What changed in this filing

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Item 1. Financial Statements

2020-11-09 compared with 2020-08-10 · 118 added, 81 removed, 361 unchanged (36% of the section changed)

2 unchanged sentences

BALANCE SHEETS

June 30, 2020

September 30, 2020

December 31, 2019

1 unchanged sentence

Cash and cash equivalents

At-the-market ("ATM") funds receivable

Accounts receivable

15 unchanged sentences

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

at June 30, 2020 and December 31, 2019;

at September 30, 2020 and December 31, 2019;

no shares issued or

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

at June 30, 2020 and December 31, 2019;

41,685,310 and

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

and December 31, 2019, respectively.

Common Stock, $ 0.00001 par value, 200,000,000 and 50,000,000

shares authorized at September 30, 2020 and December 31, 2019,

respectively;

43,062,944 and 33,203,806 shares issued and

outstanding at September 30, 2020 and December 31, 2019, respectively.

Additional paid-in capital

7 unchanged sentences

CONDENSED STATEMENTS OF OPERATIONS

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Operating expenses:

38 unchanged sentences

( 279,943,062

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 $ 240,060 in issuance costs

Balance, September 30, 2020 (unaudited)

( 287,499,899

Energous Corporation

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

Stockholders'

22 unchanged sentences

( 245,565,035

Stock-based compensation - restricted

stock units ("RSUs")

Stock-based compensation - employee

stock purchase plan ("ESPP")

Issuance of shares for RSUs

Shares returned

Proceeds from contributions to the ESPP

Balance, September 30, 2019 (unaudited)

( 253,749,262

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

1 unchanged sentence

CONDENSED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flows from operating activities:

22 unchanged sentences

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents - beginning

1 unchanged sentence

Supplemental disclosure of non-cash financing activities:

At-the-market ("ATM") funds receivable

Common stock issued for RSUs

5 unchanged sentences

Note 2 – Liquidity and Management Plans

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.

During the three and nine months ended September 30, 2020, the Company recorded revenue of $ 61,500 and $ 237,350 , respectively, and during the three and nine months ended September 30, 2019, the Company recorded revenue of $ 40,500 and $ 154,500 , respectively.

During the three and nine months ended September 30, 2020, the Company recorded net losses of $ 7,556,837 and $ 24,359,239 , respectively, and during the three and nine months ended September 30, 2019, the Company recorded net losses of $ 8,184,227 and $ 29,007,691 , respectively.

Net cash used in operating activities was $ 19,435,940 and $ 20,968,817 for the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, the Company had cash on hand of $ 17,303,234 .

The Company expects that cash on hand as of September 30, 2020, together with anticipated revenues and funds raised from the at-the-market (“ATM”) finance offering (see Note 9 – Subsequent Events) will be sufficient to fund the Company’s operations into November 2021.

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

49 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 $ 4,330,433 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.

The Company incurred research and development costs of $ 4,003,642 and $ 5,190,056 for the three months ended September 30, 2020 and 2019, respectively, and the Company incurred research and development costs of $ 12,909,378 and $ 17,505,751 for the nine months ended September 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 June 30, 2020, no liability for unrecognized tax benefits was required to be reported.

As of September 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 or six months ended June 30, 2020 or 2019.

No interest or penalties were recorded during the three or nine months ended September 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 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.

The computation of diluted loss per share excludes potentially dilutive securities of 5,990,698 and 6,876,595 for the three months ended September 30, 2020 and 2019, respectively, and 5,990,698 and 6,876,595 for the nine months ended September 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 June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 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 June 30, 2020, through the date which the financial statements are issued.

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

Note 4 – Commitments and Contingencies

25 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 $ 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:

The Company anticipates having future total lease payments of $ 1,670,460 during the period from the fourth quarter of 2020 to the third quarter of 2022.

As of September 30, 2020, the company has total operating lease right-of-use assets of $ 1,487,116 , current portion operating lease liabilities of $ 845,108 and long-term portion of operating lease liabilities of $ 765,209 .

The weighted average remaining lease term is 1.9 years as of September 30, 2020.

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

Total future lease payments

1 unchanged sentence

Total operating lease liabilities

Hosted Design Solution Agreement

Hosted Design Software Agreement

On June 25, 2015, the Company entered into a three-year agreement to license electronic design automation software in a hosted environment.

10 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 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.

During the three months ended September 30, 2020, the Company accrued $ 189,728 in expense under the Bonus Plan, which will be paid during the fourth quarter of 2020.

During the three months ended September 30, 2019, the Company accrued $ 167,740 in expense, which was paid during the fourth quarter of 2019.

During the nine months ended September 30, 2020 and 2019, the Company incurred $ 867,248 and $ 691,928 in expense under the Bonus Plan.

Severance and Change in Control Agreement

24 unchanged sentences

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

On August 9, 2018, the Company filed a shelf registration statement on Form S-3, which became effective on August 17, 2018.

On August 9, 2018, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on August 17, 2018.

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 $ 75,000,000 .

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) 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.

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 (net of $ 236,528 in issuance costs) during the second quarter of 2020.

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, and contains two prospectuses:

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

and a sales agreement prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 40,000,000 of its common stock that may be issued and sold under a sales agreement.

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

Pursuant to this shelf registration statement, the Company sold shares which raised net proceeds of $ 3,165,868 (before legal and issuance costs of $ 158,810 ) on September 30, 2020 which were recorded as a receivable on the accompanying balance sheet on September 30, 2020.

Common Stock Outstanding

2 unchanged sentences

There are no voting rights for shares that are deemed delivered under US GAAP until the actual delivery of shares takes place.

As of September 30, 2020, a total of 200,000,000 common shares are authorized .

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 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.

As of September 30, 2020, 1,893,044 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 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.

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.

As of September 30, 2020, 1,047,794 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

As of September 30, 2020, 1,510,274 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 June 30, 2020, 213,776 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

As of September 30, 2020, 155,776 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

Employee Stock Purchase Plan

6 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 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.

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

Employees contributed $ 121,692 through payroll withholdings as of September 30, 2020 to the ESPP for the current offering period that will end on December 31, 2020 and shares were deemed delivered on that date.

Note 6 – Stock-Based Compensation, continued

Stock Option Activity

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

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

Outstanding at January 1, 2020

Outstanding at June 30, 2020

Outstanding at September 30, 2020

Exercisable at January 1, 2020

Exercisable at June 30, 2020

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

Note 6 – Stock-Based Compensation, continued

Exercisable at September 30, 2020

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

Restricted Stock Units (“RSUs”)

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.

During the nine months ended September 30, 2020, the Compensation Committee granted various employees RSUs covering 648,781 shares of common stock under the 2013 Equity Incentive Plan.

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

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.

During the nine months ended September 30, 2020, the Compensation Committee and the Board of Directors granted various non-employees RSUs covering 25,000 shares of common stock under the 2014 Non-employee Equity Compensation Plan.

The awards vest over terms ranging from one to three years .

During the nine months ended September 30, 2020, the Compensation Committee granted employees RSUs covering 171,000 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 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 .

As of September 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 $ 5,921,305 .

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 1.3 y ea r s .

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

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

Outstanding at January 1, 2020

RSUs forfeited

Outstanding at June 30, 2020

Outstanding at September 30, 2020

Note 6 – Stock-Based Compensation, continued

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 $ 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:

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

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

Average Grant

2 unchanged sentences

PSUs forfeited

Outstanding at June 30, 2020

Note 6 – Stock-Based Compensation, continued

Outstanding at September 30, 2020

Employee Stock Purchase Plan (“ESPP”)

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

The current offering period under the ESPP started on July 1, 2020 and will conclude on December 31, 2020.

The recently completed 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 six months ended June 30, 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 $ 1.11 and $ 2.05 for the nine months ended September 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 $ 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 Company recognized compensation expense for the plan of $ 96,056 and $ 62,055 for the three months ended September 30, 2020 and 2019, respectively, and $ 180,191 and $ 272,629 for the nine months ended September 30, 2020 and 2019, respectively.

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

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

Six Months Ended

June 30, 2020

Six Months Ended

June 30, 2019

Nine Months Ended

September 30, 2020

Nine Months Ended

September 30, 2019

$1.77 - $2.96

$4.27 - $5.79

Dividend yield

1 unchanged sentence

Risk-free interest rate

0.17% - 1.57%

2.10% - 2.51%

Expected life

Note 6 – Stock-Based Compensation, continued

Stock-Based Compensation Expense

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

Three Months Ended September 30,

Nine Months Ended September 30,

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 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 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.

As of September 30, 2020, none of the warrants remain outstanding.

As of September 30, 2020, Dialog owns approximately 4.0 % of the Company’s outstanding common shares.

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

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

The Company recorded $ 0 and $ 0 in cost of services revenue associated with the contract services performed for Dialog during the three months ended September 30, 2020 and 2019, respectively, and $ 126,539 and $ 0 in cost of services revenue during the nine months ended September 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 approximately 81 % of the Company’s revenue for the three months ended September 30, 2020, and three customers accounted for 100 % of the Company’s revenue for the three months ended September 30, 2019.

Three customers accounted for approximately 78 % of the Company’s revenue for the nine months ended September 30, 2020 and three customers accounted for approximately 55 % of the Company’s revenue for the nine months ended September 30, 2019.

Four customers accounted for approximately 95 % of the accounts receivable balance as of September 30, 2020.

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

Note 9 – Subsequent Event

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.

Note 9 – Subsequent Events

On October 2, 2020, the Company received $ 3,165,868 in ATM proceeds, which were recorded as a receivable as of September 30, 2020 (see Note 5 – Stockholders’ Equity).

Subsequent to October 2, 2020, and through November 4, 2020, the Company received an additional $ 4,206,475 in net ATM proceeds from the issuance of 1,605,810 common 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