What changed in this filing

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Item 1. Financial Statements

2020-08-10 compared with 2020-05-11 · 111 added, 78 removed, 331 unchanged (36% of the section changed)

2 unchanged sentences

BALANCE SHEETS

March 31, 2020

June 30, 2020

December 31, 2019

10 unchanged sentences

Accrued expenses

Operting lease liabilities, current portion

Operating lease liabilities, current portion

Deferred revenue

5 unchanged sentences

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

at March 31, 2020 and December 31, 2019;

at June 30, 2020 and December 31, 2019;

no shares issued or

Common Stock, $ 0.00001 par value, 50,000,000 shares authorized

at March 31, 2020 and December 31, 2019;

at June 30, 2020 and December 31, 2019;

41,685,310 and

33,203,806 shares issued and outstanding at March 31, 2020

33,203,806 shares issued and outstanding at June 30, 2020

and December 31, 2019, respectively.

1 unchanged sentence

Accumulated deficit

( 279,943,062

( 263,140,660

Total stockholders’ equity

3 unchanged sentences

CONDENSED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Operating expenses:

15 unchanged sentences

Balance at January 1, 2020

( 263,140,660

Stock-based compensation - restricted

9 unchanged sentences

Balance March 31, 2020 (unaudited)

( 271,738,396

Stock-based compensation - restricted

stock units ("RSUs")

Stock-based compensation - employee

stock purchase plan ("ESPP")

Issuance of shares for RSUs

Proceeds from contributions to the ESPP

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

offering, net of $ 236,528 in issuance costs

Balance, June 30, 2020 (unaudited)

( 279,943,062

Stockholders'

Balance at January 1, 2019

( 224,741,571

Stock-based compensation - restricted

10 unchanged sentences

Balance, March 31, 2019 (unaudited)

( 235,761,039

Stock-based compensation - restricted

stock units ("RSUs")

Stock-based compensation - employee

stock purchase plan ("ESPP")

Issuance of shares for RSUs

Proceeds from contributions to the ESPP

Balance, June 30, 2019 (unaudited)

( 245,565,035

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

Energous Corpora tion

Energous Corporation

CONDENSED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities:

22 unchanged sentences

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents - beginning

8 unchanged sentences

Note 2 – Liquidity and Management Plans

During the three months ended March 31, 2020 and 2019, the Company recorded revenue of $61,475 and $66,500, respectively.

During the three months ended March 31, 2020 and 2019, the Company recorded net losses of $8,597,736 and $11,019,468, respectively.

Net cash used in operating activities was $7,340,111 and $7,369,177 for the three months ended March 31, 2020 and 2019, respectively.

The Company is currently meeting its liquidity requirements through the proceeds of securities offerings that raised net proceeds of $23,319,156 in March 2019, $4,557,693 during the fourth quarter 2019 and $5,506,880 during the first quarter 2020, along with payments received under product development projects.

As of March 31, 2020, the Company had cash on hand of $19,963,917.

The Company expects that cash on hand as of March 31, 2020, together with anticipated revenues and potential financing will be sufficient to fund the Company’s operations into May 2021.

During the three and six months ended June 30, 2020, the Company recorded revenue of $ 114,375 and $ 175,850 , respectively, and during the three and six months ended June 30, 2019, the Company recorded revenue of $ 47,500 and $ 114,000 , respectively.

During the three and six months ended June 30, 2020, the Company recorded net losses of $ 8,204,666 and $ 16,802,402 , respectively, and during the three and six months ended June 30, 2019, the Company recorded net losses of $ 9,803,996 and $ 20,823,464 , respectively.

Net cash used in operating activities was $ 13,215,844 and $ 14,423,911 for the six months ended June 30, 2020 and 2019, respectively.

The Company is currently meeting its liquidity requirements through the proceeds of securities offerings that raised net proceeds of $ 23,319,156 in March 2019, $ 4,557,693 during the fourth quarter 2019, $ 5,506,880 during the first quarter 2020 and $ 9,216,611 during the second quarter 2020, along with payments received under product development projects.

As of June 30, 2020, the Company had cash on hand of $ 23,408,940 .

The Company expects that cash on hand as of June 30, 2020, together with anticipated revenues and potential financing will be sufficient to fund the Company’s operations into August 2021.

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

3 unchanged sentences

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, competition and global market fluctuations.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the world.

The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees.

Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company's operations and liquidity is uncertain as of the date of this report.

While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance, the impact could not be determined.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic.

The pandemic continues to affect the United States and the world.

The Company is monitoring the ongoing effects of COVID-19 (including continued outbreaks) and the related business and travel restrictions and changes to behavior intended to reduce its spread, and COVID-19’s impact on the Company’s operations, financial position, cash flows, inventory, supply chains, global regulatory approvals, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees.

Due to the continuing developments and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company's operations and liquidity are still uncertain as of the date of this report.

Note 3 – Summary of Significant Accounting Policies

5 unchanged sentences

The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2019 audited financial statements .

Note 3 – Summar y of Significant Accounting Policies, continued

Note 3 – Summary of Significant Accounting Policies, continued

Use of Estimates

17 unchanged sentences

Recognize revenue when the performance obligations are met or delivered.

The Company’s revenue currently consists of product development projects revenue and royalty revenue from Dialog.

The Company’s revenue primarily consists of product development projects revenue and royalty revenue from Dialog.

The Company also provides contract services for Dialog.

6 unchanged sentences

The Company records royalty revenue from its manufacturing partner, Dialog, and such royalty revenue is recognized at a point in time based on shipments from Dialog to its customers.

The Company recognizes contract services revenue from Dialog over a period of time as the services are performed.

The Company recognizes contract services revenue from Dialog over the period of time that the services are performed.

The costs associated with this revenue are recognized as the services are performed and are included in cost of services revenue.

3 unchanged sentences

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 $4,575,303 and $6,800,678 for the three months ended March 31, 2020 and 2019, respectively.

The Company incurred research and development costs of $ 4,330,433 and $ 5,515,017 for the three months ended June 30, 2020 and 2019, respectively, and the Company incurred research and development costs of $ 8,905,736 and $ 12,315,695 for the six months ended June 30, 2020 and 2019, respectively.

Note 3 – Summary of Significant Accounting Policies, continued

7 unchanged sentences

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

As of March 31, 2020, no liability for unrecognized tax benefits was required to be reported.

As of June 30, 2020, no liability for unrecognized tax benefits was required to be reported.

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

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

No interest or penalties were recorded during the three months ended March 31, 2020 or 2019.

No interest or penalties were recorded during the three or six months ended June 30, 2020 or 2019.

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

3 unchanged sentences

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

The computation of diluted loss per share excludes potentially dilutive securities of 7,206,004 and 7,601,654 for the three months ended March 31, 2020 and 2019, respectively because their inclusion would be anti-dilutive.

The computation of diluted loss per share excludes potentially dilutive securities of 6,945,580 and 7,228,185 for the three months ended June 30, 2020 and 2019, respectively, and 6,945,580 and 7,228,185 for the six months ended June 30, 2020 and 2019, respectively, because their inclusion would be anti-dilutive.

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 Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Warrant issued to private investors

22 unchanged sentences

Management’s Evaluation of Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of March 31, 2020, through the date which the financial statements are issued.

The Company evaluates events that have occurred after the balance sheet date of June 30, 2020, through the date which the financial statements are issued.

Note 4 – Commitments and Contingencies

11 unchanged sentences

Upon expiration of the original lease on September 30, 2019, the new monthly lease payment starting October 1, 2019 was $ 52,970 and is subject to annual escalations up to a maximum monthly lease payment of $ 64,941 .

Note 4 – Comm itments and Contingencies, continued

Note 4 – Commitments and Contingencies, continued

Operating Leases, continued

11 unchanged sentences

The Company’s adoption of the new standard resulted in the recognition of right-of-use assets of $ 414,426 and operating lease liabilities of $ 485,747 , with no material cumulative effect adjustment to equity as of the date of adoption.

The Company anticipates having future total lease payments of $2,049,918 during the period from the second quarter of 2020 to the third quarter of 2022.

As of March 31, 2020, the company has total operating lease right-of-use assets of $1,869,131, current portion operating lease liabilities of $762,822 and long-term portion of operating lease liabilities of $1,191,981.

The weighted average remaining lease term is 2.4 years as of March 31, 2020.

A reconciliation of undiscounted cash flows to lease liabilities recognized as of March 31, 2020 is as follows:

The Company anticipates having future total lease payments of $ 1,860,189 during the period from the third quarter of 2020 to the third quarter of 2022.

As of June 30, 2020, the company has total operating lease right-of-use assets of $ 1,678,983 , current portion operating lease liabilities of $ 803,760 and long-term portion of operating lease liabilities of $ 979,660 .

The weighted average remaining lease term is 2.2 years as of June 30, 2020.

A reconciliation of undiscounted cash flows to lease liabilities recognized as of June 30, 2020 is as follows:

Total future lease payments

14 unchanged sentences

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

During the three months ended March 31, 2020, the Company accrued $284,591 in expense under the Bonus Plan, which will be paid during the second quarter of 2020.

During the three months ended March 31, 2019, the Company accrued $314,513 in expense, which was paid during the second quarter of 2019.

During the three months ended June 30, 2020, the Company accrued $ 392,929 in expense under the Bonus Plan, which will be paid during the third quarter of 2020.

During the three months ended June 30, 2019, the Company accrued $ 209,675 in expense, which was paid during the third quarter of 2019.

During the six months ended June 30, 2020 and 2019, the Company incurred $ 677,520 and $ 524,188 in expense under the Bonus Plan.

Severance and Change in Control Agreement

27 unchanged sentences

Pursuant to this registration statement, in March 2019 the Company raised $ 23,319,156 (net of $ 1,680,844 in issuance costs) from an offering of shares of its common stock and warrants to purchase 1,666,666 shares of common stock at an exercise price of $ 10.00 per share.

The Company also raised $4,557,693 (net of $339,081 in issuance costs) and $5,506,880 (net of $141,322 in issuance costs), pursuant to this shelf registration statement, in an “at-the-market” equity offering during the fourth quarter of 2019 and the first quarter of 2020, respectively.

The Company also raised $ 4,557,693 (net of $ 339,081 in issuance costs) during the fourth quarter of 2019, $ 5,506,880 (net of $ 141,322 in issuance costs) during the first quarter of 2020 and $ 9,216,611 during the second quarter of 2020, pursuant to this shelf registration statement, in an “at-the-market” equity offering.

Common Stock Outstanding

Our outstanding common shares typically include shares that are deemed delivered under US 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 our Employee Stock Purchase Program (“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 US GAAP until the actual delivery of shares takes place.

In August 2019, an aggregate of 38,666 shares of common stock were returned to the Company and retired in connection with the rescission of restricted stock unit agreements.

3 unchanged sentences

Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 1,200,000 shares, bringing to 7,285,967 the total number of shares approved for issuance under that plan.

As of March 31, 2020, 649,695 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

As of June 30, 2020, 1,882,783 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the 2014 Non-employee Equity Compensation Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 800,000 shares, bringing to 1,650,000 the total number of shares approved for issuance under that plan.

As of March 31, 2020, 227,825 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

As of June 30, 2020, 1,072,794 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

2015 Performance Share Unit Plan

Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the 2015 Performance Share Unit Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 700,000 shares, bringing to 3,410,104 the total number of shares approved for issuance under that plan.

As of March 31, 2020, 764,274 shares of common stock remain eligible to be issued through equity-based instruments under the 2015 Performance Share Unit Plan.

Note 6 – Stock-Based Compensation, continued

Equity Incentive Plans, continued

As of June 30, 2020, 1,498,274 shares of common stock remain eligible to be issued through equity-based instruments under the 2015 Performance Share Unit Plan.

2017 Equity Inducement Plan

5 unchanged sentences

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

As of March 31, 2020, 298,404 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

As of June 30, 2020, 213,776 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

Employee Stock Purchase Plan

1 unchanged sentence

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

Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the Employee Stock Purchase Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 250,000 shares, bring to 850,000 the total number of shares approved for issuance under that plan.

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.

2 unchanged sentences

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

As of March 31, 2020, 165,750 shares of common stock remain eligible to be issued under the ESPP.

As of March 31, 2020, employees have contributed $113,509 through payroll withholdings to the ESPP for the current offering period.

Shares will be deemed delivered on June 30, 2020 for the current offering period.

As of June 30, 2020, 271,380 shares of common stock remain eligible to be issued under the ESPP.

Employees contributed $ 217,204 through payroll withholdings to the ESPP for the offering period ended June 30, 2020 and shares were deemed delivered on June 30, 2020.

Stock Option Activity

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2020:

The following is a summary of the Company’s stock option activity during the six months ended June 30, 2020:

Outstanding at January 1, 2020

Outstanding at March 31, 2020

Outstanding at June 30, 2020

Exercisable at January 1, 2020

Exercisable at March 31, 2020

As of March 31, 2020, the unamortized value of options was $0.

Exercisable at June 30, 2020

As of June 30, 2020, the unamortized value of options was $ 0 .

Note 6 – Stock-Based Compensation, continued

Restricted Stock Units (“RSUs”)

During the three months ended March 31, 2020, the Compensation Committee granted various employees RSUs covering 645,031 shares of common stock under the 2013 Equity Incentive Plan.

During the six months ended June 30, 2020, the Compensation Committee granted various employees RSUs covering 645,031 shares of common stock under the 2013 Equity Incentive Plan.

The awards vest over terms ranging from two to four years .

During the three months ended March 31, 2020, the Compensation Committee granted employees RSUs covering 20,000 shares of common stock under the 2017 Equity Inducement Plan.

During the six months ended June 30, 2020, the Compensation Committee granted employees RSUs covering 113,000 shares of common stock under the 2017 Equity Inducement Plan.

The awards vest over four years beginning on the anniversary of the grant date.

As of March 31, 2020, t h e un am or ti ze d v a l u e o f t h e R SUs w a s $ 10,274,477.

As of June 30, 2020, t h e un am or ti ze d v a l u e o f t h e R SUs w a s $ 7,576,429 .

T h e un am or ti ze d am oun t w il l b e e xp e n s e d ov e r a weighted average p e r i o d o f 1.4 y ea r s .

A summary of the activity related to RSUs for the three months ended March 31, 2020 is presented below:

A summary of the activity related to RSUs for the six months ended June 30, 2020 is presented below:

Outstanding at January 1, 2020

RSUs forfeited

Outstanding at March 31, 2020

Outstanding at June 30, 2020

Performance Share Units (“PSUs”)

1 unchanged sentence

The goals are commonly related to the Company’s revenue, market capitalization or market share price of the common stock.

Amortization for all PSU awards was $(88,348) and $0 for the three months ended March 31, 2020 and 2019, respectively.

A summary of the activity related to PSUs for the three months ended March 31, 2020 is presented below:

Amortization for all PSU awards was $ 0 and $ 0 for the three months ended June 30, 2020 and 2019, respectively and amortization for all PSU awards was $( 88,348 ) and $ 0 for the six months ended June 30, 2020 and 2019, respectively.

A summary of the activity related to PSUs for the six months ended June 30, 2020 is presented below:

Average Grant

2 unchanged sentences

PSUs forfeited

Outstanding at March 31, 2020

Outstanding at June 30, 2020

Note 6 – Stock-Based Compensation, continued

Employee Stock Purchase Plan (“ESPP”)

The current offering period under the ESPP started on January 1, 2020 and will conclude on June 30, 2020.

The most recent offering period under the ESPP started on January 1, 2020 and concluded on June 30, 2020.

During the year ended December 31, 2019, there were two offering periods for the ESPP.

1 unchanged sentence

The second offering period started on July 1, 2019 and concluded on December 31, 2019.

The weighted-average grant-date fair value of the purchase option for each designated share purchased under this plan was approximately $0.57 and $2.43 for the three months ended March 31, 2020 and 2019, respectively, which represents the fair value of the option, consisting of three main components:

The weighted-average grant-date fair value of the purchase option for each designated share purchased under this plan was approximately $ 0.57 and $ 2.43 for the six months ended June 30, 2020 and 2019, 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 recognized compensation expense for the plan of $42,827 and $87,825 for the three months ended March 31, 2020 and 2019, respectively.

Note 6 – Stock-Based Compensation, continued

Employee Stock Purchase Plan (“ESPP”), continued

The Company estimated the fair value of ESPP purchase options granted during the three months ended March 31, 2020 and 2019 using the Black-Scholes option pricing model.

The Company recognized compensation expense for the plan of $ 41,308 and $ 122,749 for the three months ended June 30, 2020 and 2019, respectively, and $ 84,135 and $ 210,574 for the six months ended June 30, 2020 and 2019, respectively.

The Company estimated the fair value of ESPP purchase options granted during the six months ended June 30, 2020 and 2019 using the Black-Scholes option pricing model.

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

Three Months Ended

March 31, 2020

Three Months Ended

March 31, 2019

Six Months Ended

June 30, 2020

Six Months Ended

June 30, 2019

Dividend yield

3 unchanged sentences

Stock-Based Compensation Expense

The following tables summarize total stock-based compensation costs recognized for the three months ended March 31, 2020 and 2019:

Three Months Ended March 31,

The following tables summarize total stock-based compensation costs recognized for the three and six months ended June 30, 2020 and 2019:

Three Months Ended June 30,

Six Months Ended June 30,

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

4 unchanged sentences

On November 7, 2016 and June 28, 2017, the Company and Dialog entered into securities purchase agreements under which Dialog acquired a total of 1,739,691 shares and received warrants to purchase up to 1,417,565 shares.

As of March 31, 2020, a total of 654,013 of the warrants remain outstanding.

As of March 31, 2020, Dialog owns approximately 4.6% of the Company’s outstanding common shares and could potentially own approximately 6.2% of the Company’s outstanding common shares if it exercised all of its warrants for common shares.

The Company recorded $0 and $7,100 in royalty revenue pursuant to the Strategic Alliance Agreement for the three months ended March 31, 2020 and 2019, respectively.

Additionally, the Company recorded $40,625 and $0 in contract services revenue performed for Dialog during the three months ended March 31, 2020 and 2019, respectively.

The Company recorded $39,544 and $0 in cost of services revenue associated with the contract services performed for Dialog during the three months ended March 31, 2020 and 2019, respectively.

Note 8 – Customer Concentratio ns

Two customers accounted for approximately 82% of the Company’s revenue for the three months ended March 31, 2020 and four customers accounted for approximately 98% of the Company’s revenue for the three months ended March 31, 2019.

Two customers accounted for approximately 90% of the accounts receivable balance, one of which is Dialog, a related party, as of March 31, 2020.

The accounts receivable balance for Dialog was $43,322 as of March 31, 2020.

As of June 30, 2020, a total of 654,013 of the warrants remain outstanding.

As of June 30, 2020, Dialog owns approximately 4.2 % of the Company’s outstanding common shares and could potentially own approximately 5.7 % of the Company’s outstanding common shares if it exercised all of its warrants for common shares.

The Company recorded $ 0 and $ 0 for the three months ended June 30, 2020 and 2019, respectively, and $ 0 and $ 7,100 for the six months ended June 30, 2020 and 2019, respectively, in royalty revenue pursuant to the Strategic Alliance Agreement.

Additionally, the Company recorded $ 89,375 and $ 0 in contract services revenue performed for Dialog during the three months ended June 30, 2020 and 2019, respectively, and $ 130,000 and $ 0 in contract services revenue performed for Dialog during the six months ended June 30, 2020 and 2019, respectively.

The Company recorded $ 86,995 and $ 0 in cost of services revenue associated with the contract services performed for Dialog during the three months ended June 30, 2020 and 2019, respectively, and $ 126,539 and $ 0 in cost of services revenue during the six months ended June 30, 2020 and 2019, respectively.

Note 8 – Customer Concentrations

Two customers accounted for approximately 96 % of the Company’s revenue for the three months ended June 30, 2020, and two customers accounted for approximately 95 % of the Company’s revenue for the three months ended June 30, 2019.

Two customers accounted for approximately 85 % of the Company’s revenue for the six months ended June 30, 2020 and three customers accounted for approximately 75 % of the Company’s revenue for the six months ended June 30, 2019.

One customer accounted for approximately 85 % of the accounts receivable balance, which is Dialog, a related party, as of June 30, 2020.

The accounts receivable balance for Dialog was $ 89,375 as of June 30, 2020.

Four customers accounted for nearly 100 % of the accounts receivable balance as of December 31, 2019.

Note 9 – Subsequent Event

During April 2020, the Company raised net proceeds of $9,216,621 through an “at-the-market” (ATM) offering, pursuant to the shelf registration statement on Form S-3 filed on August 9, 2018 disclosed in Note 5 – Stockholders’ Equity, Financing .

On July 24, 2020, the Company held a special meeting of stockholders via a live webcast during which the stockholders approved an increase of total authorized shares from 60,000,000 to 210,000,000 and the number of authorized shares of common stock from 50,000,000 to 200,000,000 shares.

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

What changed 10-Q

Item 1. Financial Statements