10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-36379

ENERGOUS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	46-1318953
(State of incorporation)	(I.R.S. Employer Identification No.)

3590 North First Street, Suite 210, San Jose, CA 95134

(Address of principal executive office) (Zip code)

(408) 963-0200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value	WATT	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐          No ☑

As of May 10, 2024, there were 6,538,240 shares of our Common Stock, par value $0.00001 per share, outstanding.

ENERGOUS CORPORATION

FORM 10-Q

FOR THE THREE MONTHS ENDED MARCH 31, 2024

INDEX

PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosure About Market Risk	30
Item 4. Controls and Procedures	30
PART II – OTHER INFORMATION	31
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3. Defaults Upon Senior Securities	31
Item 4. Mine Safety Disclosures	31
Item 5. Other Information	31
Item 6. Exhibits	32

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Energous Corporation

CONDENSED BALANCE SHEETS

(in thousands, except share and per share amounts)

	As of
	March 31, 2024		December 31, 2023
	(unaudited)			(1)
ASSETS
Current assets:
Cash and cash equivalents	$	10,655	$	13,876
Restricted cash		60		60
Accounts receivable, net		27		102
Inventory		623		430
Prepaid expenses and other current assets		316		539
Total current assets		11,681		15,007
Property and equipment, net		382		429
Operating lease right-of-use assets		1,029		1,240
Total assets	$	13,092	$	16,676
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,532	$	1,879
Accrued expenses		1,170		1,254
Accrued severance expense		1,469		134
Warrant liability		702		620
Operating lease liabilities, current portion		684		707
Deferred revenue		10		27
Total current liabilities		5,567		4,621
Operating lease liabilities, long-term portion		369		557
Total liabilities		5,936		5,178
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred Stock, $0.00001 par value, 10,000,000 shares authorized as of March 31, 2024 and December 31, 2023; no shares issued or outstanding as of March 31, 2024 and December 31, 2023.		—		—
Common Stock, $0.00001 par value, 200,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 6,085,766 and 5,471,121 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.		1		1
Additional paid-in capital		395,796		393,539
Accumulated deficit		(388,641)		(382,042)
Total stockholders’ equity		7,156		11,498
Total liabilities and stockholders’ equity	$	13,092	$	16,676

(1) The condensed balance sheet as of December 31, 2023 was derived from the audited balance sheet as of that date.

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

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

3

Energous Corporation

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except share and per share amounts)

	For the Three Months Ended March 31,
	2024		2023
Revenue	$	64	$	97
Costs and expenses:
Cost of revenue		109		139
Research and development		2,349		3,079
Sales and marketing		873		1,212
General and administrative		1,835		1,961
Severance expense		1,563		—
Total costs and expenses		6,729		6,391
Loss from operations		(6,665)		(6,294)
Other income (expense):
Offering costs related to warrant liability		—		(592)
Change in fair value of warrant liability		(82)		—
Interest income		148		233
Total other income (expense)		66		(359)
Net loss	$	(6,599)	$	(6,653)
Basic and diluted loss per common share	$	(1.11)	$	(1.63)
Weighted average shares outstanding, basic and diluted		5,961,186		4,070,438

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

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

4

Energous Corporation

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except for share amounts)

				Additional				Total
	Common Stock			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Balance as of January 1, 2024	5,471,121	$	1	$	393,539	$	(382,042)	$	11,498
Stock-based compensation - options	—		—		72		—		72
Stock-based compensation - restricted stock units (“RSUs”)	—		—		313		—		313
Stock-based compensation - employee stock purchase plan (“ESPP”)	—		—		19		—		19
Issuance of shares for RSUs	16,775		—		—		—		—
Proceeds from contributions to the ESPP	—		—		36		—		36
Issuance of shares in an at-the-market (“ATM”) placement, net of $2 in issuance costs	27,870		—		47		—		47
Issuance of shares in a sale of common stock, pre-funded warrants and warrants, net of $230 in issuance costs	570,000		—		1,770		—		1,770
Net loss	—		—		—		(6,599)		(6,599)
Balance as of March 31, 2024	6,085,766	$	1	$	395,796	$	(388,641)	$	7,156

				Additional				Total
	Common Stock			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Balance as of January 1, 2023	3,947,267	$	1	$	387,320	$	(362,675)	$	24,646
Stock-based compensation - options	—		—		21		—		21
Stock-based compensation - RSUs	—		—		476		—		476
Stock-based compensation - ESPP	—		—		25		—		25
Issuance of shares for RSUs	9,347		—		—		—		—
Proceeds from contributions to the ESPP	—		—		65		—		65
Issuance of shares in an ATM placement, net of $69 in issuance costs	182,511		—		2,675		—		2,675
Issuance of shares in a sale of common stock, net of $3,166 in issuance costs and fair value of liability warrant	412,500		—		134		—		134
Net loss	—		—		—		(6,653)		(6,653)
Balance as of March 31, 2023	4,551,625	$	1	$	390,716	$	(369,328)	$	21,389

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

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

5

Energous Corporation

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	For the Three Months Ended
	March 31,
	2024		2023
Cash flows from operating activities:
Net loss	$	(6,599)	$	(6,653)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		48		46
Stock based compensation		404		522
Inventory net realizable value adjustment		—		111
Allowance for credit losses		—		(13)
Change in fair value of warrant liability		82		—
Offering costs allocated to warrants		—		592
Changes in operating assets and liabilities:
Accounts receivable, net		75		56
Inventory		(193)		(77)
Prepaid expenses and other current assets		223		178
Operating lease right-of-use assets		160		181
Accounts payable		(347)		450
Accrued expenses		(84)		(420)
Accrued severance expense		1,335		(167)
Operating lease liabilities		(160)		(176)
Deferred revenue		(17)		6
Net cash used in operating activities		(5,073)		(5,364)
Cash flows from investing activities:
Purchases of property and equipment		(1)		—
Net cash used in investing activities		(1)		—
Cash flows from financing activities:
Net proceeds from an ATM offering		47		2,675
Net proceeds from a sale of common stock and warrant issuance		1,770		2,677
Proceeds from contributions to the ESPP		36		65
Net cash provided by financing activities		1,853		5,417
Net decrease in cash, cash equivalents and restricted cash		(3,221)		53
Cash, cash equivalents and restricted cash - beginning		13,936		26,287
Cash, cash equivalents and restricted cash - ending	$	10,715	$	26,340
Supplemental disclosure of non-cash investing and financing activities:
Decrease in operating lease right-of-use assets and operating lease liabilities from incremental borrowing rate change	$	51	$	—

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

6

Note 1 - Business Organization, Nature of Operations

Description of Business

Energous Corporation (the “Company”) has developed a wireless power networks technology (“WPNT”), consisting of semiconductor chipsets, software controls, hardware designs and antennas, that enable radio frequency (“RF”) based charging for Internet of Things (“IoT”) devices. The WPNT has a broad spectrum of capabilities to enable the next generation of wireless power networks, delivering power and data in a seamless device portfolio. This includes near field and at-a-distance wireless charging with multiple power levels at various distances.

The Company believes its technology is innovative in its approach, in that the Company is developing solutions that charge IoT devices using RF technology. To date, the Company has developed and released to production multiple transmitters and receivers, including prototypes and partner production designs. The transmitters vary based on form factor and power specifications and frequencies, while the receivers are designed to support a myriad of wireless charging applications including:

Device Type	Application
RF Tags	Cold Chain, Asset Tracking, Medical IoT
IoT Sensors	Cold Chain, Logistics, Asset Tracking
Electronic Shelf Labels	Retail and Industrial IoT

The first end product featuring the Company’s technology entered the market in 2019. The Company started shipping its first at-a-distance wireless PowerBridges for commercial IoT applications in the fourth quarter of 2021 and expects additional wireless power enabled products to be released as the Company’s business moves forward.

Reverse Stock Split

On June 14, 2023, at the Company’s 2023 annual meeting of stockholders, the Company’s stockholders approved a proposal to effect a reverse stock split of the Company’s common stock by a ratio not to exceed 1-for-20.

On August 15, 2023, the Company announced that its Board of Directors had determined to set the reverse stock split ratio at 1-for-20 and that the Company’s common stock would begin trading at the split-adjusted price beginning August 16, 2023. Upon effectiveness of the reverse stock split, every twenty shares of issued and outstanding common stock held were converted into one share of common stock. No fractional shares were distributed as a result of the reverse stock split and stockholders were entitled to a cash payment in lieu of fractional shares. Additionally, the par value of the Company’s common stock did not change.

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

7

Note 2 – Liquidity and Management Plans

During the three months ended March 31, 2024 and 2023, the Company recorded revenue of $0.1 million and $0.1 million, respectively. During the three months ended March 31, 2024 and 2023, the Company recorded net losses of $6.6 million and $6.7 million, respectively. Net cash used in operating activities was $5.1 million and $5.4 million for the three months ended March 31, 2024 and 2023, respectively. However, the Company is currently meeting its liquidity requirements through the proceeds of securities offerings that raised net proceeds of $27.0 million during 2021, $0.7 million during 2022, $6.9 million during 2023 and $1.8 million during the first quarter of 2024.

As of March 31, 2024, the Company had cash and cash equivalents of $10.7 million. The Company expects that cash and cash equivalents as of March 31, 2024, together with additional anticipated proceeds from the ATM sales agreement during 2024, continued cost and expense reductions and collections generated by anticipated revenues, will be sufficient to fund the Company’s operations through May 2025.

Research and development of new technologies is by its nature unpredictable. Although the Company intends to continue its research and development activities and transition to commercial production, there can be no assurance that its available resources and revenue generated from its business operations will be sufficient to sustain its operations. Accordingly, the Company expects to pursue additional financing, which could include offerings of equity or debt securities, bank 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 the Company would find acceptable, or at all. If the Company is unsuccessful in implementing this plan, the Company will be required to make further cost and expense reductions or modifications to its on-going and strategic plans.

The market for products using the Company’s technology is broad and evolving, but remains nascent and unproven, so the Company’s success is dependent upon many factors, including customer acceptance of its existing products, technical feasibility of future products, regulatory approvals, the development of complementary technologies, competition and global market fluctuations.

Note 3 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the period presented. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for other future periods.

These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 28, 2024. The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2023 audited financial statements.

Reclassifications

Certain reclassifications have been made to the fiscal year 2023 condensed balance sheet to conform to the fiscal year 2024 presentation. The reclassifications had no impact on total assets, total liabilities, or stockholders’ equity.

8

Note 3 – Summary of Significant Accounting Policies, continued

Use of Estimates

The preparation of financial statements in conformity with 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.

The Company’s significant estimates and assumptions include the valuation of stock-based compensation instruments, recognition of revenue, inventory valuation, fair value of warrant liabilities and the valuation allowance on deferred tax assets. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term, highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. The Company maintains cash balances that may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation limits. The Company maintains its cash deposits with major financial institutions. The Company reports restricted cash on its balance sheet to disclose the amount reserved for a specific purpose aside from ordinary business operations. The Company has restricted cash as collateral for the Company’s corporate credit card program. As of March 31, 2024 and December 31, 2023, the carrying value of restricted cash was $0.1 million and $0.1 million, respectively.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each reporting period.

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 the proceeds received.

9

Note 3 – Summary of Significant Accounting Policies, continued

Fair Value

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

ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities to which the Company has access at a measurement date.

● Level 2: Observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3: Unobservable inputs for which little or no market data exists and for which the Company must develop its own assumptions regarding the assumptions that market participants would use in pricing the asset or liability, including assumptions regarding risk.

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

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses and other current assets, and accounts payable and accrued expenses, are an approximate of their fair values because of the short maturity of these instruments. The Company’s warrant liability recognized at fair value on a recurring basis is a level 3 measurement (see Note 8 – Fair Value Measurement).

Revenue Recognition

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

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

1. Identify the contract with a 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 in the contract.

5. Recognize revenue when or as the performance obligations are satisfied.

The Company’s revenue consists of its single segment of wireless charging system solutions. The wireless charging system revenue consists of revenue from product development projects and production-level systems. During the three months ended March 31, 2024 and 2023, the Company recognized $0.1 million and $0.1 million, respectively, in revenue.

10

Note 3 – Summary of Significant Accounting Policies, continued

The Company records revenue associated with product development projects that it enters into with certain customers. In general, these product development projects are complex, and the Company does not have certainty about its ability to achieve the project milestones. The achievement of a milestone is dependent on the Company’s performance obligation and requires acceptance by the customer. The Company recognizes this revenue at the point in time at which the performance obligation is met. The payment associated with achieving the performance obligation is generally commensurate with the Company’s effort or the value of the deliverable and is nonrefundable. Any deferred revenue is recognized upon achievement of the performance obligation or expiration of a support agreement.

Inventory

The Company follows ASC 330, “Inventory” (“Topic 330”) to account for its inventory, which includes finished goods ready for sale, work in process and raw materials, at the lower of cost or net realizable value. Net realizable value is calculated at the end of each reporting period and adjustment, if needed, is made. At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis.

Research and Development

Research and development expenses are charged to operations as incurred. For internally developed patents, all patent costs are expensed as incurred as research and development expense. Patent application costs, which are generally legal costs, are expensed as research and development costs until such time as the future economic benefits of such patents become more certain. The Company incurred research and development costs of $2.3 million and $3.1 million for the three months ended March 31, 2024 and 2023, respectively.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees, board members and contractors in accordance with accounting guidance that requires awards to be recorded at their fair value on the date of grant and amortized over the vesting period of the award. The Company amortizes compensation costs on a straight-line basis over the requisite service period of the award, which is typically the vesting term of the equity instrument issued.

Under the ESPP, employees may purchase a limited number of shares of the Company’s common stock at a 15% discount from the lower of the closing market prices measured on the first and last days of each half-year period. The Company recognizes stock-based compensation expense for the fair value of the purchase options, as measured on the grant date.

Income Taxes

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of March 31, 2024, no liability for unrecognized tax benefits was required to be reported. The guidance from ASC 740, “Income Taxes” also discusses the classification of related interest and penalties on income taxes. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the three months ended March 31, 2024 and 2023. The Company files income tax returns with the United States, California, Texas and Arizona governments.

11

Note 3 – Summary of Significant Accounting Policies, continued

Net Loss Per Common Share

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. 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 1,546,213 and 644,530, as outlined in the table below, for the three months ended March 31, 2024 and 2023, respectively, because their inclusion would be anti-dilutive.

	For the Three Months Ended
	March 31,
	2024	2023
Warrants issued to investors 1	1,432,909	495,833
Options to purchase common stock	11,250	15,000
RSUs	102,054	133,697
Total potentially dilutive securities	1,546,213	644,530

For the three months ended March 31, 2024, the table above includes 1,020,409 warrants expiring on February 20, 2029, which have an exercise price of $1.84 and 412,500 warrants expiring on March 28, 2029, which have an exercise price of $1.66. For the three months ended March 31, 2023, the table above includes 83,333 warrants that expired on March 1, 2024, which had an exercise price of $200, and 412,500 warrants expiring on March 28, 2029, which have an exercise price of $1.66.

¹ The weighted average number of common shares outstanding as of March 31, 2024 includes the weighted average effect of the 450,409 pre-funded warrants issued in connection with a registered direct offering the Company entered into on February 15, 2024 (see Note 7 – Capital Stock and Warrants) because the exercise of such warrants requires nominal consideration ($0.001 per share exercise price for each pre-funded warrant). As of March 31, 2024, none of the pre-funded warrants have been exercised; therefore, all 450,409 outstanding pre-funded warrants as of that date are not included in the table above.

Leases

The Company determines if an arrangement is a lease at the inception of the arrangement. The Company applies the short-term lease recognition exemption and recognizes lease payments in profit or loss at lease commencement for facility or equipment leases that have a lease term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities.

ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are measured and recorded at the later of the adoption date, January 1, 2019, or the service commencement date based on the present value of lease payments over the lease term. The Company uses the implicit interest rate when readily determinable; however, most leases do not establish an implicit rate, so the Company uses an estimate of the incremental borrowing rate based on the information available at the time of measurement. Lease expense for lease payments is recognized on a straight-line basis over the lease term. See Note 6 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.

12

Note 3 – Summary of Significant Accounting Policies, continued

Recently Issued Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting” (“Topic 280”), Improvements to Reportable Segment Reporting. This standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses This standard is effective for the Company’s annual fiscal period beginning January 1, 2024 and for the Company’s interim periods beginning January 1, 2025. Adoption of this standard will not likely have a material impact on the Company’s financial statements.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes” (“Topic 740”), Improvements to Income Tax Disclosures. This standard is intended to enhance the transparency and usefulness of income tax disclosures to better asses how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This standard is effective for the Company’s annual fiscal period beginning January 1, 2025. Adoption of this standard will not likely have a material impact on the Company’s financial statements.

Note 4 – Inventory

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

	Balance as of
	March 31, 2024		December 31, 2023
Raw Materials	$	295	$	101
Work-in-process		51		52
Finished goods		277		277
Total	$	623	$	430

Note 5 – Accrued Expenses

Accrued expenses consist of the following (in thousands):

	Balance as of
	March 31, 2024		December 31, 2023
Accrued compensation	$	660	$	993
Accrued legal expenses		303		147
Other accrued expenses		207		114
Total	$	1,170	$	1,254

Note 6 – Commitments and Contingencies

Operating Leases

San Jose Lease

On May 20, 2022, the Company signed a lease amendment to the existing lease for its office space at its corporate headquarters in San Jose, California, extending the term of the lease for an additional three years. Upon signing the lease amendment, the Company recorded a new ROU lease asset of $2.1 million and operating lease liability of $2.1 million, using a present value discount rate of 3.0%, which was used as an incremental borrowing rate for a hypothetical fully collateralized real estate transaction. As of January 1, 2024, the discount rate was adjusted to 8% in order to reflect a realistic incremental borrowing rate at lease commencement. The adjustment created a one-time reduction to the ROU lease asset and operating lease liability of approximately $51,000. Upon expiration of the original lease on September 30, 2022, the new monthly lease payment starting October 1, 2022 is approximately $59,000, subject to annual escalations up to a maximum monthly lease payment of approximately $62,000. The Company recorded lease expense of $0.2 million for both the three months ended March 31, 2024 and 2023.

13

Note 6 – Commitments and Contingencies, continued

Operating Lease Commitments

The Company follows ASC 842, Leases, (“Topic 842”) and recognizes the required ROU assets and operating lease liabilities on its balance sheet. The Company anticipates having future total lease payments of $1.1 million during the period from the second quarter of 2024 to the third quarter of 2025. As of March 31, 2024, the Company has total operating lease ROU assets of $1.0 million, current portion of operating lease liabilities of $0.7 million and long-term portion of operating lease liabilities of $0.4 million. The weighted average remaining lease term is 1.5 years as of March 31, 2024.

A reconciliation of undiscounted cash flows to lease liabilities recognized as of March 31, 2024 is as follows (in thousands):

For the year ending December 31,	Amount
2024 (remaining)	$	552
2025		562
Total future lease payments		1,114
Present value discount (8.0% weighted average)		(61)
Total operating lease liabilities	$	1,053

Hosted Design Software Agreement

In June 2021, the Company entered into an electronic design automation software in a hosted environment license agreement with a term of three-years under which the Company is required to remit quarterly payments of approximately $0.2 million through the second quarter of 2024.

Litigations, Claims, and Assessments

The Company is from time to time involved in various disputes, claims, liens and litigation matters arising in the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company’s combined financial position, results of operations or cash flows.

MBO Bonus Plan

On March 15, 2018, the Company’s Board of Directors (“Board”), on the recommendation of the Board’s Compensation Committee (“Compensation Committee”), approved the Energous Corporation MBO Bonus Plan (“Bonus Plan”) for executive officers of the Company. To be eligible to receive a bonus under the Bonus Plan, an executive officer must be continuously employed throughout the applicable performance period, and in good standing, and achieve the performance objectives selected by the Compensation Committee.

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

The Company did not record any expense under the Bonus Plan during the three months ended March 31, 2024. During the three months ended March 31, 2023, the Company recorded $0.1 million in expense under the Bonus Plan. As of December 31, 2023, the Company had $0.5 million in bonuses earned during 2023 that had not yet been paid and was included in accrued expenses. As of March 31, 2024, the Company had $0.2 million in MBO bonus expense earned and accrued during 2023 that had not yet been paid and was subsequently paid during the second quarter of 2024.

Severance and Change in Control Agreement

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

14

Note 6 – Commitments and Contingencies, continued

Under the Severance Agreement, if an Executive is terminated in a qualifying change in control termination, the Company agrees to pay the Executive six to twelve months of that Executive’s monthly base salary. If an Executive elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) the Company will pay the full amount of the Executive’s premiums under the Company’s health, dental and vision plans, including coverage for the Executive’s eligible dependents, for the six-to-twelve-month period, as applicable, following the Executive’s termination.

Executive Transition – Cesar Johnston

On March 26, 2024, the Company announced that Cesar Johnston was no longer serving as President and Chief Executive Officer of the Company effective March 24, 2024. In connection with his cessation as an officer of the Company, Mr. Johnston is entitled to receive the benefits and payments set forth in the Amended and Restated Severance and Change in Control Agreement, dated December 6, 2021 (“Severance Agreement”), between the Company and Mr. Johnston. Accordingly, Mr. Johnston will receive (a) 18 months of his monthly salary plus the amount equal to 100% of his target bonus, (b) any outstanding unvested equity awards held by Mr. Johnston that were scheduled to vest during the next 18 months following the termination date, (c) reimbursement for continued COBRA payments, if elected by Mr. Johnston, during the 18 months following the termination date. The Company recorded $1.5 million in total severance expense pertaining to Mr. Johnston’s departure during the three months ended March 31, 2024, including $0.1 million in stock-based compensation as a result of accelerated vesting of RSUs and options (see Note 8 – Stock-Based Compensation for additional details).

As of March 31, 2024, the Company had accrued unpaid severance expense of $1.4 million pertaining to Mr. Johnston’s Severance Agreement, which is due to be paid approximately 60 days following of Mr. Johnston’s date of separation.

Executive Transition – William Mannina

On July 20, 2023, the Company announced the departure of William Mannina, former Acting Chief Financial Officer, effective August 16, 2023. Pursuant to the terms of a letter agreement between Mr. Mannina and the Company, Mr. Mannina will receive payments and benefits including cash severance payments equivalent to nine months of his then-current salary of $265,825 and premium payments for continued healthcare coverage for nine months following his resignation effective date. Mr. Mannina’s restricted stock units continued to vest through August 16, 2023.

As of March 31, 2024, the Company had accrued unpaid severance expense of approximately $0.1 million pertaining to Mr. Mannina’s agreement.

Strategic Alliance Agreement

In November 2016, the Company and Dialog Semiconductor plc (“Dialog”), a related party (see Note 11—Related Party Transactions), entered into a Strategic Alliance Agreement (“Alliance Agreement”) for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (“Licensed Products”). Pursuant to the terms of the Alliance Agreement, the Company agreed to engage Dialog as the exclusive supplier of the Licensed Products for specified fields of use, subject to certain exceptions (the “Company Exclusivity Requirement”). Dialog agreed to not distribute, sell or work with any third party to develop any competing products without the Company’s approval. In addition, both parties agreed on a revenue sharing arrangement and to collaborate on the commercialization of Licensed Products based on a mutually-agreed upon plan. Each party will retain all of its intellectual property.

The Alliance Agreement had an initial term of seven years, with automatic renewal annually thereafter unless terminated by either party upon 180 days’ prior written notice. The Company could terminate the Alliance Agreement at any time after the third anniversary of the Alliance Agreement upon 180 days’ prior written notice to Dialog, or if Dialog breached certain exclusivity obligations. Dialog could terminate the Alliance Agreement if sales of Licensed Products did not meet specified targets. The Company Exclusivity Requirement had a termination date of the earlier of January 1, 2021 or the occurrence of certain events relating to the Company’s pre-existing exclusivity obligations. The Company Exclusivity Requirement renewed automatically on an annual basis unless the Company and Dialog agreed to terminate the requirement.

15

Note 6 – Commitments and Contingencies, continued

On September 20, 2021, the Company was notified by Dialog, which had been recently acquired by Renesas Electronics Corporation (“Renesas”), that it was terminating the Alliance Agreement between the Company and Dialog. There is a wind down period included in the Alliance Agreement which will conclude in September 2024. During the wind down period, the Alliance Agreement’s terms will continue to apply to the Company’s products that are covered by certain existing customer relationships, except that the parties’ respective exclusivity rights have terminated (see Note 11 – Related Party Transactions for expenses incurred by the Company from Renesas).

Note 7 – Capital Stock and Warrants

Authorized Capital

The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available funds. Upon the liquidation, dissolution or winding up of the Company, holders of common stock are entitled to share ratably in all assets of the Company that are legally available for distribution.

Financing

On September 15, 2020, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on September 24, 2020 (“Prior Shelf”), and contained two prospectuses: a base prospectus, which covered the offering, issuance and sale by the Company of up to $75 million of its common stock, preferred stock, debt securities, warrants to purchase our common stock, preferred stock or debt securities, subscription rights to purchase its common stock, preferred stock or debt securities and/or units consisting of some or all of these securities; and an at-the-market sales agreement prospectus supplement covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $40 million of its common stock that may be issued and sold under the At Market Issuance Sales Agreement, as amended, between the Company and B. Riley Securities, Inc. (the “ATM Program”). The $40 million of common stock to be offered, issued and sold under the ATM Program is included in the $75 million 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 $38.8 million (net of $1.2 million in issuance costs) during the third and fourth quarters of 2020 under the ATM Program.

On October 4, 2021, the Company filed a prospectus supplement covering the offering, issuance and sale of up to an additional $35 million of shares of the Company’s common stock pursuant to the ATM Program. The Company raised net proceeds of $27.0 million (net of $0.9 million in issuance costs), during 2021 under the ATM Program. During 2022, the Company raised an additional $0.7 million (net of $0.1 million in issuance costs) under the ATM Program. During the first quarter of 2023, the Company raised $3.6 million (net of $0.2 million in issuance costs). As of March 31, 2024, there is no amount remaining in the Prior Shelf due to its expiration on September 24, 2023.

On November 15, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on December 16, 2021 (the “Current Shelf”). This shelf registration statement allows the Company to sell, from time to time, any combination of debt or equity securities described in the registration statement up to aggregate proceeds of $100 million. Pursuant to this registration statement, on March 28, 2023, the Company completed an underwritten offering pursuant to which it issued and sold an aggregate of (i) 412,500 shares of its common stock (the “Shares”) and (ii) warrants to purchase up to 412,500 shares of its common stock (the “2023 Warrants”), for net proceeds of $2.7 million, after deducting underwriting discounts, commission and expenses payable by the Company. The 2023 Warrants were immediately exercisable upon issuance and have a term of six years and an exercise price of $8.00. The Company allocated the proceeds received first to the 2023 Warrants based on the fair value of the 2023 Warrants as determined at initial measurement, with the remaining proceeds allocated to the Shares (see Note 9 – Warrant Liability and Note 10 – Fair Value Measurements). Pursuant to the terms of the 2023 Warrants, the exercise price was adjusted to $1.66 during 2023.

16

Note 7 – Capital Stock and Warrants, continued

On February 15, 2024, the Company entered into a securities purchase agreement with an institutional investor, providing for the issuance and sale by the Company in a registered direct offering (the “Offering”), of (i) 570,000 shares of the Company’s common stock, (ii) pre-funded warrants to purchase up to 450,409 shares of common stock (referred to individually as a “Pre-Funded Warrant” and collectively as the “Pre-Funded Warrants”), and (iii) warrants to purchase an aggregate of 1,020,409 shares of common stock (referred to individually as a “Warrant” and collectively as the “Warrants”). Each share of common stock and Pre-Funded Warrant was offered and sold together with an accompanying Warrant at a combined price of $1.96 per share of common stock or Pre-Funded Warrant, as applicable. Each Pre-Funded Warrant and Warrant is exercisable at any time on or after the date of issuance to purchase one share of common stock at a price of either $0.001 per share, in the case of Pre-Funded Warrants, or $1.84 per share, in the case of Warrants. The Pre-Funded Warrants expire when they are exercised in full, and the Warrants expire five years from the date of issuance. The Offering closed on February 20, 2024. The Company received net proceeds of approximately $1.8 million (net of $0.2 million in issuance costs).

Common Stock Outstanding

Our outstanding shares of common stock 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 the ESPP where actual transfer of shares normally occurs a few days after the completion of the purchase periods. There are no voting rights for shares that are deemed delivered under US GAAP until the actual delivery of shares takes place. There are currently 200,000,000 shares of common stock authorized for issuance.

Common Stock Reserved for Future Issuance

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

	March 31, 2024		December 31, 2023
Stock options outstanding		11,250		15,000
RSUs outstanding		102,179		71,734
Warrants outstanding		1,883,318		495,833
Shares available for issuance under the 2013 Equity Incentive Plan		120,949		118,877
Shares available for issuance under the 2014 Non-employee Equity Compensation Plan		23,262		29,137
Shares available for issuance under the 2015 Performance Share Unit Plan		112,647		108,897
Shares available for issuance under the 2017 Equity Inducement Plan		132,927		51,084
Shares available for issuance under the Employee Stock Purchase Plan		14,716		14,716
Total		2,401,248		905,278

17

Note 8 – Stock-Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

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

As of March 31, 2024, 120,949 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

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

As of March 31, 2024, 23,262 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

2015 Performance Share Unit Plan

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

As of March 31, 2024, 112,647 shares of common stock remain eligible to be issued through equity-based instruments under the 2015 Performance Share Unit Plan.

2017 Equity Inducement Plan

On December 28, 2017, the Board approved the 2017 Equity Inducement Plan. Under the 2017 Equity Inducement Plan, the Board reserved 30,000 shares for the grant of RSUs. These grants will be administered by the Board or a committee of the Board. These awards will be granted to individuals who (a) are being hired as an employee by the Company or any subsidiary and such award is a material inducement to such person being hired; (b) are being rehired as an employee following a bona fide period of interruption of employment with the Company or any subsidiary; or (c) will become an employee of the Company or any subsidiary in connection with a merger or acquisition.

On July 20, 2022, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Equity Inducement Plan by 100,000 shares. On March 28, 2024, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Equity Inducement Plan by 121,510 shares. As of March 31, 2024, 132,927 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

18

Note 8 – Stock-Based Compensation, continued

Employee Stock Purchase Plan

In April 2015, the Company’s Board approved the ESPP, under which 30,000 shares of common stock were reserved for purchase by the Company’s employees, subject to the approval by the Company’s stockholders. On May 21, 2015, the Company’s stockholders approved the ESPP. Effective on June 14, 2023, the Company’s stockholders approved the amendment and restatement of the ESPP to increase the number of shares reserved for issuance through equity-based instruments thereunder by 25,000 shares, bringing the total number of shares approved for issuance under that plan to 102,500. Under the ESPP, employees may designate an amount not less than 1% but not more than 10% of their annual compensation for the purchase of Company shares. No more than 375 shares may be purchased by an employee under the ESPP during an offering period. An offering period is six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of options purchased under the ESPP is the lesser of 85% of the fair market 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, 2024, 14,716 shares of common stock remain eligible to be issued under the ESPP. Employees contributed approximately $36,000 through payroll withholdings to the ESPP as of March 31, 2024 for the current offering period which will end on June 30, 2024 with shares deemed delivered on that date.

Stock Option Activity

In February 2022, the Board granted the Company’s former Chief Executive Officer 15,000 stock options under the 2013 Equity Incentive Plan at an exercise price of $25.40 per share with half of the options vesting on the second anniversary of the vesting start date and a quarter of the options vesting on each of the two following anniversaries. Under the former Chief Executive Officer’s Severance Agreement, unvested awards vesting within 18 months of termination were accelerated and became vested on March 26, 2024. Consequently, 3,750 options became vested and another 3,750 options were forfeited. This resulted in stock-based compensation expense of approximately $53,000 during the three months ended March 31, 2024.

No stock options were granted during the three months ended March 31, 2023 and 2024.

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2024:

				Weighted
		Weighted		Average
		Average		Remaining
	Number of	Exercise		Life In	Intrinsic
	Options	Price		Years	Value
Outstanding as of January 1, 2024	15,000	$	25.40	7.9	$	—
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited	(3,750)		25.40	—		—
Outstanding as of March 31, 2024	11,250	$	25.40	0.2	$	—
Exercisable as of January 1, 2024	7,500	$	25.40	7.9	$	—
Vested	3,750		25.40	—		—
Exercised	—		—	—		—
Forfeited	—		—	—		—
Exercisable as of March 31, 2024	11,250	$	25.40	0.2	$	—

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

19

Note 8 – Stock-Based Compensation, continued

RSUs

During the three months ended March 31, 2024, the Board granted its interim principal executive officer and Chief Financial Officer RSUs covering 50,000 shares of common stock under the 2017 Equity Inducement Plan and RSUs covering 2,000 shares of common stock under the 2013 Equity Incentive Plan. The awards vest over four years.

During the three months ended March 31, 2024, the Compensation Committee granted various non-employees RSUs covering 6,000 shares of common stock under the 2014 Non-Employee Equity Compensation Plan. The awards vest on the one-year anniversary of the grant date.

Under the former Chief Executive Officer’s Severance Agreement, unvested RSUs vesting within 18 months of termination were accelerated and became vested on March 26, 2024. Consequently, 3,017 RSUs became vested resulting in stock-based compensation expense of approximately $77,000 during the three months ended March 31, 2024.

As of March 31, 2024, the unamortized fair value of the RSUs was $0.8 million. The unamortized amount will be expensed over a weighted average period of 1.9 years. A summary of the activity related to RSUs for the three months ended March 31, 2024 is presented below:

		Weighted
		Average
		Grant
		Date Fair
	Total	Value
Outstanding at January 1, 2024	71,734	$	24.65
RSUs granted	58,000		1.67
RSUs forfeited	(10,780)		13.52
RSUs vested	(16,775)		18.82
Outstanding at March 31, 2024	102,179	$	13.39

PSUs

PSUs are grants that vest upon the achievement of certain performance goals. The goals are commonly related to the Company’s revenue and achievement of sales and marketing goals.

On July 20, 2022, the Board granted the Company’s former Chief Executive Officer, Cesar Johnston, up to 14,350 PSUs under the Company’s 2015 Performance Share Unit Plan pursuant to the terms of Mr. Johnston’s offer letter with the Company (See Note 6 – Commitments and Contingencies). The up to 14,350 PSUs that had been approved were to vest as follows: (a) up to 9,350 PSU shares would vest on December 31, 2022, subject to Mr. Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr. Johnston of certain performance metrics previously determined by the Compensation Committee and approved by the Board, and (b) up to an additional 2,500 PSU shares would vest on each of December 31, 2023 and December 31, 2024, subject to Mr. Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr. Johnston of certain performance metrics to be recommended by the Compensation Committee and approved by the Board at a subsequent date.

There was no PSU activity for the three months ended March 31, 2024 and 2023. The 2,500 PSU shares that were reserved for grant during 2024 per Mr. Johnston’s offer letter with the Company, as well as the 1,250 shares reserved for potential outperformance by Mr. Johnston of 2024 goals were returned to the 2015 Performance Share Unit Plan for future issuance.

20

Note 8 – Stock-Based Compensation, continued

Employee Stock Purchase Plan

The current offering period under the ESPP started on January 1, 2024 and will conclude on June 30, 2024. During the year ended December 31, 2023, there were two offering periods. The first offering period began on January 1, 2023 and concluded on June 30, 2023. The second offering period began on July 1, 2023 and concluded on December 31, 2023.

The weighted average grant-date fair value of the purchase option for each designated share purchased under the ESPP was approximately $0.85 and $8.00 for the three months ended March 31, 2024 and 2023, respectively, which represents the fair value of the option, consisting of three main components: (i) the value of the discount on the enrollment date, (ii) the proportionate value of the call option for 85% of the stock and (iii) the proportionate value of the put option for 15% of the stock. The Company recognized compensation expense for the ESPP of approximately $19,000 and $25,000 for the three months ended March 31, 2024 and 2023, respectively.

The Company estimated the fair value of ESPP purchase options granted during the three months ended March 31, 2024 and 2023 using the Black-Scholes option pricing model. The fair values of ESPP purchase options granted were estimated using the following assumptions:

	Three Months Ended March 31,
	2024			2023
Stock price	$	1.83		$	16.72
Dividend yield		0	%		0	%
Expected volatility		112	%		59	%
Risk-free interest rate		5.26	%		4.42	%
Expected life		6 months			6 months

Stock-Based Compensation Expense

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

	Three Months Ended March 31,
	2024		2023
Research and development	$	107	$	209
Sales and marketing		80		105
General and administrative		87		208
Severance expense		130		—
Total	$	404	$	522

21

Note 9 – Warrant Liability

2023 Warrants

In March 2023, the Company issued 412,500 warrants to purchase up to 412,500 shares of its common stock. The 2023 Warrants have a six-year term and were exercisable upon issuance on March 28, 2023. Each 2023 Warrant was initially exercisable for one share of the Company’s common stock at a price of $8.00 per share. As of March 31, 2024, the exercise price was adjusted to $1.66 per share (subject to further adjustment in certain circumstances, including in the event of stock dividends and splits; recapitalizations; change of control transactions; and issuances or sales of, or agreements to issue or sell, shares of common stock or common stock equivalents at a price per share less than the then-applicable exercise price for the 2023 Warrants, including sales under the ATM, the “Exercise Price”).

In the event of certain transactions such as a merger, consolidation, tender offer, reorganization, or other change in control, if holders of common stock are given any choice as to the consideration to be received, the holder of each 2023 Warrant shall be given the same choice of alternate consideration. In the event of certain transactions that are not within the Company’s control, such as a merger, consolidation, tender offer, reorganization, or other change in control of the Company, each holder of a 2023 Warrant shall be entitled to receive the same form of consideration at the Black Scholes value of the unexercised portion of the 2023 Warrant that is being offered and paid to holders of common stock, including the option to exercise the 2023 Warrants on a “cashless basis”.

If the Company issues additional shares of common stock or equity-linked securities for a consideration per share less than the Exercise Price, then such Exercise Price will be reduced to a new lower price pursuant to the terms of the 2023 Warrants. Additionally, if the Exercise Price of any outstanding derivative securities is modified by the Company such that such security’s modified exercise price is below the Exercise Price, the Exercise Price will adjust downward pursuant to the terms of the 2023 Warrant. This provision would not apply for stock or stock equivalents which fall under shares that qualify for exempt issuance, such as if the Company adjusted the option exercise price for an option granted to an employee, officer, or director.

The Company accounted for the 2023 Warrants in accordance with the derivative guidance contained in ASC 815-40, as the warrants did not meet the criteria for equity treatment. The Company believes that the adjustments to the Exercise Price is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40, and thus the 2023 Warrants are not eligible for an exception from derivative accounting. As such, the 2023 Warrants were initially measured at fair value and recorded as a liability in the amount of $3.1 million. As of March 31, 2024, all 2023 Warrants were outstanding. As of March 31, 2024, the fair value of the warrant liability was $0.7 million. The Company recorded a change in fair value of the warrant liability of $0.1 million for the three months ended March 31, 2024. The Company did not record a change in fair value of the warrant liability for the three months ended March 31, 2023.

	For the three months ended March 31,
	2024		2023
Beginning value	$	620	$	—
Initial valuation of new warrants		—		3,135
Change in value of warrant liability		82		—
Ending value	$	702	$	3,135

22

Note 10 – Fair Value Measurements

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

	Balance as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	10,110	$	—	$	—	$	10,110
Liabilities:
Warrant liability	$	—	$	—	$	702	$	702

	Balance as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	12,567	$	—	$	—	$	12,567
Liabilities:
Warrant liability	$	—	$	—	$	620	$	620

There were no transfers among Level 1, Level 2, or Level 3 categories during the periods presented.

2023 Warrants

The Company utilizes a Monte Carlo simulation model for the 2023 Warrants at each reporting period, with changes in fair value recognized in the statements of operations. The estimated fair value of the 2023 Warrant liability is determined using Level 3 inputs. Inherent in a Monte Carlo simulation model are assumptions related to expected share-price volatility, expected life, risk-free interest rate, and dividend yield.

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

	As of March 31,
	2024			2023
Share price	$	2.03		$	10.80
Exercise price	$	1.66		$	8.00
Term (in years)		5.0			6.0
Volatility		85	%		65	%
Risk-free rate		4.2	%		3.6	%
Dividend yield		0	%		0	%

The change in the fair value of the 2023 Warrant liability was determined to be $0.1 million during the three months ended March 31, 2024. There was no change in fair value of the 2023 Warrant liability for the three months ended March 31, 2023 (see Note 9 – Warrant Liability).

23

Note 11 – Related Party Transactions

In November 2016, the Company and Dialog entered into the Alliance Agreement for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (See Note 6 – Commitments and Contingencies, Strategic Alliance Agreement). On November 7, 2016 and June 28, 2017, the Company and Dialog entered into securities purchase agreements under which Dialog acquired a total of 86,985 shares of common stock and received warrants to purchase up to 70,878 shares of common stock. As of March 31, 2024, none of the warrants remain outstanding. As of March 31, 2024, Renesas owns approximately 1.4% of the Company’s outstanding common stock. The Company did not record any revenue during the three months ended March 31, 2024 and 2023 under the Alliance Agreement. The Company incurred $0 and $0.1 million in chip test development expense from Renesas, which acquired Dialog in August 2021, during the three months ended March 31, 2024 and 2023, respectively.

On September 20, 2021, the Company was notified by Dialog that it was terminating the Alliance Agreement between the Company and Dialog.

Note 12 – Customer Concentrations

Four customers accounted for approximately 87% of the Company’s revenue for the three months ended March 31, 2024, and two customers accounted for approximately 84% of the Company’s revenue for the three months ended March 31, 2023. Two customers accounted for approximately 92% of the Company’s accounts receivable balance as of March 31, 2024, and two customers accounted for approximately 88% of the Company’s accounts receivable balance as of December 31, 2023.

24

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, unless the context otherwise requires the terms “we,” “us,” “our,” and “Energous” refer to Energous Corporation, 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 proposed business strategy; market opportunities; regulatory approval; expectations for current and potential business relationships; and expectations for revenues, liquidity cash flows and financial performance, the anticipated results of our research and development efforts, the timing for receipt of required regulatory approvals and product launches; and the impact of geopolitical, macroeconomic, health and other world events. 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; 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 development partners; market acceptance of our technology; competition in our industry; our ability to protect our intellectual property; competition; 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 Quarterly Report on Form 10-Q. 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 our wireless power networks technology (“WPNT”), consisting of semiconductor chipsets, software controls, hardware designs and antennas, that enable radio frequency (“RF”) based charging for Internet of Things (“IoT”) devices. Our WPNT has a broad spectrum of capabilities to enable the next generation of wireless power networks, delivering power and data in a seamless device portfolio. This includes near field and at-a-distance wireless charging, with multiple power levels at various distances. We believe our WPNTs will facilitate the deployment of the growing universe of IoT applications. According to Statista 2024, the number of IoT connected devices worldwide is forecasted to grow to 29.4 billion units by 2030. The initial IoT applications we are targeting are RF tags for asset tracking and cold chain applications, electronic shelf labeling (“ESL”), and IoT sensors for retail, industrial, healthcare, and logistics markets.

We believe our technology is innovative in its approach, in that we are developing solutions that charge IoT devices using RF technology. To date, we have developed and released to production multiple transmitters and receivers, including prototypes and partner production designs. The transmitters vary based on form factor and power specifications and frequencies, while the receivers are designed to support a myriad of wireless charging applications, including:

Device Type	Application
RF Tags	Cold Chain, Asset Tracking, Medical IoT
IoT Sensors	Cold Chain, Logistics, Asset Tracking
Electronic Shelf Labels	Retail and Industrial IoT

The first end product featuring our technology entered the market in 2019. We started shipping our first at-a-distance wireless PowerBridges for commercial IoT applications in the fourth quarter of 2021, and we expect additional wireless power enabled products to be released as we move our business forward.

25

Critical Accounting Policies and Estimates

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

During the three months ended March 31, 2024, 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, 2023.

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, intellectual property costs, 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.

26

Three Months Ended March 31, 2024 and 2023

The following table sets forth selected Condensed Statements of Operations data (in thousands) and such data as a percentage of revenue:

	Three months ended March 31,
	2024				2023
Revenue	$	64	100	%	$	97	100	%
Costs and expenses:
Cost of revenue		109	170	%		139	143	%
Research and development		2,349	3,670	%		3,079	3,174	%
Sales and marketing		873	1,364	%		1,212	1,249	%
General and administrative		1,835	2,867	%		1,961	2,022	%
Severance expense		1,563	2,442	%		—	—
Total operating expenses		6,729	10,514	%		6,391	6,589	%
Loss from operations		(6,665)	(10,414)	%		(6,294)	(6,489)	%
Other (expense) income:
Offering costs related to warrant liability		—	—			(592)	(610)	%
Change in fair value of warrant liability		(82)	(128)	%		—	—
Interest income		148	231	%		233	240	%
Total other (expense) income		66	103	%		(359)	(370)	%
Net loss	$	(6,599)	(10,311)	%	$	(6,653)	(6,859)	%

Revenue. During the three months ended March 31, 2024 and 2023, we recorded revenue of $0.1 million and $0.1 million, respectively. There was a slight decrease due to a decrease in transmitter sales volume.

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 and severance expense. Loss from operations for the three months ended March 31, 2024 and 2023 were $6.7 million and $6.3 million, respectively.

Cost of Revenue:

	Three months ended March 31,
	2024			2023			$Change		% Change
Cost of sales	$	109		$	139		$	(30)	(22)	%
Percent of total revenue		170	%		143	%

Cost of revenue was $0.1 million and $0.1 million, respectively, for the three months ended March 31, 2024 and 2023. There was a slight decrease due to a lower cost of transmitters sold.

Research and Development Costs:

	Three months ended March 31,
	2024			2023			$Change		% Change
Research and development	$	2,349		$	3,079		$	(730)	(24)	%
Percent of total revenue		3,670	%		3,174	%

Research and development costs were $2.3 million and $3.1 million, respectively, for the three months ended March 31, 2024 and 2023. The decrease of $0.7 million is primarily due to a $0.3 million decrease in employee compensation, consisting of a $0.2 million decrease in payroll costs and a $0.1 million decrease in stock-based compensation, a $0.1 million decrease in engineering components and supplies, a $0.1 million decrease in legal fees pertaining to patents, a $0.1 million decrease in test development costs and a $0.1 million decrease in miscellaneous office and facility expenses.

27

Sales and Marketing Costs:

	Three months ended March 31,
	2024			2023			$Change		% Change
Sales and marketing	$	873		$	1,212		$	(339)	(28)	%
Percent of total revenue		1,364	%		1,249	%

Sales and marketing costs for the three months ended March 31, 2024 and 2023 were $0.9 million and $1.2 million, respectively. The decrease of $0.3 million is primarily due to a $0.2 million decrease in payroll costs, a $0.1 million decrease in stock-based compensation and a $0.1 million decrease in marketing, tradeshow and public relations costs, partially offset by a $0.1 million increase in consulting expenses.

General and Administrative Expenses:

	Three months ended March 31,
	2024			2023			$Change		% Change
General and administrative	$	1,835		$	1,961		$	(126)	(6)	%
Percent of total revenue		2,867	%		2,022	%

General and administrative costs for the three months ended March 31, 2024 and 2023 were $1.8 million and $2.0 million, respectively. The decrease of $0.1 million is primarily due to a $0.1 million decrease in stock-based compensation, a $0.1 million decrease in legal fees and a $0.1 million decrease in miscellaneous travel, facilities and office expenses, partially offset by a $0.1 million increase in franchise tax.

Severance Expense:

	Three months ended March 31,
	2024			2023	$Change		% Change
Severance expense	$	1,563		—	$	1,563	100	%
Percent of total revenue		2,442	%	—

Severance expense for the three months ended March 31, 2024 was $1.6 million which was mostly attributed to the departure of our former President and Chief Executive Officer, Cesar Johnston. We did not incur any such costs for the three months ended March 31, 2023.

Other (expense) income:

	Three months ended March 31,
	2024	2023	$Change		% Change
Offering costs related to warrant liability	—	(592)	$	592	—
Change in fair value of warrant liability	(82)	—	$	(82)	(100)	%
Interest income	148	233	$	(85)	(36)	%
Total other (expense) income	66	(359)	$	425	118	%

Offering costs related to warrant liability were $0.6 million for the three months ended March 31, 2023. We did not incur any such costs for the three months ended March 31, 2024.

Other expense resulting from the change in fair value of the warrant liability was $0.1 million for the three months ended March 31, 2024. We did not incur any such expense for the three months ended March 31, 2023.

Interest income for the three months ended March 31, 2024 was $0.1 million as compared to interest income of $0.2 for the three months ended March 31, 2023. The decrease was due to a lower average cash balance in our savings account during the three months ended March 31, 2024 compared to the prior year period.

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Net Loss. As a result of the above, net loss for the three months ended March 31, 2024 was $6.6 million as compared to $6.7 million for the three months ended March 31, 2023.

Liquidity and Capital Resources

During the three months ended March 31, 2024 and 2023, we recorded revenue of $0.1 million and $0.1 million, respectively. We incurred net losses of $6.6 million and $6.7 for the three months ended March 31, 2024 and 2023, respectively. Net cash used in operating activities was $5.1 million and $5.4 million for the three months ended March 31, 2024 and 2023, respectively. We are currently meeting our liquidity requirements through the proceeds of securities offerings that raised net proceeds of $27.0 million during 2021, $0.7 million during 2022, $5.4 million during 2023 and $1.8 million during the first quarter of 2024.

We believe our current cash on hand, together with proceeds from additional future equity financing, implementation of cost and expense reductions and anticipated revenues, will be sufficient to fund our operations through at least the next twelve months.

Although we intend to continue our research and development activities and transition to commercial production, there can be no assurance that our available resources will be sufficient to enable us to generate revenues sufficient to sustain operations. Accordingly, we will likely 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.

Research and development of new technologies is, by its nature, unpredictable. Although we intend to continue our research and undertake development activities, there can be no assurance that our available resources will be sufficient to enable us to generate revenues sufficient to sustain operations.

Furthermore, since we have no committed source of financing, there can be no assurance that we will be able to raise capital as and when we need it to continue our operations.

February 2024 Equity Offering

On February 15, 2024, we entered into a securities purchase agreement with an institutional investor, providing for the issuance and sale by us, in a registered direct offering (the “Offering”), of (i) 570,000 shares of our common stock, (ii) pre-funded warrants to purchase up to 450,409 shares of common stock, and (iii) warrants to purchase up to an aggregate of 1,020,409 shares of common stock. Each share of common stock and pre-funded warrant was offered and sold together with an accompanying warrant at a combined price of $1.96 per share of common stock or pre-funded warrant, as applicable. Each pre-funded warrant and other warrants are exercisable at any time on or after the date of issuance to purchase one share of common stock at a price of either $0.001 per share, in the case of the pre-funded warrants, or $1.84 per share, in the case of the other warrants. The pre-funded warrants expire when they are exercised in full, and the other warrants expire five years from the date of issuance. We received net proceeds of approximately $1.8 million from the Offering, after deducting placement agent fees and estimated offering expenses.

Cash Flows

Operating Activities - During the three months ended March 31, 2024, cash flows used in operating activities were $5.1 million, consisting of a net loss of $6.6 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $0.6 million (principally stock-based compensation of $0.4 million and change in fair value of warrant liability of $0.1 million), a $0.3 million decrease in accounts payable, a $0.2 million increase in inventory and a $0.1 million decrease in accrued expenses, partially offset by a $1.3 million increase in accrued severance expense, a $0.2 decrease in prepaid expenses and other current assets and a $0.1 decrease in accounts receivable.

During the three months ended March 31, 2023, cash flows used in operating activities were $5.4 million, consisting of a net loss of $6.7 million, less adjustments to reconcile net loss to net cash used in operating activities aggregating $1.3 million (principally issuance costs allocated to warrant liability of $0.6 million, stock-based compensation of $0.5 million and an inventory net realizable adjustment of $0.1 million), a $0.4 million decrease in accrued expenses and a $0.2 million decrease in accrued severance expense, partially offset by a $0.5 million increase in accounts payable and a $0.2 million decrease in prepaid expenses and other current assets.

29

Investing Activities - During the three months ended March 31, 2024 and 2023, cash flows used in investing activities were not material. During the three months ended March 31, 2024, a small amount of testing equipment was purchased. No assets were purchased during the three months ended March 31, 2023.

Financing Activities - During the three months ended March 31, 2024, cash flows provided by financing activities were $1.9 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. During the three months ended March 31, 2023, cash flows provided by financing activities were $5.4 million, which consisted of $2.7 million in net proceeds from the issuance and sale of common stock and warrants, $2.7 million in net proceeds from the sale of shares of our common stock in an at-the-market (“ATM”) offering and $0.1 million in proceeds from the ESPP.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company, we are not required to provide this information.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to us is made known to the officers who certify our financial reports and the Board. Under the supervision and with the participation of our management, including our interim principal executive officer and our principal financial officer, we conducted an evaluation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) and 15d-15(e) under the Exchange Act.

Based on the evaluation, our interim principal executive officer and our principal financial officer has concluded that these disclosure controls and procedures were effective as of March 31, 2024 to provide reasonable assurance that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms and that information required to be disclosed by us in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our interim principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

For the three months ended March 31, 2024, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business, financial condition or cash flows. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.

Item 1A. Risk Factors

Our future performance is subject to a variety of risks and uncertainties that could materially and adversely affect our business, financial condition, results of operations, and the trading price of our common stock. These risks and uncertainties are described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to these risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

31

Item 6. Exhibits

The following are filed, furnished or incorporated by reference as a part of this Quarterly Report on Form 10-Q:

Exhibit Number	Description
3.1	Second Amended and Restated Certificate of Incorporation of Energous Corporation, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2020).
3.2	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Energous Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on August 15, 2023).
3.3	Amended and Restated Bylaws of Energous Corporation (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-193522) filed on March 13, 2014).
4.1	Form of Pre-Funded Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on February 20, 2024).
4.2	Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed on February 20, 2024).
10.1	Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on February 20, 2024).
10.2#	Energous Corporation 2017 Equity Inducement Plan, as amended and restated on March 14, 2024 (incorporated by reference to Exhibit 99.3 of the Registration Statement on Form S-8 (File No. 333-278352), filed on March 28, 2024).
31.1+	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
32.1+	Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS†	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH†	Inline XBRL Taxonomy Extension Schema Document
101.CAL†	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF†	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB†	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE†	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)

† Filed herewith.

+ Furnished herewith.

# Indicates a management contract or any compensatory plan, contract or arrangement.

32

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ENERGOUS CORPORATION
	(Registrant)
Date: May 14, 2024	By:	/s/ Mallorie Burak
		Name:	Mallorie Burak
		Title:	Chief Financial Officer
			(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

33

EX-31.1

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mallorie Burak, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Energous Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 14, 2024
/s/ Mallorie Burak
Name:	Mallorie Burak
Title:	Chief Financial Officer
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Energous Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mallorie Burak, Chief Financial Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

A signed original of this written statement required by Section 906 has been provided to Energous Corporation and will be retained by Energous Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Mallorie Burak
Name:	Mallorie Burak
Title:	Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Date:	May 14, 2024

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 10, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-36379
Entity Registrant Name	ENERGOUS CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-1318953
Entity Address, Address Line One	3590 North First Street
Entity Address, Address Line Two	Suite 210
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95134
City Area Code	408
Local Phone Number	963-0200
Title of 12(b) Security	Common Stock, $0.00001 par value
Trading Symbol	WATT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		6,538,240
Entity Central Index Key	0001575793
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Amendment Flag	false

XML

Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 10,655	$ 13,876
Restricted cash	60	60
Accounts receivable, net	27	102
Inventory	623	430
Prepaid expenses and other current assets	316	539
Total current assets	11,681	15,007
Property and equipment, net	382	429
Operating lease right-of-use assets	1,029	1,240
Total assets	13,092	16,676
Current liabilities:
Accounts payable	1,532	1,879
Accrued expenses	1,170	1,254
Accrued severance expense	1,469	134
Warrant liability	702	620
Operating lease liabilities, current portion	684	707
Deferred revenue	10	27
Total current liabilities	5,567	4,621
Operating lease liabilities, long-term portion	369	557
Total liabilities	5,936	5,178
Commitments and contingencies (Note 6)
Stockholders' equity:
Common Stock, $0.00001 par value, 200,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 6,085,766 and 5,471,121 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.	1	1
Additional paid-in capital	395,796	393,539
Accumulated deficit	(388,641)	(382,042)
Total stockholders' equity	7,156	11,498
Total liabilities and stockholders' equity	$ 13,092	$ 16,676

XML

Condensed Balance Sheets (Parenthetical)	3 Months Ended
	Mar. 31, 2024 $ / shares shares	Dec. 31, 2023 $ / shares shares
Condensed Balance Sheets
Preferred stock, par value | $ / shares	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value | $ / shares	$ 0.00001	$ 0.00001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	6,085,766	5,471,121
Common stock, shares outstanding	6,085,766	5,471,121
Reverse stock split, conversion ratio	20

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Condensed Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Condensed Statements of Operations
Revenue	$ 64	$ 97
Costs and expenses:
Cost of revenue	109	139
Research and development	2,349	3,079
Sales and marketing	873	1,212
General and administrative	1,835	1,961
Severance expense	1,563
Total costs and expenses	6,729	6,391
Loss from operations	(6,665)	(6,294)
Other income (expense):
Offering costs related to warrant liability		(592)
Change in fair value of warrant liability	(82)
Interest income	148	233
Total other income (expense)	66	(359)
Net loss	$ (6,599)	$ (6,653)
Basic loss per common share	$ (1.11)	$ (1.63)
Weighted average shares outstanding, basic	5,961,186	4,070,438
Diluted loss per common share	$ (1.11)	$ (1.63)
Weighted average shares outstanding, diluted	5,961,186	4,070,438

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Condensed Statements of Operations (Parenthetical)		3 Months Ended
	Aug. 15, 2023	Mar. 31, 2024
Condensed Statements of Operations
Reverse stock split, conversion ratio	20	20

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Condensed Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Beginning balance at Dec. 31, 2022	$ 1	$ 387,320	$ (362,675)	$ 24,646
Beginning balance (in shares) at Dec. 31, 2022	3,947,267
Stock-based compensation - options		21		21
Stock-based compensation - restricted stock units ("RSUs")		476		476
Stock-based compensation - employee stock purchase plan ("ESPP")		25		25
Issuance of shares for RSUs (in shares)	9,347
Proceeds from contributions to the ESPP		65		65
Issuance of shares in an at-the-market ("ATM") placement, net of issuance costs		2,675		2,675
Issuance of shares in an at-the-market ("ATM") placement, net of issuance costs (in shares)	182,511
Issuance of shares in a sale of common stock, net of $3,166,139 in issuance costs and fair value of a liability warrant		134		134
Issuance of shares in a sale of common stock, net of issuance costs and fair value of liability warrant(in shares)	412,500
Net Income (Loss)			(6,653)	(6,653)
Ending balance at Mar. 31, 2023	$ 1	390,716	(369,328)	21,389
Ending balance (in shares) at Mar. 31, 2023	4,551,625
Beginning balance at Dec. 31, 2023	$ 1	393,539	(382,042)	11,498
Beginning balance (in shares) at Dec. 31, 2023	5,471,121
Stock-based compensation - options		72		72
Stock-based compensation - restricted stock units ("RSUs")		313		313
Stock-based compensation - employee stock purchase plan ("ESPP")		19		19
Issuance of shares for RSUs (in shares)	16,775
Proceeds from contributions to the ESPP		36		36
Issuance of shares in an at-the-market ("ATM") placement, net of issuance costs		47		47
Issuance of shares in an at-the-market ("ATM") placement, net of issuance costs (in shares)	27,870
Issuance of shares in a sale of common stock, net of $3,166,139 in issuance costs and fair value of a liability warrant		1,770		1,770
Issuance of shares in a sale of common stock, net of issuance costs and fair value of liability warrant(in shares)	570,000
Net Income (Loss)			(6,599)	(6,599)
Ending balance at Mar. 31, 2024	$ 1	$ 395,796	$ (388,641)	$ 7,156
Ending balance (in shares) at Mar. 31, 2024	6,085,766

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Condensed Statement of Changes in Stockholders' Equity (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)
Reverse stock split, conversion ratio	20
At The Market [Member]
Issuance costs	$ 2	$ 69
Sale of Common Stock [Member]
Issuance costs	$ 230	$ 3,166

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Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (6,599)	$ (6,653)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	48	46
Stock based compensation	404	522
Inventory net realizable value adjustment		111
Allowance for credit losses		(13)
Change in fair value of warrant liability	82
Offering costs allocated to warrants		592
Changes in operating assets and liabilities:
Accounts receivable, net	75	56
Inventory	(193)	(77)
Prepaid expenses and other current assets	223	178
Operating lease right-of-use assets	160	181
Accounts payable	(347)	450
Accrued expenses	(84)	(420)
Accrued severance expense	1,335	(167)
Operating lease liabilities	(160)	(176)
Deferred revenue	(17)	6
Net cash used in operating activities	(5,073)	(5,364)
Cash flows from investing activities:
Purchases of property and equipment	(1)
Net cash used in investing activities	(1)
Cash flows from financing activities:
Net proceeds from an ATM offering	47	2,675
Net proceeds from a sale of common stock and warrant issuance	1,770	2,677
Proceeds from contributions to the ESPP	36	65
Net cash provided by financing activities	1,853	5,417
Net decrease in cash, cash equivalents and restricted cash	(3,221)	53
Cash, cash equivalents and restricted cash - beginning	13,936	26,287
Cash, cash equivalents and restricted cash - ending	10,715	$ 26,340
Supplemental disclosure of non-cash investing and financing activities:
Decrease in operating lease right-of-use assets and operating lease liabilities from incremental borrowing rate change	$ 51

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Business Organization, Nature of Operations

3 Months Ended

Mar. 31, 2024

Business Organization, Nature of Operations

Business Organization, Nature of Operations

Note 1 - Business Organization, Nature of Operations

Description of Business

Energous Corporation (the “Company”) has developed a wireless power networks technology (“WPNT”), consisting of semiconductor chipsets, software controls, hardware designs and antennas, that enable radio frequency (“RF”) based charging for Internet of Things (“IoT”) devices. The WPNT has a broad spectrum of capabilities to enable the next generation of wireless power networks, delivering power and data in a seamless device portfolio. This includes near field and at-a-distance wireless charging with multiple power levels at various distances.

The Company believes its technology is innovative in its approach, in that the Company is developing solutions that charge IoT devices using RF technology. To date, the Company has developed and released to production multiple transmitters and receivers, including prototypes and partner production designs. The transmitters vary based on form factor and power specifications and frequencies, while the receivers are designed to support a myriad of wireless charging applications including:

Device Type	Application
RF Tags	Cold Chain, Asset Tracking, Medical IoT
IoT Sensors	Cold Chain, Logistics, Asset Tracking
Electronic Shelf Labels	Retail and Industrial IoT

The first end product featuring the Company’s technology entered the market in 2019. The Company started shipping its first at-a-distance wireless PowerBridges for commercial IoT applications in the fourth quarter of 2021 and expects additional wireless power enabled products to be released as the Company’s business moves forward.

Reverse Stock Split

On June 14, 2023, at the Company’s 2023 annual meeting of stockholders, the Company’s stockholders approved a proposal to effect a reverse stock split of the Company’s common stock by a ratio not to exceed 1-for-20.

On August 15, 2023, the Company announced that its Board of Directors had determined to set the reverse stock split ratio at 1-for-20 and that the Company’s common stock would begin trading at the split-adjusted price beginning August 16, 2023. Upon effectiveness of the reverse stock split, every twenty shares of issued and outstanding common stock held were converted into one share of common stock. No fractional shares were distributed as a result of the reverse stock split and stockholders were entitled to a cash payment in lieu of fractional shares. Additionally, the par value of the Company’s common stock did not change.

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

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Liquidity and Management Plans

3 Months Ended

Mar. 31, 2024

Liquidity and Management Plans

Liquidity and Management Plans

Note 2 – Liquidity and Management Plans

During the three months ended March 31, 2024 and 2023, the Company recorded revenue of $0.1 million and $0.1 million, respectively. During the three months ended March 31, 2024 and 2023, the Company recorded net losses of $6.6 million and $6.7 million, respectively. Net cash used in operating activities was $5.1 million and $5.4 million for the three months ended March 31, 2024 and 2023, respectively. However, the Company is currently meeting its liquidity requirements through the proceeds of securities offerings that raised net proceeds of $27.0 million during 2021, $0.7 million during 2022, $6.9 million during 2023 and $1.8 million during the first quarter of 2024.

As of March 31, 2024, the Company had cash and cash equivalents of $10.7 million. The Company expects that cash and cash equivalents as of March 31, 2024, together with additional anticipated proceeds from the ATM sales agreement during 2024, continued cost and expense reductions and collections generated by anticipated revenues, will be sufficient to fund the Company’s operations through May 2025.

Research and development of new technologies is by its nature unpredictable. Although the Company intends to continue its research and development activities and transition to commercial production, there can be no assurance that its available resources and revenue generated from its business operations will be sufficient to sustain its operations. Accordingly, the Company expects to pursue additional financing, which could include offerings of equity or debt securities, bank 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 the Company would find acceptable, or at all. If the Company is unsuccessful in implementing this plan, the Company will be required to make further cost and expense reductions or modifications to its on-going and strategic plans.

The market for products using the Company’s technology is broad and evolving, but remains nascent and unproven, so the Company’s success is dependent upon many factors, including customer acceptance of its existing products, technical feasibility of future products, regulatory approvals, the development of complementary technologies, competition and global market fluctuations.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 3 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the period presented. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for other future periods.

These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 28, 2024. The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2023 audited financial statements.

Reclassifications

Certain reclassifications have been made to the fiscal year 2023 condensed balance sheet to conform to the fiscal year 2024 presentation. The reclassifications had no impact on total assets, total liabilities, or stockholders’ equity.

Note 3 – Summary of Significant Accounting Policies, continued

Use of Estimates

The preparation of financial statements in conformity with 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.

The Company’s significant estimates and assumptions include the valuation of stock-based compensation instruments, recognition of revenue, inventory valuation, fair value of warrant liabilities and the valuation allowance on deferred tax assets. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term, highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. The Company maintains cash balances that may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation limits. The Company maintains its cash deposits with major financial institutions. The Company reports restricted cash on its balance sheet to disclose the amount reserved for a specific purpose aside from ordinary business operations. The Company has restricted cash as collateral for the Company’s corporate credit card program. As of March 31, 2024 and December 31, 2023, the carrying value of restricted cash was $0.1 million and $0.1 million, respectively.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each reporting period.

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 the proceeds received.

Note 3 – Summary of Significant Accounting Policies, continued

Fair Value

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

ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities to which the Company has access at a measurement date.

● Level 2: Observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3: Unobservable inputs for which little or no market data exists and for which the Company must develop its own assumptions regarding the assumptions that market participants would use in pricing the asset or liability, including assumptions regarding risk.

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

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses and other current assets, and accounts payable and accrued expenses, are an approximate of their fair values because of the short maturity of these instruments. The Company’s warrant liability recognized at fair value on a recurring basis is a level 3 measurement (see Note 8 – Fair Value Measurement).

Revenue Recognition

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

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

1. Identify the contract with a 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 in the contract.

5. Recognize revenue when or as the performance obligations are satisfied.

The Company’s revenue consists of its single segment of wireless charging system solutions. The wireless charging system revenue consists of revenue from product development projects and production-level systems. During the three months ended March 31, 2024 and 2023, the Company recognized $0.1 million and $0.1 million, respectively, in revenue.

Note 3 – Summary of Significant Accounting Policies, continued

The Company records revenue associated with product development projects that it enters into with certain customers. In general, these product development projects are complex, and the Company does not have certainty about its ability to achieve the project milestones. The achievement of a milestone is dependent on the Company’s performance obligation and requires acceptance by the customer. The Company recognizes this revenue at the point in time at which the performance obligation is met. The payment associated with achieving the performance obligation is generally commensurate with the Company’s effort or the value of the deliverable and is nonrefundable. Any deferred revenue is recognized upon achievement of the performance obligation or expiration of a support agreement.

Inventory

The Company follows ASC 330, “Inventory” (“Topic 330”) to account for its inventory, which includes finished goods ready for sale, work in process and raw materials, at the lower of cost or net realizable value. Net realizable value is calculated at the end of each reporting period and adjustment, if needed, is made. At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis.

Research and Development

Research and development expenses are charged to operations as incurred. For internally developed patents, all patent costs are expensed as incurred as research and development expense. Patent application costs, which are generally legal costs, are expensed as research and development costs until such time as the future economic benefits of such patents become more certain. The Company incurred research and development costs of $2.3 million and $3.1 million for the three months ended March 31, 2024 and 2023, respectively.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees, board members and contractors in accordance with accounting guidance that requires awards to be recorded at their fair value on the date of grant and amortized over the vesting period of the award. The Company amortizes compensation costs on a straight-line basis over the requisite service period of the award, which is typically the vesting term of the equity instrument issued.

Under the ESPP, employees may purchase a limited number of shares of the Company’s common stock at a 15% discount from the lower of the closing market prices measured on the first and last days of each half-year period. The Company recognizes stock-based compensation expense for the fair value of the purchase options, as measured on the grant date.

Income Taxes

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of March 31, 2024, no liability for unrecognized tax benefits was required to be reported. The guidance from ASC 740, “Income Taxes” also discusses the classification of related interest and penalties on income taxes. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the three months ended March 31, 2024 and 2023. The Company files income tax returns with the United States, California, Texas and Arizona governments.

Note 3 – Summary of Significant Accounting Policies, continued

Net Loss Per Common Share

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. 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 1,546,213 and 644,530, as outlined in the table below, for the three months ended March 31, 2024 and 2023, respectively, because their inclusion would be anti-dilutive.

	For the Three Months Ended
	March 31,
	2024	2023
Warrants issued to investors 1	1,432,909	495,833
Options to purchase common stock	11,250	15,000
RSUs	102,054	133,697
Total potentially dilutive securities	1,546,213	644,530

For the three months ended March 31, 2024, the table above includes 1,020,409 warrants expiring on February 20, 2029, which have an exercise price of $1.84 and 412,500 warrants expiring on March 28, 2029, which have an exercise price of $1.66. For the three months ended March 31, 2023, the table above includes 83,333 warrants that expired on March 1, 2024, which had an exercise price of $200, and 412,500 warrants expiring on March 28, 2029, which have an exercise price of $1.66.

¹ The weighted average number of common shares outstanding as of March 31, 2024 includes the weighted average effect of the 450,409 pre-funded warrants issued in connection with a registered direct offering the Company entered into on February 15, 2024 (see Note 7 – Capital Stock and Warrants) because the exercise of such warrants requires nominal consideration ($0.001 per share exercise price for each pre-funded warrant). As of March 31, 2024, none of the pre-funded warrants have been exercised; therefore, all 450,409 outstanding pre-funded warrants as of that date are not included in the table above.

Leases

The Company determines if an arrangement is a lease at the inception of the arrangement. The Company applies the short-term lease recognition exemption and recognizes lease payments in profit or loss at lease commencement for facility or equipment leases that have a lease term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities.

ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are measured and recorded at the later of the adoption date, January 1, 2019, or the service commencement date based on the present value of lease payments over the lease term. The Company uses the implicit interest rate when readily determinable; however, most leases do not establish an implicit rate, so the Company uses an estimate of the incremental borrowing rate based on the information available at the time of measurement. Lease expense for lease payments is recognized on a straight-line basis over the lease term. See Note 6 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.

Note 3 – Summary of Significant Accounting Policies, continued

Recently Issued Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting” (“Topic 280”), Improvements to Reportable Segment Reporting. This standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses This standard is effective for the Company’s annual fiscal period beginning January 1, 2024 and for the Company’s interim periods beginning January 1, 2025. Adoption of this standard will not likely have a material impact on the Company’s financial statements.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes” (“Topic 740”), Improvements to Income Tax Disclosures. This standard is intended to enhance the transparency and usefulness of income tax disclosures to better asses how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This standard is effective for the Company’s annual fiscal period beginning January 1, 2025. Adoption of this standard will not likely have a material impact on the Company’s financial statements.

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Inventory

3 Months Ended

Mar. 31, 2024

Inventory

Inventory

Note 4 – Inventory

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

	Balance as of
	March 31, 2024		December 31, 2023
Raw Materials	$	295	$	101
Work-in-process		51		52
Finished goods		277		277
Total	$	623	$	430

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Accrued Expenses

3 Months Ended

Mar. 31, 2024

Accrued Expenses

Accrued Expenses

Note 5 – Accrued Expenses

Accrued expenses consist of the following (in thousands):

	Balance as of
	March 31, 2024		December 31, 2023
Accrued compensation	$	660	$	993
Accrued legal expenses		303		147
Other accrued expenses		207		114
Total	$	1,170	$	1,254

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Commitments and Contingencies

Note 6 – Commitments and Contingencies

Operating Leases

San Jose Lease

On May 20, 2022, the Company signed a lease amendment to the existing lease for its office space at its corporate headquarters in San Jose, California, extending the term of the lease for an additional three years. Upon signing the lease amendment, the Company recorded a new ROU lease asset of $2.1 million and operating lease liability of $2.1 million, using a present value discount rate of 3.0%, which was used as an incremental borrowing rate for a hypothetical fully collateralized real estate transaction. As of January 1, 2024, the discount rate was adjusted to 8% in order to reflect a realistic incremental borrowing rate at lease commencement. The adjustment created a one-time reduction to the ROU lease asset and operating lease liability of approximately $51,000. Upon expiration of the original lease on September 30, 2022, the new monthly lease payment starting October 1, 2022 is approximately $59,000, subject to annual escalations up to a maximum monthly lease payment of approximately $62,000. The Company recorded lease expense of $0.2 million for both the three months ended March 31, 2024 and 2023.

Note 6 – Commitments and Contingencies, continued

Operating Lease Commitments

The Company follows ASC 842, Leases, (“Topic 842”) and recognizes the required ROU assets and operating lease liabilities on its balance sheet. The Company anticipates having future total lease payments of $1.1 million during the period from the second quarter of 2024 to the third quarter of 2025. As of March 31, 2024, the Company has total operating lease ROU assets of $1.0 million, current portion of operating lease liabilities of $0.7 million and long-term portion of operating lease liabilities of $0.4 million. The weighted average remaining lease term is 1.5 years as of March 31, 2024.

A reconciliation of undiscounted cash flows to lease liabilities recognized as of March 31, 2024 is as follows (in thousands):

For the year ending December 31,	Amount
2024 (remaining)	$	552
2025		562
Total future lease payments		1,114
Present value discount (8.0% weighted average)		(61)
Total operating lease liabilities	$	1,053

Hosted Design Software Agreement

In June 2021, the Company entered into an electronic design automation software in a hosted environment license agreement with a term of three-years under which the Company is required to remit quarterly payments of approximately $0.2 million through the second quarter of 2024.

Litigations, Claims, and Assessments

The Company is from time to time involved in various disputes, claims, liens and litigation matters arising in the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company’s combined financial position, results of operations or cash flows.

MBO Bonus Plan

On March 15, 2018, the Company’s Board of Directors (“Board”), on the recommendation of the Board’s Compensation Committee (“Compensation Committee”), approved the Energous Corporation MBO Bonus Plan (“Bonus Plan”) for executive officers of the Company. To be eligible to receive a bonus under the Bonus Plan, an executive officer must be continuously employed throughout the applicable performance period, and in good standing, and achieve the performance objectives selected by the Compensation Committee.

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

The Company did not record any expense under the Bonus Plan during the three months ended March 31, 2024. During the three months ended March 31, 2023, the Company recorded $0.1 million in expense under the Bonus Plan. As of December 31, 2023, the Company had $0.5 million in bonuses earned during 2023 that had not yet been paid and was included in accrued expenses. As of March 31, 2024, the Company had $0.2 million in MBO bonus expense earned and accrued during 2023 that had not yet been paid and was subsequently paid during the second quarter of 2024.

Severance and Change in Control Agreement

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

Note 6 – Commitments and Contingencies, continued

Under the Severance Agreement, if an Executive is terminated in a qualifying change in control termination, the Company agrees to pay the Executive six to twelve months of that Executive’s monthly base salary. If an Executive elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) the Company will pay the full amount of the Executive’s premiums under the Company’s health, dental and vision plans, including coverage for the Executive’s eligible dependents, for the six-to-twelve-month period, as applicable, following the Executive’s termination.

Executive Transition – Cesar Johnston

On March 26, 2024, the Company announced that Cesar Johnston was no longer serving as President and Chief Executive Officer of the Company effective March 24, 2024. In connection with his cessation as an officer of the Company, Mr. Johnston is entitled to receive the benefits and payments set forth in the Amended and Restated Severance and Change in Control Agreement, dated December 6, 2021 (“Severance Agreement”), between the Company and Mr. Johnston. Accordingly, Mr. Johnston will receive (a) 18 months of his monthly salary plus the amount equal to 100% of his target bonus, (b) any outstanding unvested equity awards held by Mr. Johnston that were scheduled to vest during the next 18 months following the termination date, (c) reimbursement for continued COBRA payments, if elected by Mr. Johnston, during the 18 months following the termination date. The Company recorded $1.5 million in total severance expense pertaining to Mr. Johnston’s departure during the three months ended March 31, 2024, including $0.1 million in stock-based compensation as a result of accelerated vesting of RSUs and options (see Note 8 – Stock-Based Compensation for additional details).

As of March 31, 2024, the Company had accrued unpaid severance expense of $1.4 million pertaining to Mr. Johnston’s Severance Agreement, which is due to be paid approximately 60 days following of Mr. Johnston’s date of separation.

Executive Transition – William Mannina

On July 20, 2023, the Company announced the departure of William Mannina, former Acting Chief Financial Officer, effective August 16, 2023. Pursuant to the terms of a letter agreement between Mr. Mannina and the Company, Mr. Mannina will receive payments and benefits including cash severance payments equivalent to nine months of his then-current salary of $265,825 and premium payments for continued healthcare coverage for nine months following his resignation effective date. Mr. Mannina’s restricted stock units continued to vest through August 16, 2023.

As of March 31, 2024, the Company had accrued unpaid severance expense of approximately $0.1 million pertaining to Mr. Mannina’s agreement.

Strategic Alliance Agreement

In November 2016, the Company and Dialog Semiconductor plc (“Dialog”), a related party (see Note 11—Related Party Transactions), entered into a Strategic Alliance Agreement (“Alliance Agreement”) for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (“Licensed Products”). Pursuant to the terms of the Alliance Agreement, the Company agreed to engage Dialog as the exclusive supplier of the Licensed Products for specified fields of use, subject to certain exceptions (the “Company Exclusivity Requirement”). Dialog agreed to not distribute, sell or work with any third party to develop any competing products without the Company’s approval. In addition, both parties agreed on a revenue sharing arrangement and to collaborate on the commercialization of Licensed Products based on a mutually-agreed upon plan. Each party will retain all of its intellectual property.

The Alliance Agreement had an initial term of seven years, with automatic renewal annually thereafter unless terminated by either party upon 180 days’ prior written notice. The Company could terminate the Alliance Agreement at any time after the third anniversary of the Alliance Agreement upon 180 days’ prior written notice to Dialog, or if Dialog breached certain exclusivity obligations. Dialog could terminate the Alliance Agreement if sales of Licensed Products did not meet specified targets. The Company Exclusivity Requirement had a termination date of the earlier of January 1, 2021 or the occurrence of certain events relating to the Company’s pre-existing exclusivity obligations. The Company Exclusivity Requirement renewed automatically on an annual basis unless the Company and Dialog agreed to terminate the requirement.

Note 6 – Commitments and Contingencies, continued

On September 20, 2021, the Company was notified by Dialog, which had been recently acquired by Renesas Electronics Corporation (“Renesas”), that it was terminating the Alliance Agreement between the Company and Dialog. There is a wind down period included in the Alliance Agreement which will conclude in September 2024. During the wind down period, the Alliance Agreement’s terms will continue to apply to the Company’s products that are covered by certain existing customer relationships, except that the parties’ respective exclusivity rights have terminated (see Note 11 – Related Party Transactions for expenses incurred by the Company from Renesas).

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Capital Stock and Warrants

3 Months Ended

Mar. 31, 2024

Capital Stock and Warrants

Capital Stock and Warrants

Note 7 – Capital Stock and Warrants

Authorized Capital

The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available funds. Upon the liquidation, dissolution or winding up of the Company, holders of common stock are entitled to share ratably in all assets of the Company that are legally available for distribution.

Financing

On September 15, 2020, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on September 24, 2020 (“Prior Shelf”), and contained two prospectuses: a base prospectus, which covered the offering, issuance and sale by the Company of up to $75 million of its common stock, preferred stock, debt securities, warrants to purchase our common stock, preferred stock or debt securities, subscription rights to purchase its common stock, preferred stock or debt securities and/or units consisting of some or all of these securities; and an at-the-market sales agreement prospectus supplement covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $40 million of its common stock that may be issued and sold under the At Market Issuance Sales Agreement, as amended, between the Company and B. Riley Securities, Inc. (the “ATM Program”). The $40 million of common stock to be offered, issued and sold under the ATM Program is included in the $75 million 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 $38.8 million (net of $1.2 million in issuance costs) during the third and fourth quarters of 2020 under the ATM Program.

On October 4, 2021, the Company filed a prospectus supplement covering the offering, issuance and sale of up to an additional $35 million of shares of the Company’s common stock pursuant to the ATM Program. The Company raised net proceeds of $27.0 million (net of $0.9 million in issuance costs), during 2021 under the ATM Program. During 2022, the Company raised an additional $0.7 million (net of $0.1 million in issuance costs) under the ATM Program. During the first quarter of 2023, the Company raised $3.6 million (net of $0.2 million in issuance costs). As of March 31, 2024, there is no amount remaining in the Prior Shelf due to its expiration on September 24, 2023.

On November 15, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC, which became effective on December 16, 2021 (the “Current Shelf”). This shelf registration statement allows the Company to sell, from time to time, any combination of debt or equity securities described in the registration statement up to aggregate proceeds of $100 million. Pursuant to this registration statement, on March 28, 2023, the Company completed an underwritten offering pursuant to which it issued and sold an aggregate of (i) 412,500 shares of its common stock (the “Shares”) and (ii) warrants to purchase up to 412,500 shares of its common stock (the “2023 Warrants”), for net proceeds of $2.7 million, after deducting underwriting discounts, commission and expenses payable by the Company. The 2023 Warrants were immediately exercisable upon issuance and have a term of six years and an exercise price of $8.00. The Company allocated the proceeds received first to the 2023 Warrants based on the fair value of the 2023 Warrants as determined at initial measurement, with the remaining proceeds allocated to the Shares (see Note 9 – Warrant Liability and Note 10 – Fair Value Measurements). Pursuant to the terms of the 2023 Warrants, the exercise price was adjusted to $1.66 during 2023.

Note 7 – Capital Stock and Warrants, continued

On February 15, 2024, the Company entered into a securities purchase agreement with an institutional investor, providing for the issuance and sale by the Company in a registered direct offering (the “Offering”), of (i) 570,000 shares of the Company’s common stock, (ii) pre-funded warrants to purchase up to 450,409 shares of common stock (referred to individually as a “Pre-Funded Warrant” and collectively as the “Pre-Funded Warrants”), and (iii) warrants to purchase an aggregate of 1,020,409 shares of common stock (referred to individually as a “Warrant” and collectively as the “Warrants”). Each share of common stock and Pre-Funded Warrant was offered and sold together with an accompanying Warrant at a combined price of $1.96 per share of common stock or Pre-Funded Warrant, as applicable. Each Pre-Funded Warrant and Warrant is exercisable at any time on or after the date of issuance to purchase one share of common stock at a price of either $0.001 per share, in the case of Pre-Funded Warrants, or $1.84 per share, in the case of Warrants. The Pre-Funded Warrants expire when they are exercised in full, and the Warrants expire five years from the date of issuance. The Offering closed on February 20, 2024. The Company received net proceeds of approximately $1.8 million (net of $0.2 million in issuance costs).

Common Stock Outstanding

Our outstanding shares of common stock 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 the ESPP where actual transfer of shares normally occurs a few days after the completion of the purchase periods. There are no voting rights for shares that are deemed delivered under US GAAP until the actual delivery of shares takes place. There are currently 200,000,000 shares of common stock authorized for issuance.

Common Stock Reserved for Future Issuance

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

	March 31, 2024		December 31, 2023
Stock options outstanding		11,250		15,000
RSUs outstanding		102,179		71,734
Warrants outstanding		1,883,318		495,833
Shares available for issuance under the 2013 Equity Incentive Plan		120,949		118,877
Shares available for issuance under the 2014 Non-employee Equity Compensation Plan		23,262		29,137
Shares available for issuance under the 2015 Performance Share Unit Plan		112,647		108,897
Shares available for issuance under the 2017 Equity Inducement Plan		132,927		51,084
Shares available for issuance under the Employee Stock Purchase Plan		14,716		14,716
Total		2,401,248		905,278

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Stock Based Compensation

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Stock Based Compensation

Note 8 – Stock-Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

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

As of March 31, 2024, 120,949 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

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

As of March 31, 2024, 23,262 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

2015 Performance Share Unit Plan

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

As of March 31, 2024, 112,647 shares of common stock remain eligible to be issued through equity-based instruments under the 2015 Performance Share Unit Plan.

2017 Equity Inducement Plan

On December 28, 2017, the Board approved the 2017 Equity Inducement Plan. Under the 2017 Equity Inducement Plan, the Board reserved 30,000 shares for the grant of RSUs. These grants will be administered by the Board or a committee of the Board. These awards will be granted to individuals who (a) are being hired as an employee by the Company or any subsidiary and such award is a material inducement to such person being hired; (b) are being rehired as an employee following a bona fide period of interruption of employment with the Company or any subsidiary; or (c) will become an employee of the Company or any subsidiary in connection with a merger or acquisition.

On July 20, 2022, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Equity Inducement Plan by 100,000 shares. On March 28, 2024, the Board increased the number of shares of common stock reserved and available for issuance under the 2017 Equity Inducement Plan by 121,510 shares. As of March 31, 2024, 132,927 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

Note 8 – Stock-Based Compensation, continued

Employee Stock Purchase Plan

In April 2015, the Company’s Board approved the ESPP, under which 30,000 shares of common stock were reserved for purchase by the Company’s employees, subject to the approval by the Company’s stockholders. On May 21, 2015, the Company’s stockholders approved the ESPP. Effective on June 14, 2023, the Company’s stockholders approved the amendment and restatement of the ESPP to increase the number of shares reserved for issuance through equity-based instruments thereunder by 25,000 shares, bringing the total number of shares approved for issuance under that plan to 102,500. Under the ESPP, employees may designate an amount not less than 1% but not more than 10% of their annual compensation for the purchase of Company shares. No more than 375 shares may be purchased by an employee under the ESPP during an offering period. An offering period is six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of options purchased under the ESPP is the lesser of 85% of the fair market 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, 2024, 14,716 shares of common stock remain eligible to be issued under the ESPP. Employees contributed approximately $36,000 through payroll withholdings to the ESPP as of March 31, 2024 for the current offering period which will end on June 30, 2024 with shares deemed delivered on that date.

Stock Option Activity

In February 2022, the Board granted the Company’s former Chief Executive Officer 15,000 stock options under the 2013 Equity Incentive Plan at an exercise price of $25.40 per share with half of the options vesting on the second anniversary of the vesting start date and a quarter of the options vesting on each of the two following anniversaries. Under the former Chief Executive Officer’s Severance Agreement, unvested awards vesting within 18 months of termination were accelerated and became vested on March 26, 2024. Consequently, 3,750 options became vested and another 3,750 options were forfeited. This resulted in stock-based compensation expense of approximately $53,000 during the three months ended March 31, 2024.

No stock options were granted during the three months ended March 31, 2023 and 2024.

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2024:

				Weighted
		Weighted		Average
		Average		Remaining
	Number of	Exercise		Life In	Intrinsic
	Options	Price		Years	Value
Outstanding as of January 1, 2024	15,000	$	25.40	7.9	$	—
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited	(3,750)		25.40	—		—
Outstanding as of March 31, 2024	11,250	$	25.40	0.2	$	—
Exercisable as of January 1, 2024	7,500	$	25.40	7.9	$	—
Vested	3,750		25.40	—		—
Exercised	—		—	—		—
Forfeited	—		—	—		—
Exercisable as of March 31, 2024	11,250	$	25.40	0.2	$	—

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

Note 8 – Stock-Based Compensation, continued

RSUs

During the three months ended March 31, 2024, the Board granted its interim principal executive officer and Chief Financial Officer RSUs covering 50,000 shares of common stock under the 2017 Equity Inducement Plan and RSUs covering 2,000 shares of common stock under the 2013 Equity Incentive Plan. The awards vest over four years.

During the three months ended March 31, 2024, the Compensation Committee granted various non-employees RSUs covering 6,000 shares of common stock under the 2014 Non-Employee Equity Compensation Plan. The awards vest on the one-year anniversary of the grant date.

Under the former Chief Executive Officer’s Severance Agreement, unvested RSUs vesting within 18 months of termination were accelerated and became vested on March 26, 2024. Consequently, 3,017 RSUs became vested resulting in stock-based compensation expense of approximately $77,000 during the three months ended March 31, 2024.

As of March 31, 2024, the unamortized fair value of the RSUs was $0.8 million. The unamortized amount will be expensed over a weighted average period of 1.9 years. A summary of the activity related to RSUs for the three months ended March 31, 2024 is presented below:

		Weighted
		Average
		Grant
		Date Fair
	Total	Value
Outstanding at January 1, 2024	71,734	$	24.65
RSUs granted	58,000		1.67
RSUs forfeited	(10,780)		13.52
RSUs vested	(16,775)		18.82
Outstanding at March 31, 2024	102,179	$	13.39

PSUs

PSUs are grants that vest upon the achievement of certain performance goals. The goals are commonly related to the Company’s revenue and achievement of sales and marketing goals.

On July 20, 2022, the Board granted the Company’s former Chief Executive Officer, Cesar Johnston, up to 14,350 PSUs under the Company’s 2015 Performance Share Unit Plan pursuant to the terms of Mr. Johnston’s offer letter with the Company (See Note 6 – Commitments and Contingencies). The up to 14,350 PSUs that had been approved were to vest as follows: (a) up to 9,350 PSU shares would vest on December 31, 2022, subject to Mr. Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr. Johnston of certain performance metrics previously determined by the Compensation Committee and approved by the Board, and (b) up to an additional 2,500 PSU shares would vest on each of December 31, 2023 and December 31, 2024, subject to Mr. Johnston’s continued service as Chief Executive Officer and the achievement, to be determined in the Compensation Committee’s sole discretion, by Mr. Johnston of certain performance metrics to be recommended by the Compensation Committee and approved by the Board at a subsequent date.

There was no PSU activity for the three months ended March 31, 2024 and 2023. The 2,500 PSU shares that were reserved for grant during 2024 per Mr. Johnston’s offer letter with the Company, as well as the 1,250 shares reserved for potential outperformance by Mr. Johnston of 2024 goals were returned to the 2015 Performance Share Unit Plan for future issuance.

Note 8 – Stock-Based Compensation, continued

Employee Stock Purchase Plan

The current offering period under the ESPP started on January 1, 2024 and will conclude on June 30, 2024. During the year ended December 31, 2023, there were two offering periods. The first offering period began on January 1, 2023 and concluded on June 30, 2023. The second offering period began on July 1, 2023 and concluded on December 31, 2023.

The weighted average grant-date fair value of the purchase option for each designated share purchased under the ESPP was approximately $0.85 and $8.00 for the three months ended March 31, 2024 and 2023, respectively, which represents the fair value of the option, consisting of three main components: (i) the value of the discount on the enrollment date, (ii) the proportionate value of the call option for 85% of the stock and (iii) the proportionate value of the put option for 15% of the stock. The Company recognized compensation expense for the ESPP of approximately $19,000 and $25,000 for the three months ended March 31, 2024 and 2023, respectively.

The Company estimated the fair value of ESPP purchase options granted during the three months ended March 31, 2024 and 2023 using the Black-Scholes option pricing model. The fair values of ESPP purchase options granted were estimated using the following assumptions:

	Three Months Ended March 31,
	2024			2023
Stock price	$	1.83		$	16.72
Dividend yield		0	%		0	%
Expected volatility		112	%		59	%
Risk-free interest rate		5.26	%		4.42	%
Expected life		6 months			6 months

Stock-Based Compensation Expense

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

	Three Months Ended March 31,
	2024		2023
Research and development	$	107	$	209
Sales and marketing		80		105
General and administrative		87		208
Severance expense		130		—
Total	$	404	$	522

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Warrant Liability

3 Months Ended

Mar. 31, 2024

Warrant Liability

Warrant Liability

Note 9 – Warrant Liability

2023 Warrants

In March 2023, the Company issued 412,500 warrants to purchase up to 412,500 shares of its common stock. The 2023 Warrants have a six-year term and were exercisable upon issuance on March 28, 2023. Each 2023 Warrant was initially exercisable for one share of the Company’s common stock at a price of $8.00 per share. As of March 31, 2024, the exercise price was adjusted to $1.66 per share (subject to further adjustment in certain circumstances, including in the event of stock dividends and splits; recapitalizations; change of control transactions; and issuances or sales of, or agreements to issue or sell, shares of common stock or common stock equivalents at a price per share less than the then-applicable exercise price for the 2023 Warrants, including sales under the ATM, the “Exercise Price”).

In the event of certain transactions such as a merger, consolidation, tender offer, reorganization, or other change in control, if holders of common stock are given any choice as to the consideration to be received, the holder of each 2023 Warrant shall be given the same choice of alternate consideration. In the event of certain transactions that are not within the Company’s control, such as a merger, consolidation, tender offer, reorganization, or other change in control of the Company, each holder of a 2023 Warrant shall be entitled to receive the same form of consideration at the Black Scholes value of the unexercised portion of the 2023 Warrant that is being offered and paid to holders of common stock, including the option to exercise the 2023 Warrants on a “cashless basis”.

If the Company issues additional shares of common stock or equity-linked securities for a consideration per share less than the Exercise Price, then such Exercise Price will be reduced to a new lower price pursuant to the terms of the 2023 Warrants. Additionally, if the Exercise Price of any outstanding derivative securities is modified by the Company such that such security’s modified exercise price is below the Exercise Price, the Exercise Price will adjust downward pursuant to the terms of the 2023 Warrant. This provision would not apply for stock or stock equivalents which fall under shares that qualify for exempt issuance, such as if the Company adjusted the option exercise price for an option granted to an employee, officer, or director.

The Company accounted for the 2023 Warrants in accordance with the derivative guidance contained in ASC 815-40, as the warrants did not meet the criteria for equity treatment. The Company believes that the adjustments to the Exercise Price is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40, and thus the 2023 Warrants are not eligible for an exception from derivative accounting. As such, the 2023 Warrants were initially measured at fair value and recorded as a liability in the amount of $3.1 million. As of March 31, 2024, all 2023 Warrants were outstanding. As of March 31, 2024, the fair value of the warrant liability was $0.7 million. The Company recorded a change in fair value of the warrant liability of $0.1 million for the three months ended March 31, 2024. The Company did not record a change in fair value of the warrant liability for the three months ended March 31, 2023.

	For the three months ended March 31,
	2024		2023
Beginning value	$	620	$	—
Initial valuation of new warrants		—		3,135
Change in value of warrant liability		82		—
Ending value	$	702	$	3,135

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Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Fair Value Measurements

Note 10 – Fair Value Measurements

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

	Balance as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	10,110	$	—	$	—	$	10,110
Liabilities:
Warrant liability	$	—	$	—	$	702	$	702

	Balance as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	12,567	$	—	$	—	$	12,567
Liabilities:
Warrant liability	$	—	$	—	$	620	$	620

There were no transfers among Level 1, Level 2, or Level 3 categories during the periods presented.

2023 Warrants

The Company utilizes a Monte Carlo simulation model for the 2023 Warrants at each reporting period, with changes in fair value recognized in the statements of operations. The estimated fair value of the 2023 Warrant liability is determined using Level 3 inputs. Inherent in a Monte Carlo simulation model are assumptions related to expected share-price volatility, expected life, risk-free interest rate, and dividend yield.

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

	As of March 31,
	2024			2023
Share price	$	2.03		$	10.80
Exercise price	$	1.66		$	8.00
Term (in years)		5.0			6.0
Volatility		85	%		65	%
Risk-free rate		4.2	%		3.6	%
Dividend yield		0	%		0	%

The change in the fair value of the 2023 Warrant liability was determined to be $0.1 million during the three months ended March 31, 2024. There was no change in fair value of the 2023 Warrant liability for the three months ended March 31, 2023 (see Note 9 – Warrant Liability).

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Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions

Related Party Transactions

Note 11 – Related Party Transactions

In November 2016, the Company and Dialog entered into the Alliance Agreement for the manufacture, distribution and commercialization of products incorporating the Company’s wire-free charging technology (See Note 6 – Commitments and Contingencies, Strategic Alliance Agreement). On November 7, 2016 and June 28, 2017, the Company and Dialog entered into securities purchase agreements under which Dialog acquired a total of 86,985 shares of common stock and received warrants to purchase up to 70,878 shares of common stock. As of March 31, 2024, none of the warrants remain outstanding. As of March 31, 2024, Renesas owns approximately 1.4% of the Company’s outstanding common stock. The Company did not record any revenue during the three months ended March 31, 2024 and 2023 under the Alliance Agreement. The Company incurred $0 and $0.1 million in chip test development expense from Renesas, which acquired Dialog in August 2021, during the three months ended March 31, 2024 and 2023, respectively.

On September 20, 2021, the Company was notified by Dialog that it was terminating the Alliance Agreement between the Company and Dialog.

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Customer Concentrations

3 Months Ended

Mar. 31, 2024

Customer Concentrations

Customer Concentrations

Note 12 – Customer Concentrations

Four customers accounted for approximately 87% of the Company’s revenue for the three months ended March 31, 2024, and two customers accounted for approximately 84% of the Company’s revenue for the three months ended March 31, 2023. Two customers accounted for approximately 92% of the Company’s accounts receivable balance as of March 31, 2024, and two customers accounted for approximately 88% of the Company’s accounts receivable balance as of December 31, 2023.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the period presented. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for other future periods.

These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 28, 2024. The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2023 audited financial statements.

Reclassifications

Reclassifications

Certain reclassifications have been made to the fiscal year 2023 condensed balance sheet to conform to the fiscal year 2024 presentation. The reclassifications had no impact on total assets, total liabilities, or stockholders’ equity.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with 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.

The Company’s significant estimates and assumptions include the valuation of stock-based compensation instruments, recognition of revenue, inventory valuation, fair value of warrant liabilities and the valuation allowance on deferred tax assets. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term, highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. The Company maintains cash balances that may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation limits. The Company maintains its cash deposits with major financial institutions. The Company reports restricted cash on its balance sheet to disclose the amount reserved for a specific purpose aside from ordinary business operations. The Company has restricted cash as collateral for the Company’s corporate credit card program. As of March 31, 2024 and December 31, 2023, the carrying value of restricted cash was $0.1 million and $0.1 million, respectively.

Warrants

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each reporting period.

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 the proceeds received.

Fair Value

Fair Value

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

ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities to which the Company has access at a measurement date.

● Level 2: Observable inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3: Unobservable inputs for which little or no market data exists and for which the Company must develop its own assumptions regarding the assumptions that market participants would use in pricing the asset or liability, including assumptions regarding risk.

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

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses and other current assets, and accounts payable and accrued expenses, are an approximate of their fair values because of the short maturity of these instruments. The Company’s warrant liability recognized at fair value on a recurring basis is a level 3 measurement (see Note 8 – Fair Value Measurement).

Revenue Recognition

Revenue Recognition

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

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

1. Identify the contract with a 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 in the contract.

5. Recognize revenue when or as the performance obligations are satisfied.

The Company’s revenue consists of its single segment of wireless charging system solutions. The wireless charging system revenue consists of revenue from product development projects and production-level systems. During the three months ended March 31, 2024 and 2023, the Company recognized $0.1 million and $0.1 million, respectively, in revenue.

The Company records revenue associated with product development projects that it enters into with certain customers. In general, these product development projects are complex, and the Company does not have certainty about its ability to achieve the project milestones. The achievement of a milestone is dependent on the Company’s performance obligation and requires acceptance by the customer. The Company recognizes this revenue at the point in time at which the performance obligation is met. The payment associated with achieving the performance obligation is generally commensurate with the Company’s effort or the value of the deliverable and is nonrefundable. Any deferred revenue is recognized upon achievement of the performance obligation or expiration of a support agreement.

Inventory

Inventory

The Company follows ASC 330, “Inventory” (“Topic 330”) to account for its inventory, which includes finished goods ready for sale, work in process and raw materials, at the lower of cost or net realizable value. Net realizable value is calculated at the end of each reporting period and adjustment, if needed, is made. At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis.

Research and Development

Research and Development

Research and development expenses are charged to operations as incurred. For internally developed patents, all patent costs are expensed as incurred as research and development expense. Patent application costs, which are generally legal costs, are expensed as research and development costs until such time as the future economic benefits of such patents become more certain. The Company incurred research and development costs of $2.3 million and $3.1 million for the three months ended March 31, 2024 and 2023, respectively.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for equity instruments issued to employees, board members and contractors in accordance with accounting guidance that requires awards to be recorded at their fair value on the date of grant and amortized over the vesting period of the award. The Company amortizes compensation costs on a straight-line basis over the requisite service period of the award, which is typically the vesting term of the equity instrument issued.

Under the ESPP, employees may purchase a limited number of shares of the Company’s common stock at a 15% discount from the lower of the closing market prices measured on the first and last days of each half-year period. The Company recognizes stock-based compensation expense for the fair value of the purchase options, as measured on the grant date.

Income Taxes

Income Taxes

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of March 31, 2024, no liability for unrecognized tax benefits was required to be reported. The guidance from ASC 740, “Income Taxes” also discusses the classification of related interest and penalties on income taxes. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the three months ended March 31, 2024 and 2023. The Company files income tax returns with the United States, California, Texas and Arizona governments.

Net Loss Per Common Share

Net Loss Per Common Share

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. 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 1,546,213 and 644,530, as outlined in the table below, for the three months ended March 31, 2024 and 2023, respectively, because their inclusion would be anti-dilutive.

	For the Three Months Ended
	March 31,
	2024	2023
Warrants issued to investors 1	1,432,909	495,833
Options to purchase common stock	11,250	15,000
RSUs	102,054	133,697
Total potentially dilutive securities	1,546,213	644,530

For the three months ended March 31, 2024, the table above includes 1,020,409 warrants expiring on February 20, 2029, which have an exercise price of $1.84 and 412,500 warrants expiring on March 28, 2029, which have an exercise price of $1.66. For the three months ended March 31, 2023, the table above includes 83,333 warrants that expired on March 1, 2024, which had an exercise price of $200, and 412,500 warrants expiring on March 28, 2029, which have an exercise price of $1.66.

¹ The weighted average number of common shares outstanding as of March 31, 2024 includes the weighted average effect of the 450,409 pre-funded warrants issued in connection with a registered direct offering the Company entered into on February 15, 2024 (see Note 7 – Capital Stock and Warrants) because the exercise of such warrants requires nominal consideration ($0.001 per share exercise price for each pre-funded warrant). As of March 31, 2024, none of the pre-funded warrants have been exercised; therefore, all 450,409 outstanding pre-funded warrants as of that date are not included in the table above.

Leases

Leases

The Company determines if an arrangement is a lease at the inception of the arrangement. The Company applies the short-term lease recognition exemption and recognizes lease payments in profit or loss at lease commencement for facility or equipment leases that have a lease term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities.

ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are measured and recorded at the later of the adoption date, January 1, 2019, or the service commencement date based on the present value of lease payments over the lease term. The Company uses the implicit interest rate when readily determinable; however, most leases do not establish an implicit rate, so the Company uses an estimate of the incremental borrowing rate based on the information available at the time of measurement. Lease expense for lease payments is recognized on a straight-line basis over the lease term. See Note 6 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.

Recently Issued Pronouncements

Recently Issued Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting” (“Topic 280”), Improvements to Reportable Segment Reporting. This standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses This standard is effective for the Company’s annual fiscal period beginning January 1, 2024 and for the Company’s interim periods beginning January 1, 2025. Adoption of this standard will not likely have a material impact on the Company’s financial statements.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes” (“Topic 740”), Improvements to Income Tax Disclosures. This standard is intended to enhance the transparency and usefulness of income tax disclosures to better asses how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This standard is effective for the Company’s annual fiscal period beginning January 1, 2025. Adoption of this standard will not likely have a material impact on the Company’s financial statements.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	For the Three Months Ended
	March 31,
	2024	2023
Warrants issued to investors 1	1,432,909	495,833
Options to purchase common stock	11,250	15,000
RSUs	102,054	133,697
Total potentially dilutive securities	1,546,213	644,530

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Inventory (Tables)

3 Months Ended

Mar. 31, 2024

Inventory

Summary of inventory balance

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

	Balance as of
	March 31, 2024		December 31, 2023
Raw Materials	$	295	$	101
Work-in-process		51		52
Finished goods		277		277
Total	$	623	$	430

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Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2024

Accrued Expenses

Schedule of Accrued Liabilities

Accrued expenses consist of the following (in thousands):

	Balance as of
	March 31, 2024		December 31, 2023
Accrued compensation	$	660	$	993
Accrued legal expenses		303		147
Other accrued expenses		207		114
Total	$	1,170	$	1,254

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Schedule of Reconciliation of Undiscounted Cash Flows to Lease Liabilities Recognized

A reconciliation of undiscounted cash flows to lease liabilities recognized as of March 31, 2024 is as follows (in thousands):

For the year ending December 31,	Amount
2024 (remaining)	$	552
2025		562
Total future lease payments		1,114
Present value discount (8.0% weighted average)		(61)
Total operating lease liabilities	$	1,053

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Capital Stock and Warrants (Tables)

3 Months Ended

Mar. 31, 2024

Capital Stock and Warrants

Schedule of shares of common stock reserved for future issuance

	March 31, 2024		December 31, 2023
Stock options outstanding		11,250		15,000
RSUs outstanding		102,179		71,734
Warrants outstanding		1,883,318		495,833
Shares available for issuance under the 2013 Equity Incentive Plan		120,949		118,877
Shares available for issuance under the 2014 Non-employee Equity Compensation Plan		23,262		29,137
Shares available for issuance under the 2015 Performance Share Unit Plan		112,647		108,897
Shares available for issuance under the 2017 Equity Inducement Plan		132,927		51,084
Shares available for issuance under the Employee Stock Purchase Plan		14,716		14,716
Total		2,401,248		905,278

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Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Summary of Stock Option Activity

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2024:

				Weighted
		Weighted		Average
		Average		Remaining
	Number of	Exercise		Life In	Intrinsic
	Options	Price		Years	Value
Outstanding as of January 1, 2024	15,000	$	25.40	7.9	$	—
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited	(3,750)		25.40	—		—
Outstanding as of March 31, 2024	11,250	$	25.40	0.2	$	—
Exercisable as of January 1, 2024	7,500	$	25.40	7.9	$	—
Vested	3,750		25.40	—		—
Exercised	—		—	—		—
Forfeited	—		—	—		—
Exercisable as of March 31, 2024	11,250	$	25.40	0.2	$	—

Schedule of Restricted Stock Units Activity

		Weighted
		Average
		Grant
		Date Fair
	Total	Value
Outstanding at January 1, 2024	71,734	$	24.65
RSUs granted	58,000		1.67
RSUs forfeited	(10,780)		13.52
RSUs vested	(16,775)		18.82
Outstanding at March 31, 2024	102,179	$	13.39

Summary of Fair Values of Stock Options Granted

	Three Months Ended March 31,
	2024			2023
Stock price	$	1.83		$	16.72
Dividend yield		0	%		0	%
Expected volatility		112	%		59	%
Risk-free interest rate		5.26	%		4.42	%
Expected life		6 months			6 months

Summary of Stock-based Compensation Reflected within Statements of Operations

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

	Three Months Ended March 31,
	2024		2023
Research and development	$	107	$	209
Sales and marketing		80		105
General and administrative		87		208
Severance expense		130		—
Total	$	404	$	522

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Warrant Liability (Tables)

3 Months Ended

Mar. 31, 2024

Warrant Liability

Schedule of changes in fair value of liability

	For the three months ended March 31,
	2024		2023
Beginning value	$	620	$	—
Initial valuation of new warrants		—		3,135
Change in value of warrant liability		82		—
Ending value	$	702	$	3,135

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis

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

	Balance as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	10,110	$	—	$	—	$	10,110
Liabilities:
Warrant liability	$	—	$	—	$	702	$	702

	Balance as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	12,567	$	—	$	—	$	12,567
Liabilities:
Warrant liability	$	—	$	—	$	620	$	620

Schedule of Estimated Fair Value of the Warrant Liability

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

	As of March 31,
	2024			2023
Share price	$	2.03		$	10.80
Exercise price	$	1.66		$	8.00
Term (in years)		5.0			6.0
Volatility		85	%		65	%
Risk-free rate		4.2	%		3.6	%
Dividend yield		0	%		0	%

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Business Organization, Nature of Operations - Additional Information (Details)			3 Months Ended
	Aug. 15, 2023	Jun. 14, 2023	Mar. 31, 2024
Reverse stock split, description	1-for-20	1-for-20	1-for-20
Reverse stock split, conversion ratio	20		20
Maximum
Reverse stock split, conversion ratio		20

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Liquidity and Management Plans - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Liquidity And Management Plan
Engineering product development	$ 64	$ 97
Net loss	(6,599)	(6,653)
Net cash provided by (used in) operating activities	(5,073)	(5,364)
Net proceeds of securities offerings	1,800		$ 6,900	$ 700	$ 27,000
Cash and cash equivalents, at carrying value, total	10,655		$ 13,876
Technology Service
Liquidity And Management Plan
Engineering product development	$ 100	$ 100

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2015	Mar. 31, 2024	Mar. 31, 2023	Feb. 15, 2024	Dec. 31, 2023	Mar. 28, 2023
Summary of Significant Accounting Policies
Restricted cash		$ 100			$ 100
Revenue		64	$ 97
Research and development expense, total		2,349	3,079
Liability for unrecognized tax benefits		0
Interest or penalties for uncertain tax positions		$ 0	$ 0
Antidilutive securities excluded from computation of earnings per share, amount		1,546,213	644,530
Exercise price				$ 1.84		$ 8.00
Warrants outstanding		450,409
Pre Funded Warrant
Summary of Significant Accounting Policies
Exercise price		$ 0.001		$ 0.001
Weighted average effect		450,409
Warrants exercised		0
Number Of Issued Warrants Included In The Weighted Average Effect		450,409
Warrants Issued to Investors
Summary of Significant Accounting Policies
Antidilutive securities excluded from computation of earnings per share, amount		1,432,909	495,833
Exercise price		$ 1.66
Warrants Issued to Investors | Expiring at March 1 2024
Summary of Significant Accounting Policies
Antidilutive securities excluded from computation of earnings per share, amount		1,020,409
Exercise price		$ 1.84
Warrants Issued to Investors | Expiring at March 1 2023
Summary of Significant Accounting Policies
Antidilutive securities excluded from computation of earnings per share, amount			83,333
Exercise price			$ 200
Warrants Issued to Investors | Expiring on March 28 2029
Summary of Significant Accounting Policies
Antidilutive securities excluded from computation of earnings per share, amount		412,500	412,500
Exercise price		$ 1.66	$ 1.66
Employee Stock Purchase Plan
Summary of Significant Accounting Policies
Common stock purchase price discount percentage	85.00%	15.00%
Product Development Projects Revenue
Summary of Significant Accounting Policies
Revenue		$ 100	$ 100

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Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Summary of Significant Accounting Policies
Total potentially dilutive securities	1,546,213	644,530
Warrants Issued to Investors
Summary of Significant Accounting Policies
Total potentially dilutive securities	1,432,909	495,833
Employee Stock Option
Summary of Significant Accounting Policies
Total potentially dilutive securities	11,250	15,000
Restricted Stock Units (RSUs) [Member]
Summary of Significant Accounting Policies
Total potentially dilutive securities	102,054	133,697

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Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Inventory
Raw materials	$ 295	$ 101
Work-in-process	51	52
Finished goods	277	277
Total	$ 623	$ 430

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Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued Expenses
Accrued compensation	$ 660	$ 993
Accrued legal expenses	303	147
Other accrued expenses	207	114
Total	$ 1,170	$ 1,254

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Commitments and Contingencies - Operating Leases - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended
	Oct. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Jan. 01, 2024	Dec. 31, 2023	May 22, 2022	May 20, 2022
Commitments and Contingencies
ROU lease assets		$ 1,029,000			$ 1,240,000
Operating lease liability		684,000			707,000
Total operating lease payments		1,114,000
Long-term portion of operating lease liabilities		369,000			$ 557,000
Accounting Standards Update 2016-02
Commitments and Contingencies
ROU lease assets		1,000,000.0
Operating lease liability		700,000
Total operating lease payments		1,100,000
Long-term portion of operating lease liabilities		$ 400,000
Weighted average remaining lease term		1 year 6 months
San Jose, California
Commitments and Contingencies
Operating lease, renewal term						3 years
ROU lease assets							$ 2,100,000
Operating lease liability							$ 2,100,000
Operating lease present value discount rate				8.00%			3.00%
Operating lease payment	$ 59,000
Lease expenses		$ 200,000	$ 200,000
Reduction in Right-Of-Use Asset				$ 51,000
Reduction in Lease Liability				$ 51,000
San Jose, California | Maximum
Commitments and Contingencies
Maximum monthly lease payment	$ 62,000

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Commitments and Contingencies - Schedule of Reconciliation of Undiscounted Cash Flows to Lease Liabilities Recognized (Detail) $ in Thousands	Mar. 31, 2024 USD ($)
Reconciliation of undiscounted cash flows to lease liabilities
2024 (remaining)	$ 552
2025	562
Total future lease payments	1,114
Present value discount (8.0% weighted average)	(61)
Total operating lease liabilities	$ 1,053

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Commitments and Contingencies - Hosted Design Software Agreement (Details) $ in Millions	1 Months Ended
	Jun. 30, 2021 USD ($)
Commitments and Contingencies
Initial term of agreement	3 years
Quarterly payments for service agreement	$ 0.2

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Commitments and Contingencies - MBO Bonus Plan (Details) - Executive Officers [Member] - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies
Bonus expense	$ 0.1
Accrued Expenses [Member]
Commitments and Contingencies
Bonus expense	$ 0.2	$ 0.5

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Commitments and Contingencies - Executive Transition - Cesar Johnston (Details) - USD ($) $ in Thousands		3 Months Ended
	Mar. 24, 2024	Mar. 31, 2024	Dec. 31, 2023
Commitments And Contingencies [Line Items]
Severance expense		$ 1,563
Accrued severance expense		1,469	$ 134
Mr. Johnston | Amended and Restated Severance and Change in Control Agreement [Member]
Commitments And Contingencies [Line Items]
Monthly salary	18 months
Target bonus percentage	100.00%
Scheduled to vest	18 months
Termination date	18 months
Severance expense		1,500
Compensation-based payments		100
Accrued severance expense		$ 1,400
Date of separation		60 days

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Commitments and Contingencies - Executive Transition Agreement - William Mannina (Details) - USD ($)	Jul. 20, 2023	Mar. 31, 2024	Dec. 31, 2023
Commitments And Contingencies [Line Items]
Accrued severance expense		$ 1,469,000	$ 134,000
Mr. William Mannina [Member]
Commitments And Contingencies [Line Items]
Payments and benefits to be received including cash severance payments	$ 265,825
Accrued severance expense		$ 100,000

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Commitments and Contingencies - Strategic Alliance Agreement (Details)	1 Months Ended
	Jun. 30, 2021	Nov. 30, 2016
Commitments and Contingencies
Initial term of agreement	3 years
Strategic Alliance Agreement
Commitments and Contingencies
Initial term of agreement		7 years

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Capital Stock and Warrants - Additional Information (Detail)							3 Months Ended			12 Months Ended
	Feb. 20, 2024 USD ($)	Mar. 28, 2023 USD ($) $ / shares shares	Dec. 16, 2021 USD ($)	Oct. 04, 2021 USD ($)	Sep. 24, 2020 USD ($)	Sep. 24, 2020 USD ($)	Mar. 31, 2024 USD ($) Vote $ / shares shares	Mar. 31, 2023 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Feb. 15, 2024 $ / shares shares	Dec. 31, 2023 $ / shares shares
Capital Stock and Warrants
Number of common stock voting entitlement per share | Vote							1
Securities reserved for issuance		$ 2,700,000	$ 100,000,000
At-the-market ("ATM") funds receivable									$ 38,800,000
Accounting issuance costs will be paid					$ 1,200,000
Issuance of shares in an at-the-market ("ATM") placement, net of issuance costs							$ 47,000	$ 2,675,000
Net of issuance costs from offering of shares	$ 200,000
Common stock, shares issued | shares		412,500					6,085,766					570,000	5,471,121
Class of warrant or right, number of securities called by warrants or rights | shares		412,500
Exercise price | $ / shares		$ 8.00										$ 1.84
Common stock, par value | $ / shares							$ 0.00001						$ 0.00001
Warrants exercisable term							6 years
Warrants term												5 years
Proceeds of securities offerings	$ 1,800,000
Common stock outstanding							Our outstanding shares of common stock 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 the ESPP where actual transfer of shares normally occurs a few days after the completion of the purchase periods. There are no voting rights for shares that are deemed delivered under US GAAP until the actual delivery of shares takes place. There are currently 200,000,000 shares of common stock authorized for issuance.
Common stock, shares authorized | shares							200,000,000						200,000,000
Pre Funded Warrant
Capital Stock and Warrants
Class of warrant or right, number of securities called by warrants or rights | shares												450,409
Exercise price | $ / shares							$ 0.001					$ 0.001
Common Stock Or Pre Funded Warrant
Capital Stock and Warrants
Class of warrant or right, number of securities called by warrants or rights | shares												1,020,409
Stock price | $ / shares												$ 1.96
Warrants Issued to Investors
Capital Stock and Warrants
Exercise price | $ / shares							$ 1.66
Maximum
Capital Stock and Warrants
Securities reserved for issuance					75,000,000	$ 75,000,000
Sales Agreement
Capital Stock and Warrants
Sale of stock, Description							The $40 million of common stock to be offered, issued and sold under the ATM Program is included in the $75 million of securities that may be offered, issued and sold by the Company under the base prospectus.
Issuance of shares in an at-the-market ("ATM") placement, net of issuance costs								3,600,000		$ 700,000	$ 27,000,000.0
Net of issuance costs from offering of shares								$ 200,000		$ 100,000	$ 900,000
Remaining securities under agreements to Repurchase on shelf registration statement							$ 0
Sales Agreement | Maximum
Capital Stock and Warrants
Securities sold under agreements				$ 35,000,000	$ 40,000,000

XML

Capital Stock and Warrants - Shares of common stock reserved for future issuance (Details) - shares	Mar. 31, 2024	Mar. 28, 2024	Dec. 31, 2023	Jun. 14, 2023	Jul. 20, 2022	Jun. 16, 2021	May 26, 2020	Dec. 28, 2017
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	2,401,248		905,278
2013 Equity Incentive Plan
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	120,949		118,877	50,000
2014 Non-employee Equity Compensation Plan
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	23,262		29,137				40,000
2015 Performance Share Unit Plan
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	112,647		108,897			85,000
2017 Equity Inducement Plan
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	132,927	121,510	51,084		100,000
Employee Stock Purchase Plan
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	14,716		14,716
Employee Stock Option
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	11,250		15,000
RSUs
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	102,179		71,734
RSUs | 2017 Equity Inducement Plan
Capital Stock and Warrants
Total shares of common stock reserved for future issuance								30,000
Warrants
Capital Stock and Warrants
Total shares of common stock reserved for future issuance	1,883,318		495,833

XML

Stock Based Compensation - Equity Incentive Plan - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Apr. 30, 2015	Mar. 31, 2024	Mar. 28, 2024	Dec. 31, 2023	Jun. 14, 2023	Jul. 20, 2022	Jun. 16, 2021	May 26, 2020	Dec. 28, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance		2,401,248		905,278
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance		102,179		71,734
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, number of shares authorized for issuance					102,500
Common stock, capital shares reserved for future issuance	30,000				25,000
Common stock remain eligible to be issued		14,716
Lowest percentage of annual compensation to be utilized by an employee for purchase of shares under the plan	1.00%
Highest percentage of annual compensation to be utilized by an employee for purchase of shares under the plan	10.00%
Maximum number of shares permitted to purchase	375
Vesting period	6 months
Exercise price discount from fair value on offering date	85.00%
Exercise price discount from fair value on exercise date	85.00%	15.00%
Employee contribution through payroll withholdings		$ 36,000
2013 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, number of shares authorized for issuance					489,298
Common stock, capital shares reserved for future issuance		120,949		118,877	50,000
Common stock remain eligible to be issued		120,949
Non-Employee Equity Compensation Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, number of shares authorized for issuance								82,500
Common stock, capital shares reserved for future issuance		23,262		29,137				40,000
Common stock remain eligible to be issued		23,262
2015 Performance Share Unit Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, number of shares authorized for issuance							255,505
Common stock, capital shares reserved for future issuance		112,647		108,897			85,000
Common stock remain eligible to be issued		112,647
2017 Equity Inducement Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance		132,927	121,510	51,084		100,000
Common stock remain eligible to be issued		132,927
2017 Equity Inducement Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance									30,000

XML

Stock Based Compensation - Additional Information (Detail) - USD ($)			1 Months Ended	3 Months Ended
	Mar. 26, 2024	Mar. 24, 2024	Feb. 28, 2022	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting description			half of the options vesting on the second anniversary of the vesting start date and a quarter of the options vesting on each of the two following anniversaries
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Vested				3,750
Number of options, Forfeited				3,750
2013 Equity Incentive Plan | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			15,000	0	0
2013 Equity Incentive Plan | Employee Stock Option | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price per share of shares granted			$ 25.40
Number of Options, Vested	3,750
Number of options, Forfeited		3,750
Stock-based compensation expense				$ 53,000

XML

Stock Based Compensation - Summary of Stock Option Activity (Detail) - Employee Stock Option - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Outstanding	15,000
Number of Options, Forfeited	(3,750)
Number of Options, Outstanding	11,250	15,000
Number of Options, Exercisable	7,500
Number of Options, Vested	3,750
Number of Options, Exercisable	11,250	7,500
Weighted Average Exercise Price, Outstanding	$ 25.40
Weighted Average Exercise Price, Forfeited	25.40
Weighted Average Exercise Price, Outstanding	25.40	$ 25.40
Weighted Average Exercise Price, Exercisable	25.40
Weighted Average Exercise Price, Vested	25.40
Weighted Average Exercise Price, Exercisable	$ 25.40	$ 25.40
Weighted Average Remaining Life In Years, Outstanding	2 months 12 days	7 years 10 months 24 days
Weighted Average Remaining Life In Years, Exercisable	2 months 12 days	7 years 10 months 24 days

XML

Stock Based Compensation - Performance Share Units (Detail) - USD ($)		3 Months Ended	12 Months Ended
	Jul. 20, 2022	Mar. 31, 2024	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
2015 Performance Share Unit Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance		1,250
Performance Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation arrangement by share based payment award unamortized value		$ 0
Performance Share Units [Member] | Mr. Johnston
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period	14,350				14,350
Performance Share Units [Member] | Mr. Johnston | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested			2,500	2,500	9,350
Performance Share Units [Member] | 2015 Performance Share Unit Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		2,500

XML

Stock Based Compensation - Restricted Stock Units (Detail) - USD ($)		3 Months Ended
	Mar. 26, 2024	Mar. 31, 2024
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee service share-based compensation, nonvested awards, compensation not yet recognized, share-based awards other than options		$ 800,000
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition		1 year 10 months 24 days
Restricted Stock Units (RSUs) [Member] | Employee [Member] | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		4 years
2013 Equity Incentive Plan | Restricted Stock Units (RSUs) [Member] | Employee [Member] | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		2,000
Non-Employee Equity Compensation Plan 2014 [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		1 year
Non-Employee Equity Compensation Plan 2014 [Member] | Restricted Stock Units (RSUs) [Member] | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		6,000
2017 Equity Inducement Plan [Member] | Restricted Stock Units (RSUs) [Member] | Employee [Member] | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		50,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		58,000
Shares vested		16,775
Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested	3,017
Stock-based compensation expense		$ 77,000

XML

Stock Based Compensation - Schedule of Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs) [Member]	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Outstanding | shares	71,734
Shares granted | shares	58,000
Shares Forfeited | shares	(10,780)
Shares vested | shares	(16,775)
Number of Options, Outstanding | shares	102,179
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 24.65
Weighted Average Grant Date Fair Value, Shares Granted | $ / shares	1.67
Weighted Average Grant Date Fair Value, Shares Forfeited | $ / shares	13.52
Weighted Average Grant Date Fair Value, Shares Vested | $ / shares	18.82
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 13.39

XML

Stock Based Compensation - Employee Stock Purchase Plan (Detail) - Employee Stock Purchase Plan [Member] - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value	$ 0.85	$ 8.00
Percentage of proportionate value of call option of stock	85.00%
Percentage of proportionate value of put option of stock	15.00%
Compensation-based payments	$ 19,000	$ 25,000

XML

Stock Based Compensation - Summary of Fair Values of Stock Options Granted (Detail) - Employee Stock Option - Employee Stock Purchase Plan [Member] - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price	$ 1.83	$ 16.72
Dividend yield	0.00%	0.00%
Expected volatility	112.00%	59.00%
Risk-free interest rate	5.26%	4.42%
Expected life	6 months	6 months

XML

Stock Based Compensation - Summary of Stock-based Compensation Costs Recognized (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total	$ 404,000	$ 522,000
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	$ 19,000	$ 25,000

XML

Stock Based Compensation - Summary of Stock-based Compensation Reflected within Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total	$ 404	$ 522
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	107	209
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	80	105
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	87	$ 208
Severance expense
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	$ 130

XML

Warrant Liability - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Feb. 15, 2024	Mar. 28, 2023
Class Of Warrant Or Right
Class of warrant or right, number of securities called by warrants or rights					412,500
Warrants exercisable term	6 years
Exercise price				$ 1.84	$ 8.00
Fair value of warrant liability	$ 702	$ 3,135	$ 620
Change in fair value of warrant liability	82
Warrants Two Thousand Twenty Three
Class Of Warrant Or Right
Warrant liability			$ 3,100
Fair value of warrant liability	700
Change in fair value of warrant liability	$ 100	$ 0
Common Stock | Warrants Two Thousand Twenty Three
Class Of Warrant Or Right
Number of warrants issued		412,500
Class of warrant or right, number of securities called by warrants or rights		412,500	1
Warrants exercisable term			6 years
Warrants of exercisable beginning			Mar. 28, 2023
Exercise price	$ 1.66		$ 8.00

XML

Warrant Liability - Schedule of changes in fair value of liability (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Warrant Liability
Beginning value	$ 620
Initial valuation of new warrants		$ 3,135
Change in fair value of warrant liability	82
Ending value	$ 702	$ 3,135

XML

Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Fair Value Measurements
Warrant liability	$ 702	$ 620	$ 3,135
Fair Value Measurements Recurring
Fair Value Measurements
Cash and cash equivalents	10,110	12,567
Warrant liability	702	620
Level 1 | Fair Value Measurements Recurring
Fair Value Measurements
Cash and cash equivalents	10,110	12,567
Level 3 | Fair Value Measurements Recurring
Fair Value Measurements
Warrant liability	$ 702	$ 620

XML

Fair Value Measurements - Schedule of Estimated Fair Value of the Warrant Liability (Detail)	Mar. 31, 2024 $ / shares	Feb. 15, 2024	Mar. 31, 2023 $ / shares
Fair Value Measurements
Warrants and rights outstanding measurement input term		5 years
Share price | Warrants Two Thousand Twenty Three | Level 3
Fair Value Measurements
Warrants and rights outstanding measurement input	2.03		10.80
Exercise price | Warrants Two Thousand Twenty Three | Level 3
Fair Value Measurements
Warrants and rights outstanding measurement input	1.66		8.00
Term (in years) | Warrants Two Thousand Twenty Three | Level 3
Fair Value Measurements
Warrants and rights outstanding measurement input term	5 years		6 years
Volatility | Warrants Two Thousand Twenty Three | Level 3
Fair Value Measurements
Warrants and rights outstanding measurement input	0.85		0.65
Risk-free rate | Warrants Two Thousand Twenty Three | Level 3
Fair Value Measurements
Warrants and rights outstanding measurement input	0.042		0.036
Dividend yield | Warrants Two Thousand Twenty Three | Level 3
Fair Value Measurements
Warrants and rights outstanding measurement input	0		0

XML

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Fair Value Measurements
Change in fair value of warrant liability	$ 82
Warrants Two Thousand Twenty Three
Fair Value Measurements
Change in fair value of warrant liability	$ 100	$ 0

XML

Related Party Transactions - Additional Information (Detail) - USD ($)	3 Months Ended		8 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Jun. 28, 2017	Mar. 28, 2023
Related Party Transactions
Class of warrant or right, number of securities called by warrants or rights				412,500
Warrants outstanding	450,409
Cost of revenue	$ 109,000	$ 139,000
Dialog
Related Party Transactions
Equity method investment, ownership percentage	1.40%
Dialog Semiconductor Plc
Related Party Transactions
Warrants outstanding	0
Dialog Semiconductor Plc | Related Party | Strategic Alliance Agreement
Related Party Transactions
Revenues	$ 0	0
Dialog Semiconductor Plc | Chip Development Expense
Related Party Transactions
Cost of revenue	$ 0	$ 100,000
Private Placements | Dialog Semiconductor Plc
Related Party Transactions
Stock issued during period, shares, new issues			86,985
Private Placements | Warrants Issued to Investors | Dialog Semiconductor Plc
Related Party Transactions
Class of warrant or right, number of securities called by warrants or rights			70,878

XML

Customer Concentrations - Additional Information (Detail) - customer	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Customer Concentration Risk | Revenues | Two Customer
Customer Concentrations
Number of customers		2
Concentration percentage		84.00%
Customer Concentration Risk | Revenues | Four Customer
Customer Concentrations
Number of customers	4
Concentration percentage	87.00%
Credit Concentration Risk | Accounts Receivable | Two Customer
Customer Concentrations
Number of customers	2		2
Concentration percentage	92.00%		88.00%

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (6,599)	$ (6,653)

XML

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false