Energous Corp 10-K

Item 8. Financial Statements and Supplementary Data. ​ ​ 36 Table of Contents Energous Corporation INDEX TO FINANCIAL STATEMENTS ​ ​ Page(s) Report of Independent Registered Public Accounting Firm (PCAOB ID Number 207 ) ​ 38 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 688 ) ​ 40 Balance Sheets as of December 31, 2024 and 2023 ​ 42 Statements of Operations for the years ended December 31, 2024 and 2023 ​ 43 Statement of Changes in Stockholders’ Equity/(Deficit) for the years ended December 31, 2024 and 2023 ​ 44 Statements of Cash Flows for the years ended December 31, 2024 and 2023 ​ 45 Notes to Financial Statements ​ 46 ​ ​ ​ 37 Table of Contents 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. 38 Table of Contents 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. /s/ BPMLLP We have served as the Company’s auditor since 2024. ​ San Jose, California February 27, 2025 ​ 39 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Energous Corporation Opinion on the Financial Statements 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 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 Matters 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 matters below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Going Concern – Refer to Note 2 to the financial statements Critical Audit Matter Description 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. 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. 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. 40 Table of Contents How the Critical Audit Matter was Addressed in the Audit The primary audit procedures we performed to address this critical audit matter included the following: ● We evaluated the design of the internal control related to the Company’s going concern assessment. ● We evaluated the reasonableness of the Company’s forecasted revenues, operating expenses, and the projected cash balance as of March 31, 2025 (collectively, “forecasts”), by (1) inquiring of the 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. ● We also assessed management’s ability to forecast revenue and cash flows by comparing prior year forecasts to actual financial results. ● We assessed the adequacy of the consolidated financial statements’ disclosure related to the going concern assessment by comparing it to the audit evidence obtained. /s/ Marcum LLP Marcum LLP We served as the Company’s auditor from 2013 to 2024. San Jose, CA March 28, 2024 ​ ​ 41 Table of Contents Energous Corporation BALANCE SHEETS (in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, ​ December 31, ​ 2024 2023 ASSETS ​ ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 1,353 ​ $ 13,876 Restricted cash ​ ​ — ​ ​ 60 Accounts receivable, net of allowance for credit losses of $ 0 and $ 53 as of December 31, 2024 and 2023, respectively ​ 78 ​ 102 Inventory ​ 498 ​ 430 Prepaid expenses and other current assets ​ 983 ​ 539 Total current assets ​ 2,912 ​ 15,007 Property and equipment, net ​ 356 ​ 429 Operating lease right-of-use assets ​ 527 ​ 1,240 Total assets ​ $ 3,795 ​ $ 16,676 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 1,852 ​ $ 1,879 Accrued expenses ​ 1,135 ​ 1,254 Accrued severance expense ​ 28 ​ 134 Warrant liability ​ 358 ​ 620 Operating lease liabilities, current portion ​ 668 ​ 707 Short-term debt, net ​ ​ 818 ​ ​ — Deferred revenue ​ 13 ​ 27 Total current liabilities ​ 4,872 ​ 4,621 ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities, long-term portion ​ — ​ 557 Total liabilities ​ 4,872 ​ 5,178 ​ ​ ​ ​ ​ ​ ​ 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. ​ 1 ​ 1 Additional paid-in capital ​ 399,362 ​ 393,539 Accumulated deficit ​ ( 400,440 ) ​ ( 382,042 ) Total stockholders’ equity (deficit) ​ ( 1,077 ) ​ 11,498 Total liabilities and stockholders’ equity (deficit) ​ $ 3,795 ​ $ 16,676 ​ Note: 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. ​ ​ 42 Table of Contents Energous Corporation STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2024 2023 Revenue $ 768 ​ $ 474 Cost of revenue ​ 756 ​ 279 Gross profit ​ ​ 12 ​ ​ 195 Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ 8,275 ​ 10,811 Sales and marketing ​ 3,066 ​ 3,852 General and administrative ​ 5,704 ​ 7,272 Severance expense ​ 1,377 ​ 359 Total operating expenses ​ 18,422 ​ 22,294 Loss from operations ​ ( 18,410 ) ​ ( 22,099 ) Other income (expense), net: ​ ​ ​ ​ Offering costs related to warrant liability ​ — ​ ( 592 ) Change in fair value of warrant liability ​ 262 ​ 2,515 Interest income, net ​ — ​ 809 Loss on extinguishment of short-term debt ​ ​ ( 219 ) ​ ​ — Other expense ​ ​ ( 31 ) ​ ​ — Total other income (expense), net ​ 12 ​ 2,732 Net loss ​ $ ( 18,398 ) ​ $ ( 19,367 ) Basic and diluted loss per common share ​ $ ( 2.57 ) ​ $ ( 4.15 ) Weighted average shares outstanding, basic and diluted ​ 7,153,385 ​ 4,663,594 ​ Note: 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. ​ ​ 43 Table of Contents Energous Corporation STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except for share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Deficit Equity (Deficit) Balance as of January 1, 2023 ​ 3,947,267 ​ $ 1 ​ $ 387,319 ​ $ ( 362,675 ) ​ $ 24,645 Stock-based compensation - stock options — ​ — ​ 85 ​ — ​ 85 Stock-based compensation - restricted stock units (“RSUs”) — ​ — ​ 1,533 ​ — ​ 1,533 Stock-based compensation - employee stock purchase plan (“ESPP”) — ​ — ​ 44 ​ — ​ 44 Stock-based compensation - performance share units (“PSUs”) — ​ — ​ 16 ​ — ​ 16 Issuance of shares for RSUs 64,062 ​ — ​ — ​ — ​ — Issuance of shares for PSUs 1,125 ​ — ​ — ​ — ​ — Shares purchased from contributions to the ESPP 20,366 ​ — ​ 73 ​ — ​ 73 Cash in lieu of shares from reverse stock split ( 1,857 ) ​ — ​ — ​ — ​ — Issuance of shares in an at-the-market (“ATM”) placement, net of $ 198 in issuance costs ​ 975,658 ​ ​ — ​ ​ 4,240 ​ ​ — ​ ​ 4,240 Issuance of shares in a sale of common stock, net of $ 3,166 in issuance costs and fair value of liability warrant ​ 412,500 ​ ​ — ​ ​ 134 ​ ​ — ​ ​ 134 Issuance of shares in a sale of common stock to Chief Executive Officer ​ 52,000 ​ ​ — ​ ​ 95 ​ ​ — ​ ​ 95 Net loss — ​ — ​ — ​ ( 19,367 ) ​ ( 19,367 ) Balance as of December 31, 2023 5,471,121 ​ 1 ​ 393,539 ​ ( 382,042 ) ​ 11,498 Stock-based compensation - stock options — ​ — ​ 72 ​ — ​ 72 Stock-based compensation - RSUs — ​ — ​ 722 ​ — ​ 722 Stock-based compensation - ESPP — ​ — ​ 5 ​ — ​ 5 Issuance of shares for RSUs 34,629 ​ — ​ — ​ — ​ — Shares purchased from contributions to the ESPP ​ 7,125 ​ ​ — ​ ​ 6 ​ ​ — ​ ​ 6 Shares issued to consultants for services 163,000 ​ — ​ 95 ​ — ​ 95 Pre-funded warrants exercised 450,409 ​ — ​ — ​ — ​ — Issuance of shares in a sale of common stock, pre-funded warrants and warrants, net of $ 230 in issuance costs 570,000 ​ — ​ 1,770 ​ — ​ 1,770 Issuance of shares in an ATM placement, net of $ 346 in issuance costs 6,879,623 ​ — ​ 3,153 ​ — ​ 3,153 Net loss — ​ — ​ — ​ ( 18,398 ) ​ ( 18,398 ) Balance as of December 31, 2024 13,575,907 ​ $ 1 ​ $ 399,362 ​ $ ( 400,440 ) ​ $ ( 1,077 ) ​ Note: 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. ​ ​ 44 Table of Contents Energous Corporation STATEMENTS OF CASH FLOWS (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2024 2023 Cash flows from operating activities: ​ ​ Net loss ​ $ ( 18,398 ) ​ $ ( 19,367 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Depreciation and amortization ​ 196 ​ 187 Stock-based compensation ​ 799 ​ 1,678 Inventory net realizable value adjustment ​ — ​ 167 Allowance for credit losses ​ — ​ ( 13 ) Common stock issued to consultants for services ​ 95 ​ — Loss on extinguishment of short-term debt ​ 219 ​ — Accrued interest ​ ​ 81 ​ ​ — Amortization of short-term loan fees ​ ​ 13 ​ ​ — Change in fair value of warrant liability ​ ( 262 ) ​ ( 2,515 ) Offering costs allocated to warrants ​ ​ — ​ ​ 592 Changes in operating assets and liabilities: ​ ​ ​ Accounts receivable ​ 24 ​ 54 Inventory ​ ( 68 ) ​ ( 491 ) Prepaid expenses and other current assets ​ ( 42 ) ​ 288 Operating lease right-of-use assets ​ 657 ​ 720 Accounts payable ​ ( 27 ) ​ 979 Accrued expenses ​ ( 200 ) ​ ( 536 ) Accrued severance expense ​ ( 106 ) ​ ( 283 ) Operating lease liabilities ​ ( 540 ) ​ ( 706 ) Deferred revenue ​ ( 14 ) ​ ( 3 ) Net cash used in operating activities ​ ( 17,573 ) ​ ( 19,249 ) Cash flows from investing activities: ​ ​ Purchases of property and equipment ​ ( 123 ) ​ ( 187 ) Net cash used in investing activities ​ ( 123 ) ​ ( 187 ) Cash flows from financing activities: ​ ​ Net borrowings from short-term loan ​ 801 ​ — Repayments of short-term loan ​ ​ ( 269 ) ​ ​ — Repayments of financed insurance premiums ​ ​ ( 348 ) ​ ​ — Net proceeds from an ATM offering ​ 3,153 ​ 4,240 Net proceeds from a sale of common stock and warrant issuance ​ 1,770 ​ 2,677 Proceeds from sale of common stock to the former Chief Executive Officer ​ — ​ 95 Proceeds from contributions to the ESPP ​ ​ 6 ​ ​ 73 Net cash provided by financing activities ​ 5,113 ​ 7,085 Net decrease in cash, cash equivalents and restricted cash ​ ( 12,583 ) ​ ( 12,351 ) Cash, cash equivalents and restricted cash - beginning ​ 13,936 ​ 26,287 Cash, cash equivalents and restricted cash - ending ​ $ 1,353 ​ $ 13,936 Supplemental disclosure of cash flow information: ​ ​ Interest paid ​ $ 140 ​ $ — 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 ​ $ 51 ​ $ — Financing of insurance premiums ​ $ 402 ​ $ — Increase in operating lease right-of-use assets and operating lease liabilities from lease modification ​ $ 5 ​ $ — Common stock issued for RSUs ​ $ — ​ $ 9 ​ ​ ​ 45 Table of Contents ENERGOUS CORPORATION Notes to Financial Statements Note 1 – Business Organization, Nature of Operations Description of Business 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. including: ​ ​ ​ Device Type Application RF Tags Cold Chain, Asset Tracking, Medical IoT IoT Sensors Cold Chain, Logistics, Asset Tracking Electronic Shelf Labels Retail and Industrial IoT ​ 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 On June 14, 2023, at the Company’s 2023 annual meeting of stockholders, the Company’s stockholders approved a proposal to effect a reverse stock split of the Company’s common stock by a ratio not to exceed 1-for- 20 . On August 15, 2023, the Company announced that its Board of Directors had determined to set the reverse stock split ratio at 1-for- 20 and that the Company’s common stock would begin trading at the split-adjusted price beginning August 16, 2023. Upon effectiveness of the reverse stock split, every twenty shares of issued and outstanding common stock held were converted into one share of common stock. No fractional shares were distributed as a result of the reverse stock split and stockholders were entitled to a cash payment in lieu of fractional shares. Additionally, the par value of the Company’s common stock did not change. All information presented herein, 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. ​ ​ 46 Table of Contents Note 2 – Liquidity and Management Plans 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. The market for products using the Company’s technology is broad and evolving, but remains nascent and unproven, so the Company’s success is dependent upon many factors, including customer acceptance of its existing products, technical feasibility of future products, regulatory approvals, the development of complementary technologies, competition and global market fluctuations. ​ ​ 47 Table of Contents Note 3 – Summary of Significant Accounting Policies Basis of Presentation 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 The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements as well as the reported expenses during the reporting periods. The Company’s significant estimates and assumptions include the valuation of stock-based compensation instruments, recognition of revenue, inventory valuation, fair value of warrant liabilities and the valuation allowance on deferred tax assets. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates. Cash, 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. The Company maintains cash balances that may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation limits. The Company maintains its cash deposits with major financial institutions. 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. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each reporting period. ​ 48 Table of Contents 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. Fair Value 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. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities to which the Company has access at a measurement date. ● Level 2: Observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Unobservable inputs for which little or no market data exists and for which the Company must develop its own assumptions regarding the assumptions that market participants would use in pricing the asset or liability, including assumptions regarding risk. Because of the uncertainties inherent in the valuation of assets or liabilities for which there are no observable inputs, those estimated fair values may differ significantly from the values that may have been used had a ready market for the assets or liabilities existed. The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses, other current assets, and accounts payable 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). ​ 49 Table of Contents Note 3 – Summary of Significant Accounting Policies, continued Revenue Recognition 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: 1. Identify the contract with the customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price of the contract. 4. Allocate the transaction price to the performance obligations of the contract. 5. Recognize revenue when or as the performance obligations are satisfied. The Company’s revenue consists of its single segment of wireless charging system solutions. The wireless charging system revenue consists of revenue from product development projects and production-level systems. During the 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. In general, these product development projects are complex, and the Company does not have certainty about its ability to achieve the project milestones. The achievement of a milestone is dependent on the Company’s performance obligation and requires acceptance by the customer. The Company recognizes this revenue at the point in time at which the performance obligation is met. The payment associated with achieving the performance obligation is generally commensurate with the Company’s effort or the value of the deliverable and is nonrefundable. 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 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. 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. 50 Table of Contents Note 3 – Summary of Significant Accounting Policies, continued Research and Development Research and development expenses are charged to operations as incurred. For internally developed patents, all patent application costs are expensed as incurred as research and development expense. Patent application costs, 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 $ 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, 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. Income Taxes 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. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. 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. Net Loss Per Common Share 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 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. 51 Table of Contents 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 year ended ​ For the year ended ​ December 31,2024 December 31,2023 Warrants issued to investors 1,432,909 ​ 495,833 Options to purchase common stock — ​ 15,000 RSUs 538,506 ​ 71,734 Total potentially dilutive securities 1,971,415 ​ 582,567 ​ 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 . Leases The Company determines if an arrangement is a lease at the inception of the arrangement. The Company applies the short-term lease recognition exemption and recognizes lease payments in profit or loss at lease commencement for facility or equipment leases that have a lease term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are measured and recorded at the service commencement date based on the present value of lease payments over the lease term. The Company uses the implicit interest rate when readily determinable; however, most leases do not establish an implicit rate, so the Company uses an estimate of the incremental borrowing rate based on the information available at the time of measurement. Lease expense for lease payments is recognized on a straight-line basis over the lease term. See Note 8 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases. Segments 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. 52 Table of Contents 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. ​ ​ 53 Table of Contents 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 ​ $ 372 ​ $ — Deposit with contract manufacturer ​ ​ 323 ​ ​ 116 Prepaid insurance ​ 163 ​ 260 Prepaid software and support ​ 67 ​ 51 Prepaid subscriptions ​ 22 ​ 45 Tradeshow deposits ​ 21 ​ 35 Other deposits ​ 15 ​ 32 Total ​ $ 983 ​ $ 539 ​ ​ 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 ​ $ 498 ​ $ 101 Work-in-process ​ — ​ 52 Finished goods ​ — ​ 277 Total ​ $ 498 ​ $ 430 ​ ​ Note 6 – Property and Equipment Property and equipment are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of ​ December 31, 2024 December 31, 2023 Computer software ​ $ 1,055 ​ $ 901 Computer hardware ​ 2,257 ​ 2,284 Furniture and fixtures ​ 489 ​ 488 Leasehold improvements ​ 783 ​ 783 ​ ​ 4,584 ​ 4,456 Less – accumulated depreciation ​ ( 4,228 ) ​ ( 4,027 ) Total property and equipment, net ​ $ 356 ​ $ 429 ​ 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 $ 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. ​ 54 Table of Contents Note 7 – Accrued Expenses Accrued expenses consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of ​ December 31,2024 December 31,2023 Accrued compensation ​ $ 740 ​ $ 993 Accrued legal expenses ​ 178 ​ 147 Accrued interest ​ ​ 81 ​ ​ — Other accrued expenses ​ 136 ​ 114 Total ​ $ 1,135 ​ $ 1,254 ​ ​ Note 8 – Commitments and Contingencies Operating Leases San Jose Lease On May 20, 2022, the Company signed a lease amendment to the existing lease for its office space at its corporate headquarters in San Jose, California, extending the term of the lease for an additional 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 $ 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. 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, Amount 2025 $ 686 Total future lease payments ​ 686 Present value discount (8.0% weighted average) ​ ( 18 ) Total operating lease liabilities ​ $ 668 ​ 55 Table of Contents 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 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 The Company is from time to time involved in various disputes, claims, liens and litigation matters arising in the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company’s combined financial position, results of operations or cash flows. MBO Bonus Plan On March 15, 2018, the Company’s Board of Directors (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. ​ 56 Table of Contents Note 8 – Commitments and Contingencies, continued 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. Johnston. 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. Mr. 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 On July 20, 2023, the Company announced the departure of William Mannina, former Acting Chief Financial Officer, effective August 16, 2023. Pursuant to the terms of a letter agreement between Mr. Mannina and the Company, Mr. 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. Mr. Mannina’s restricted stock units continued to vest through August 16, 2023. As of December 31, 2024, the Company did no t have any accrued unpaid severance expense pertaining to Mr. Mannina’s agreement. 57 Table of Contents Note 8 – Commitments and Contingencies, continued Strategic Alliance Agreement 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. 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 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. 58 Table of Contents 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 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. Financing On September 15, 2020, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on September 24, 2020 (“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 “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. 59 Table of Contents 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. 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 million. 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. 60 Table of Contents 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 The Company’s outstanding shares of common stock typically include shares that are deemed delivered under U.S. GAAP. 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. There are no voting rights for shares that are deemed delivered under U.S. GAAP until the actual delivery of shares takes place. 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 — 15,000 RSUs outstanding 538,506 71,734 Warrants outstanding 1,432,909 495,833 Shares available for issuance under the 2013 Equity Incentive Plan — 118,877 Shares available for issuance under the 2014 Non-employee Equity Compensation Plan — 29,137 Shares available for issuance under the 2015 Performance Share Unit Plan — 108,897 Shares available for issuance under the 2017 Equity Inducement Plan — 51,084 Shares available for issuance under the 2024 Equity Incentive Plan 262,883 — Shares available for issuance under the Employee Stock Purchase Plan 13,791 14,716 Total 2,248,089 905,278 ​ ​ Note 11 – Stock Based Compensation Equity Incentive Plans 2017 Equity Inducement Plan On December 28, 2017, the Board approved the 2017 Equity Inducement Plan. Under the 2017 Equity Inducement Plan, the Board reserved 30,000 shares for the grant of RSUs. These grants will be administered by the Board or a committee of the Board. 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. 61 Table of Contents 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 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. 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. 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. 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 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. ​ 62 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ ​ ​ ​ ​ Number of ​ Exercise ​ Life In ​ Intrinsic ​ Options Price Years Value Outstanding as of January 1, 2024 15,000 ​ $ 25.40 7.9 ​ $ — Granted — ​ — — ​ — Exercised — ​ — — ​ — Forfeited ( 15,000 ) ​ 25.40 — ​ — Outstanding as of December 31, 2024 — ​ $ — — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable as of January 1, 2024 7,500 ​ $ 25.40 7.9 ​ $ — Vested 3,750 ​ 25.40 — ​ — Exercised — ​ — — ​ — Forfeited ( 11,250 ) ​ 25.40 — ​ — Exercisable as of December 31, 2024 — ​ $ — — ​ $ — ​ As of December 31, 2024, the unamortized value of options was $ 0 . Restricted Stock Units (“RSUs”) 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. A summary of the activity related to RSUs for the year ended December 31, 2024 is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average Grant ​ Total Date Fair Value Outstanding as of January 1, 2024 71,734 ​ $ 24.65 RSUs granted 586,000 ​ ​ 1.14 RSUs forfeited ( 84,599 ) ​ ​ 4.08 RSUs vested ( 34,629 ) ​ ​ 23.26 Outstanding as of December 31, 2024 538,506 ​ $ 2.39 ​ ​ 63 Table of Contents Note 11 – Stock Based Compensation, continued Performance Share Units (“PSUs”) Performance share units (“PSUs”) are grants that vest upon the achievement of certain performance goals. The goals are commonly related to the Company’s revenue and achievement of sales and marketing goals. On July 20, 2022, the Board granted the Company’s 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”) During the years ended December 31, 2024 and 2023, there were two offering periods per year for the ESPP. The first offering period started on January 1 of each year and concluded on June 30 of each year. The second offering period started on July 1 of each year and concluded on December 31 of each year. The weighted-average grant-date fair value of the purchase option for each designated share purchased under the ESPP was approximately $ 0.64 and $ 4.66 during the years ended December 31, 2024 and 2023, respectively, which represents the fair value of the option, consisting of three main components: (i) the value of the discount on the enrollment date, (ii) the proportionate value of the call option for 85 % of the stock and (iii) the proportionate value of the put option for 15 % of the stock. The Company recorded stock-based compensation expense for the plan of $ 5,000 and $ 44,000 for the years ended December 31, 2024 and 2023, respectively. The Company estimated the fair value of the purchase options granted during the years ended December 31, 2024 and 2023 using the Black-Scholes option pricing model. The fair values of the purchase options granted were estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2024 2023 Stock price ​ $ 1.09 - 1.83 ​ $ 4.80 - 16.72 Dividend yield ​ 0 % ​ ​ 0 % Expected volatility ​ 76 %- 112 % ​ ​ 59 %- 67 % Risk-free interest rate ​ 5.26 %- 5.37 % ​ ​ 4.42 %- 5.47 % Expected life ​ 6 months ​ ​ 6 months ​ ​ 64 Table of Contents Note 11 – Stock Based Compensation, continued Stock-Based Compensation Expense The total amount of stock-based compensation was reflected within the statements of operations as (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2024 2023 Research and development ​ $ 213 ​ $ 658 Sales and marketing ​ 287 ​ 368 General and administrative ​ 163 ​ 652 Severance expense ​ 130 ​ — Cost of revenue ​ ​ 6 ​ ​ — Total ​ $ 799 ​ $ 1,678 ​ ​ Note 12 – Income Taxes 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, ​ 2024 2023 Tax benefit at federal statutory rate ( 21.0 ) % ( 21.0 ) % State income taxes 6.8 ( 8.8 ) ​ Permanent differences: ​ ​ ​ Stock-based compensation ( 0.1 ) 0.1 ​ Change in tax reserves 4.0 — ​ Research and development tax credits ( 2.4 ) ( 4.0 ) ​ Increase in valuation allowance 12.6 33.9 ​ Mark-to-market warrant liability ( 0.3 ) ( 2.1 ) ​ Other 0.4 1.9 ​ Effective income tax rate 0.0 % 0.0 % ​ 65 Table of Contents Note 12 – Income Taxes, continued 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Deferred tax assets: ​ ​ Research and development tax credits ​ $ 11,087 ​ $ 11,638 Net operating loss carryovers ​ 87,825 ​ 83,393 Property and equipment ​ 197 ​ 147 Research and development costs ​ 6,919 ​ 8,653 Start-up and organizational costs ​ 9 ​ 10 Stock-based compensation ​ 338 ​ 119 Operating lease liability ​ 176 ​ 354 Other accruals and reserves ​ 215 ​ 351 Total gross deferred tax assets ​ 106,766 ​ 104,665 Less: valuation allowance ​ ( 106,627 ) ​ ( 104,318 ) Total deferred tax assets ​ 139 ​ 347 Deferred tax liabilities: ​ ​ ​ ​ Operating lease right-of-use asset ​ ( 139 ) ​ ( 347 ) Total deferred tax liabilities ​ ( 139 ) ​ ( 347 ) 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Beginning balance ​ $ 104,318 ​ $ 97,757 Increase in valuation allowance ​ 2,309 ​ 6,561 Ending balance ​ $ 106,627 ​ $ 104,318 ​ 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. ​ 66 Table of Contents Note 12 – Income Taxes, continued 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): ​ ​ ​ ​ ​ ​ Total Unrecognized tax benefit as of January 1, 2024 ​ $ — Gross increases – tax positions in prior period ​ 1,275 Gross increases – tax positions in current period ​ 82 Unrecognized tax benefit as of December 31, 2024 ​ $ 1,357 ​ 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. ​ ​ ​ 67 Table of Contents Note 13 - Warrant Liability 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 . 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 Program, 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. In the event of certain transactions that are not within the Company’s control, such as a merger, consolidation, tender offer, reorganization, or other change in control of the Company, each holder of a 2023 Warrant shall be entitled to receive the same form of consideration at the Black Scholes value of the unexercised portion of the 2023 Warrant that is being offered and paid to holders of common stock, including the option to exercise the 2023 Warrants on a “cashless basis”. If the Company issues additional shares of common stock or equity-linked securities for a consideration per share less than the Exercise Price, then such Exercise Price will be reduced to a new lower price pursuant to the terms of the 2023 Warrants. Additionally, if the Exercise Price of any outstanding derivative securities is modified by the Company such that such security’s modified exercise price is below the Exercise Price, the Exercise Price will adjust downward pursuant to the terms of the 2023 Warrant. 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. 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 $ 3.1 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. ​ ​ 68 Table of Contents 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, 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 ​ Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ Cash equivalents ​ $ 1,353 ​ $ — ​ $ — ​ $ 1,353 Liabilities: ​ ​ ​ ​ Warrant liability ​ $ — ​ $ — ​ $ 358 ​ $ 358 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2023 ​ Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ Cash equivalents ​ $ 12,567 ​ $ — ​ $ — ​ $ 12,567 Liabilities: ​ ​ ​ ​ Warrant liability ​ $ — ​ $ — ​ $ 620 ​ $ 620 ​ There were no transfers among Level 1, Level 2, or Level 3 categories during the periods presented. 2023 Warrants The Company utilizes a Monte Carlo simulation model for the 2023 Warrants at each reporting period, with changes in fair value recognized in the statements of operations. The estimated fair value of the 2023 Warrant liability is determined using Level 3 inputs. 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 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2024 2023 Share price ​ $ 1.01 ​ $ 1.83 ​ Exercise price ​ $ 0.30 ​ $ 1.66 ​ Term (in years) ​ 4.24 ​ 5.25 ​ Volatility ​ 90 % 85 % Risk-free rate ​ 4.3 % 3.8 % Dividend yield ​ 0 % 0 % ​ ​ 69 Table of Contents 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, ​ 2024 2023 Beginning value ​ $ 620 ​ $ — Initial valuation of new warrants ​ — ​ 3,135 Change in value of warrant liability ​ ( 262 ) ​ ( 2,515 ) Ending value ​ $ 358 ​ $ 620 ​ ​ Note 15 – Customer Concentration 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. Two customers accounted for approximately 88 % of the Company’s accounts receivable balance as of December 31, 2023. ​ Note 16 – Subsequent Events 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. ​ ​ 70 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. ​