) as of December 31, 2024, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Going Concern

The Company has incurred operating losses and negative cash flows from operations.

As the Company is dependent on its ability to raise funds in the future, to continue as a going concern, it places higher reliance on projected financial information in ascertaining that no substantial doubt exists for it to continue as a going concern.

We evaluated the reasonableness of the Company’s forecasted revenues, operating expenses, and the projected cash balance as of February 28, 2026 (collectively, “forecasts”), by (1) inquiring of senior management to gain an understanding of the Company’s operations and strategy, and (2) testing the forecasts by challenging the significant assumptions used by management in calculating such forecasts.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures included:

● Reviewing the cash forecast prepared by management for one year after the date the financial statements are expected to be issued and management’s evaluation of the Company’s ability to continue as a going concern through the report issuance date.

● Assessing management’s ability to forecast revenue and cash flows by comparing prior year forecasts to actual financial results.

● Assessing the adequacy of the disclosures in the financial statements related to the going concern assessment by comparing it to the audit evidence obtained.

We have served as the Company’s auditor since 2024.

San Jose, California

February 27, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

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Opinion on the Financial Statements

We have audited the accompanying balance sheets of Energous Corporation (the “Company”) as of December 31, 2023 and 2022, the related statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying balance sheet of Energous Corporation (the “Company”) as of December 31, 2023, the related statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

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In evaluating management’s assessment of whether substantial doubt exists, and the projected financial information used in such an evaluation, we identified assessing the reasonableness of management’s such evaluation of the Company’s ability to continue as a going concern and related disclosures as a critical audit matter.

required a high degree of auditor judgment and increased effort when performing audit procedures to evaluate (1) the reasonableness of management’s forecasted revenues, operating expenses, and projected ending cash balance as of March 31, 2025, and (2) the adequacy of the consolidated financial statements disclosure related to the going concern assessment.

This matter required a high degree of auditor judgment and increased effort when performing audit procedures to evaluate (1) the reasonableness of management’s forecasted revenues, operating expenses, and projected ending cash balance as of March 31, 2025, and (2) the adequacy of the consolidated financial statements disclosure related to the going concern assessment.

How the Critical Audit Matter was Addressed in the Audit

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/s/ Marcum LLP

We have served as the Company’s auditor since 2013.

We served as the Company’s auditor from 2013 to 2024.

March 28, 2024

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BALANCE SHEETS

(in thousands, except share and per share amounts)

Current assets:

Cash and cash equivalents

Accounts receivable, net

Restricted cash

Accounts receivable, net of allowance for credit losses of $ 0 and $ 53 as of December 31, 2024 and 2023, respectively

Prepaid expenses and other current assets

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Property and equipment, net

Operating right-of-use lease assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Operating lease right-of-use assets

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

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Accrued expenses

Accrued severance

Accrued severance expense

Warrant liability

Operating lease liabilities, current portion

Short-term debt, net

Deferred revenue

Total current liabilities

Long-term liabilities:

Operating lease liabilities, long-term portion

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Preferred Stock, $ 0.00001 par value, 10,000,000 shares authorized at

December 31, 2023 and December 31, 2022;

no shares issued or

Common Stock, $ 0.00001 par value, 200,000,000 shares authorized

at December 31, 2023 and December 31, 2022;

5,471,121 and

3,947,267 shares issued and outstanding at December 31, 2023

and December 31, 2022, respectively.

Commitments and contingencies (Note 8)

Stockholders’ equity (deficit):

Preferred Stock, $ 0.00001 par value, 10,000,000 shares authorized as of December 31, 2024 and December 31, 2023;

no shares issued or outstanding as of December 31, 2024 and December 31, 2023.

Common Stock, $ 0.00001 par value, 200,000,000 shares authorized as of December 31, 2024 and December 31, 2023;

13,575,907 and 5,471,121 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively.

Additional paid-in capital

Accumulated deficit

( 382,042,062

( 362,675,299

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

Share and per share amounts have been retroactively adjusted to reflect the impact of a 1-for- 20 reverse stock split effected in August 2023, as discussed in Note 1.

Energous Corporation

STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

For the Year Ended December 31,

Cost of revenue

Operating expenses:

Research and development

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Severance expense

Total expenses

Total operating expenses

Loss from operations

Other (expense) income:

Other income (expense), net:

Offering costs related to warrant liability

Change in fair value of warrant liability

Interest income

Total other income

Interest income, net

Loss on extinguishment of short-term debt

Other expense

Total other income (expense), net

Basic and diluted loss per common share

Weighted average shares outstanding, basic and diluted

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

Share and per share amounts have been retroactively adjusted to reflect the impact of a 1-for- 20 reverse stock split effected in August 2023, as discussed in Note 1.

Energous Corporation

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except for share amounts)

Stockholders’

Balance, January 1, 2022

( 336,400,039

Equity (Deficit)

Balance as of January 1, 2023

Stock-based compensation - stock options

Stock-based compensation - restricted stock units (“RSUs”)

Stock-based compensation - employee stock purchase plan

Stock-based compensation - employee stock purchase plan (“ESPP”)

Stock-based compensation - performance share units (“PSUs”)

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Shares purchased from contributions to the ESPP

Issuance of shares in an at-the-market ("ATM") placement, net

of $ 73,403 in issuance costs

Balance, December 31, 2022

( 362,675,299

Cash in lieu of shares from reverse stock split

Issuance of shares in an at-the-market (“ATM”) placement, net of $ 198 in issuance costs

Issuance of shares in a sale of common stock, net of $ 3,166 in issuance costs and fair value of liability warrant

Issuance of shares in a sale of common stock to Chief Executive Officer

Balance as of December 31, 2023

Stock-based compensation - stock options

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Stock-based compensation - ESPP

Stock-based compensation - PSUs

Issuance of shares for RSUs

Issuance of shares for PSUs

Shares purchased from contributions to the ESPP

Cash in lieu of shares from reverse stock split

Issuance of shares in an ATM placement, net

of $ 197,647 in issuance costs

Issuance of shares in a sale of common stock, net

of $ 3,166,139 in issuance costs and fair value of liability warrant

Issuance of shares in a sale of common stock to Chief Executive Officer

Balance, December 31, 2023

( 382,042,062

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

Shares issued to consultants for services

Pre-funded warrants exercised

Issuance of shares in a sale of common stock, pre-funded warrants and warrants, net of $ 230 in issuance costs

Issuance of shares in an ATM placement, net of $ 346 in issuance costs

Balance as of December 31, 2024

Share and per share amounts have been retroactively adjusted to reflect the impact of a 1-for- 20 reverse stock split effected in August 2023, as discussed in Note 1.

Energous Corporation

STATEMENTS OF CASH FLOWS

(in thousands)

For the year ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to:

Net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Stock-based compensation

Change in operating lease right-of-use assets

Inventory net realizable value adjustment

Bad debt (recovered) expensed

Allowance for credit losses

Common stock issued to consultants for services

Loss on extinguishment of short-term debt

Accrued interest

Amortization of short-term loan fees

Change in fair value of warrant liability

Offering costs allocated to warrant liability

Offering costs allocated to warrants

Changes in operating assets and liabilities:

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Prepaid expenses and other current assets

Operating lease right-of-use assets

Accounts payable

Accrued expenses

Accrued severance

Accrued severance expense

Operating lease liabilities

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Purchases of property and equipment

Net cash from investing activities

Net cash used in investing activities

Cash flows from financing activities:

Net borrowings from short-term loan

Repayments of short-term loan

Repayments of financed insurance premiums

Net proceeds from an ATM offering

Net proceeds from a registered offering of common stock and warrants

Proceeds from a sale of common stock to the Chief Executive Officer

Proceeds from contributions to employee stock purchase plan

Net proceeds from a sale of common stock and warrant issuance

Proceeds from sale of common stock to the former Chief Executive Officer

Proceeds from contributions to the ESPP

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents - beginning

Cash and cash equivalents - ending

Supplemental disclosure of non-cash financing activities:

Increase in operating lease right-of-use assets and operating lease liabilities

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash - beginning

Cash, cash equivalents and restricted cash - ending

Supplemental disclosure of cash flow information:

Interest paid

Supplemental disclosure of non-cash investing and financing activities:

Decrease in operating lease right-of-use assets and operating lease liabilities from incremental borrowing rate change

Financing of insurance premiums

Increase in operating lease right-of-use assets and operating lease liabilities from lease modification

Common stock issued for RSUs

Common stock issued for PSUs

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

ENERGOUS CORPORATION

Notes to Financi al Statements

Notes to Financial Statements

Note 1 – Business Organization, Nature of Operations

Description of Business

Energous Corporation ("the Company") has developed a wireless power networks technology (“WPNT”), consisting of semiconductor chipsets, software controls, hardware designs and antennas, that enable radio frequency (“RF”) based charging for Internet of Things (“IoT”) devices.

The WPNT has a broad spectrum of capabilities to enable the next generation of wireless power networks, delivering power and data in a seamless device portfolio.

This includes near field and at-a-distance wireless charging with multiple power levels at various distances.

The Company believes its technology is innovative in its approach, in that the Company is developing solutions that charge IoT devices using RF technology.

To date, the Company has developed and released to production multiple transmitters and receivers, including prototypes and partner production designs.

The transmitters vary based on form factor and power specifications and frequencies, while the receivers are designed to support a myriad of wireless charging applications including:

Energous Corporation d/b/a Energous Wireless Power Solutions (the “Company”) has developed a 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 Internet of Things (“IoT”) devices.

The Company’s 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.

The Company’s 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, the Company’s 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.

The Company believes its technology represents a breakthrough in wireless power delivery, offering a differentiated approach to charging IoT devices via RF technology.

To date, the Company has developed and released multiple transmitter and receiver solutions, including prototypes and partner production designs.

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

Cold Chain, Asset Tracking, Medical IoT

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Retail and Industrial IoT

The first end product featuring the Company's technology entered the market in 2019.

The Company started shipping its first at-a-distance wireless PowerBridges for commercial IoT applications in the fourth quarter of 2021 and expects additional wireless power enabled products to be released as the Company's business moves forward.

The first WPN-enabled end product featuring the Company’s technology entered the market in 2019.

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

As the Company continues to innovate its technology applications, the Company anticipates the release of additional wireless power-enabled products.

Reverse Stock Split

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Note 2 – Liquidity and Management Plans

During the years ended December 31, 2023 and 2022, the Company has recorded revenue of $ 474,184 and $ 851,321 , respectively.

The Company incurred a net loss of $ 19,366,763 and $ 26,275,260 for the years ended December 31, 2023 and 2022, respectively.

Net cash used in operating activities was $ 19,248,510 and $ 23,636,747 for the years ended December 31, 2023 and 2022, respectively.

However, the Company is currently meeting its liquidity requirements through the proceeds of securities offerings that raised net proceeds of $ 27,043,751 during 2021, $ 744,787 during 2022 and $ 6,916,775 during 2023, along with proceeds from the sale of the Company's common stock to Cesar Johnston, the Company's President and Chief Executive Officer, contributions to the employee stock purchase plan (“ESPP”) and payments received from customers.

As of December 31, 2023, the Company had cash on hand of $ 13,936,050 .

The Company expects that cash and cash equivalents as of December 31, 2023, together with anticipated additional proceeds from the ATM financing during 2024, proceeds from the Company's securities offering that closed on February 20, 2024, continued cost and expense reductions and collections generated by anticipated revenues, will be sufficient to fund the Company's operations through March 2025.

Research and development of new technologies is by its nature unpredictable.

Although the Company intends to continue its research and development activities, there can be no assurance that its available resources and revenue generated from its business operations will be sufficient to sustain its operations.

Accordingly, the Company expects to pursue additional cost and expense reductions in addition to 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 cost and expense reductions and financing will be available on terms that the Company would find acceptable, or at all.

During the years ended December 31, 2024 and 2023, the Company has recorded revenue of $ 0.8 million and $ 0.5 million, respectively.

The Company incurred a net loss of $ 18.4 million and $ 19.4 million for the years ended December 31, 2024 and 2023, respectively.

Net cash used in operating activities was $ 17.6 million and $ 19.2 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company had cash on hand of $ 1.4 million.

The Company is currently meeting its liquidity requirements through the proceeds of securities offerings, including the ATM Program (as defined in Note 10 below), which securities offerings generated aggregate net proceeds of $ 3.2 million during the year ended December 31, 2024, as well as short-term loans which have a net balance of $ 0.8 million as of December 31, 2024.

The Company raised net proceeds in the ATM Program of approximately $ 13.4 million during January and February 2025 (see Note 16 – Subsequent Events).

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

As the Company gains traction in the market with its 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 its available resources and revenue generated from its business operations will be sufficient to sustain its operations.

Accordingly, the Company expects to pursue additional financing, which could include offerings of equity or debt securities, bank 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 the Company would find acceptable, or at all.

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

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Basis of Presentation

The accompanying financial statements are presented in U.S.

dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), and pursuant to the accounting and disclosure rules and regulations of the U.S.

Securities and Exchange Commission (the “SEC”).

Reclassifications

Certain reclassifications have been made to the fiscal year 2023 balance sheet to conform to the fiscal year 2024 presentation.

The reclassifications had no impact on total assets, total liabilities, or stockholders’ equity.

Use of Estimates

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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.

The Company’s significant estimates and assumptions include the valuation of stock-based compensation instruments, recognition of revenue, inventory valuation, fair value of warrant liabilities and the valuation allowance on deferred tax assets.

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

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Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term, highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents.

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The Company maintains its cash deposits with major financial institutions.

Note 3 – Summary of Significant Accounting Policies, continued

The Company reports restricted cash on its balance sheet to disclose the amount reserved for a specific purpose aside from ordinary business operations.

The Company had restricted cash as collateral for the Company’s corporate credit card program which was discontinued during the second quarter of 2024.

As of December 31, 2024 and 2023, the carrying value of restricted cash was $ 0 and $ 0.1 million, respectively.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”).

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Such warrant classification is also subject to re-evaluation at each reporting period.

Note 3 – Summary of Significant Accounting Policies, continued

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.

The Company follows ASC 820, Fair Value Measurements (“ASC 820”), which establishes a common definition of fair value to be applied when US GAAP requires the use of fair value, establishes a framework for measuring fair value, and requires certain disclosure about such fair value measurements.

The Company follows ASC 820, Fair Value Measurements (“ASC 820”), which establishes a common definition of fair value to be applied when U.S.

GAAP requires the use of fair value, establishes a framework for measuring fair value, and requires certain disclosure about such fair value measurements.

ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available.

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Because of the uncertainties inherent in the valuation of assets or liabilities for which there are no observable inputs, those estimated fair values may differ significantly from the values that may have been used had a ready market for the assets or liabilities existed.

Note 3 – Summary of Significant Accounting Policies, continued

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses, other current assets, and accounts payable & accrued expenses, are an approximate of their fair values because of the short maturity of these instruments.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses, other current assets, and accounts payable and accrued expenses, are an approximate of their fair values because of the short maturity of these instruments.

The carrying amounts of the Company’s short-term debt and lease liabilities approximate fair value due to the market interest rates that these obligations bear and interest rates currently available to the Company.

The Company’s derivative liabilities recognized at fair value on a recurring basis are a level 3 measurement (see Note 14 – Fair Value Measurement).

Note 3 – Summary of Significant Accounting Policies, continued

Revenue Recognition

The Company follows Accounting Standards Codification (“ASC”) 606, "Revenue from Contracts with Customers" (“Topic 606”).

The Company follows ASC 606, “Revenue from Contracts with Customers” (“Topic 606”).

In accordance with Topic 606, the Company recognizes revenue using the following five-step approach:

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

During the years ended December 31, 2023 and 2022, the Company recognized $ 474,184 and $ 851,321 in revenue, respectively.

During the years ended December 31, 2024 and 2023, the Company recognized $ 0.8 million and $ 0.5 million in revenue, respectively.

The Company records revenue associated with product development projects that it enters into with certain customers.

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The payment associated with achieving the performance obligation is generally commensurate with the Company’s effort or the value of the deliverable and is nonrefundable.

The Company records the expenses related to these product development projects in research and development expense, in the periods such expenses were incurred.

The Company follows ASC Topic 330, Inventory (“Topic 330”) to account for its inventory, which includes finished goods ready for sale, work in process and raw materials, at the lower of cost or net realizable value.

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

Accounts Receivable

The Company reviews its receivables for collectibility based on historical loss patterns, aging of the receivables, and assessments of specific identifiable client accounts considered at risk or uncollectible and provides allowances for potential credit losses, as needed.

The Company also considers any changes to the financial condition of its clients and any other external market factors that could impact the collectibility of the receivables in the determination of the allowance for credit losses.

Based on these assessments, the Company recorded $ 0 for credit losses on its accounts receivable as of December 31, 2024 compared to an allowance of $ 0.1 million on its accounts receivable balance as of December 31, 2023.

The Company follows ASC Topic 310, Receivables (“Topic 310”) to account for transactions related to factoring accounts receivable.

The Company has entered into an agreement to sell certain accounts receivable to a third-party financial institution under which the Company receives the proceeds of customer invoices from the third-party financial institution, less a discount fee.

The third-party financial institution is responsible for subsequent collection of the amount due from the customer without recourse.

Proceeds from the factoring agreements are reflected as a reduction of accounts receivable on the Company’s Balance Sheets and included in the cash flows operating activities in the Statements of Cash Flows.

The Company received proceeds under its accounts receivable factoring agreement of approximately $ 0.3 million and $ 0 during the years ended December 31, 2024 and 2023, respectively.

There were no outstanding receivables due under the accounts receivable factoring agreement as of December 31, 2024 and 2023.

Discount fees from factoring accounts receivable were approximately $ 31,000 and $ 0 for the years ended December 31, 2024 and 2023, respectively, and are included in other income (expense), net on the Statement of Operations.

Inventory is stated at the lower of cost or net realizable value.

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

Cost is determined by the first-in, first-out ("FIFO") method.

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.

Note 3 – Summary of Significant Accounting Policies, continued

Research and Development

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Patent application costs, which are generally legal costs, are expensed as research and development costs until such time as the future economic benefits of such patents become more certain.

The Company incurred research and development costs of $ 10,810,570 and $ 12,497,781 for the years ended December 31, 2023 and 2022, respectively.

Note 3 – Summary of Significant Accounting Policies, continued

The Company incurred research and development costs of $ 8.3 million and $ 10.8 million for the years ended December 31, 2024 and 2023, respectively.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees in accordance with accounting guidance that requires awards to be recorded at their fair value on the date of grant and are amortized over the vesting period of the award.

The Company recognizes compensation costs on a straight-line basis over the requisite service period of the award, which is typically the vesting term of the equity instrument issued.

Forfeitures are recognized as they occur.

Under the Company’s Employee Stock Purchase Plan (“ESPP”), employees may purchase a limited number of shares of the Company’s stock at a 15 % discount from the lower of the closing market prices measured on the first and last days of each half-year period.

The Company accounts for equity instruments issued to employees, board members and contractors in accordance with accounting guidance that requires awards to be recorded at their fair value on the date of grant and amortized over the vesting period of the award.

The Company amortizes compensation costs on a straight-line basis over the requisite service period of the award, which is typically the vesting term of the equity instrument issued.

Forfeitures are recorded as they occur.

Under the ESPP, employees may purchase a limited number of shares of the Company’s common stock at a 15 % discount from the lower of the closing market prices measured on the first and last days of each half-year period.

The Company recognizes stock-based compensation expense for the fair value of the purchase options, as measured on the grant date.

The Company follows the asset and liability method of accounting for income taxes under ASC Topic 740, Income Taxes (“ASC 740”).

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between consolidated financial statement carrying amounts and the tax basis of existing assets and liabilities and net operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply in the years in which those tax assets and liabilities are expected to be realized.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

A valuation allowances is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

The Company continues to assess the need for a valuation allowance on the deferred tax assets by evaluating both positive and negative evidence that may exist.

Any adjustment to the valuation allowance on deferred tax assets would be recorded in the statements of income for the period that the adjustment is determined to be required.

The Company accounts for uncertain tax position in accordance with ASC 740.

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities.

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A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.

As of December 31, 2023, no liability for unrecognized tax benefits was required to be reported.

The guidance also discusses the classification of related interest and penalties on income taxes.

The guidance from ASC 740, “Income Taxes” also discusses the classification of related interest and penalties on income taxes.

The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense.

No interest or penalties were recorded during the years ended December 31, 2023 and 2022.

The Company files income tax returns with the United States and California governments.

Property and Equipment

The Company currently uses the following expected life terms for depreciating property and equipment:

computer software – 1 - 2 years , computer hardware – 3 years , furniture and fixtures – 7 years , leasehold improvements – remaining life of the lease .

Accounting for Reverse Stock Split

During the year ended December 31, 2023, the Company effected a reverse stock split of its common stock at a ratio of 1-for- 20 (See Note 1 - Business Organization, Nature of Operations, Reverse Stock Split).

On August 15, 2023, the Company had 92,069,632 shares of common stock issued and outstanding prior to the reverse stock split taking effect.

On August 16, 2023, the Company had 4,601,654 shares of outstanding common stock after the reverse stock split became effective.

No fractional shares were issued in connection with the reverse stock split, and stockholders of record who would have otherwise been entitled to receive a fractional share received a cash payment in lieu thereof.

The Company paid approximately $ 6,250 for cash in lieu of fractional shares.

The par value of the Company's common stock did not change and no adjustments to historical par value were made.

All information presented in the accompanying financial statements, unless otherwise indicated herein, reflects the 1-for- 20 reverse stock split of the Company’s outstanding shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price or exercise price data set forth herein have been adjusted to give effect to such reverse stock split.

Net Loss Per Common Share

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period.

Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted net loss per common share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period.

Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method), the vesting of restricted stock units (“RSUs”) and performance stock units (“PSUs”) and the enrollment of employees in the ESPP.

The computation of diluted loss per share excludes potentially dilutive securities of 582,567 and 206,603 for the years ended December 31, 2023 and 2022, respectively, because their inclusion would be antidilutive.

The computation of diluted net loss per common share excludes potentially dilutive securities of 1,971,415 and 582,567 for the years ended December 31, 2024 and 2023, respectively, because their inclusion would be antidilutive.

Note 3 – Summary of Significant Accounting Policies, continued

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

For the Years Ended December 31,

Warrants issued to private investors

For the year ended

December 31,2024

December 31,2023

Warrants issued to investors

Options to purchase common stock

Total potentially dilutive securities

The table above includes 83,333 warrants expiring March 1, 2024, with an exercise price of $ 200.00 and 412,500 warrants expiring on March 28,2029, which have an exercise price of $ 1.66 .

For the year ended December 31, 2024, the table above includes 1,020,409 warrants expiring on February 20, 2029, which have an exercise price of $ 1.84 per share and 412,500 warrants expiring on March 28, 2029, which, as of December 31, 2024 have an exercise price of $ 0.30 per share.

For the year ended December 31, 2023, the table above includes 83,333 warrants that expired on March 1, 2024, which had an exercise price of $ 200.00 per share and 412,500 warrants expiring on March 28, 2029, which have an exercise price of $ 0.30 per share.

Property and Equipment

The Company currently uses the following expected life terms for depreciating property and equipment:

computer software – 1 - 2 years, computer hardware – 3 years , furniture and fixtures – 7 years , leasehold improvements – shorter of estimated life or remaining life of the lease .

The Company determines if an arrangement is a lease at the inception of the arrangement.

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See Note 8 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.

The Company has one operating segment and one reportable segment as its chief operating decision maker (“CODM”), who is its Chief Executive Officer and Chief Financial Officer, reviews financial information on a regular basis for purposes of allocating resources and evaluating financial performance.

The CODM also reviews and utilizes functional expenses, such as cost of revenue, research and development, sales and marketing and general and administrative, to manage the Company’s operations.

All long-lived assets are located in the United States and substantially all revenue is attributed to customers based in the United States.

Adoption of New Accounting Standard

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-07, “Segment Reporting” (“Topic 280”), Improvements to Reportable Segment Reporting.

This standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The Company adopted this standard on a retrospective basis for the fiscal 2024 annual period, and for interim periods beginning January 1, 2025.

The adoption did not have a material impact on the Company’s financial statements and is limited to financial statement disclosures.

Note 3 – Summary of Significant Accounting Policies, continued

Recent Accounting Pronouncements, Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, “Income Taxes” (“Topic 740”), Improvements to Income Tax Disclosures.

This standard is intended to enhance the transparency and usefulness of income tax disclosures to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

This standard is effective for the Company’s annual fiscal period beginning January 1, 2025.

Adoption of this standard will not have a material impact on the Company’s financial statements.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.” This ASU requires the disaggregation of certain expenses in the notes to the financial statements, to provide enhanced transparency into the expense captions presented on the face of the income statement.

This ASU is effective on a prospective basis for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, with early adoption permitted.

This ASU may be applied either prospectively or retrospectively.

The Company is currently evaluating the impact of the new standard on the financial statements and related disclosures.

Management has reviewed other recently issued accounting pronouncements issued or proposed by the FASB and does not believe any of these accounting pronouncements has had or will have a material impact on the financial statements.

Note 4 – Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

Balance as of

December 31, 2024

December 31, 2023

Prepaid and deferred financing costs

Deposit with contract manufacturer

Prepaid insurance

Prepaid software and support

Prepaid subscriptions

Tradeshow deposits

Other deposits

Note 5 – Inventory

Below is a summary of the Company’s inventory as of December 31, 2024 and 2023 (in thousands):

Balance as of

December 31, 2024

December 31, 2023

Raw materials

Work-in-process

Finished goods

Note 6 – Property and Equipment

Property and equipment are as follows:

As of December 31,

Property and equipment are as follows (in thousands):

Balance as of

December 31, 2024

December 31, 2023

Computer software

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The Company disposed of $ 0 and $ 125,000 in property and equipment during the years ended December 31, 2024 and 2023, respectively.

Total depreciation and amortization expense of the Company’s property and equipment was $ 187,209 and $ 246,156 for the years ended December 31, 2023 and 2022, respectively.

Total depreciation and amortization expense of the Company’s property and equipment was $ 196,000 and $ 187,000 for the years ended December 31, 2024 and 2023, respectively, of which, $ 4,000 and $ 0 were included in cost of revenue for the years ended December 31, 2024 and 2023, respectively.

Note 7 – Accrued Expenses

Accrued expenses consist of the following:

As of December 31,

Accrued expenses consist of the following (in thousands):

Balance as of

December 31,2024

December 31,2023

Accrued compensation

Accrued legal expenses

Accrued interest

Other accrued expenses

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San Jose Lease

On May 20, 2022, the Company signed a lease amendment to the existing lease of its office space at its corporate headquarters in San Jose, California, extending the term of the lease for an additional three years .

Upon signing the lease amendment, the Company recorded a new ROU lease asset of $ 2,071,336 and operating lease liability of $ 2,071,336 , using a present value discount rate of 3.0 % which was used as an incremental borrowing rate for a hypothetical fully collateralized real estate transaction.

Upon expiration of the original lease on September 30, 2022, the new monthly lease payment starting October 1, 2022 was $ 58,903 , subject to annual escalations up to a maximum monthly lease payment of $ 62,490 .

Costa Mesa Lease

On September 22, 2021, the Company signed a new Costa Mesa lease to lease a new, distinct office space in a different building with the same landlord.

Per the lease, the stated commencement date was October 1, 2021 with the lease running through September 30, 2023, and the Company did not take control of the new office space until October 2021, at which time the Company recorded a new right-of-use asset of $ 104,563 and operating lease liability of $ 104,563 .

The new Costa Mesa lease had an initial monthly lease payment of $ 4,369 which started on October 1, 2021, subject to an annual escalation up to a maximum monthly lease payment of $ 4,522 .

The lease expired on September 30, 2023 and was not renewed.

On May 20, 2022, the Company signed a lease amendment to the existing lease for its office space at its corporate headquarters in San Jose, California, extending the term of the lease for an additional three years .

Upon signing the lease amendment, the Company recorded a new ROU lease asset of $ 2.1 million and operating lease liability of $ 2.1 million, using a present value discount rate of 3.0 %, which was used as an incremental borrowing rate for a hypothetical fully collateralized real estate transaction.

As of January 1, 2024, the discount rate was adjusted to 8 % in order to reflect a realistic incremental borrowing rate at lease commencement.

The adjustment created a one-time reduction to the ROU lease asset and operating lease liability of approximately $ 51,000 .

Upon expiration of the original lease on September 30, 2022, the new monthly lease payment starting October 1, 2022 is approximately $ 59,000 , subject to annual escalations up to a maximum monthly lease payment of approximately $ 62,000 .

On July 31, 2024, the Company signed an additional lease amendment where the monthly payments through the remainder of 2024 were reduced to approximately $ 37,000 and the monthly payments from January 2025 through September 2025 were increased to approximately $ 76,000 .

No other changes were made to the existing lease.

As a result of this amendment, the Company revalued its ROU lease asset to $ 0.8 million and its operating lease liability to $ 0.8 million on July 31, 2024.

The Company recorded lease expense of $ 0.8 million for both of the years ended December 31, 2024 and 2023.

Operating Lease Commitments

The Company follows ASC 842, Leases, (“Topic 842”) and recognizes the required ROU assets and operating lease liabilities on its balance sheet.

The Company anticipates having future total lease payments of $ 1,295,905 during the period from the first quarter of 2024 to the third quarter of 2025.

As of December 31, 2023, the Company has total operating lease right-of-use assets of $ 1,240,042 , current portion operating lease liabilities of $ 707,251 and long-term portion of operating lease liabilities of $ 556,879 .

The Company anticipates having future total lease payments of $ 0.7 million through the third quarter of 2025.

As of December 31, 2024, the Company has total operating lease right-of-use assets of $ 0.5 million and current operating lease liabilities of $ 0.7 million.

The weighted average remaining lease term is 0.75 years as of December 31, 2024.

Note 6 – Commitments and Contingencies, continued

Operating Leases, continued

Operating Lease Commitments , continued

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

For the Year Ended December 31,

A reconciliation of undiscounted cash flows to lease liabilities recognized as of September 30, 2024 is as follows (in thousands):

For the year ending December 31,

Total future lease payments

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Total operating lease liabilities

Note 8 – Commitments and Contingencies, continued

Hosted Design Solution Agreement

In June 2021, the Company entered into an electronic design automation software in a hosted environment license agreement with a term of three years under which the Company is required to remit quarterly payments of approximately $ 233,000 through the second quarter of 2024.

In June 2021, the Company entered into an electronic design automation software in a hosted environment license agreement with a term of three years under which the Company was required to remit quarterly payments of approximately $ 233,000 through the second quarter of 2024.

In June 2024, the Company renewed this agreement through the end of 2025 under which the Company is required to remit quarterly payments of approximately $ 52,000 through the fourth quarter of 2025.

The Company recorded $ 0.6 million and $ 0.9 million during 2024 and 2023, respectively, under this agreement.

Litigations, Claims, and Assessments

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MBO Bonus Plan

On March 15, 2018, the Company’s Board of Directors (“Board”), on the recommendation of the Board’s Compensation Committee (“Compensation Committee”), approved the Energous Corporation MBO Bonus Plan (“Bonus Plan”) for executive officers of the Company.

To be eligible to receive a bonus under the Bonus Plan, an executive officer must be continuously employed throughout the applicable performance period, in good standing, and achieve the performance objectives selected by the Compensation Committee.

Under the Bonus Plan, the Compensation Committee is responsible for selecting the amounts of potential bonuses for executive officers, the performance metrics used to determine whether any such bonuses will be paid and determining whether those performance metrics have been achieved.

During the years ended December 31, 2023 and 2022, the Company recognized a total of $ 698,842 and $ 1,293,875 , respectively, in expense under the Bonus Plan.

As of December 31, 2023, $ 530,888 of the 2023 amount was not yet paid and is included in accrued expenses.

The expense under the Bonus Plan is recorded under operating expenses on the Company’s Statement of Operations within each executive’s department.

Severance and Change in Control Agreement

On March 15, 2018, the Compensation Committee approved a form of Severance and Change in Control Agreement (“Severance Agreement”) that the Company may enter into with executive officers (each, an “Executive”).

Note 6 – Commitments and Contingencies, continued

Severance and Change in Control Agreement, continued

Under the Severance Agreement, if an Executive is terminated in a qualifying termination, the Company agrees to pay the Executive six to 12 months of that Executive’s monthly base salary.

If Executive elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) the Company will pay the full amount of Executive’s premiums under the Company’s health, dental and vision plans, including coverage for the Executive’s eligible dependents, for the six to 12 month period following the Executive’s termination.

Executive Employee Agreement – Cesar Johnston

On December 9, 2021, the Company announced that Cesar Johnston had been appointed as the Company’s Chief Executive Officer.

In connection with Mr.

Johnston’s appointment as Chief Executive Officer, the Company and Mr.

Johnston executed an offer letter dated as of December 6, 2021.

Under the offer letter, Mr.

Johnston will receive an annual base salary of $ 400,000 per year.

Beginning in year 2022, he is eligible to receive a discretionary annual bonus of up to 100 % of his base salary, at the recommendation of the Company’s Compensation Committee, with the approval of the Company’s Board of Directors.

In addition, as an inducement to accept his appointment as Chief Executive Officer, Mr.

Johnston received, subject to continued employment, (a) a special one-time sign-on bonus in the amount of $ 120,000 , payable in two equal installments of $ 60,000 each on the first payroll date in 2022 and the first payroll date after December 6, 2022, (b) a grant of 7,500 restricted stock units to acquire shares of the Company’s common stock, one third of which vested on December 6, 2022 and the remaining two thirds of which will vest in eight equal installments of 625 each on each quarterly anniversary thereafter and (c) a grant of an option to purchase 15,000 shares of the Company’s common stock at an exercise price equal to the fair market value of the Company’s common stock on the grant date, half of which shall vest on December 31, 2023, a quarter of which shall vest on December 31, 2024 and the remainder of which shall vest on December 31, 2025.

Also pursuant to the terms of his offer letter, Mr.

Johnston is eligible for (a) an additional equity award in the amount of 14,350 PSUs to acquire shares of the Company’s common stock, to vest at various amounts to be agreed upon by the Board per year over a three year period commencing January 1, 2022 and ending December 31, 2024, upon the achievement of performance criteria to be mutually established by Mr.

Johnston and the Compensation Committee, and (b) an additional equity award of up to 1,250 PSUs per calendar year for each of 2022, 2023 and 2024, based on outperformance of agreed upon goals per calendar year, as determined by the Compensation Committee with approval of the Board.

On July 20, 2022, the Board approved, by unanimous written consent, the grant to Mr.

Johnston of up to 14,350 PSUs pursuant to the terms of Mr.

Johnston’s offer letter.

The 14,350 PSUs that have been approved shall vest as follows:

(a) up to 9,350 PSU shares shall vest on December 31, 2022, subject to Mr.

Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr.

Johnston of certain performance metrics previously determined by the Compensation Committee and approved by the Board, and (b) up to an additional 2,500 PSU shares shall vest on each of December 31, 2023 and December 31, 2024, subject to Mr.

Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr.

Johnston of certain performance metrics to be recommended by the Compensation Committee and approved by the Board at a subsequent date.

As of December 31, 2023, the Board had not yet approved the performance criteria applicable to the up to 2,500 PSU shares that will vest on December 31, 2024;

therefore, these 2,500 PSUs have not been considered granted.

Note 6 – Commitments and Contingencies, continued

Executive Employee Agreement – Cesar Johnston, continued

In connection with Mr.

Johnston’s appointment as Chief Executive Officer, the Company and Mr.

Johnston additionally entered into an amended and restated severance and change in control agreement, dated as of December 6, 2021.

In the event of a termination that is not a change-in-control qualifying termination, Mr.

Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to 100 % of his target bonus plus, if agreed by the Compensation Committee, a discretionary bonus for the year in which the termination occurs, (b) any outstanding unvested equity awards held by Mr.

Johnston that would vest in the next 18 months of continuing employment (other than any equity awards that vest upon satisfaction of performance criteria) will accelerate and become vested and (c) if Mr.

Johnston timely elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company or its successor will pay the full amount of Mr.

Johnston’s COBRA premiums on his behalf for 18 months.

Johnston’s agreement additionally provides that, in the event of a change-in-control qualifying termination, Mr.

Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to 150 % of his target bonus plus a prorated bonus for the year in which the termination occurs, (b) any outstanding unvested equity awards held by Mr.

Johnston (including any equity awards that vest upon satisfaction of performance criteria) will accelerate in full and become vested and (c) if Mr.

Johnston timely elects continued coverage under COBRA, the Company or its successor will pay the full amount of Mr.

Johnston’s COBRA premiums on his behalf for 18 months.

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

Executive Transition Agreement – Stephen Rizzone

On April 3, 2015, the Company entered into an Amended and Restated Executive Employment Agreement with Stephen R.

Rizzone, the Company’s President and Chief Executive Officer (“Employment Agreement”).

The Employment Agreement effective as of January 1, 2015 , had an initial term of four years and automatically renewed each year after the initial term.

The Employment Agreement provided for an annual base salary of $ 365,000 , and Mr.

Rizzone was eligible to receive quarterly cash bonuses from the MBO Bonus Plan with a total target amount equal to 100 % of his base salary based upon achievement of performance-based objectives established by the Board.

On July 9, 2021, the Company announced that Stephen R.

Rizzone had retired from his position as the Company’s President and Chief Executive Officer and as a member of the Board.

In connection with Mr.

Rizzone’s retirement, the Company and Mr.

Rizzone entered into an Executive Transition Agreement (“Separation Agreement”), providing for continued employment through August 31, 2021.

Upon his termination of employment, the Separation Agreement provides severance payments and benefits to Mr.

Rizzone consistent with the terms of his existing employment agreement with the Company, including without limitation:

compensation-based payments of $ 1,460,000 in the aggregate, payable under a certain payment scheme as set forth therein, an additional lump sum cash payment of $ 2,000,000 , a pro-rated bonus payment for the two months of employment during the current quarterly bonus period payable at the same time bonus payments are made to other executives of the Company, settlement of deferred vested restricted stock units and an extension of the exercise periods of all stock options held by Mr.

Rizzone until the one year anniversary of his termination date, and additional benefits related to Mr.

Rizzone’s medical insurance.

In addition, the Company will pay-off all amounts owed under a lease agreement relating to a Company Car and Mr.

Rizzone will receive the title to the vehicle.

All compensation under the Separation Agreement will be subject to applicable withholding.

As of December 31, 2023 and 2022, the Company had $ 0 and $ 411,607 , respectively, in unpaid severance expense pertaining to Mr.

Rizzone's Separation Agreement.

On March 15, 2018, the Company’s Board of Directors (the “Board”), on the recommendation of the Board’s Compensation Committee (the “Compensation Committee”), approved the Energous Corporation MBO Bonus Plan (“MBO Bonus Plan”) for executive officers of the Company.

To be eligible to receive a bonus under the MBO Bonus Plan, an executive officer must be continuously employed throughout the applicable performance period, in good standing, and achieve the performance objectives selected by the Compensation Committee.

Under the MBO Bonus Plan, the Compensation Committee was responsible for selecting the amounts of potential bonuses for executive officers, the performance metrics used to determine whether any such bonuses would be paid and determining whether those performance metrics had been achieved.

During the years ended December 31, 2024 and 2023, the Company recognized a total of $ 0 and $ 0.7 million, respectively, in expense under the MBO Bonus Plan.

The expense under the MBO Bonus Plan is recorded under operating expenses on the Company’s Statement of Operations within each executive’s department.

On May 30, 2024, the Board, on the recommendation of the Compensation Committee, approved the 2024 Corporate Bonus Plan (the “2024 Bonus Plan”), whereby employees’ bonuses will be based upon achievement of performance objectives set by the Compensation Committee and paid annually.

Employees must be continuously employed throughout the applicable performance period and payment date and achieve the performance objectives.

Under the 2024 Bonus Plan, the Compensation Committee is responsible for selecting the amounts of potential bonuses for executive officers and vice presidents, the performance metrics used to determine whether any such bonuses will be paid and determining whether those performance metrics have been achieved.

During the year ended December 31, 2024, the Company recorded approximately $ 0.3 million expense under the 2024 Bonus Plan to be paid during the first quarter of 2025.

Note 8 – Commitments and Contingencies, continued

Executive Transition Agreement – Neeraj Sahejpal

On April 29, 2022, the Company announced the departure of Neeraj Sahejpal, former Senior Vice President of Marketing and Business Development, effective April 30, 2022.

Pursuant to the terms of Mr.

Sahejpal’s severance and change of control agreement with the Company, Mr.

Sahejpal received payments and benefits including compensation equal to 12 months of Mr.

Sahejpal’s then-current salary of $ 261,250 , 12 months of maximum potential bonus of $ 261,250 , and 12 months of COBRA reimbursements.

In addition, all RSUs held by Mr.

Sahejpal that were due to vest in the 12 months after his departure, totaling RSUs covering 85,943 shares, were accelerated.

The Company recorded $ 798,391 in total severance expense pertaining to Mr.

Sahejpal’s departure for the year ended December 31, 2022, including $ 252,609 in stock-based compensation as a result of accelerated vesting of RSUs.

As of December 31, 2023, the Company had no unpaid accrued severance expense pertaining to Mr.

Sahejpal's agreement.

Severance and Change in Control Agreement

On March 15, 2018, the Compensation Committee approved a form of Severance and Change in Control Agreement that the Company may enter into with executive officers.

On May 30, 2024, the Compensation Committee approved a new form of Severance Agreement and Change in Control Agreement (“Severance Agreement”) that the Company may enter into with executive officers and vice presidents (each, an “Executive”).

Under the Severance Agreement, if an Executive party thereto is terminated without cause or in a qualifying change in control termination, the Company agrees to pay the Executive three to twelve months of that Executive’s monthly base salary and 25 % to 100 % of the Executive’s target bonus, and to accelerate the vesting of 25 % to 100 % of the Executive’s unvested equity awards.

If an Executive elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) the Company will pay the full amount of the Executive’s premiums under the Company’s health, dental and vision plans, including coverage for the Executive’s eligible dependents, for the three -to- twelve-month period, as applicable, following the Executive’s termination.

Executive Transition – Cesar Johnston

On March 26, 2024, the Company announced that Cesar Johnston was no longer serving as President and Chief Executive Officer of the Company effective March 24, 2024.

In connection with his cessation as an officer of the Company, Mr.

Johnston was entitled to receive the benefits and payments set forth in the Amended and Restated Severance and Change in Control Agreement, dated December 6, 2021 (“Johnston Severance Agreement”), between the Company and Mr.

Accordingly, Mr.

Johnston received (a) 18 months of his monthly salary plus the amount equal to 100 % of his target bonus, (b) any outstanding unvested equity awards held by Mr.

Johnston that were scheduled to vest during the next 18 months following the termination date, and (c) reimbursement for continued COBRA payments, if elected by Mr.

Johnston, during the 18 months following the termination date.

The Company recorded $ 1.2 million in total severance expense pertaining to Mr.

Johnston’s departure during the year ended December 31, 2024, including $ 0.1 million in stock-based compensation as a result of accelerated vesting of RSUs and options (see Note 8 – Stock-Based Compensation for additional details).

As of December 31, 2024, the Company had accrued unpaid severance expense related to COBRA reimbursements of approximately $ 28,000 pertaining to the Johnston Severance Agreement, which is due to be paid through September 2025.

Johnston received approximately $ 8,000 in Director’s fees for the period of March 28, 2024 through June 12, 2024, during which he did not serve as President and Chief Executive Officer but continued to serve as a member of the Board.

Executive Transition Agreement – William Mannina

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Mannina and the Company, Mr.

Mannina will receive payments and benefits including cash severance payments equivalent to nine months of his then-current salary of $ 265,825 and premium payments for continued healthcare coverage for nine months following his resignation effective date.

Mannina received payments and benefits including cash severance payments equivalent to nine months of his then-current salary of $ 266,000 and premium payments for continued healthcare coverage for nine months following his resignation effective date.

Mannina’s restricted stock units continued to vest through August 16, 2023.

As of December 31, 2023, the Company had accrued unpaid severance expense of $ 127,593 pertaining to Mr.

As of December 31, 2024, the Company did no t have any accrued unpaid severance expense pertaining to Mr.

Mannina’s agreement.

Note 8 – Commitments and Contingencies, continued

Strategic Alliance Agreement

In November 2016, the Company and Dialog Semiconductor plc (“Dialog”), a related party (see Note 10—Related Party Transactions), entered into a Strategic Alliance Agreement (“Alliance Agreement”) for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (“Licensed Products”).

In November 2016, the Company and Dialog Semiconductor plc (“Dialog”), a related party, entered into a Strategic Alliance Agreement (“Alliance Agreement”) for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (“Licensed Products”).

Pursuant to the terms of the Alliance Agreement, the Company agreed to engage Dialog as the exclusive supplier of the Licensed Products for specified fields of use, subject to certain exceptions (the “Company Exclusivity Requirement”).

Dialog agreed to not distribute, sell or work with any third party to develop any competing products without the Company’s approval (the “Dialog Exclusivity Requirement”).

In addition, both parties agreed on a revenue sharing arrangement and will collaborate on the commercialization of Licensed Products based on a mutually-agreed upon plan.

Each party will retain all of its intellectual property.

The Alliance Agreement has an initial term of seven years , with automatic renewal annually thereafter unless terminated by either party upon 180 days’ prior written notice.

Under the terms of the Alliance Agreement, the Company could terminate the Alliance Agreement at any time after the third anniversary of the Agreement upon 180 days’ prior written notice to Dialog, or if Dialog breaches certain exclusivity obligations.

Dialog agreed to not distribute, sell or work with any third party to develop any competing products without the Company’s approval.

In addition, both parties agreed on a revenue sharing arrangement and to collaborate on the commercialization of Licensed Products based on a mutually-agreed upon plan.

Each party would retain all of its intellectual property rights.

The Alliance Agreement had an initial term of seven years , with automatic renewal annually thereafter unless terminated by either party upon 180 days’ prior written notice.

The Company could terminate the Alliance Agreement at any time after the third anniversary of the Alliance Agreement upon 180 days’ prior written notice to Dialog, or if Dialog breached certain exclusivity obligations.

Dialog could terminate the Alliance Agreement if sales of Licensed Products did not meet specified targets.

The Company Exclusivity Requirement had a termination date of the earlier of January 1, 2021 or the occurrence of certain events relating to the Company’s pre-existing exclusivity obligations.

The Company Exclusivity Requirement renewed automatically on an annual basis unless the Company and Dialog agree to terminate the requirement.

On September 20, 2021, the Company was notified by Dialog, then recently acquired by Renesas Electronics Corporation, that it was terminating the Alliance Agreement.

There is a wind down period included in the Alliance Agreement which will conclude in September 2024.

During the wind down period, the Alliance Agreement’s terms will continue to apply to the Company’s products that are covered by certain existing customer relationships, except that the parties’ respective exclusivity rights have terminated.

Note 7 – Stockholders’ Equity

The Company Exclusivity Requirement renewed automatically on an annual basis unless the Company and Dialog agreed to terminate the requirement.

On September 20, 2021, the Company was notified by Dialog, which had been recently acquired by Renesas Electronics Corporation (“Renesas”), that it was terminating the Alliance Agreement between the Company and Dialog.

There is a wind down period included in the Alliance Agreement which concluded in September 2024.

During the wind down period, the Alliance Agreement’s terms applied to the Company’s products that are covered by certain existing customer relationships, except that the parties’ respective exclusivity rights have terminated.

Note 9 – Short-term Debt

Financing for Insurance Premiums

On April 5, 2024, the Company financed $ 365,000 in business insurance premiums to be repaid in nine installments of $ 42,000 with a borrowing rate of 8.3 %.

On October 31, 2024, the Company financed $ 37,000 in additional business insurance premiums to be repaid in three installments of $ 12,000 with a borrowing rate of 8.3 %.

As of December 31, 2024, the outstanding balance on the financing for insurance premiums was $ 54,000 .

Agile Subordinated Loan Agreement

Effective October 1, 2024, the Company 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 “Term Loan”).

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 the Company’s obligations on certain senior indebtedness of the Company as provided in the Original Loan Agreement.

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

Note 9 – Short-term Debt, continued

Effective November 5, 2024, the Company 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.

The remaining proceeds will be utilized for working capital.

The New Term Loan will be expressly subordinated to the Company’s 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, the Company had a short-term loan payable balance of approximately $ 0.8 million.

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

The Company 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.

These fees are recorded as a debt discount against the proceeds received.

As of December 31, 2024, the unamortized debt discount was $ 39,000 .

Note 10 – Capital Stock and Warrants

Authorized Capital

The holders of the Company’s common stock are entitled to one vote per share.

Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds.

Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available funds.

Upon the liquidation, dissolution or winding up of the Company, holders of common stock are entitled to share ratably in all assets of the Company that are legally available for distribution.

On September 15, 2020, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on September 24, 2020 (the "Prior Shelf"), and contains two prospectuses:

a base prospectus, which covers the offering, issuance and sale by the Company of up to $ 75,000,000 of its common stock, preferred stock, debt securities, warrants to purchase our common stock, preferred stock or debt securities, subscription rights to purchase its common stock, preferred stock or debt securities and/or units consisting of some or all of these securities;

and an at-the-market sales agreement prospectus supplement covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 40,000,000 of its common stock that may be issued and sold under the At Market Issuance Sales Agreement, as amended, between the Company and B.

On September 15, 2020, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on September 24, 2020 (“Prior Shelf”), and contained two prospectuses:

a base prospectus, which covered the offering, issuance and sale by the Company of up to $ 75 million of its common stock, preferred stock, debt securities, warrants to purchase its common stock, preferred stock or debt securities, subscription rights to purchase its common stock, preferred stock or debt securities and/or units consisting of some or all of these securities;

and an at-the-market sales agreement prospectus supplement covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 40 million of its common stock to be issued and sold under the At Market Issuance Sales Agreement, as amended, between the Company and B.

Riley Securities, Inc.

(the “ATM Program”).

The $ 40,000,000 of common stock to be offered, issued and sold under the ATM Program is included in the $ 75,000,000 of securities that may be offered, issued and sold by the Company under the base prospectus.

Pursuant to the Prior Shelf, the Company sold shares which raised net proceeds of $ 38,832,711 (net of $ 1,167,289 in issuance costs) during the third and fourth quarters of 2020 under the ATM Program.

On October 4, 2021, the Company filed a prospectus supplement covering the offering, issuance and sale of up to an additional $ 35,000,000 of shares of the Company’s common stock pursuant to the ATM Program.

The Company raised net proceeds of $ 27,043,751 (net of $ 868,122 in issuance costs), during 2021 under the ATM Program.

During 2022, the Company raised an additional $ 744,787 (net of $ 73,403 in issuance costs).

During 2023, the Company raised an additional $ 3,555,563 (net of $ 162,799 in issuance costs).

As of December 31, 2023, there is no amount remaining in the Prior Shelf due to its expiration on September 24.

On November 15, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on December 16, 2021 (the "Current Shelf").

This shelf registration statement allows the Company to sell, from time to time, any combination of debt or equity securities described in the registration statement up to aggregate proceeds of $ 100,000,000 .

Pursuant to this registration statement, on March 28, 2023, the Company completed an underwritten offering pursuant to which it issued and sold an aggregate of (i) 412,500 shares of its common stock (the “Shares”) and (ii) warrants to purchase up to 412,500 shares of its common stock (the “2023 Warrants”), for net proceeds of $ 2,677,191 , after deducting underwriting discounts, commission and expenses payable by the Company.

The 2023 Warrants were immediately exercisable upon issuance and have a term of six years and an exercise price of $ 8.00 .

The Company allocated the proceeds received first to the 2023 Warrants based on the fair value of the 2023 Warrants as determined at initial measurement, with the remaining proceeds allocated to the Shares (see Note 7 – Warrant Liability and Note 8 – Fair Value Measurements).

Pursuant to the terms of the 2023 Warrants, the exercise price was adjusted to $ 1.66 as of December 31, 2023.

On August 30, 2023, the Company filed a prospectus supplement to the Current Shelf covering the offering, issuance and sale of up to an additional $ 25,000,000 of shares of the Company’s common stock pursuant to the ATM Program.

During 2023, the Company raised $ 684,021 (net of $ 34,848 in issuance costs) under the ATM Program.

As of December 31, 2023, the Company has $ 24,281,132 remaining available under the ATM Program.

(the “Prior ATM Program”).

The $40 million of common stock to be offered, issued and sold under the Prior ATM Program was included in the $75 million of securities that could be offered, issued and sold by the Company under the base prospectus.

The Company sold shares of its common stock which raised net proceeds of $ 38.8 million (net of $ 1.2 million in issuance costs) during the third and fourth quarters of 2020 under the Prior ATM Program.

On October 4, 2021, the Company filed a prospectus supplement covering the offering, issuance and sale of up to an additional $ 35 million of shares of the Company’s common stock pursuant to the Prior ATM Program.

The Company raised net proceeds of $ 27.0 million (net of $ 0.9 million in issuance costs), during 2021 under the Prior ATM Program.

During 2022, the Company raised an additional $ 0.7 million (net of $ 0.1 million in issuance costs) under the Prior ATM Program.

During the first quarter of 2023, the Company raised $ 3.6 million (net of $ 0.2 million in issuance costs) under the Prior ATM Program.

The Prior Shelf expired on September 24, 2023.

As of December 31, 2024, there is no amount remaining under the Prior Shelf due to its expiration.

Note 10 – Capital Stock and Warrants, continued

On November 15, 2021, the Company filed an additional shelf registration statement on Form S-3 with the SEC, which became effective on December 16, 2021.

Pursuant to this registration statement, on March 28, 2023, the Company completed an underwritten offering pursuant to which it issued and sold an aggregate of (i) 412,500 shares of its common stock and (ii) warrants to purchase up to 412,500 shares of its common stock (the “2023 Warrants”), for net proceeds of $ 2.7 million, after deducting underwriting discounts, commission and expenses payable by the Company.

The 2023 Warrants were immediately exercisable upon issuance and have a term of six years and had an initial exercise price of $ 8.00 .

The Company allocated the proceeds received first to the 2023 Warrants based on the fair value of the 2023 Warrants as determined at initial measurement, with the remaining proceeds allocated to the shares of common stock (see Note 13 – Warrant Liability and Note 14 – Fair Value Measurements).

Pursuant to the terms of the 2023 Warrants, the exercise price was adjusted to $ 1.66 during 2023 and was further adjusted to $ 0.30 as of December 31, 2024.

On February 15, 2024, the Company entered into a securities purchase agreement with an institutional investor, providing for the issuance and sale by the Company in a registered direct offering (the “Offering ”) pursuant to a prospectus supplement dated February 15, 2024, of (i) 570,000 shares of the Company’s common stock, (ii) pre-funded warrants to purchase up to 450,409 shares of common stock (referred to individually as a “Pre-Funded Warrant” and collectively as the “Pre-Funded Warrants”), and (iii) warrants to purchase an aggregate of 1,020,409 shares of common stock (referred to individually as a “Warrant” and collectively as the “2024 Warrants”).

Each share of common stock and Pre-Funded Warrant was offered and sold, together with an accompanying 2024 Warrant at a combined price of $ 1.96 per share of common stock or Pre-Funded Warrant, as applicable , and the accompanying 2024 Warrant.

Each Pre-Funded Warrant and 2024 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 $ 0.001 per share, in the case of Pre-Funded Warrants, or $ 1.84 per share, in the case of 2024 Warrants.

The Pre-Funded Warrants expired upon full exercise in April 2024, and the 2024 Warrants expire five years from the date of issuance.

The Offering closed on February 20, 2024.

The Company received net proceeds of approximately $ 1.8 million (net of $ 0.2 million in issuance costs).

On June 21, 2024, the Company filed a prospectus supplement (“June 2024 Prospectus Supplement”) covering the offering, issuance and sale of up to $ 3.4 million in shares of the Company’s common stock pursuant to an At the Market Offering Agreement, dated June 21, 2024, between the Company and H.C.

Wainwright & Co., LLC (the “Current ATM Program”, and together with the Prior ATM program, the “ATM Program”).

In addition, on June 20, 2024, the Company provided notice of termination of the Prior ATM Program that the Company had entered into with Roth Capital Partners, LLC, as sales agent.

Prior to the termination of the Prior ATM program, the Company sold 27,870 shares of its common stock under the Prior ATM Program for proceeds of $ 47,000 (net of commissions and fees of $ 2,000 ) during the year ended December 31, 2024.

The Company entered into the Current ATM Program discussed above to replace the Prior ATM Program.

During the three months and year ended December 31, 2024, the Company sold 5,634,585 shares and 6,851,753 shares, respectively, of its 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).

On December 30, 2024, the Company filed a prospectus supplement (“December 2024 Prospectus Supplement”) to amend the June 2024 Prospectus Supplement to cover the issuance and sale of an additional $ 7.46 million in shares of the Company’s common stock subject to, and in accordance with, the Current ATM Program.

As of December 31, 2024, no sales had settled under this prospectus supplement.

See Note 16 – Subsequent Events for details on proceeds raised during January and February 2025.

Regulation A Offering

On October 11, 2024, the Company 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 was qualified by the SEC on November 22, 2024.

Note 10 – Capital Stock and Warrants, continued

As of December 31, 2024, the Company has not closed any transactions related to the Regulation A Offering.

The Company’s prepaid expenses and other current assets as of December 31, 2024 include approximately $ 0.3 million in prepaid financing expenses related to the Regulation A Offering.

If the Company decides not to pursue financing under the Regulation A Offering, the prepaid financing expenses that have been deferred will be expensed and not available to use for other financing transactions.

Common Stock Outstanding

Our outstanding shares of common stock typically include shares that are deemed delivered under U.S.

The Company’s outstanding shares of common stock typically include shares that are deemed delivered under U.S.

Shares that are deemed delivered currently include shares that have vested, but have not yet been delivered, under tax-deferred equity awards, as well as shares purchased under the ESPP where actual transfer of shares normally occurs a few days after the completion of the purchase periods.

2 unchanged sentences

There are currently 200,000,000 shares of common stock authorized for issuance.

Common Stock Reserved for Future Issuance

The Company has reserved the following shares of common stock for future issuance:

December 31, 2024

December 31, 2023

Stock options outstanding

RSUs outstanding

Warrants outstanding

Shares available for issuance under the 2013 Equity Incentive Plan

Shares available for issuance under the 2014 Non-employee Equity Compensation Plan

Shares available for issuance under the 2015 Performance Share Unit Plan

Shares available for issuance under the 2017 Equity Inducement Plan

Shares available for issuance under the 2024 Equity Incentive Plan

Shares available for issuance under the Employee Stock Purchase Plan

Note 11 – Stock Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

Effective on June 14, 2023, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 50,000 shares, bringing to 489,298 the total number of shares approved for issuance under that plan.

As of December 31, 2023, 118,877 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the 2014 Non-Employee Equity Compensation Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 40,000 shares, bringing to 82,500 the total number of shares approved for issuance under that plan.

As of December 31, 2023, 29,137 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

2015 Performance Share Unit Plan

Effective on June 16, 2021, the Company’s stockholders approved the amendment and restatement of the 2015 Performance Share Unit Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 85,000 shares, bringing to 255,505 the total number of shares approved for issuance under that plan.

As of December 31, 2023, 108,897 shares of common stock remain eligible to be issued through equity-based instruments under the 2015 Performance Share Unit Plan.

2017 Equity Inducement Plan

On December 28, 2017, the Board approved the 2017 Equity Inducement Plan (“2017 Plan”).

Under the 2017 Plan, the Board reserved 30,000 shares for the grant of RSUs.

On December 28, 2017, the Board approved the 2017 Equity Inducement Plan.

Under the 2017 Equity Inducement Plan, the Board reserved 30,000 shares for the grant of RSUs.

These grants will be administered by the Board or a committee of the Board.

These awards will be granted to individuals who (a) are being hired as an employee by the Company or any subsidiary and such award is a material inducement to such person being hired;

(b) are being rehired as an employee following a bona fide period of interruption of employment with the Company or any subsidiary;

or (c) will become an employee of the Company or any subsidiary in connection with a merger or acquisition.

On July 20, 2022, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Plan by 100,000 shares.

As of December 31, 2023, 51,084 shares of common stock remain available to be issued through equity-based instruments under the 2017 Plan.

Under the 2017 Equity Inducement Plan, awards could be granted to individuals who (a) were being hired as an employee by the Company or any subsidiary and such award is a material inducement to such person being hired;

(b) were being rehired as an employee following a bona fide period of interruption of employment with the Company or any subsidiary;

or (c) would become an employee of the Company or any subsidiary in connection with a merger or acquisition.

On July 20, 2022, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Equity Inducement Plan by 100,000 shares.

On March 28, 2024, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Equity Inducement Plan by 121,510 shares.

As of December 31, 2024, there are 62,285 RSUs granted and outstanding under the 2017 Equity Inducement Plan.

No new equity award grants are to be issued from the 2017 Equity Inducement Plan.

Note 11 – Stock Based Compensation, continued

2024 Equity Incentive Plan

On June 12, 2024, the Energous Corporation 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”) was approved by stockholders for the issuance of equity incentive awards to eligible participants, which replaced the following equity plans of the Company:

(i) the 2013 Equity Incentive Plan, (ii) 2014 Non-Employee Equity Compensation Plan, (iii) the Performance Share Unit Plan and (iv) the 2017 Equity Inducement Plan (collectively, the “Prior Equity Plans”).

All existing outstanding awards remain outstanding under the Prior Equity Plans, and an additional 456,000 shares of common stock were approved for issuance under the 2024 Equity Incentive Plan.

As of December 31, 2024, there are 476,221 RSUs granted and outstanding under the 2024 Equity Incentive Plan.

As of December 31, 2024, 262,883 shares of common stock remain available for issuance under the 2024 Equity Incentive Plan.

Employee Stock Purchase Plan

In April 2015, the Company’s Board approved the ESPP, under which 30,000 shares of common stock have been reserved for purchase by the Company’s employees, subject to approval by the Company’s stockholders.

In April 2015, the Board approved the Energous Corporation Employee Stock Purchase Plan (“ESPP”), under which 30,000 shares of common stock were reserved for purchase by the Company’s employees, subject to the approval by the Company’s stockholders.

On May 21, 2015, the Company’s stockholders approved the ESPP.

Effective on June 14, 2023, the Company’s stockholders approved the amendment and restatement of the ESPP to increase the number of shares reserved for issuance through equity-based instruments thereunder by 25,000 shares, bringing to 102,500 the total number of shares approved for issuance under that plan.

On June 12, 2024, the Company’s stockholders approved the amendment and restatement of the ESPP to increase the number of shares reserved for issuance under the ESPP by 6,200 shares.

Under the ESPP, employees may designate an amount not less than 1 % but not more than 10 % of their annual compensation for the purchase of Company shares.

An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year.

The exercise price of the option will be the lesser of 85 % of the fair market of the common stock on the first business day of the offering period and 85 % of the fair market value of the common stock on the applicable exercise date which is typically the last market date of the offering period.

Note 8 – Stock Based Compensation, continued

Equity Incentive Plans, continued

Employee Stock Purchase Plan , continued

No more than 375 shares may be purchased by an employee under the ESPP during an offering period.

Excess contributions during an offering period are refunded to the employees.

An offering period is six months in duration commencing on or about January 1 and July 1 of each year.

The exercise price of options purchased under the ESPP is the lesser of 85 % of the fair market value of the common stock on the first business day of the offering period and 85 % of the fair market value of the common stock on the applicable exercise date.

As of December 31, 2024, 13,791 shares of common stock remain eligible to be issued under the ESPP.

For the year ended December 31, 2023, eligible employees contributed $ 72,930 through payroll deductions to the ESPP and 20,336 shares were deemed delivered for the year ended December 31, 2023.

For the year ended December 31, 2022, eligible employees contributed $ 272,833 through payroll deductions to the ESPP and 17,297 shares were deemed delivered for the year ended December 31, 2022.

Employees contributed approximately $ 6,000 and $ 73,000 through payroll withholdings to the ESPP during the years ended December 31, 2024 and 2023, respectively.

Stock Option Award Activity

In February 2022, the Board granted our Chief Executive Officer 15,000 stock options under the 2013 Equity Incentive Plan at an exercise price of $ 25.40 per share with half of the options vesting on the second anniversary of the vesting start date and a quarter of the options vesting on each of the next two anniversaries of the vesting start date .

No options were granted during the year ended December 31, 2023.

The Company estimated the fair value of stock options granted during 2022 using the Black-Scholes option pricing model.

The fair values of stock options granted during 2022 were estimated using the following assumptions:

December 31, 2022

Dividend yield

Expected volatility

Risk-free interest rate

Expected life

In February 2022, the Board granted the Company’s former Chief Executive Officer 15,000 stock options at an exercise price of $ 25.40 per share with half of the options vesting on the second anniversary of the vesting start date and a quarter of the options vesting on each of the two following anniversaries .

Under the former Chief Executive Officer’s Severance Agreement, unvested awards vesting within 18 months of termination were accelerated and became vested on March 26, 2024.

Consequently, 3,750 options became vested and another 3,750 options were forfeited.

This resulted in stock-based compensation expense of approximately $ 53,000 during the year ended December 31, 2024.

As of December 31, 2024, all stock options granted to the former Chief Executive Officer were forfeited.

Note 11 – Stock Based Compensation, continued

No stock options were granted during the years ended December 31, 2024 and 2023.

The following is a summary of the Company’s stock option activity during the year ended December 31, 2024:

Outstanding at January 1, 2023

Outstanding at December 31, 2023

Exercisable at January 1, 2023

Exercisable at December 31, 2023

Outstanding as of January 1, 2024

Outstanding as of December 31, 2024

Exercisable as of January 1, 2024

Exercisable as of December 31, 2024

As of December 31, 2024, the unamortized value of options was $ 0 .

The unamortized amount will be expensed over a weighted average period of 1.9 years.

The aggregate intrinsic value of options exercised was $ 0 for the years ended December 31, 2023 and 2022.

Note 8 – Stock Based Compensation, continued

Restricted Stock Units (“RSUs”)

During the year ended December 31, 2023, the Compensation Committee granted various employees RSUs covering 3,439 shares of common stock under the 2013 Equity Incentive Plan .

The awards vest over five years .

During the year ended December 31, 2023, the Compensation Committee granted various non-employees RSUs covering 6,223 shares of common stock under the 2014 Non-Employee Equity Compensation Plan.

The awards granted vest over terms ranging from one to four years .

During the year ended December 31, 2023, the Compensation Committee granted employees RSUs covering 30,750 shares of common stock under the 2017 Equity Inducement Plan.

The awards vest over four years .

At December 31, 2023, the unamortized value of the RSUs was $ 1,130,709 .

During the year ended December 31, 2024, the Board granted its Chief Executive Officer and Chief Financial Officer 112,000 RSUs.

Each RSU represents the contingent right to one share of common stock of the Company.

The RSU awards vest over four years .

During the year ended December 31, 2024, the Compensation Committee granted directors an aggregate of 6,000 RSUs for service on the Board.

These RSU awards vest on the one-year anniversary of the grant date.

During the year ended December 31, 2024, the Board granted employees an aggregate of 468,000 RSUs, which vest over four years .

Under the former Chief Executive Officer’s Severance Agreement, unvested RSUs vesting within 18 months of termination were accelerated and vested on March 26, 2024.

Consequently, 3,017 RSUs vested resulting in stock-based compensation expense of approximately $ 77,000 during the year ended December 31, 2024.

As of December 31, 2024, the unamortized fair value of the RSUs was $ 0.7 million.

The unamortized amount will be expensed over a weighted average period of 2.7 years.

2 unchanged sentences

Date Fair Value

Unvested at January 1, 2023

Outstanding as of January 1, 2024

RSUs forfeited

Unvested at December 31, 2023

Outstanding as of December 31, 2024

Note 11 – Stock Based Compensation, continued

Performance Share Units (“PSUs”)

1 unchanged sentence

The goals are commonly related to the Company’s revenue and achievement of sales and marketing goals.

On July 20, 2022, the Board granted the Company’s Chief Executive Officer, Cesar Johnston, up to 14,350 PSUs under the Company’s 2015 Performance Share Unit Plan pursuant to the terms of Mr.

Johnston’s offer letter with the Company (See Note 6 – Commitments and Contingencies).

The up to 14,350 PSUs that have been approved shall vest as follows:

(a) up to 9,350 PSU shares shall vest on December 31, 2022, subject to Mr.

Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr.

Johnston of certain performance metrics previously determined by the Compensation Committee and approved by the Board, (b) up to an additional 2,500 PSU shares shall vest on December 31, 2023, subject to Mr.

Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr.

Johnston of certain performance metrics determined and granted by the Board on May 17, 2023, and (c) up to an additional 2,500 PSU shares shall vest on December 31, 2024, subject to Mr.

Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr.

Johnston of certain performance metrics to be recommended by the Compensation Committee and approved by the Board at a subsequent date.

As of December 31, 2022, 6,779 PSUs were achieved, vested and deemed delivered on that date.

As of December 31, 2023, an additional 1,125 PSUs were achieved, vested and deemed delivered on that date.

As of December 31, 2023, the performance criteria for the additional 2,500 PSUs that shall vest on December 31, 2024 have not been approved by the Board.

Note 8 – Stock Based Compensation, continued

Performance Share Units (“PSUs”), continued

At December 31, 2023, the unamortized value of all PSUs was $ 0 .

A summary of the activity related to PSUs for the year ended December 31, 2023 is presented below:

Average Grant

Date Fair Value

Unvested at January 1, 2023

PSUs forfeited

Unvested at December 31, 2023

On July 20, 2022, the Board granted the Company’s former Chief Executive Officer 14,350 PSUs under the Company’s 2015 Performance Share Unit Plan pursuant to the terms of the former executive’s offer letter with the Company (See Note 6 – Commitments and Contingencies).

The 14,350 PSUs that had been approved were to vest as follows:

(a) up to 9,350 PSU shares would vest on December 31, 2022, subject to the former executive’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by the former executive of certain performance metrics previously determined by the Compensation Committee and approved by the Board, and (b) up to an additional 2,500 PSU shares would vest on each of December 31, 2023 and December 31, 2024, subject to continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, of certain performance metrics.

There was no PSU activity for the year ended December 31, 2024.

The 2,500 PSU shares that were reserved for grant during 2024 per the former executive’s offer letter with the Company, as well as the 1,250 shares reserved for potential outperformance by the former executive of 2024 goals were returned to the 2024 Equity Incentive Plan for future issuance upon the former executive’s termination of service with the Company.

Employee Stock Purchase Plan (“ESPP”)

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The fair values of the purchase options granted were estimated using the following assumptions:

For the Year Ended

December 31, 2023

Stock price range

For the year ended December 31,

Dividend yield

Expected volatility range

Risk-free interest rate range

Expected life

For the Year Ended

December 31, 2022

Stock price range

Expected volatility

Risk-free interest rate

5.26 %- 5.37 %

Dividend yield

Expected volatility range

Risk-free interest rate range

4.42 %- 5.47 %

Expected life

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Stock-Based Compensation Expense

The following tables summarize total stock-based compensation costs recognized for years ended December 31, 2023 and 2022:

For the Years Ended December 31,

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

For the Years Ended December 31,

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

For the year ended December 31,

Research and development

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Severance expense

Cost of revenue

Note 12 – Income Taxes

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”).

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period.

Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance as of December 31, 2023.

For years ended December 31, 2024 and 2023, the Company recognized zero provision for income taxes.

Reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate of 21 % is as follows:

For the Year Ended December 31,

Tax benefit at federal statutory rate

State income taxes

Permanent differences:

Stock-based compensation

Change in tax reserves

Research and development tax credits

Increase in valuation allowance

Mark-to-market warrant liability

Effective income tax rate

Note 12 – Income Taxes, continued

As of December 31, 2023 and 2022, the Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following:

As of December 31, 2024 and 2023, the Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following (in thousands):

Deferred tax assets:

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Operating lease liability

Other accruals

Other accruals and reserves

Total gross deferred tax assets

valuation allowance

( 104,318,267

Total deferred tax assets

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Total deferred taxes, net

The Company considers all available evidence, both positive and negative, including historical levels of taxable income, expectations and risks associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance.

Because of the Company’s recent history of operating losses, management believes that it is more likely than not that all of the Company’s deferred tax assets will not be realized and accordingly, has provided a full valuation allowance for its deferred tax asset as of December 31, 2024 and 2023.

The change in the Company’s valuation allowance is as follows:

Beginning balance

Increase in valuation allowance

The Company has federal and state net operating loss carryforwards of approximately $ 297,696,000 and $ 298,948,000 , respectively, available to offset future taxable income.

The federal and state NOL carryforwards will expire at various dates beginning in 2033 .

The Company has federal and state research and development tax credit carryforwards of approximately $ 7,152,000 and $ 5,678,000 , respectively.

Ending balance

As of December 31, 2024 and 2023, the Company has NOL carryforwards for U.S.

federal income tax purposes of approximately $ 320.2 million and $ 297.7 million, respectively, and for state income tax purposes, approximately $ 294.9 million and $ 298.9 million, respectively.

NOL carryforwards of $ 235.5 million will be carried forward indefinitely for U.S.

federal tax purposes and $ 84.7 million will expire beginning in 2033.

State net operating loss carryforwards, if not utilized, will begin to expire on various dates starting in 2033.

The Company has federal and state R&D tax credit carryforwards of approximately $ 7.6 million and $ 6.0 million, respectively.

The federal R&D credit carryforwards will expire beginning in 2032 and state R&D credit carryforwards do not expire.

The ultimate realization of the net operating loss is dependent upon future taxable income, if any, of the Company.

Although management believes that the Company may have sufficient future taxable income to absorb the net operating loss carryforwards and research and development tax credit carryforwards before the expiration of the carryforward period, there may be circumstances beyond the Company’s control that limit such utilization.

Accordingly, management has determined that a full valuation allowance of the deferred tax asset is appropriate at December 31, 2023 and 2022.

The Inflation Reduction Act (IRA) of 2022 was signed into law by President Joe Biden on August 16, 2022.

The IRA provides several tax incentives, including the expanded Internal Revenue Code (IRC) Section 179D deduction, increased ability to leverage the R&D credit to offset payroll taxes for eligible start-up businesses, and 15% alternative minimum tax (AMT) for corporations with average income more than $1 billion for the past three tax period.

The provisions do not have material impact to the Company for the 2023 tax year and the Company will continue to monitor the effect of this legislation.

Note 12 – Income Taxes, continued

IRC Section 382 imposes limitations on the use of net operating loss carryforwards when the stock ownership of one or more 5% stockholders (stockholders owning 5% or more of the Company’s outstanding capital stock) has increased on a cumulative basis by more than 50 percentage points .

Management cannot control the ownership changes occurring as a result of public trading of the Company’s Common Stock.

Accordingly, there is a risk of an ownership change beyond the control of the Company that could trigger a limitation of the use of the loss carryforward.

The Company completed a Section 382 analysis as of December 31, 2023 and determined that none of its NOLs or R&D credits would be limited.

For the Year Ended December 31,

Tax benefit at federal statutory rate

State income taxes

Permanent differences:

Stock-based compensation

Executive compensation

Research and development tax credits

Increase in valuation allowance

Mark-to-market warrant liability

Effective income tax rate

Under Section 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income may be limited.

As a result of such ownership changes, the annual limitation may result in the expiration of net operating losses and credits before utilization.

In general, an “ownership change” will occur if there is a cumulative change in the Company’s ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period.

Similar rules may apply under state tax laws.

The Company accounts for uncertain tax position in accordance with ASC 740.

Tax positions are evaluated in a two-step process, whereby the Company first determines whether it is more likely than not that a tax position will be sustained upon examination by tax authorities, including resolutions of any related appeals or litigation processes, based on technical merit.

If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognized in the financial statements.

The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

The total amount of unrecognized tax benefits as of December 31, 2024 is $ 1.4 million.

If recognized, none of the unrecognized tax benefits would impact the effective tax rate because of the valuation allowance.

The Company recognizes interest and penalties related to income tax matters as a component of income tax expense.

As of December 31, 2024, there were no accrued interest and penalties related to unrecognized tax benefits.

The Company does not anticipate any significant change of the unrecognized tax benefits within twelve months of this reporting date.

A reconciliation of the beginning and ending balance of total unrecognized tax benefits is as follows (in thousands):

Unrecognized tax benefit as of January 1, 2024

Gross increases – tax positions in prior period

Gross increases – tax positions in current period

Unrecognized tax benefit as of December 31, 2024

The Company files income tax returns in the U.S.

federal and various state jurisdictions.

Due to the Company’s net operating loss carryforwards, all tax years since inception remain subject to examination by all taxing authorities.

The Company is not currently under audit in any tax jurisdiction.

Note 13 - Warrant Liability

2023 Warrants

In March 2023, the Company issued 412,500 warrants to purchase up to 412,500 shares of its common stock.

The 2023 Warrants have a six-year term and were exercisable upon issuance on March 28, 2023 .

At issuance, each 2023 Warrant was exercisable for one share of the Company’s common stock at a price of $ 8.00 per share.

As of December 31, 2023, the exercise price of the 2023 Warrants was adjusted to $ 1.66 per share (subject to further adjustment in certain circumstances, including in the event of stock dividends and splits;

Each 2023 Warrant was initially exercisable for one share of the Company’s common stock at a price of $ 8.00 per share.

As of December 31, 2024, the exercise price was adjusted to $ 0.30 per share (subject to further adjustment in certain circumstances, including in the event of stock dividends and splits;

recapitalizations;

change of control transactions;

and issuances or sales of, or agreements to issue or sell, shares of common stock or common stock equivalents at a price per share less than the then-applicable exercise price for the 2023 Warrants, including sales under the ATM, the “Exercise Price”).

In the event of certain transactions such as a merger, consolidation, tender offer, reorganization, or other change in control, if holders of common stock are given any choice as to the consideration to be received, the holder of each 2023 Warrant shall be given the same choice of alternate consideration.

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This provision would not apply for stock or stock equivalents which fall under shares that qualify for exempt issuance, such as if the Company adjusted the option exercise price for an option granted to an employee, officer, or director.

Note 10 - Warrant Liability, continued

The Company accounted for the 2023 Warrants in accordance with the derivative guidance contained in ASC 815-40, as the warrants did not meet the criteria for equity treatment.

The Company believes that the adjustments to the Exercise Price is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40, and thus the 2023 Warrants are not eligible for an exception from derivative accounting.

As such, the 2023 Warrants were initially measured at fair value and recorded as a liability in the amount of $ 3,135,000 .

As of December 31, 2023, all 2023 Warrants were outstanding.

As of December 31, 2023, the fair value of the warrant liability was $ 619,575 .

The Company recorded a change in fair value of the warrant liability of $ 2,515,425 for the year ended December 31, 2023.

As such, the 2023 Warrants were initially measured at fair value and recorded as a liability in the amount of $ 3.1 million.

As of December 31, 2024, all 2023 Warrants were outstanding, and the fair value of the warrant liability was $ 0.4 million.

The Company recorded a change in fair value of the warrant liability of $ 0.3 million and $ 2.5 million for the years ended December 31, 2024 and 2023, respectively.

Note 14 - Fair Value Measurements

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value:

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and December 31, 2023 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

Balance as of December 31, 2024

Cash and cash equivalents

Cash equivalents

Warrant liability

Balance as of December 31, 2023

Cash and cash equivalents

Cash equivalents

Warrant liability

4 unchanged sentences

Inherent in a Monte Carlo simulation model are assumptions related to expected share-price volatility, expected life, risk-free interest rate, and dividend yield.

The key inputs into the Monte Carlo simulation model for the 2023 Warrants are as follows:

At March 31, 2023

At June 30, 2023

At September 30, 2023

At December 31, 2023

The key inputs into the Monte Carlo simulation model for the 2023 Warrants were as follows:

As of December 31,

Exercise price

2 unchanged sentences

Dividend yield

The decrease in the fair value of the 2023 Warrant liability was determined to be $ 2,515,425 during the year ended December 31, 2023, respectively (see Note 10 – Warrant Liability).

Note 12 – Related Party Transactions

In November 2016, the Company and Dialog entered into the Alliance Agreement for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (See Note 6 – Commitments and Contingencies, Strategic Alliance Agreement ).

On November 7, 2016 and June 28, 2017, the Company and Dialog entered into securities purchase agreements under which Dialog acquired a total of 86,985 shares and received warrants to purchase up to 70,878 shares.

As of December 31, 2023, none of the warrants remain outstanding.

Dialog presently owns approximately 1.6 % of the Company’s outstanding common shares.

The Company did no t record any revenue under the Alliance Agreement during the years ended December 31, 2023 and 2022.

The Company incurred $ 87,701 and $ 0 in chip development expense from Renesas Electronics Corporation, which acquired Dialog in August 2021 ("Renesas"), during the years ended December 31, 2023 and 2022, respectively.

On September 20, 2021, the Company was notified by Dialog, then acquired by Renesas Electronics Corporation, that it was terminating the Alliance Agreement between the Company and Dialog.

Note 14 - Fair Value Measurements, continued

The decrease in the fair value of the 2023 Warrant liability was determined to be $ 0.3 million and $ 2.5 million during the years ended December 31, 2024 and 2023, respectively (see Note 13 – Warrant Liability).

For the year ended December 31,

Beginning value

Initial valuation of new warrants

Change in value of warrant liability

Note 15 – Customer Concentration

Three customers accounted for approximately 70 % of the Company’s revenue for the year ended December 31, 2023 and one customer accounted for approximately 50 % of the Company’s revenue for the year ended December 31, 2022.

Two customers accounted for approximately 76 % of the Company’s revenue for the year ended December 31, 2024 and three customers accounted for approximately 70 % of the Company’s revenue for the year ended December 31, 2023.

Two customers accounted for approximately 99 % of the Company’s accounts receivable balance as of December 31, 2024.

One customer accounted for approximately 87 % of the Company’s accounts receivable balance as of December 31, 2022.

Two customers accounted for approximately 88 % of the Company’s accounts receivable balance as of December 31, 2023.

Note 16 – Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of December 31, 2023, through the date which the financial statements are issued.

On February 15, 2024, the Company entered into a securities purchase agreement with an institutional investor, providing for the issuance and sale by the Company, in a registered direct offering (the “Offering”), of (i) 570,000 shares of the Company’s common stock, par value $ 0.00001 (“Common Stock”), (ii) pre-funded warrants to purchase up to 450,409 shares of Common Stock (referred to individually as a “Pre-Funded Warrant” and collectively as the “Pre-Funded Warrants”), and (iii) warrants to purchase up to an aggregate of 1,020,409 shares of Common Stock (referred to individually as a “Warrant” and collectively as the “Warrants”).

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.

Each Pre-Funded Warrant and 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 $ 0.001 per share, in the case of the Pre-Funded Warrants, or $ 1.84 per share, in the case of the Warrants.

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

The Offering closed on February 20, 2024.

The Company received net proceeds of approximately $ 1.8 million from the Offering, after deducting placement agent fees and estimated offering expenses payable by the Company.

On March 26, 2024, the Company announced that effective March 24, 2024 Cesar Johnston is no longer serving as President and Chief Executive Officer.

Johnston will remain a member of the Board.

No agreement pertaining to Mr.

Johnston's departure has yet been signed.

Except for the events stated above, no events have occurred that would require adjustment to the amounts, or disclosures, in the financial statements.

Changes in and Disagreements with Accou ntants on Accounting and Financial Disclosure.

After December 31, 2024, the Company settled sales of 16,584,405 shares of common stock for net proceeds of approximately $ 13.4 million under the ATM Program.

Sales settled between January 2, 2025 and February 12, 2025.

On February 13, 2025, the Company filed a prospectus supplement covering the offering, issuance and sale of an additional $ 80.0 million in shares of 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.

On January 21, 2025, the Company terminated the ESPP.

No shares will be issued under the ESPP going forward.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data