Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
As used in this Quarterly Report on Form 10-Q (this “Report”), unless the context otherwise requires the terms “we,” “us,” “our,” and “Energous” refer to Energous Corporation d/b/a Energous Wireless Power Solutions, a Delaware corporation. This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “would,” “should,” “could,” “seek,” “intend,” “plan,” “continue,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this report regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expectations with respect to future financings; expectations for revenues, liquidity, cash flows and financial performance; expectations regarding repayment of our Term Loan (defined below); and expectations regarding the release of additional wireless power-enabled products. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements relate to the future and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and generally outside of our control, so actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others: our ability to develop commercially feasible technology or commercialize such technology; timing of customer implementations of our technology in consumer products; timing and receipt of regulatory approvals in the United States and internationally; our ability to find and maintain contract manufacturing partners; market acceptance of our technology; competition in our industry; our ability to protect our intellectual property; our ability to maintain or improve our financial position, cash flows, and liquidity and our expected financial needs; and other risks and uncertainties described in the Risk Factors and in Management’s Discussion and Analysis sections of our most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, including this Report. We undertake no obligation to publicly update any of our forward-looking statements, whether as a result of new information, future developments or otherwise.
Overview
We have developed scalable, over-the-air Wireless Power Network (“WPN”) technology that integrates advanced semiconductor chipsets, software controls, hardware designs, and antenna systems to enable radio frequency (“RF”)-based charging for Internet of Things (“IoT”) devices. Our WPN technology provides a comprehensive suite of capabilities designed to power the next generation of wireless energy networks, seamlessly delivering power and data across diverse, battery-free device ecosystems. This innovation enhances operational visibility, control, and intelligent business automation.
With a patent portfolio exceeding 250 patents, our solutions support both near-field and at-a-distance wireless charging, supplying power at multiple levels across varying distances, as well as expertise in advanced receiver technology. By enabling continuous wireless power transmission, our transmitter and receiver technologies facilitate the use of battery-free IoT devices, transforming asset and inventory tracking across multiple industries. Key applications include retail sensors, electronic shelf labels, asset trackers, air quality monitors, motion detectors, and other smart monitoring solutions.
We believe our technology represents a breakthrough in wireless power delivery, offering a differentiated approach to charging IoT devices via RF technology. To date, we have developed and released multiple transmitter and receiver solutions. Our transmitters vary in form factor, power specifications, and operating frequencies, while our receivers are engineered to support a wide range of wireless charging applications across multiple device categories. 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
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The first WPN-enabled end product featuring our technology entered the market in 2019. In the fourth quarter of 2021, we commenced shipments of its first at-a-distance wireless PowerBridge transmitter systems for commercial IoT applications and proof-of-concept deployments. As we continue to innovate our technology applications, we anticipate the release of additional wireless power-enabled products.
Nasdaq Market Compliance
As previously reported. on August 29, 2024, we received a notification letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) advising that for 30 consecutive trading days preceding the date of the notice, the bid price of our common stock had closed below the $1.00 per share minimum required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Marketplace Rule 5550(a)(2) (the “Bid Price Rule”). We were provided an initial 180 calendar days, or until February 25, 2025, to regain compliance with the Bid Price Rule. On February 27, 2025, we received a letter from the Staff granting an additional 180 calendar days, or until August 25, 2025, to regain compliance with Bid Price Rule. The Nasdaq determination to grant the second compliance period was based on our compliance with the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the Bid Price Rule, and written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. To regain compliance with the Big Price Rule, our common stock must close at or above $1.00 per share for a minimum of ten consecutive business days at any time during the second 180-day compliance period, or August 25, 2025.
At our 2025 Annual Meeting of Stockholders held on June 11, 2025, our stockholders approved a proposal for an amendment to the our second amended and restated certificate of incorporation, as amended, to effect a reverse stock split of our common stock at a ratio ranging from any whole number between 1-for-5 and 1-for-50, as determined by the Board of Directors in its discretion.
Subject to market conditions, our Board of Directors may need to implement a reverse stock split prior to August 25, 2025 in order to regain compliance with the Bid Price Rule.
Critical Accounting Policies and Estimates
Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements as well as the reported expenses during the reporting periods.
Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although we believe that 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.
Going Concern. Accounting Standards Codification (“ASC”) 205-40 Presentation of Financial Statements - Going Concern , requires management to assess our ability to continue as a going concern. In accordance with this guidance, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. We have determined that there was substantial doubt about our ability to continue as a going concern, but it was alleviated based on financing received in 2025, as well as current operating levels and further cost reductions implemented in the first and second quarters of 2025. We anticipate cash flows generated from operations and our cash and cash equivalents will be sufficient to meet our liquidity needs for at least the next 12 months.
Determining the extent to which conditions or events raise substantial doubt about our ability to continue as a going concern requires significant judgment and estimation by us. Our significant estimates related to this analysis may include identifying business factors used in the forecasted financial results and liquidity. We believe that the estimated values used in our going concern analysis are based on reasonable assumptions. However, such assumptions are inherently uncertain and actual results could differ materially from those estimates.
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Warrants. We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each reporting period.
Offering costs associated with warrants classified as liabilities are expensed as incurred and are presented as offering cost related to warrant liability in the statement of operations. Offering costs associated with the sale of warrants classified as equity are charged against proceeds.
Revenue Recognition. We follow ASC 606, “Revenue from Contracts with Customers” (“Topic 606”). In accordance with Topic 606, we recognize revenue using the following five-step approach:
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.
Our revenue consists of its single segment of wireless charging system solutions. The wireless charging system revenue consists of revenue from product development projects and production-level systems.
We record revenue associated the sales of products, such as PowerBridge transmitter systems, and with product development projects that we enter into with certain customers. For the sales of products, we generally records revenue upon shipment of the products. For product development projects that are complex, and we do not have certainty about our ability to achieve the project milestones. The achievement of a milestone is dependent on our performance obligation and requires acceptance by the customer. We recognize this revenue at the point in time at which the performance obligation is met. The payment associated with achieving the performance obligation is generally commensurate with our effort or the value of the deliverable and is nonrefundable. Any deferred revenue is recognized upon achievement of the performance obligation or expiration of a support agreement.
During the three months ended June 30, 2025, management believes there have been no significant changes to the items that we disclosed within our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
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Results of Operations
Costs and Expenses
Cost of revenue consists of direct materials, direct labor and overhead for our production-level wireless charging systems. Research and development expenses include costs associated with our efforts to develop our technology, including personnel compensation, consulting, engineering supplies and components, regulatory expense and general office expenses specifically related to the research and development department. Sales and marketing expenses include costs associated with selling and marketing our technology to our customers, including personnel compensation, public relations, graphic design, tradeshow, engineering supplies utilized by the sales team and general office expenses specifically related to the sale and marketing department. General and administrative expenses include costs for general and corporate functions, including personnel compensation, facility fees, travel, telecommunications, insurance, professional fees, consulting fees, general office expenses, and other overhead.
Comparison of Three Months Ended June 30, 2025 and 2024
The following table sets forth selected Condensed Statements of Operations data (in thousands):
For the three months ended June 30,
2025
2024
$ Change
% Change
Revenue
$
975
$
46
$
929
2,020
%
Cost of revenue
637
122
515
422
%
Gross profit (loss)
338
(76)
414
545
%
Operating expenses:
Research and development
1,100
2,299
(1,199)
(52)
%
Sales and marketing
704
819
(115)
(14)
%
General and administrative
1,286
1,726
(440)
(25)
%
Severance expense
23
(269)
292
109
%
Expenses from abandoned financing transaction
5
—
5
100
%
Total operating expenses
3,118
4,575
(1,457)
(32)
%
Loss from operations
(2,780)
(4,651)
1,871
40
%
Other income (expense), net:
Change in fair value of warrant liability
—
336
(336)
(100)
%
Interest income (expense), net
(7)
57
(64)
(112)
%
Loss on retirement of property and equipment
(1)
—
(1)
(100)
%
Total other income (expense), net
(8)
393
(401)
(102)
%
Net loss
$
(2,788)
$
(4,258)
$
1,470
35
%
Revenue. During the three months ended June 30, 2025 and 2024, we recorded revenue of $1.0 million and $46,000, respectively. The 2,020% year over year increase is primarily due to the expansion of commercial applications with multinational enterprise retailers deploying our WPN technology in connection with their infrastructure modernization initiatives.
Costs and Expenses and Loss from Operations. Costs and expenses are made up of cost of revenue, research and development, sales and marketing, general and administrative, severance expense and expenses from the abandoned financing transaction. Loss from operations for the three months ended June 30, 2025 and 2024 were $2.8 million and $4.7 million, respectively.
Cost of Revenue:
For the three months ended June 30,
2025
2024
$ Change
% Change
Cost of revenue
$
637
$
122
$
515
422
%
Percent of total revenue
65
%
265
%
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Cost of revenue was $0.6 million and $0.1 million, respectively, for the three months ended June 30, 2025 and 2024. The increase is primarily due to higher sales volume of PowerBridge Pro transmitters that were shipped during the second quarter of 2025. With the ramp up of our volume manufacturing during the first and second quarters of 2025 and other strategic efforts made to optimize operations, product margins improved significantly, transitioning from a gross loss in 2024 of $76,000 to a gross profit in 2025 of approximately $0.3 million, representing a 545% year over year improvement in gross profit for the same quarter last year.
Research and Development Costs:
For the three months ended June 30,
2025
2024
$ Change
% Change
Research and development
$
1,100
$
2,299
$
(1,199)
(52)
%
Percent of total revenue
113
%
4,998
%
Research and development costs were $1.1 million and $2.3 million, respectively, for the three months ended June 30, 2025 and 2024. The decrease of $1.2 million is primarily due to a $0.6 million decrease in engineering components, circuit boards and software, a $0.4 million decrease in payroll costs and a $42,000 decrease in stock-based compensation.
Sales and Marketing Costs:
For the three months ended June 30,
2025
2024
$ Change
% Change
Sales and marketing
$
704
$
819
$
(115)
(14)
%
Percent of total revenue
72
%
1,780
%
Sales and marketing costs for the three months ended June 30, 2025 and 2024 were $0.7 million and $0.8 million, respectively. The decrease of $0.1 million is primarily due to a $0.2 million decrease in public relations and consulting fees, partially offset by a $0.1 million increase in payroll costs.
General and Administrative Expenses:
For the three months ended June 30,
2025
2024
$ Change
% Change
General and administrative
$
1,286
$
1,726
$
(440)
(25)
%
Percent of total revenue
132
%
3,752
%
General and administrative costs for the three months ended June 30, 2025 and 2024 were $1.3 million and $1.7 million, respectively. The decrease of $0.4 million is primarily due to a $0.2 million decrease in legal fees and a $0.2 million decrease in annual meeting-related expenses, partially offset by a $0.1 million increase in payroll costs accrued as a result of key milestones achieved in the second quarter of 2025 under the 2025 Bonus Plan.
Severance Expense:
For the three months ended June 30,
2025
2024
$ Change
% Change
Severance expense
$
23
$
(269)
$
292
109
%
Percent of total revenue
2
%
(585)
%
Severance expense for the three months ended June 30, 2025 and 2024 was $23,000 and $(0.3) million, respectively. Severance expense for the three months ended June 30, 2025 was related to separation with certain non-executive employees. The credit during the three months ended June 30, 2024 was a result of the finalization of the negotiated settlement and payroll taxes for our former CEO.
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Expenses from Abandoned Financing Transaction:
For the three months ended June 30,
2025
2024
$ Change
% Change
Expenses from abandoned financing transaction
$
5
$
—
$
5
100
%
Percent of total revenue
1
%
0
%
Expenses related to our abandoned financing transaction were $5,000 for the three months ended June 30, 2025, primarily attributable to our decision to terminate the previously announced convertible preferred equity offering under Regulation A. There was no such expense during the three months ended June 30, 2024.
Other income (expense), net:
For the three months ended June 30,
2025
2024
$ Change
% Change
Change in fair value of warrant liability
$
—
$
336
$
(336)
(100)
%
Interest income (expense), net
(7)
57
(64)
(112)
%
Loss on retirement of fixed asset
(1)
—
(1)
(100)
%
Total other income (expense), net
$
(8)
$
393
$
(401)
(102)
%
Other income resulting from the change in fair value of the warrant liability was $0 for the three months ended June 30, 2025, compared to $0.3 million in income for the three months ended June 30, 2024. The change during the three months ended June 30, 2024 is due to a lower market value of our common stock.
Net interest expense for the three months ended June 30, 2025 was $7,000, as we incurred $97,000 in interest expense from a short-term loan, partially offset by $89,000 in interest earned from our money market account. Interest income for the three months ended June 30, 2024 was $62,000 from interest earned on our money market account, and we had approximately $5,000 in interest expense from a short-term loan.
Net Loss. As a result of the above, net loss for the three months ended June 30, 2025 was $2.8 million as compared to $4.3 million for the three months ended June 30, 2024.
Comparison of Six Months Ended June 30, 2025 and 2024
The following table sets forth selected Condensed Statements of Operations data (in thousands):
For the six months ended June 30,
2025
2024
$ Change
% Change
Revenue
$
1,318
$
110
$
1,208
1,098
%
Cost of revenue
887
231
656
284
%
Gross profit (loss)
431
(121)
552
456
%
Operating expenses:
Research and development
2,292
4,488
(2,196)
(49)
%
Sales and marketing
1,293
1,692
(399)
(24)
%
General and administrative
2,181
3,721
(1,540)
(41)
%
Severance expense
395
1,294
(899)
(69)
%
Expenses from abandoned financing transaction
661
—
661
100
%
Total operating expenses
6,822
11,195
(4,373)
(39)
%
Loss from operations
(6,391)
(11,316)
4,925
44
%
Other income (expense), net:
Change in fair value of warrant liability
267
254
13
5
%
Interest income (expense), net
(29)
205
(234)
(114)
%
Loss on retirement of property and equipment
(1)
—
(1)
(100)
%
Total other income, net
237
459
(222)
(48)
%
Net loss
$
(6,154)
$
(10,857)
$
4,703
43
%
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Revenue. During the six months ended June 30, 2025 and 2024, we recorded revenue of $1.3 million and $0.1 million, respectively. The 1,098% year over year increase is primarily due to the expansion of commercial applications with multinational enterprise retailers deploying our WPN technology in connection with their infrastructure modernization initiatives.
Costs and Expenses and Loss from Operations. Costs and expenses are made up of cost of revenue, research and development, sales and marketing, general and administrative, severance expense and expenses from the abandoned financing transaction. Loss from operations for the six months ended June 30, 2025 and 2024 were $6.4 million and $11.3 million, respectively.
Cost of Revenue:
For the six months ended June 30,
2025
2024
$ Change
% Change
Cost of revenue
$
887
$
231
$
656
284
%
Percent of total revenue
67
%
210
%
Cost of revenue was $0.9 million and $0.2 million, respectively, for the six months ended June 30, 2025 and 2024. The increase is primarily due to higher sales volume of PowerBridge Pro transmitters that were shipped during the first and second quarters of 2025. With the ramp up of our volume manufacturing during the first and second quarters of 2025 and other strategic efforts made to optimize operations, product margins improved significantly, transitioning from a gross loss in 2025 of $0.1 million to a gross profit in 2025 of approximately $0.4 million, representing a 456% year over year improvement in gross profit.
Research and Development Costs:
For the six months ended June 30,
2025
2024
$ Change
% Change
Research and development
$
2,292
$
4,488
$
(2,196)
(49)
%
Percent of total revenue
174
%
4,080
%
Research and development costs were $2.3 million and $4.5 million, respectively, for the six months ended June 30, 2025 and 2024. The decrease of $2.2 million is primarily due to a $1.1 million in payroll costs from a lower headcount within the department, a $0.9 million decrease in engineering components, circuit boards and software and a $0.1 million decrease in stock-based compensation.
Sales and Marketing Costs:
For the six months ended June 30,
2025
2024
$ Change
% Change
Sales and marketing
$
1,293
$
1,692
$
(399)
(24)
%
Percent of total revenue
98
%
1,538
%
Sales and marketing costs for the six months ended June 30, 2025 and 2024 were $1.3 million and $1.7 million, respectively. The decrease of $0.4 million is primarily due to a $0.3 million decrease in public relations, consulting and recruiting fees and a $0.1 million decrease in marketing, promotional and tradeshow expenses.
General and Administrative Expenses:
For the six months ended June 30,
2025
2024
$ Change
% Change
General and administrative
$
2,181
$
3,721
$
(1,540)
(41)
%
Percent of total revenue
165
%
3,383
%
General and administrative costs for the six months ended June 30, 2025 and 2024 were $2.2 million and $3.7 million, respectively. The decrease of $1.5 million is primarily due to a $0.7 million decrease in legal fees, a $0.3 million decrease in annual meeting-related expenses, a $0.3 million decrease in consulting, investor relations, recruiting and third-party services, a $0.1 million decrease in insurance premiums and a $0.1 million decrease in stock-based compensation, partially offset by a $0.1 million increase in payroll costs accrued as a result of key milestones achieved in the second quarter of 2025 under the 2025 Bonus Plan.
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Severance Expense:
For the six months ended June 30,
2025
2024
$ Change
% Change
Severance expense
$
395
$
1,294
$
(899)
(69)
%
Percent of total revenue
30
%
1,176
%
Severance expense for the six months ended June 30, 2025 and 2024 was $0.4 million and $1.3 million, respectively. Severance expense for the six months ended June 30, 2025 was related to separation with certain non-executive employees. The severance expense for the six months ended June 30, 2024 was primarily due to the departure of our former CEO during 2024 for which $1.2 million in severance expense was recorded.
Expenses from Abandoned Financing Transaction:
For the six months ended June 30,
2025
2024
$ Change
% Change
Expenses from abandoned financing transaction
$
661
—
$
661
100
%
Percent of total revenue
50
%
0
%
Expenses related to our abandoned financing transaction were $0.7 million for the six months ended June 30, 2025, primarily attributable to our decision to terminate the previously announced convertible preferred equity offering under Regulation A. There was no such expense during the six months ended June 30, 2024.
Other income (expense), net:
For the six months ended June 30,
2025
2024
$ Change
% Change
Change in fair value of warrant liability
$
267
$
254
$
13
5
%
Interest income (expense), net
(29)
205
(234)
114
%
Loss on retirement of fixed asset
(1)
—
(1)
(100)
%
Total other income, net
$
237
$
459
$
(222)
(48)
%
Other income resulting from the change in fair value of the warrant liability was $0.3 million for the six months ended June 30, 2025, consistent with $0.3 million for the six months ended June 30, 2024.
Net interest expense for the six months ended June 30, 2025 was $29,000, as we incurred $284,000 in interest expense from a short-term loan, partially offset by $255,000 in interest earned from our money market account. Interest income for the six months ended June 30, 2024 was $209,000 from interest earned on our money market account, offset by $4,000 in interest expense.
Net Loss. As a result of the above, net loss for the six months ended June 30, 2025 was $6.2 million as compared to $10.9 million for the six months ended June 30, 2024.
ATM Offering Program
On June 21, 2024, we entered into the At the Market Offering Agreement with H.C. Wainwright & Co., LLC, as sales agent, pursuant to which we could issue and sell of up to $3.45 million in shares of our common stock (as amended to date, the “ATM Program”). During the year ended December 31, 2024, we sold 6,851,753 shares of our common stock under the ATM Program for net proceeds of approximately $3.1 million (net of commissions and other related offering expenses of approximately $0.3 million).
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During the three months ended June 30, 2025, we sold 6,793,371 shares of our common stock under the ATM Program for net proceeds of approximately $2.0 million (net of commissions and other related offering expenses of approximately $0.1 million). During the six months ended June 30, 2025, we sold 25,496,676 shares of our common stock under the ATM Program for net proceeds of approximately $15.8 million (net of commissions and other related offering expenses of approximately $1.0 million). As of June 30, 2025, approximately $77.2 million in shares of common stock remained available for issuance under the ATM Program, subject to availability of authorized shares.
From July 1, 2025 through July 28, 2025, we settled sales of 4,400,469 shares of common stock for net proceeds of approximately $1.7 million under the ATM Program.
Agile Subordinated Loan Agreement
Effective October 1, 2024, we entered into a subordinated business loan agreement (the “Original Loan Agreement”) with Agile Capital Funding, LLC and Agile Lending, LLC (collectively, the “Lender”), which provided for an initial term loan of $525,000, with the ability to receive additional term loans of up to $1.6 million, subject to certain conditions (such loans, the “Original Term Loan”). Principal and interest on the Original Term Loan in the aggregate amount of $756,000 was to be repaid in weekly payments of $27,000 commencing on October 14, 2024 and fully repaid on or before the maturity date of April 21, 2025.
Effective November 5, 2024, we entered into an amended subordinated business loan agreement with the Lender (the “Amended Loan Agreement”) to refinance the Original Term Loan. The Amended Loan Agreement provided for a new term loan of $997,000, with the ability to receive additional term loans of up to $1.6 million, subject to certain conditions (such new loans, the “New Term Loan”). Principal and interest on the New Term Loan in the aggregate amount of $1,415,740 was repaid in weekly payments of approximately $39,000 and was fully repaid before the maturity date of July 17, 2025 on July 7, 2025. The proceeds of the New Term Loan were used to repay in full the Original Term Loan, which had a settlement value of $648,000 on November 5, 2024. The New Term Loan was expressly subordinated to our obligations on certain senior indebtedness of the Company as provided in the Amended Loan Agreement. As of June 30, 2025, we owed approximately $0.1 million on the “Amended Loan Agreement.”
On July 7, 2025, we paid off all outstanding amounts owed to the Lender. There are no further obligations under the Amended Loan Agreement.
Liquidity and Capital Resources
During the six months ended June 30, 2025 and 2024, we recorded revenue of $1.3 million and $0.1 million, respectively. We incurred net losses of $6.2 million and $10.9 million for the six months ended June 30, 2025 and 2024, respectively. Net cash used in operating activities was $7.5 million and $10.8 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had cash and cash equivalents of $8.7 million. We are currently meeting our liquidity requirements through the proceeds of the ATM Program (as defined above) that raised net proceeds of $15.8 million during the six months ended June 30, 2025.
As we gain traction in the market with our new technology and continue to invest capital in transitioning and scaling the business from research and development of new technologies to commercial production, there can be no assurance that our available resources and revenue generated from our business operations will be sufficient to sustain our operations.
Accordingly, we expect to pursue additional financing, which could include offerings of equity or debt securities, bank financings, commercial agreements with customers or strategic partners, and other alternatives, depending upon market conditions. There is no assurance that such financing will be available on terms that we would find acceptable, or at all. If we are unsuccessful in implementing this plan, we will be required to make further cost and expense reductions or modifications to our on-going and strategic plans.
Based on current operating levels and further cost reductions implemented during the first half of 2025, the Company believes it has sufficient cash on hand and access to capital to fund operations for the next 12 months.
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Cash Flows
Operating Activities - During the six months ended June 30, 2025, cash flows used in operating activities were $7.5 million, consisting of a net loss of $6.2 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.1 million (principally stock-based compensation of $0.2 million and depreciation and amortization and amortization of short-term loan fees totaling approximately $0.1 million, partially offset by a change in fair value of warrant liability of $0.3 million), a $1.1 million decrease in accounts payable, a $0.6 million increase in accounts receivable, a $0.3 million decrease in operating lease liabilities and a $0.2 million increase in inventory, partially offset by a $0.4 million decrease in operating lease right-of-use assets and a $0.3 million decrease in prepaid expenses and other current assets.
During the six months ended June 30, 2024, cash flows used in operating activities were $10.8 million, consisting of a net loss of $10.9 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.4 million (principally stock-based compensation of $0.5 million, depreciation and amortization of $0.1 million, partially offset by a change in fair value of warrant liability of $0.3 million), a $0.3 million decrease in accrued expenses, a $0.1 million increase in inventory and a $0.1 million decrease in accounts payable, partially offset by a $0.1 million decrease in prepaid expenses and other current assets.
Investing Activities - During the six months ended June 30, 2025 and 2024, cash flows used in investing activities were $37,000 and $58,000, respectively. A small amount of hardware and equipment was purchased during each period.
Financing Activities - During the six months ended June 30, 2025, cash flows provided by financing activities were $14.9 million, which primarily consisted of $15.8 million in net proceeds from the sale of shares of our common stock under the ATM Program, partially offset by $0.8 million in repayments of a short-term loan and $0.1 million in repayments of financed insurance. During the six months ended June 30, 2024, cash flows provided by financing activities were $1.8 million, which primarily consisted of $1.8 million in net proceeds from a registered direct offering that included the sale of common stock, pre-funded warrants and warrants.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
As a smaller reporting company, we are not required to provide this information.
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