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, 2023

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, 2023, there were 91,055,881 shares of our Common Stock, par value $0.00001 per share, outstanding.

ENERGOUS CORPORATION

FORM 10-Q

FOR THE THREE MONTHS ENDED MARCH 31, 2023

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	22
Item 3.  Quantitative and Qualitative Disclosure About Market Risk	25
Item 4.  Controls and Procedures	26
PART II – OTHER INFORMATION	27
Item 1.  Legal Proceedings	27
Item 1A.  Risk Factors	27
Item 2.  Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities	40
Item 3.  Defaults Upon Senior Securities	40
Item 4.  Mine Safety Disclosures	40
Item 5.  Other Information	40
Item 6.  Exhibits	40

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Energous Corporation

CONDENSED BALANCE SHEETS

	As of
	March 31, 2023			December 31, 2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	26,339,960		$	26,287,293
Accounts receivable, net		100,935			143,353
Inventory		71,597			105,821
Prepaid expenses and other current assets		649,479			827,551
Total current assets		27,161,971			27,364,018
Property and equipment, net		383,238			429,035
Operating lease right-of-use assets		1,778,512			1,959,869
Total assets	$	29,323,721		$	29,752,922
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,351,018		$	900,765
Accrued expenses		1,370,046			1,790,414
Accrued severance expense		249,610			416,516
Warrant liability		3,135,000			–
Operating lease liabilities, current portion		702,780			705,894
Deferred revenue		35,891			29,727
Total current liabilities		6,844,345			3,843,316
Operating lease liabilities, long-term portion		1,090,639			1,264,131
Total liabilities		7,934,984			5,107,447
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $0.00001 par value, 10,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued or outstanding at March 31, 2023 and December 31, 2022.		–			–
Common Stock, $0.00001 par value, 200,000,000 shares authorized at March 31, 2023 and December 31, 2022; 91,032,030 and 78,944,954 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively.		911			789
Additional paid-in capital		390,715,632			387,319,985
Accumulated deficit		(369,327,806	)		(362,675,299	)
Total stockholders’ equity		21,388,737			24,645,475
Total liabilities and stockholders’ equity	$	29,323,721		$	29,752,922

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

3

Energous Corporation

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended March 31,
	2023			2022
Revenue	$	96,676		$	215,961
Costs and expenses:
Cost of revenue		138,813			203,249
Research and development		3,078,524			3,527,146
Sales and marketing		1,211,938			1,613,590
General and administrative		1,961,460			2,027,520
Total costs and expenses		6,390,735			7,371,505
Loss from operations		(6,294,059	)		(7,155,544	)
Other (expense) income:
Offering costs related to warrant liability		(591,670	)		–
Interest income		233,222			2,826
Total other (expense) income		(358,448	)		2,826
Net loss	$	(6,652,507	)	$	(7,152,718	)
Basic and diluted loss per common share	$	(0.08	)	$	(0.09	)
Weighted average shares outstanding, basic and diluted		81,408,347			76,930,919

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

4

Energous Corporation

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

	Common Stock				Additional Paid-in			Accumulated			Total Stockholders'
	Shares		Amount		Capital			Deficit			Equity
Balance at January 1, 2023		78,944,954	$	789	$	387,319,985		$	(362,675,299	)	$	24,645,475
Stock-based compensation - options		–		–		21,095			–			21,095
Stock-based compensation - restricted stock units ("RSUs")		–		–		476,242			–			476,242
Stock-based compensation - employee stock purchase plan ("ESPP")		–		–		24,740			–			24,740
Issuance of shares for RSUs		186,878		2		(2	)		–			–
Proceeds from contributions to the ESPP		–		–		65,134			–			65,134
Issuance of shares in an at-the-market ("ATM") placement, net of $68,637 in issuance costs		3,650,198		37		2,674,660			–			2,674,697
Issuance of shares in a sale of common stock, net of $3,166,139 in issuance costs and fair value of a liability warrant		8,250,000		83		133,778			–			133,861
Net loss		–		–		–			(6,652,507	)		(6,652,507	)
Balance at March 31, 2023 (unaudited)		91,032,030	$	911	$	390,715,632		$	(369,327,806	)	$	21,388,737

	Common Stock				Additional Paid-in			Accumulated			Total Stockholders'
	Shares		Amount		Capital			Deficit			Equity
Balance at January 1, 2022		76,667,205	$	767	$	383,383,550		$	(336,400,039	)	$	46,984,278
Stock-based compensation - options		–		–		10,313			–			10,313
Stock-based compensation - RSUs		–		–		745,620			–			745,620
Stock-based compensation - ESPP		–		–		40,973			–			40,973
Issuance of shares for RSUs		387,823		4		(4	)		–			–
Proceeds from contributions to the ESPP		–		–		104,217			–			104,217
Net loss		–		–		–			(7,152,718	)		(7,152,718	)
Balance at March 31, 2022 (unaudited)		77,055,028	$	771	$	384,284,669		$	(343,552,757	)	$	40,732,683

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

5

Energous Corporation

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(6,652,507	)	$	(7,152,718	)
Adjustments to reconcile net loss to:
Net cash used in operating activities:
Depreciation and amortization		45,797			70,119
Stock based compensation		522,077			796,906
Changes in operating lease right-of-use assets		181,357			186,736
Inventory net realizable adjustment		111,019			–
Bad debt expense		(12,500	)		–
Offering costs allocated to warrants		591,670			–
Changes in operating assets and liabilities:
Accounts receivable		54,918			84,678
Inventory		(76,795	)		(68,480	)
Prepaid expenses and other current assets		178,072			443,216
Accounts payable		450,253			(271,044	)
Accrued expenses		(420,368	)		(180,535	)
Accrued severance expense		(166,906	)		(65,566	)
Operating lease liabilities		(176,606	)		(203,010	)
Deferred revenue		6,164			2,727
Net cash used in operating activities		(5,364,355	)		(6,356,971	)
Cash flows from investing activities:
Purchases of property and equipment		–			(44,489	)
Net cash used in investing activities		–			(44,489	)
Cash flows from financing activities:
Net proceeds from an ATM offering		2,674,697			–
Net proceeds from a sale of common stock and warrant issuance		2,677,191			–
Proceeds from contributions to employee stock purchase plan		65,134			104,217
Net cash provided by financing activities		5,417,022			104,217
Net increase (decrease) in cash and cash equivalents		52,667			(6,297,243	)
Cash and cash equivalents – beginning		26,287,293			49,071,414
Cash and cash equivalents – ending	$	26,339,960		$	42,774,171
Supplemental disclosure of non-cash investing and financing activities:
Common stock issued for RSUs	$	2		$	4

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

6

Note 1 - Business Organization, Nature of Operations

Energous Corporation (the “Company”) was incorporated in Delaware on October 30, 2012. The Company has developed its WattUp® wireless power technology, consisting of proprietary semiconductor chipsets, software controls, hardware designs and antennas, that enables radio frequency (“RF”) based charging for electronic devices. The WattUp technology has a broad spectrum of capabilities, including near-field wireless charging and at-a-distance wireless charging at various distances. The Company believes its proprietary WattUp technologies are well suited for many applications, including building and home automation, electronic shelf labels, industrial IoT sensors, surface and implanted medical devices, tracking devices, hearables, wearables, consumer electronics and public safety applications. Potential future applications include smartphones, commercial and industrial robotics, as well as automotive solutions and other devices with charging requirements that would otherwise require battery replacement or a wired power connection.

Note 2 – Liquidity and Management Plans

During the three months ended March 31, 2023 and 2022, the Company recorded revenue of $96,676 and $215,961, respectively. During the three months ended March 31, 2023 and 2022, the Company recorded net losses of $6,652,507 and $7,152,718, respectively. Net cash used in operating activities was $5,364,355 and $6,356,971 for the three months ended March 31, 2023 and 2022, respectively. The Company is currently meeting its liquidity requirements through the proceeds of securities offerings that raised net proceeds of $27,043,751 during 2021, $744,787 during 2022 and $5,351,888 during the first quarter of 2023, along with proceeds from contributions to the Company’s employee stock purchase plan (the “ESPP”) and payments received from customers.

As of March 31, 2023, the Company had cash and cash equivalents of $26,339,960. The Company expects that cash and cash equivalents as of March 31, 2023, together with anticipated revenues, will be sufficient to fund the Company’s operations through May 2024.

Research and development of new technologies is by its nature unpredictable. Although the Company intends to continue its research and development activities, 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.

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 financial statements are presented in U.S. dollars and 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”).

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, 2022 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 30, 2023.  The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2022 audited financial statements.

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.  

7

Note 3 – Summary of Significant Accounting Policies, continued

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 and Cash Equivalents

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.

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 proceeds.

Fair Value

The Company follows ASC 820, Fair Value Measurements (“ASC 820”), which establishes a common definition of fair value to be applied when 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.

8

Note 3 – Summary of Significant Accounting Policies, continued

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

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses, other current assets, and accounts payable & accrued expenses, are an approximate of their fair values because of the short maturity of these instruments. The Company’s derivative liabilities recognized at fair value on a recurring basis are 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, 2023 and 2022, the Company recognized $96,676 and $215,961, 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. The Company records the expenses related to these product development projects in research and development expense, in the periods such expenses were incurred.

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.

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 $3,078,524 and $3,527,146 for the three months ended March 31, 2023 and 2022, 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.

9

Note 3 – Summary of Significant Accounting Policies, continued

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, 2023, 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, 2023 and 2022. The Company files income tax returns with the United States and California governments.

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 12,890,622 and 5,682,499, as outlined in the table below, for the three months ended March 31, 2023 and 2022, respectively, because their inclusion would be anti-dilutive.

	For the Three Months Ended March 31,
	2023		2022
Warrants issued to investors		9,916,666		3,284,789
Options to purchase common stock		300,000		825,006
RSUs		2,673,956		1,572,704
Total potentially dilutive securities		12,890,622		5,682,499

The table above includes 1,666,666 warrants expiring on March 1, 2024, which have an exercise price of $10.00 and 8,250,000 warrants expiring on March 28, 2029, which have an exercise price of $0.40.

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 4 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.

Management’s Evaluation of Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of March 31, 2023, through the date which the financial statements are available to be issued.

10

Note 4 – 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 $2,071,336 and operating lease liability of $2,071,336, using a present value discount rate of 3.0%. Upon expiration of the original lease on September 30, 2022, the new monthly lease payment starting October 1, 2022 is $58,903, subject to annual escalations up to a maximum monthly lease payment of $62,490.

Costa Mesa Lease

On September 22, 2021, the Company signed a new lease for office space for its engineers based in Costa Mesa, California. Per the lease, the lease commencement date is October 1, 2021 and the expiration date is September 30, 2023. The Company did not have control of the new office space until October 2021, at which time the Company recorded a new ROU lease asset of $104,563 and operating lease liability of $104,563. The new Costa Mesa lease has an initial monthly lease payment of $4,369 starting October 1, 2021 and is subject to an annual escalation up to a maximum monthly lease payment of $4,522.

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 $1,858,460 during the period from the second quarter of 2023 to the third quarter of 2025. As of March 31, 2023, the Company has total operating lease ROU assets of $1,778,512, current portion of operating lease liabilities of $702,780 and long-term portion of operating lease liabilities of $1,090,639. The weighted average remaining lease term is 2.5 years as of March 31, 2023.

A reconciliation of undiscounted cash flows to lease liabilities recognized as of March 31, 2023 is as follows:

	Amount
	(unaudited)
2023		562,555
2024		733,497
2025		562,408
Total future lease payments		1,858,460
Present value discount (2.9% weighted average)		(65,041	)
Total operating lease liabilities	$	1,793,419

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 $233,000 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.

11

Note 4 – Commitments and Contingencies, continued

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

During the three months ended March 31, 2023 and 2022, the Company recorded $62,001 and $125,468 in expense, respectively, under the Bonus Plan. As of December 31, 2022, $688,364 was accrued and unpaid under the Bonus Plan, of which $560,533 was paid during the three months ended March 31, 2023. The remaining $109,452 from 2022 is expected to be paid during the second quarter of 2023. As of March 31, 2023, the Company had accrued $171,453 under the Bonus Plan, including the $109,452 remaining accrual from 2022 and the additional $62,001 accrued during the first quarter of 2023, which is expected to be paid between the second quarter of 2023 and the first 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”).

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 12 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 12 month period following the Executive’s termination.

Executive Employee Agreement – Cesar Johnston

On December 9, 2021, the Company announced that Cesar Johnston had been appointed as the Company’s Chief Executive Officer. In connection with Mr. Johnston’s appointment as Chief Executive Officer, the Company and Mr. Johnston executed an offer letter dated as of December 6, 2021.

Under the terms of his offer letter, Mr. Johnston will receive an annual base salary of $400,000 per year. Beginning in year 2022, he is eligible to receive a discretionary annual bonus of up to 100% of his base salary, at the recommendation of the Company’s Compensation Committee, with the approval of the Company’s Board. In addition, as an inducement to accept his appointment as Chief Executive Officer, Mr. Johnston received, subject to continued employment, (a) a special one-time sign-on bonus in the amount of $120,000, payable in two equal installments of $60,000 each on the first payroll date in 2022 and the first payroll date after December 6, 2022, (b) a grant of 150,000 RSUs to acquire shares of the Company’s common stock, one third of which vested on December 6, 2022 and the remaining two thirds of which vest in eight equal installments of 12,500 each on each quarterly anniversary thereafter and (c) a grant of an option to purchase 300,000 shares of the Company’s common stock at an exercise price equal to the fair market value of the Company’s common stock on the grant date, half of which shall vest on December 31, 2023, a quarter of which shall vest on December 31, 2024 and the remainder of which shall vest on December 31, 2025.

Also pursuant to the terms of his offer letter, Mr. Johnston is eligible for (a) an additional equity award in the amount of 287,000 PSUs to acquire shares of the Company’s common stock, to vest at various amounts to be agreed upon each year by the Board over a three year period commencing January 1, 2022 and ending December 31, 2024, upon the achievement of performance criteria to be mutually established by Mr. Johnston and the Compensation Committee, and (b) an additional equity award of up to 25,000 PSUs per calendar year for each of 2022, 2023 and 2024, based on outperformance of agreed upon goals per calendar year, as determined by the Compensation Committee with approval of the Board. On July 20, 2022, the Board approved, by unanimous written consent, the grant to Mr. Johnston of up to 287,000 PSUs pursuant to the terms of Mr. Johnston’s offer letter. The 287,000 PSUs that have been approved shall vest as follows: (a) up to 187,000 PSU shares shall 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 50,000 PSU shares shall 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. As of March 31, 2023, the Board had not yet approved the performance criteria applicable to the up to additional 50,000 PSU shares that will vest on each of December 31, 2023 and 2024; therefore, these PSUs have not been considered granted.

12

Note 4 – Commitments and Contingencies, continued

In connection with Mr. Johnston’s appointment as Chief Executive Officer, the Company and Mr. Johnston additionally entered into an amended and restated severance and change in control agreement, dated as of December 6, 2021. In the event of a termination that is not a change-in-control qualifying termination, Mr. Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to 100% of his target bonus plus, if agreed by the Compensation Committee, a discretionary bonus for the year in which the termination occurs, (b) any outstanding unvested equity awards held by Mr. Johnston that would vest in the next 18 months of continuing employment (other than any equity awards that vest upon satisfaction of performance criteria) will accelerate and become vested and (c) if Mr. Johnston timely elects continued coverage under COBRA, the Company or its successor will pay the full amount of Mr. Johnston’s COBRA premiums on his behalf for 18 months.

Mr. Johnston’s agreement additionally provides that, in the event of a change-in-control qualifying termination, Mr. Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to 150% of his target bonus plus a prorated bonus for the year in which the termination occurs, (b) any outstanding unvested equity awards held by Mr. Johnston (including any equity awards that vest upon satisfaction of performance criteria) will accelerate in full and become vested and (c) if Mr. Johnston timely elects continued coverage under COBRA, the Company or its successor will pay the full amount of Mr. Johnston’s COBRA premiums on his behalf for 18 months.

Mr. Johnston is also eligible to receive all customary and usual benefits generally available to senior executives of the Company.

Executive Transition Agreement – Stephen Rizzone

On April 3, 2015, the Company entered into an Amended and Restated Executive Employment Agreement with Stephen R. Rizzone, the Company’s former President and Chief Executive Officer (“Employment Agreement”).

The Employment Agreement effective as of January 1, 2015, had an initial term of four years and automatically renewed each year after the initial term. The Employment Agreement provided for an annual base salary of $365,000, and Mr. Rizzone was eligible to receive quarterly cash bonuses from the MBO Bonus Plan with a total target amount equal to 100% of his base salary based upon achievement of performance-based objectives established by the Board.

On July 9, 2021, the Company announced that Stephen R. Rizzone had retired from his position as the Company’s President and Chief Executive Officer and as a member of the Board.

In connection with Mr. Rizzone’s retirement, the Company and Mr. Rizzone entered into an Executive Transition Agreement (the “Separation Agreement”), providing for continued employment through August 31, 2021. Upon his termination of employment, the Separation Agreement provides severance payments and benefits to Mr. Rizzone consistent with the terms of his existing employment agreement with the Company, including without limitation: compensation-based payments of $1,460,000 in the aggregate, payable under a certain payment scheme as set forth therein, an additional lump sum cash payment of $2,000,000, a pro-rated bonus payment for the two months of employment during the current quarterly bonus period payable at the same time bonus payments are made to other executives of the Company, settlement of deferred vested RSUs and an extension of the exercise periods of all stock options held by Mr. Rizzone until the one year anniversary of his termination date, and additional benefits related to Mr. Rizzone’s medical insurance. In addition, the Company agreed to pay-off all amounts owed under a lease agreement relating to a company car and that Mr. Rizzone would receive the title to the vehicle. All compensation under the Separation Agreement has been or will be subject to applicable withholding.

As of March 31, 2023, the Company had unpaid accrued severance expense of $249,610 pertaining to Mr. Rizzone’s Separation Agreement which is expected to be paid through August 31, 2023.

Executive Transition Agreement – Neeraj Sahejpal

On April 29, 2022, the Company announced the departure of Neeraj Sahejpal, former Senior Vice President of Marketing and Business Development, effective April 30, 2022. Pursuant to the terms of Mr. Sahejpal’s severance and change of control agreement with the Company, Mr. Sahejpal received payments and benefits including compensation equal to twelve months of Mr. Sahejpal’s then-current salary of $261,250, twelve months of maximum potential bonus of $261,250, and twelve months of COBRA reimbursements. In addition, all RSUs held by Mr. Sahejpal that were due to vest in the twelve months after his departure, totaling RSUs covering 85,943 shares, were accelerated.

13

Note 4 – Commitments and Contingencies, continued

As of March 31, 2023, the Company had no unpaid accrued severance expense pertaining to Mr. Sahejpal’s agreement.

Strategic Alliance Agreement

In November 2016, the Company and Dialog Semiconductor plc (“Dialog”), a related party (see Note 7—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 will 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 has an initial term of seven years, with automatic renewal annually thereafter unless terminated by either party upon 180 days’ prior written notice. The Company may 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 breaches certain exclusivity obligations. Dialog may terminate the Alliance Agreement if sales of Licensed Products do 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 agree to terminate the requirement.

On September 20, 2021, the Company was notified by Dialog, recently acquired by Renesas Electronics Corporation, 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 9 – Related Party Transactions for expenses incurred by the Company from Renesas Electronics Corporation).

Note 5 – Stockholders’ Equity

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, and contains two prospectuses: a base prospectus, which covers the offering, issuance and sale by the Company of up to $75,000,000 of its common stock, preferred stock, debt securities, warrants to purchase our common stock, preferred stock or debt securities, subscription rights to purchase its common stock, preferred stock or debt securities and/or units consisting of some or all of these securities; and 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 $40,000,000 of its common stock that may be issued and sold under the At Market Issuance Sales Agreement, as amended, between the Company, B. Riley Securities, Inc., Roth Capital Partners LLC and Ladenburg Thalmann & Co. Inc. (the “ATM Program”). The $40,000,000 of common stock to be offered, issued and sold under the ATM Program is included in the $75,000,000 of securities that may be offered, issued and sold by the Company under the base prospectus. Pursuant to this shelf registration statement, the Company sold shares which raised net proceeds of $38,832,711 (net of $1,167,289 in issuance costs) during the third and fourth quarters of 2020 under the ATM Program.

14

Note 5 – Stockholders’ Equity, continued

On October 4, 2021, the Company filed a prospectus supplement covering the offering, issuance and sale of up to an additional $35,000,000 of shares of the Company’s common stock pursuant to the ATM Program. The Company raised net proceeds of $27,043,751 (net of $868,122 in issuance costs), during 2021 under the ATM Program. During 2022, the Company raised an additional $744,787 (net of $73,403 in issuance costs) under the ATM Program. During the first quarter of 2023, the Company raised $2,674,697 (net of $68,637 in issuance costs) under the ATM Program. As of March 31, 2023, the Company has $3,526,605 remaining on this shelf registration statement.

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. 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 $100,000,000. 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) 8,250,000 shares of its common stock (the “Shares”) and (ii) warrants to purchase up to 8,250,000 shares of its common stock (the “2023 Warrants”), for net proceeds of $2,677,191, 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 $0.40. 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 7 – Warrant Liability and Note 8 – Fair Value Measurements).

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.

Note 6 – Stock-Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

Effective on June 16, 2021, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 1,500,000 shares, bringing to 8,785,967 the total number of shares approved for issuance under that plan. 

As of March 31, 2023, 1,248,896 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

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

As of March 31, 2023, 546,238 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 1,700,000 shares, bringing to 5,110,104 the total number of shares approved for issuance under that plan.

15

Note 6 – Stock-Based Compensation, continued

As of March 31, 2023, 2,275,438 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 600,000 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 2,000,000 shares. As of March 31, 2023, 1,041,170 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

Employee Stock Purchase Plan

In April 2015, the Company’s Board approved the ESPP, under which 600,000 shares of common stock have been 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 16, 2021, 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 700,000 shares, bring to 1,550,000 the total number of shares approved for issuance under that plan. Under the ESPP, employees may designate an amount not less than 1% but not more than 10% of their annual compensation for the purchase of Company shares. No more than 7,500 shares may be purchased by an employee under the ESPP during an offering period. An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of the option will be the lesser of 85% of the fair market of the common stock on the first business day of the offering period and 85% of the fair market value of the common stock on the applicable exercise date.

As of March 31, 2023, 201,619 shares of common stock remain eligible to be issued under the ESPP. Employees contributed $65,134 through payroll withholdings to the ESPP as of March 31, 2023 for the current offering period which will end on June 30, 2023 with shares deemed delivered on that date.

Stock Option Activity

In February 2022, the Board granted our Chief Executive Officer 300,000 stock options under the 2013 Equity Incentive Plan at an exercise price of $1.27 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.

The Company estimated the fair value of stock options granted during the second quarter of 2022 using the Black-Scholes option pricing model. No stock options were granted during the three months ended March 31, 2023. The fair values of stock options granted during the second quarter of 2022 were estimated using the following assumptions:

	Three Months Ended June 30, 2022
Stock price	$	1.27
Dividend yield		0	%
Expected volatility		108	%
Risk-free interest rate		1.92	%
Expected life	5.6 years

16

Note 6 – Stock-Based Compensation, continued

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2023:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Intrinsic Value
Outstanding at January 1, 2023		300,262		$	1.27		8.9	$	–
Granted		–			–		–		–
Exercised		–			–		–		–
Forfeited		(262	)		2.49		–		–
Outstanding at March 31, 2023		300,000		$	1.27		8.7	$	–
Exercisable at January 1, 2023		262		$	2.49		0.3	$	–
Vested		–			–		–		–
Exercised		–			–		–		–
Forfeited		(262	)		2.49		–		–
Exercisable at March 31, 2023		–		$	–		–	$	–

As of March 31, 2023, the unamortized fair value of options was $212,594. The unamortized amount will be expensed over a weighted average period of 2.4 years.

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 Chief Executive Officer, Cesar Johnston, up to 287,000 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 4 – Commitments and Contingencies). The up to 287,000 PSUs that have been approved shall vest as follows: (a) up to 187,000 PSU shares shall 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 50,000 PSU shares shall 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. On December 31, 2022, 135,575 PSUs were achieved, vested and deemed delivered on that date. As of March 31, 2023, the performance criteria for an additional up to 100,000 PSUs had not been approved by the Board.

There was no PSU activity for the three months ended March 31, 2023 and 2022.

RSUs

During the three months ended March 31, 2023, the Compensation Committee granted various employees RSUs covering 48,750 shares of common stock under the 2013 Equity Incentive Plan. The awards vest over four years.

During the three months ended March 31, 2023, the Compensation Committee granted various non-employees RSUs covering 124,452 shares of common stock under the 2014 Non-Employee Equity Compensation Plan. The awards vest over terms ranging from one to four years.

During the three months ended March 31, 2023, the Compensation Committee granted various employees RSUs covering 535,000 shares of common stock under the 2017 Equity Inducement Plan. The awards vest over four years.

17

Note 6 – Stock-Based Compensation, continued

As of March 31, 2023, the unamortized fair value of the RSUs was $2,469,552. The unamortized amount will be expensed over a weighted average period of 2.0 years. A summary of the activity related to RSUs for the three months ended March 31, 2023 is presented below:

	Total			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2023		2,165,132		$	1.63
RSUs granted		708,202			0.69
RSUs forfeited		(12,500	)		1.27
RSUs vested		(186,878	)		2.08
Outstanding at March 31, 2023		2,673,956		$	1.35

Employee Stock Purchase Plan (“ESPP”)

The current offering period under the ESPP started on January 1, 2023 and will conclude on June 30, 2023. During the year ended December 31, 2022, there were two offering periods. The first offering period began on January 1, 2022 and concluded on June 30, 2022. The second offering period began on July 1, 2022 and concluded on December 31, 2022.

The weighted-average grant-date fair value of the purchase option for each designated share purchased under the ESPP was approximately $0.27 and $0.40 for the three months ended March 31, 2023 and 2022, 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 $24,740 and $40,973 for the three months ended March 31, 2023 and 2022, respectively.

The Company estimated the fair value of ESPP purchase options granted during the three months ended March 31, 2023 and 2022 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,
	2023			2022
Stock price	$	0.836		$	1.25
Dividend yield		0	%		0	%
Expected volatility		59	%		61	%
Risk-free interest rate		4.42	%		0.19	%
Expected life	6 months			6 months

Stock-Based Compensation Expense

The following tables summarize total stock-based compensation costs recognized for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Stock options	$	21,095	$	10,313
RSUs		476,242		745,620
ESPP		24,740		40,973
Total	$	522,077	$	796,906

18

Note 6 – Stock-Based Compensation, continued

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

	Three Months Ended March 31,
	2023		2022
Research and development	$	208,731	$	353,043
Sales and marketing		104,903		180,377
General and administrative		208,443		263,486
Total	$	522,077	$	796,906

Note 7 – Warrant Liability

2023 Warrants

In March 2023, the Company issued 8,250,000 warrants to purchase up to 8,250,000 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 is exercisable for one share of the Company’s common stock at a price of $0.40 per share (“Exercise Price”), subject to adjustment in certain circumstances including in the event of stock dividends and splits, or a recapitalization, merger, consolidation, tender offer, reorganization, or other change in control of the Company. 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 2023 Warrants 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 of the 2023 Warrants, 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 $3,135,000. As of March 31, 2023, all 2023 Warrants were outstanding.

19

Note 8 – 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, 2023 and December 31, 2022 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value:

	Balance as of March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	26,339,960	$	–	$	–	$	26,339,960
Liabilities:
Warrant liability	$	–	$	–	$	3,135,000	$	3,135,000
	Balance as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	26,287,293	$	–	$	–	$	26,287,293
Liabilities:
Warrant liability	$	–	$	–	$	–	$	–

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:

	At March 31, 2023
Share price	$	0.54
Exercise price	$	0.40
Term (in years)		6
Volatility		65	%
Risk-free rate		3.6	%
Dividend yield		0	%

The change in the fair value of the 2023 Warrant liability was determined to be zero during the three months ended March 31, 2023 (see Note 7 – Warrant Liability).

20

Note 9 – 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 4 – 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 1,739,691 shares and received warrants to purchase up to 1,417,565 shares. As of March 31, 2023, none of the warrants remain outstanding. As of March 31, 2023, Dialog owns approximately 1.9% of the Company’s outstanding common shares. The Company did not record any revenue during the three months ended March 31, 2023 and 2022. The Company incurred $124,055 and $0 in chip test development expense from Renesas Electronics Corporation, which acquired Dialog in August 2021 (“Renesas”), during the three months ended March 31, 2023 and 2022, respectively.

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

Note 10 – Customer Concentrations

Two customers accounted for approximately 84% of the Company’s revenue for the three months ended March 31, 2023, and two customers accounted for approximately 53% of the Company’s revenue for the three months ended March 31, 2022. Two customers accounted for approximately 80% of the Company’s accounts receivable balance as of March 31, 2023. One customer accounted for approximately 87% of the Company’s accounts receivable balance as of December 31, 2022.

21

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; the impact of COVID-19 and our response thereto on our business; 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. 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 WattUp® wireless power technology, consisting of semiconductor chipsets, software controls, hardware designs and antennas, that enables RF based charging for electronic devices. The WattUp technology 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 WattUp technologies will help facilitate the deployment of the growing IoT applications. According to the International Data Corporation (IDC) August 2022 Market Forecast, the IoT market is forecasted to grow to approximately $1.1 trillion in spending by 2026. The initial IoT applications that we are targeting are in the area of RF tags, ESL) and IoT sensors for the retail, industrial, healthcare and smart home/office markets.

We believe our technology is innovative in its approach, in that we are developing solutions that charge electronic devices using RF. To-date, we have developed multiple transmitters and receivers, including prototypes as well as partner production designs. The transmitters vary based on form factor, power specifications and frequencies, while the receivers are designed to support a myriad of wireless charging applications including Bluetooth tracking tags, IoT sensors, ESLs, beacons, stock management devices, security cameras, handheld devices, smart automation, wearables and hearables.

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

22

Critical Accounting Policies and Estimates

Warrants

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in 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 our 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. The liability will be re-measured at each balance sheet date until the warrants are exercised or expire. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each reporting period.

Offering costs associated with warrants classified as liabilities are expensed as incurred and are presented as offering cost related to warrant liability in the statement of operations. Offering costs associated with the sale of warrants classified as equity are charged against proceeds.

Revenue Recognition

We follow Accounting Standards Codification (“ASC”) 606, "Revenue from Contracts with Customers" (Topic 606).

In accordance with Topic 606, we recognize revenue using the following five-step approach:

1. Identify the contract with 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 performance obligations are satisfied.

We record revenue associated with product development projects that we enter into with certain customers. In general, these product development projects are complex, and we do not have certainty about our ability to achieve the project milestones. The achievement of a milestone is dependent on our performance obligation and requires acceptance by the customer. We recognize this revenue at a point in time based on when the performance obligation is met. The payment associated with achieving the performance obligation is generally commensurate with our effort or the value of the deliverable and is nonrefundable. We record the expenses related to these product development projects in research and development expense, in the periods such expenses were incurred.

We record revenue associated with the sale of production-level systems once control over the product is transferred to the customer. We record the expense related to the sales of these systems as cost of revenue during the period delivered.

23

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.

Three Months Ended March 31, 2023 and 2022

Revenue.  During the three months ended March 31, 2023 and 2022, we recorded revenue of $96,676 and $215,961, respectively. The decrease of $119,285 is primarily due to a decrease in production-level systems 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 and general and administrative. Losses from operations for the three months ended March 31, 2023 and 2022 were $6,294,059 and $7,155,544, respectively.

Cost of Revenue. Cost of revenue was $138,813 and $203,249, respectively, for the three months ended March 31, 2023 and 2022. The decrease of $64,436 is primarily due to a decrease in sales volume.

Research and Development Costs.  Research and development costs were $3,078,524 and $3,527,146, respectively, for the three months ended March 31, 2023 and 2022. The decrease of $448,622 is primarily due to a $320,939 decrease in compensation, consisting of a $176,627 decrease in payroll costs and a $144,312 decrease in stock-based compensation, an $87,786 decrease in consulting and third-party services expenses and a $35,707 decrease in regulatory legal fees.

Sales and Marketing Costs.  Sales and marketing costs for the three months ended March 31, 2023 and 2022 were $1,211,938 and $1,613,590, respectively. The decrease of $401,652 is primarily due to a $208,413 decrease in compensation, consisting of a $132,939 decrease in payroll costs and a $75,474 decrease in stock-based compensation, a $101,876 decrease in engineering supplies used by the sales and marketing staff, a $66,739 decrease in tradeshow expense and a $59,214 decrease in public relations, consulting and third-party services expenses, partially offset by a $43,000 increase in recruiting fees.

General and Administrative Expenses.  General and administrative costs for the three months ended March 31, 2023 and 2022 were $1,961,460 and $2,027,520, respectively. The decrease of $66,060 is primarily due to a $108,472 decrease in recruiting fees, a $71,048 decrease in investor relations, consulting and third-party services expenses, a $55,043 decrease in stock-based compensation, a $21,605 decrease in training expense and an $18,207 decrease in annual meeting costs, partially offset by a $209,106 increase in legal fees.

Offering costs related to warrant liability. Offering costs related to warrant liability were $591,670 for the three months ended March 31, 2023. We did not incur any such costs for the three months ended March 31, 2022.

Interest Income. Interest income for the three months ended March 31, 2023 was $233,222 as compared to interest income of $2,826 for the three months ended March 31, 2022. The increase of $230,396 is primarily due to higher savings interest rates.

Net Loss. As a result of the above, net loss for the three months ended March 31, 2023 was $6,652,507 as compared to $7,152,718 for the three months ended March 31, 2022.

24

Liquidity and Capital Resources

During the three months ended March 31, 2023 and 2022, we recorded revenue of $96,676 and $215,961, respectively. We incurred net losses of $6,652,507 and $7,152,718 for the three months ended March 31, 2023 and 2022, respectively. Net cash used in operating activities was $5,364,355 and $6,356,971 for the three months ended March 31, 2023 and 2022, respectively. We are currently meeting our liquidity requirements through the proceeds of securities offerings that raised net proceeds of $27,043,751 during 2021, $744,787 during 2022 and $5,351,888 during the first quarter of 2023, along with proceeds from contributions to the ESPP and payments received from customers.

We believe our cash on hand as of March 31, 2023, together with anticipated revenues, will be sufficient to fund our operations through May 2024. Although we intend to continue our research and development activities, 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.

During the three months ended March 31, 2023, cash flows used in operating activities were $5,364,355, consisting of a net loss of $6,652,507, less adjustments to reconcile net loss to net cash used in operating activities aggregating $1,439,420 (principally issuance costs allocated to warrant liability of $591,670, stock-based compensation of $522,077, amortization of operating lease ROU assets of $181,357, inventory net realizable adjustment of $111,019 and depreciation and amortization expense of $45,797), a $420,368 decrease in accrued expenses, a $176,606 decrease in operating lease liabilities and a $166,906 decrease in accrued severance expense, partially offset by a $450,253 increase in accounts payable and a $178,072 decrease in prepaid expenses and other current assets.

During the three months ended March 31, 2022, cash flows used in operating activities were $6,356,971, consisting of a net loss of $7,152,718, less non-cash expenses aggregating $1,053,761 (principally stock-based compensation of $796,906, decrease in amortization of operating lease right-of-use assets of $186,736 and depreciation and amortization expense of $70,119), a $271,044 decrease in accounts payable, a $203,010 decrease in operating lease liabilities and a $180,535 decrease in accrued expenses, partially offset by a $443,216 decrease in prepaid expenses and other current assets.

During the three months ended March 31, 2023 and 2022, cash flows used in investing activities were $0 and $44,489, respectively. The cash used in investing activities for the three months ended March 31, 2022 consisted of the purchase of new engineering software licenses.

During the three months ended March 31, 2023, cash flows provided by financing activities were $5,417,022, which consisted of $2,677,191 in net proceeds from the issuance and sale of common stock and warrants, $2,674,697 in net proceeds from the sale of shares of our common stock in an at-the-market (“ATM”) offering and $65,134 in proceeds from the ESPP. During the three months ended March 31, 2022, cash flows provided by financing activities were $104,217, which consisted entirely of proceeds from contributions to the ESPP.

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.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

There has been no material change in our exposure to market risk during the three months ended March 31, 2023. See "Quantitative and Qualitative Disclosures about Market Risk" in Part II, Item 7A of our Form 10-K for the year ended December 31, 2022 for a discussion of our exposure to market risk.

25

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.

Based on their evaluation as of March 31, 2023, our principal executive and principal financial officers have concluded that these disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of March 31, 2023 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 principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

For the quarter ended March 31, 2023, 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.

26

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 or financial condition. 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

We are subject to many risks that may harm our business, prospects, results of operations and financial condition. This discussion highlights some of the risks that might adversely affect our future operating results in material ways. We believe these are the risks and uncertainties that are the most important ones we face. We cannot be certain that we will successfully address these risks, and if we are unable to address them, our business may not grow, our stock price may suffer and you could lose the value of your investment in the Company. Other risks and uncertainties that we do not currently recognize as material risks, or that are similar to risks faced by other companies in our industry, may also impair our business, prospects, results of operations and financial condition. The risks discussed below include forward-looking statements, and our actual results may differ substantially from what is in these forward-looking statements.

Risks Related to Our Financial Condition

We have no history of generating meaningful product revenue, and we may never achieve or maintain profitability.

We have a limited operating history upon which investors may rely in evaluating our business and prospects. We have generated limited revenues to date, and as of March 31, 2023, we had an accumulated deficit of approximately $369 million. Our ability to generate revenues and achieve profitability will depend on our ability to execute our business plan, complete the development and approval of our technology, incorporate the technology into products that customers wish to buy, and, if necessary, secure additional financing. There can be no assurance that our technology will be adopted widely, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. Furthermore, there can be no assurance that we will be able to raise capital as and when we need it to continue our operations. If we are unable to raise sufficient additional capital, we may be required to delay, reduce or severely curtail our research and development or other operations, which could have a material adverse effect on our business, operating results, financial condition, long-term prospects and ability to continue as a viable business. If we are unable to generate revenues of sufficient scale to cover our costs of doing business, our losses will continue and we may not achieve profitability, which could negatively impact the value of your investment in our securities.

We will likely need additional financings to achieve our long-term business plans, and there is no guarantee that it will be available on acceptable terms, or at all.

We may not have sufficient funds to fully implement our long-term business plans. It is likely that we will need to raise additional capital through new financings, even if we begin to generate meaningful commercial revenue. For example, new product development for business partners may require considerable expense in advance of any substantial revenue being earned for such products. Such financings could include equity financing, which may be dilutive to our current stockholders, and debt financing, which could restrict our operations and ability to borrow from other sources. In addition, such securities may contain rights, preferences or privileges senior to those of current stockholders. As a result of current macroeconomic conditions and general global economic uncertainty (including as a result of the remaining effects of COVID-19, the ongoing conflict between Russia and the Ukraine and the global response thereto, increases in inflation, fluctuating interest rates, disruptions to global supply chains and recent turmoil in the global banking sector), political change, and other factors, we do not know whether additional capital will be available when needed, or that, if available, we will be able to obtain additional capital on reasonable terms. If we are unable to raise additional capital due to the volatile global financial markets, recent turmoil in the global banking sector, general economic uncertainty or any other factor, we may be required to curtail development of our technology or reduce operations as a result, or to sell or dispose of assets. Any inability to raise adequate funds on commercially reasonable terms or at all could have a material adverse effect on our business, results of operations and financial condition, including the possibility that a lack of funds could cause our business to fail and liquidate with little or no return to investors.

27

We may be adversely affected by the effects of inflation.

Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure. The U.S. capital markets have experienced and continue to experience extreme volatility and disruption. Inflation rates in the U.S. significantly increased in 2022 resulting in federal action to increase interest rates, adversely affecting capital markets activity. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, labor shortages, weakening exchange rates and other similar effects. As a result of inflation, we have and may continue to experience cost increases, including increases in our supply chain costs.  Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred. Additionally, because we purchase component parts from our suppliers, we may be adversely impacted by their inability to adequately mitigate inflationary, industry, or economic pressures.

Risks Related to Our Technology and Products

We may not be able to develop all the features we seek to include in our technology.

We have developed commercial products, as well as working prototypes, that utilize our technology. Additional features and performance specifications we seek to include in our technology have not yet been developed. For example, some customer applications may require specific combinations of cost, footprint, efficiencies and capabilities at various frequencies, charging power levels and distances. We believe our research and development efforts will yield additional functionality and capabilities for our products over time. However, there can be no assurance that we will be successful in achieving all the features we are targeting, and our inability to do so may limit the appeal of our technology to consumers.

We may be unable to demonstrate the commercial feasibility of the full capability of our technology.

We have developed both commercial products and working prototypes that use our technology at differing power levels and charging distances, but additional research and development is required to realize the potential of our technology for applications at increasing power levels and distances that can be successfully integrated into commercial products. Research and development of new technologies is, by its nature, unpredictable.  We could encounter unanticipated technical problems, the inability to identify products utilizing our technology that will be in demand with customers, getting our technology designed into those products, designing new products for manufacturability, regulatory hurdles and achieving acceptable price points for final products. Although we intend to undertake development efforts with commercially reasonable diligence, there can be no assurance that our available resources will be sufficient to enable us to develop our technology to the extent needed to create future revenues to sustain our operations.

Our technology must satisfy customer expectations and be suitable for use in consumer applications. Any delays in developing our technology that arise from factors of this sort would aggravate our exposure to the risk of having inadequate capital to fund the research and development needed to complete development of these products. Technical problems leading to delays would cause us to incur additional expenses that would increase our operating losses. If we experience significant delays in developing our technology and products based on it for use in potential commercial applications, particularly after incurring significant expenditures, our business may fail, and you could lose all or part of the value of your investment in the Company. If we fail to develop practical and economical commercial products based on our technology, our business may fail and you could lose all or part of the value of your investment in our stock.

28

Expanding our business operations as we intend will impose new demands on our financial, technical, operational and management resources.

To date we have operated primarily in the research and development phase of our business. If we are successful in commercializing our product offerings, we will need to expand our business operations, which will impose new demands on our financial, technical, operational and management resources. If we do not upgrade our technical, administrative, operating and financial control systems, or if unexpected expansion difficulties arise, including issues relating to our research and development activities, then retention of experienced scientists, managers and engineers could become more challenging and have a material adverse effect on our business, results of operations and financial condition.  

If products incorporating our technology are launched commercially but do not achieve widespread market acceptance, we will not be able to generate the revenue necessary to support our business.

Market acceptance of an RF-based charging system as a preferred method for charging electronic devices will be crucial to our success. The following factors, among others, may affect the level of market acceptance of our products:

• the price of products incorporating our technology relative to other products or competing technologies;

• user perceptions of the convenience, safety, efficiency and benefits of our technology;

• the effectiveness of sales and marketing efforts of our commercialization partners;

• the support and rate of acceptance of our technology and solutions with our development partners;

• press and blog coverage, social media coverage, and other publicity factors that are not within our control; and

• regulatory developments.

If we are unable to achieve or maintain market acceptance of our technology, and if related products do not win widespread market acceptance, our business will be significantly harmed.

As products incorporating our technology are launched commercially, we may experience seasonality or other unevenness in our financial results in consumer markets or a long and variable sales cycle in enterprise markets.

Our strategy depends on our customers developing successful commercial products using our technology and selling them into the retail, industrial, healthcare and smart/home office markets. We need to understand procurement and buying cycles to be successful in licensing our technology. We anticipate it is possible that demand for our technology may vary in different segments of the consumer electronics market, such as hearing aids, wearables, toys, watches, accessories, laptops, tablet, mobile phones and gaming systems. Such consumer markets are often seasonal, with peaks in and around the December holiday season and the August-September back-to-school season. Enterprises and commercial customers may have annual or other budgeting and buying cycles that could affect us, and, particularly if we are designated as a capital improvement project, we may have a long or unpredictable sales cycle.

Future products based on our technology may require the user to purchase additional products to use with existing devices. To the extent these additional purchases are inconvenient or costly, the adoption of our technology under development or other future products could be slowed, which would harm our business.

For rechargeable devices that utilize our receiver technology, the technology may be embedded in a sleeve, case or other enclosure. For example, products such as remote controls or toys equipped with replaceable AA size or other batteries would need to be outfitted with enhanced batteries and other hardware enabling the devices to be rechargeable by our system. In each case, an end user would be required to retrofit the device with a receiver and may be required to upgrade the battery technology used with the device (unless, for example, compatible battery technology and a receiver are built into the device). These additional steps and expenses may offset the convenience of our products for users and discourage customers from licensing our technology. Such factors may inhibit adoption of our technology, which could harm our business. We have not developed an enhanced battery for use in devices with our technology, and our ability to enable use of our technology with devices that require an enhanced battery will depend on our ability to develop a commercial version of such a battery that could be manufactured at a reasonable cost. If a commercially practicable enhanced battery of this nature is not developed, our business could be harmed, and we may need to change our strategy and target markets.

29

Laboratory conditions differ from field conditions, which could reduce the effectiveness of our technology under development or other future products. Failures to move from laboratory to the field effectively would harm our business.

When used in the field, our technology may not perform as expected based on performance under controlled laboratory conditions. For example, in the case of distance charging, a laboratory configuration of transmission obstructions will be arranged for testing, but in consumer use receivers may be obstructed in many different and unpredictable ways. These conditions may significantly diminish the power received at the receiver or the effective range of the transmitter. The failure of products using our technology to meet the expectations of users in the field could harm our business.

Safety concerns and legal action by private parties may affect our business.

We believe that our technology is safe. However, it is possible that we could discover safety issues with our technology or that third-parties may raise concerns relating to RF-based charging in a similar manner as has occurred with some other wireless technologies as they were put into residential and commercial use, such as the safety concerns that were raised by some regarding the use of cellular telephones and other devices to transmit data wirelessly in close proximity to the human body. In addition, while we believe our technology is safe, users of our technology under development or other future products who suffer from medical ailments may blame the use of products incorporating our technology for the triggering or worsening of those ailments, as occurred with a small number of users of cellular telephones. A discovery of safety issues relating to our technology could have a material adverse effect on our business and any legal action against us claiming that our technology caused harm could be expensive, divert management attention and adversely affect us or cause our business to fail, whether or not such legal actions were ultimately successful.  

Our industry is subject to intense competition and rapid technological change, which may result in technology that is superior to ours. If we do not keep pace with changes in the marketplace and the direction of technological innovation and customer demands, our technology and products may become less useful or obsolete and our operating results will suffer.

The consumer electronics industry in general, and the charging segments in particular, are subject to intense competition and rapidly evolving technologies. Because products incorporating our technology are expected to have long development cycles, we must anticipate changes in the marketplace and the direction of technological innovation and customer demands. To compete successfully, we will need to demonstrate the advantages of our products and technologies over established alternatives and other emerging methods of power delivery. Traditional wall plug-in recharging remains an inexpensive alternative to our technology. Directly competing technologies such as inductive charging, magnetic resonance charging, conductive charging, ultrasound and other yet unidentified solutions may have greater consumer acceptance than the technology we have developed. Furthermore, some competitors may have greater resources than we have and may be better established in the market than we are. We cannot be certain which other companies may have already decided to or may in the future choose to enter our markets. For example, consumer electronics products companies may invest substantial resources in wireless power or other recharging technologies and may decide to enter our target markets. Successful developments of competitors that result in new approaches for recharging could reduce the attractiveness of our products and technologies or render them obsolete.

Our future success will depend in large part on our ability to establish and maintain a competitive position in current and future technologies. Rapid technological development may render our technology or future products based on our technology obsolete. Many of our competitors have more corporate, financial, operational, sales and marketing resources than we have, as well as more experience in research and development. We cannot assure you that our competitors will not develop or market technologies that are more effective or commercially attractive than our products or that would render our technologies and products obsolete. We may not have the financial resources, technical expertise, marketing, distribution or support capabilities to compete successfully in the future. Our success will depend in large part on our ability to maintain a competitive position with our technologies.

Our competitive position also depends on our ability to:

• generate widespread awareness, acceptance and adoption by the consumer and enterprise markets of our technology under development and future products;

• design a product that may be sold at an acceptable price point;

30

• develop new or enhanced technologies or features that improve the convenience, efficiency, safety or perceived safety, and productivity of our technology under development and future products;

• properly identify customer needs and deliver new products or product enhancements to address those needs;

• limit the time required from proof of feasibility to routine production;

• limit the timing and cost of regulatory approvals;

• attract and retain qualified personnel;

• protect our inventions with patents or otherwise develop proprietary products and processes; and

• secure sufficient capital resources to expand both our continued research and development, and sales and marketing efforts.

If our technology does not compete well based on these or other factors, our business could be materially and adversely harmed.

Risks Related to Our Intellectual Property and Other Legal Risks

It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.

Our success depends significantly on our ability to obtain, maintain and protect our proprietary rights to the technologies used in products incorporating our technologies. Patents and other proprietary rights provide uncertain protections, and we may be unable to protect our intellectual property. For example, we may be unsuccessful in defending our patents and other proprietary rights against third party challenges. If we do not have the resources to defend our intellectual property, the value of our intellectual property and our licensed technology will decline. In addition, some companies that integrate our technology into their products may acquire rights in the technology that limit our business or increase our costs.  If we are not successful in protecting our intellectual property effectively, our financial results may be adversely affected and the price of our common stock could decline.

We depend upon a combination of patent, trade secrets, copyright and trademark laws to protect our intellectual property and technology.

We rely on a combination of patents, trade secrets, copyright and trademark laws, nondisclosure agreements and other contractual provisions and technical security measures to protect our intellectual property rights. These measures may not be adequate to safeguard our technology. If they do not protect our rights adequately, third parties could use our technology, and our ability to compete in the market would be reduced. Although we are attempting to obtain patent coverage for our technology where available and where we believe appropriate, there are aspects of the technology for which patent coverage may never be sought or received. We may not possess the resources to or may not choose to pursue patent protection outside the United States or any or every country other than the United States where we may eventually decide to sell our future products. Our ability to prevent others from making or selling duplicate or similar technologies will be impaired in those countries in which we would have no patent protection. Although we have patent applications on file in the United States and elsewhere, the patents might not issue, might issue only with limited coverage, or might issue and be subsequently successfully challenged by others and held invalid or unenforceable.  

Similarly, even if patents are issued based on our applications or future applications, any issued patents may not provide us with any competitive advantages. Competitors may be able to design around our patents or develop products that provide outcomes comparable or superior to ours. Our patents may be held invalid or unenforceable as a result of legal challenges or claims of prior art by third parties, and others may challenge the inventorship or ownership of our patents and pending patent applications. In addition, if we secure protection in countries outside the United States, the laws of some foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States. In the event a competitor infringes upon our patent or other intellectual property rights, enforcing those rights may be difficult and time consuming. Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and time consuming and could divert our management’s attention. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents against a challenge.

31

Our strategy is to deploy our technology into the market by licensing patent and other proprietary rights to third parties and customers. Disputes with our licensees may arise regarding the scope and content of these licenses. Further, our ability to expand into additional fields with our technologies may be restricted by existing licenses or licenses we may grant to third parties in the future.

The policies we use to protect our trade secrets might not be effective in preventing misappropriation of our trade secrets by others. In addition, confidentiality agreements executed by our customers, employees, consultants and advisors might not be enforceable or might not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure. Litigating a trade secret claim is expensive and time consuming, and the outcome is unpredictable. Moreover, our competitors may independently develop equivalent knowledge methods and know-how. If we are unable to protect our intellectual property rights, we may be unable to prevent competitors from using our own inventions and intellectual property to compete against us, and our business may be harmed.   

We may be subject to patent infringement or other intellectual property lawsuits that could be costly to defend.

Because our industry is characterized by competing intellectual property, we may become involved in litigation based on claims that we have violated the intellectual property rights of others. Determining whether a product infringes a patent involves complex legal and factual issues, and the outcome of patent litigation actions is often uncertain. No assurance can be given that third party patents containing claims covering our products, parts of our products, technology or methods do not exist, have not been filed, or could not be filed or issued. Because of the number of patents issued and patent applications filed in our technical areas or fields (including some pertaining specifically to wireless charging technologies), our competitors or other third parties may assert that our products and technology and the methods we employ in the use of our products and technology are covered by United States or foreign patents held by them. In addition, because patent applications can take many years to issue and because publication schedules for pending applications vary by jurisdiction, there may be applications now pending which may result in issued patents that our technology under development or other future products would infringe. Also, because the claims of published patent applications can change between publication and patent grant, there may be published patent applications that may ultimately issue with claims that we infringe. There could also be existing patents that one or more of our technologies, products or parts may infringe and of which we are unaware. As the number of competitors in the market for wire-free power and alternative recharging solutions increases, and as the number of patents issued in this area grows, the possibility of patent infringement claims against us increases. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

If we become subject to a patent infringement or other intellectual property lawsuit and if the relevant patents or other intellectual property are upheld as valid and enforceable and we are found to have infringed or violated the terms of a license to which we are a party, we could be prevented from selling any infringing products of ours unless we could obtain a license or were able to redesign the product to avoid infringement. If we are unable to obtain a license or successfully redesign, we might be prevented from selling our technology under development or other future products. If there is a determination that we have infringed the intellectual property rights of a competitor or other person, we may be required to pay damages, pay a settlement, or pay ongoing royalties, or be enjoined. In these circumstances, we may be unable to sell our products or license our technology at competitive prices or at all, and our business and operating results could be harmed.

We could become subject to product liability claims, product recalls, and warranty claims that could be expensive, divert management’s attention and harm our business.

Our business exposes us to potential liability risks that are inherent in the marketing and sale of products used by consumers. We may be held liable if our technology causes injury or death or is found otherwise unsuitable. While we believe our technology is safe, users could allege and possibly prove defects (some of which could be alleged or proved to cause harm to users or others) because we design our technology to perform complex functions involving RF energy in close proximity to users. A product liability claim, regardless of its merit or eventual outcome, could result in significant legal defense costs. The coverage limits of the insurance policies we may choose to purchase to cover related risks may not be adequate to cover future claims. If sales of products incorporating our technology increase or we suffer future product liability claims, we may be unable to maintain product liability insurance in the future at satisfactory rates or with adequate amounts. A product liability claim, any product recalls or excessive warranty claims, whether arising from defects in design or manufacture or otherwise, could negatively

32

affect our sales or require a change in the design or manufacturing process, any of which could harm our reputation, harm our relationship with licensors of our products, result in a decline in revenue and harm our business.  

In addition, if a product that we or a strategic partner design is defective, whether due to design or manufacturing defects, improper use of the product or other reasons, we or our strategic partner may be required to notify regulatory authorities and/or to recall the product. A required notification to a regulatory authority or recall could result in an investigation by regulatory authorities into the products incorporating our technology, which could in turn result in required recalls, restrictions on the sale of such products or other penalties. The adverse publicity resulting from any of these actions could adversely affect the perceptions of our customers and potential customers. These investigations or recalls, especially if accompanied by unfavorable publicity, could result in our incurring substantial costs, losing revenues and damaging our reputation, each of which would harm our business.

Our business is subject to data security risks, including security breaches.

We collect, process, store and transmit substantial amounts of information, including information about our customers. We take steps to protect the security and integrity of the information we collect, process, store and transmit, but there is no guarantee that inadvertent or unauthorized use or disclosure will not occur or that third parties will not gain unauthorized access to this information despite such efforts. Security breaches, computer malware, computer hacking attacks and other compromises of information security measures have become more prevalent in the business world and may occur on our systems or those of our vendors in the future. Large Internet companies and websites have from time to time disclosed sophisticated and targeted attacks on portions of their websites, and an increasing number have reported such attacks resulting in breaches of their information security. We and our third-party vendors are at risk of suffering from similar attacks and breaches. Although we take steps to maintain confidential and proprietary information on our information systems, these measures and technology may not adequately prevent security breaches and we rely on our third-party vendors to take appropriate measures to protect the security and integrity of the information on those information systems. Because techniques used to obtain unauthorized access to or to sabotage information systems change frequently and may not be known until launched against us, we may be unable to anticipate or prevent these attacks. In addition, a party that is able to illicitly obtain a customer’s identification and password credentials may be able to access our customer’s accounts and certain account data.

We rely on email and other electronic means of communication to connect with our existing and potential customers. Our customers may be targeted by parties using fraudulent spoofing and phishing emails to misappropriate passwords, payment information or other personal information or to introduce viruses through Trojan horse programs or otherwise through our customers’ computers, smartphones, tablets or other devices. Despite our efforts to mitigate the effectiveness of such malicious email campaigns through product improvements, spoofing and phishing may damage our brand and increase our costs.

Any actual, perceived or suspected security breach or other compromise of our security measures or those of our third-party vendors, whether as a result of hacking efforts, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering or otherwise, could harm our reputation and business, damage our brand and make it harder to retain existing customers or acquire new ones, require us to expend significant capital and other resources to address the breach, and result in a violation of applicable laws, regulations or other legal obligations. We could also be exposed to a risk of loss or litigation and potential liability under laws, regulations and contracts that protect the privacy and security of personal information. Our insurance policies may not be adequate to reimburse us for direct losses caused by any such security breach or indirect losses due to resulting customer attrition. Any of these events or circumstances could materially adversely affect our business, financial condition and operating results.

If we are not able to secure advantageous license agreements for our technology, our business and results of operations will be adversely affected.

We pursue the licensing of our technology as a primary means of revenue generation. Creating a licensing business relationship often takes substantial effort, as we expect to have to convince the counterparty of the efficacy of our technology, meet design and manufacturing requirements, satisfy marketing and product needs, and comply with selection, review, and contracting requirements. There can be no assurance that we will be able to gain access to potential licensing partners, or that they will ultimately decide to integrate our technology with their products. We may not be able to secure license agreements with customers on advantageous terms, and the timing and volume of revenue earned from license agreements will be outside of our control. If the license agreements we enter into do not prove to be advantageous to us, our business and results of operations will be adversely affected.

33

Risks Related to Regulation of Our Business

Domestic and international regulators may deny approval for our technology, and future legislative or regulatory changes may impair our business.

Our charging technology involves power transmission using RF energy, which is subject to regulation by the Federal Communications Commission (the “FCC”) in the United States and by comparable regulatory agencies worldwide. It may also be subject to regulation by other agencies. Regulatory concerns include whether human exposure to RF emissions falls below specified thresholds. Higher levels of exposure require separate approval.  For example, transmitting more power over a certain distance or transmitting power over a greater distance may require separate regulatory approvals. In addition, we design our technology to operate in a RF band that is also used for Wi-Fi routers and other wireless consumer electronics, and we also design it to operate at different frequencies as demanded for some customer applications. Applications at different frequencies may require separate regulatory approvals.  Efforts to obtain regulatory approval for devices using our technology are costly and time consuming, and there can be no assurance that requisite regulatory approvals will be forthcoming. If approvals are not obtained in a timely and cost-efficient manner, our business and operating results could be materially adversely affected. In addition, legal or regulatory developments could impose additional restrictions or costs on us that could require us to redesign our technology or future products, or that are difficult or impracticable to comply with, all of which would adversely affect our revenues and financial results.  

Risks Related to Personnel

We are highly dependent on key members of our executive management team. Our inability to retain these individuals could impede our business plan and growth strategies, which could have a negative impact on our business and the value of your investment.

Our ability to implement our business plan depends, to a critical extent, on the continued efforts and services of a very small number of key executives. If we lose the services of any of the key members of our executive management team, we could be required to expend significant time and money in the pursuit of replacements, which may result in a delay in the implementation of our business plan and plan of operations. If necessary, we can give no assurance that we could find satisfactory permanent replacements for these individuals at all or on terms that would not be unduly expensive or burdensome to us. We do not currently carry any key-person life insurance that would help us recoup our costs in the event of the death or disability of any of these executives.

Our success and growth depend on our ability to attract, integrate and retain high-level engineering talent.

Because of the highly specialized and complex nature of our business, our success depends on our ability to attract, hire, train, integrate and retain high-level engineering talent. Competition for such personnel is intense because we compete for talent against many large profitable companies and our inability to adequately staff our operations with highly qualified and well-trained engineers could render us less efficient and impede our ability to develop and deliver a commercial product. Further, in recent years, the increased availability of hybrid or remote working arrangements has expanded the pool of companies that can compete for our employees and employment candidates. Such a competitive market could put upward pressure on labor costs for engineering talent. We may incur significant costs to attract and retain highly qualified talent, and we may lose new employees to our competitors or other technology companies before we realize the benefit of our investment in recruiting and training them. Volatility or lack of performance in our stock price may also affect our ability to attract and retain qualified personnel.   

We are subject to risks associated with our utilization of engineering consultants.

To improve productivity and accelerate our development efforts while we build out our own engineering team, we use experienced consultants to assist in selected development projects. We take steps to monitor and regulate the performance of these independent third parties. However, arrangements with third party service providers may make our operations vulnerable if these consultants fail to satisfy their obligations to us as a result of their performance, changes in their own operations, financial condition, or other matters outside of our control. Effective management of our consultants is important to our business and strategy. The failure of our consultants to perform as anticipated could result in substantial costs, divert management’s attention from other strategic activities, or create other operational or financial problems for us. Terminating or transitioning arrangements with key consultants could result in additional costs and a risk of operational delays, potential errors and possible control issues as a result of the termination or during the transition.

34

Risks Related to Ownership of Our Common Stock

We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors.

We are a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a “smaller reporting company,” and have either: (i) a public float of less than $250 million or (ii) annual revenues of less than $100 million during the most recently completed fiscal year and a public float of less than $700 million. As a “smaller reporting company,” we are subject to reduced disclosure obligations in our SEC filings compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Until such time as we cease to be a “smaller reporting company,” such reduced disclosure in our SEC filings may make it harder for investors to analyze our operating results and financial prospects.

If some investors find our common stock less attractive as a result of any choices to reduce future disclosure we may make, there may be a less active trading market for our common stock and our stock price may be more volatile.

If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy of our financial reports.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. Although our management has determined that our internal control over financial reporting was effective as of March 31, 2023, we cannot assure you that we will not identify any material weakness in our internal control in the future.

We qualify as a “smaller reporting company” and are therefore not required to file an auditor attestation report. If we experience a material weakness in our internal controls, we may fail to detect errors in our financial accounting, which may require a financial statement restatement or otherwise harm our operating results, cause us to fail to meet our SEC reporting obligations or listing requirements of The Nasdaq Stock Market, or Nasdaq, adversely affect our reputation, cause our stock price to decline or result in inaccurate financial reporting or material misstatements in our annual or interim financial statements. Further, if there are material weaknesses or failures in our ability to meet any of the requirements related to the maintenance and reporting of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and that could cause the price of our common stock to decline. We could become subject to investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional management attention and which could adversely affect our business.

In addition, our internal control over financial reporting will not prevent or detect all errors and fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.  

You might lose all or part of your investment.

Investing in our common stock involves a high degree of risk. As an investor, you might never recoup all, or even part of, your investment and you may never realize any return on your investment. You must be prepared to lose all your investment.

Our stock price is likely to continue to be volatile.

The market price of our common stock has fluctuated significantly since our initial public offering in 2014. The price of our common stock is likely to continue to fluctuate significantly in response to many factors that are beyond our control, including:

• regulatory announcements;

• actual or anticipated variations in our operating results;

• general macroeconomic, industry and market conditions, including increases in inflation or fluctuating interest rates and disruptions to global supply chains, and perceptions of future economic growth prospects in the economy at large;

35

•recent turmoil in the global banking sector;

• terrorist acts, acts of war or periods of widespread civil unrest, such as the ongoing conflict between Russia and the Ukraine and the response thereto;

• natural disasters and other calamities, including global pandemics such as the COVID-19 pandemic;

• changes in the economic performance and/or market valuations of other technology companies;

• our announcements of significant strategic partnerships, regulatory developments and other events;

• announcements by other companies in our industry;

• articles published or rumors circulated by third parties regarding our business, technology or development partners;

• additions or departures of key personnel; and

• sales or other transactions involving our capital stock.

We have not paid dividends in the past and have no immediate plans to pay dividends.

We plan to reinvest all of our earnings, to the extent we have earnings, in order to market our products and technology and to cover operating costs and to otherwise become and remain competitive. We do not plan to pay any cash dividends with respect to our securities in the foreseeable future. We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend.

We expect to continue to incur significant costs as a result of being a public reporting company and our management will be required to devote substantial time to meet our compliance obligations.

As a public reporting company, we incur significant legal, accounting and other expenses. We are subject to reporting requirements of the Exchange Act and rules subsequently implemented by the SEC that require us to establish and maintain effective disclosure controls and internal controls over financial reporting, as well as some specific corporate governance practices. Our management and other personnel are expected to devote a substantial amount of time to compliance initiatives associated with our public reporting company status. Those costs will increase significantly if we cease to qualify as a smaller reporting company.

We may be subject to securities litigation, which is expensive and could divert management attention.

Our stock price has fluctuated in the past, reacting to news such as our past announcements of FCC approvals and it may be volatile in the future. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation, and we may be the target of litigation of this sort in the future. Securities litigation is costly and can divert management attention from other business concerns, which could seriously harm our business and the value of your investment in our company.

Our ability to use Federal net operating loss carry forwards to reduce future tax payments may be limited if our taxable income does not reach sufficient levels.

As of December 31, 2022, we had Federal net operating loss (“NOL”) carry forwards of approximately $273,056,000. Under the Internal Revenue Code of 1986, as amended, NOLs arising in tax years ending on or before December 31, 2017 can generally be carried forward to offset future taxable income for a period of 20 years, and NOLs arising in tax years ending after December 31, 2017 can generally be carried forward indefinitely. Our ability to use our NOLs will be dependent on our ability to generate taxable income, and the NOLs that arose in tax years ending on or before December 31, 2017 could expire before we generate sufficient taxable income to take advantage of the NOLs. As of March 31, 2023, based on our history of operating losses it is possible that a portion of our NOLs will not be fully realizable.

Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable.

Provisions of our certificate of incorporation and bylaws, and applicable Delaware law, may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our

36

stockholders might otherwise deem to be in their best interests. The provisions in our certificate of incorporation and bylaws:

• authorize our Board to issue preferred stock without stockholder approval and to designate the rights, preferences and privileges of each class; if issued, such preferred stock would increase the number of outstanding shares of our capital stock and could include terms that may deter an acquisition of us;

• limit who may call stockholder meetings;

• do not permit stockholders to act by written consent;

• do not provide for cumulative voting rights; and

• provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.

In addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. This restriction lasts for a period of three years following the share acquisition. These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.

Our warrants that are accounted for as liabilities and the changes in value of our warrants could have a material effect on the market price of our common stock or our financial results.

We account for the 2023 Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging. Such guidance provides that, because the 2023 Warrants do not meet the criteria for equity treatment thereunder, each 2023 Warrants must be recorded as a liability. Accordingly, we classify each 2023 Warrants as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statements of operations. With each such remeasurement, the warrant liability is adjusted to fair value, with the change in fair value recognized in our statement of operations and therefore our reported earnings. As a result of the recurring fair value measurement, our consolidated financial statements and results of operations may fluctuate quarterly based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the 2023 Warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.

General Risk Factors

The price of our common stock may not meet the requirements for continued listing on Nasdaq. If we fail to regain compliance with the minimum listing requirements, our common stock will be subject to delisting. Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if our common stock is delisted.

The continued listing standards of Nasdaq require, among other things, that the minimum bid price of a listed company’s stock be at or above $1.00. If the closing minimum bid price is below $1.00 for a period of more than 30 consecutive trading days, the listed company will fail to be in compliance with Nasdaq’s listing rules and, if it does not regain compliance within the grace period, will be subject to delisting. As previously reported, on January 20, 2023, we received a notice from the Nasdaq Listing Qualifications Department notifying us that for 30 consecutive trading days, the bid price of our common stock had closed below the minimum $1.00 per share requirement. In accordance with Nasdaq’s listing rules, we were afforded a grace period of 180 calendar days, or until July 19, 2023, to regain compliance with the bid price requirement. In order to regain compliance, the bid price of our common stock must close at a price of at least $1.00 per share for a minimum of 10 consecutive trading days.

If we fail to regain compliance by July 19, 2023, we may be eligible for a second 180 day compliance period, provided that we, among other things, meet the continued listing requirement for market value of publicly held shares as well as all other standards for initial listing on The Nasdaq Capital Market, with the exception of the minimum bid price requirement, and provide written notice of our intention to cure the bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary. Such extension of the grace period would be subject to Nasdaq’s discretion, and there can be no guarantee that we would be granted an extension.

37

We cannot provide any guarantee that we will regain compliance during the grace period or be able to maintain compliance with Nasdaq’s listing requirements in the future. If we are not able to regain compliance during the grace period, or any extension of the grace period for which we may be eligible, our common stock will be subject to delisting and “penny stock” rules. Delisting from Nasdaq could adversely affect our ability to raise additional financing through the public or private sale of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our common stock. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development opportunities.

Adverse macroeconomic conditions, natural disasters or reduced technology spending could adversely affect our business, operating results, and financial condition.

Our business depends on the overall demand for our technology and on the economic health of our current and prospective customers. In addition, the purchase of our products is often discretionary and may involve a significant commitment of capital and other resources. Weak global and regional macroeconomic conditions, including labor shortages, supply chain disruptions, rising interest rates and inflation, low spending environments, geopolitical instability, warfare and uncertainty, weak economic conditions in certain regions or a reduction in technology spending regardless of macroeconomic conditions, including as a result of the remaining effects of COVID-19 and the ongoing conflict between Russia and the Ukraine and the global response thereto, could adversely affect our business, operating results, and financial condition, including resulting in longer sales cycles, a negative impact on our ability to attract and retain new customers or expand our platform or sell additional products and services to our existing customers, lower prices for our products, higher default rates among our current suppliers and customers and reduced sales to new or existing customers.

There has been recent turmoil in the global banking system. For example, on March 10, 2023, Silicon Valley Bank (“SVB”), was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”), as receiver for SVB. Additionally, in May 2023, the FDIC took control of First Republic Bank (“First Republic”). While the FDIC has since stated that all depositors of SVB will be made whole and JPMorgan Chase & Co. (“JPMorgan”) has since acquired a substantial amount of assets and certain liabilities of First Republic, there is no guarantee that the federal government would similarly guarantee all depositors in the event of future bank closures. While the Company does not have a banking relationship with SVB or First Republic, continued instability and turmoil in the global banking system may negatively impact us or our customers, including our customers’ ability to pay for our products, and adversely impact our business and financial condition. Moreover, such events, in addition to the global macroeconomic conditions discussed above, may cause further turbulence and uncertainty in the capital markets. Further deterioration of the global macroeconomic environment and any regulatory action taken in response thereto may adversely affect our business, operating results, and financial condition.

Further, natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce, and the global economy, and thus could have an adverse effect on us. Our business operations are also subject to interruption by fire, power shortages, flooding, and other events beyond our control. In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss, cyberattack, or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in development of our platform, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on our future operating results. Climate change could result in an increase in the frequency or severity of such natural disasters. For example, our corporate offices are located in California, a state that frequently experiences earthquakes, wildfires, heatwaves and droughts.

The outbreak of health epidemics, such as COVID-19, has and may further adversely affect our business, results of operations and financial condition.

Any outbreaks of contagious diseases and other adverse public health developments in countries where we, our customers and suppliers operate could have a material and adverse effect on our business, results of operations and financial condition. For example, the COVID-19 pandemic resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions, manufacturing restrictions, declarations of states of emergency and business shutdowns. A majority of our potential customers have a significant dependence on the Chinese manufacturing and supply chain infrastructure. We believe the COVID-19 pandemic delayed adoption of our technology by potential customers who temporarily shut down their workforces

38

and supply chains based in China and elsewhere around the world. At times, certain of our outsourcing partners, component suppliers and logistical service providers have experienced disruptions, resulting in supply shortages that have affected and may continue to affect our sales. Similar disruptions could occur in the future.

In addition, COVID-19 has resulted and may continue to result in a widespread health crisis that could contribute to increased market volatility and adversely affect the economies and financial markets of many countries, resulting in a global economic downturn that could affect interest in our products or demand by potential customers. Any of these events could materially and adversely affect our business, results of operations and financial condition. The extent of the impact will depend on future developments, which are highly uncertain and cannot be predicted.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. There can be no assurance that analysts will continue to cover us or provide favorable coverage. If one or more of the analysts who cover us downgrade our stock or change their opinion of our stock, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

39

Item 2.  Sales of Unregistered Securities; Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

The exhibits required to be filed as a part of this report are listed in the Exhibit Index.  

40

EXHIBIT INDEX

Exhibit Number	Description
4.1	Form of Common Warrant (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K (Registration No. 001-36379) filed on March 27, 2023.
31.1	Certification of Periodic Report by Chief Executive Officer (principal executive officer) pursuant to Rule 13a-14(a)/15d-14a
31.2	Certification of Periodic Report by the Acting Chief Financial Officer (principal financial officer) pursuant to Rule 13a-14(a)/15d-14a
32.1+	Certification of Periodic Report by Chief Executive Officer (principal executive officer) and the Acting Chief Financial Officer (principal financial officer) pursuant to U.S.C. Section 1350
101.INS	Inline XBRL Instance Document (filed herewith)
101.SCH	Inline XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

+ This certification shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

41

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 17, 2023	By:	/s/ Cesar Johnston
		Name:	Cesar Johnston
		Title:	Chief Executive Officer
			(Principal Executive Officer)
Date: May 17, 2023	By:	/s/ William Mannina
		Name:	William Mannina
		Title:	Acting Chief Financial Officer
			(Principal Financial and Accounting Officer)

42

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

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

I, Cesar Johnston, 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 17, 2023

/s/ Cesar Johnston
Name:	Cesar Johnston
Title:	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER

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

I, William Mannina, 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 17, 2023

/s/ William Mannina
Name:	William Mannina
Title:	Acting Chief Financial 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, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Cesar Johnston, Chief Executive Officer and William Mannina, Acting 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/ Cesar Johnston		/s/ William Mannina
Name:	Cesar Johnston	Name:	William Mannina
Title:	Chief Executive Officer	Title:	Acting Chief Financial Officer
Date:	May 17, 2023	Date:	May 17, 2023

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 10, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Trading Symbol	WATT
Entity Registrant Name	Energous Corp
Entity Central Index Key	0001575793
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		91,055,881
Title of 12(b) Security	Common Stock, $0.00001 par value
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity File Number	001-36379
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
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Balance Sheets - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 26,339,960	$ 26,287,293
Accounts receivable, net	100,935	143,353
Inventory	71,597	105,821
Prepaid expenses and other current assets	649,479	827,551
Total current assets	27,161,971	27,364,018
Property and equipment, net	383,238	429,035
Operating lease right-of-use assets	1,778,512	1,959,869
Total assets	29,323,721	29,752,922
Current liabilities:
Accounts payable	1,351,018	900,765
Accrued expenses	1,370,046	1,790,414
Accrued severance expense	249,610	416,516
Warrant liability	3,135,000
Operating lease liabilities, current portion	702,780	705,894
Deferred revenue	35,891	29,727
Total current liabilities	6,844,345	3,843,316
Operating lease liabilities, long-term portion	1,090,639	1,264,131
Total liabilities	7,934,984	5,107,447
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $0.00001 par value, 10,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued or outstanding at March 31, 2023 and December 31, 2022.
Common Stock, $0.00001 par value, 200,000,000 shares authorized at March 31, 2023 and December 31, 2022; 91,032,030 and 78,944,954 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively.	911	789
Additional paid-in capital	390,715,632	387,319,985
Accumulated deficit	(369,327,806)	(362,675,299)
Total stockholders’ equity	21,388,737	24,645,475
Total liabilities and stockholders’ equity	$ 29,323,721	$ 29,752,922

XML

Condensed Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 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	$ 0.00001	$ 0.00001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	91,032,030	78,944,954
Common stock, shares outstanding	91,032,030	78,944,954

XML

Condensed Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenue	$ 96,676	$ 215,961
Costs and expenses:
Cost of revenue	138,813	203,249
Research and development	3,078,524	3,527,146
Sales and marketing	1,211,938	1,613,590
General and administrative	1,961,460	2,027,520
Total costs and expenses	6,390,735	7,371,505
Loss from operations	(6,294,059)	(7,155,544)
Other (expense) income:
Offering costs related to warrant liability	(591,670)
Interest income	233,222	2,826
Total other (expense) income	(358,448)	2,826
Net loss	$ (6,652,507)	$ (7,152,718)
Basic loss per common share	$ (0.08)	$ (0.09)
Weighted average shares outstanding, basic	81,408,347	76,930,919
Diluted loss per common share	$ (0.08)	$ (0.09)
Weighted average shares outstanding, diluted	81,408,347	76,930,919

XML

Condensed Statement of Changes in Stockholders' Equity - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2021	$ 46,984,278	$ 767	$ 383,383,550	$ (336,400,039)
Beginning balance (in shares) at Dec. 31, 2021		76,667,205
Stock-based compensation - options	10,313		10,313
Stock-based compensation - restricted stock units ("RSUs")	745,620		745,620
Stock-based compensation - employee stock purchase plan ("ESPP")	40,973		40,973
Issuance of shares for RSUs		$ 4	(4)
Issuance of shares for RSUs (in shares)		387,823
Proceeds from contributions to the ESPP	104,217		104,217
Net loss	(7,152,718)			(7,152,718)
Ending balance at Mar. 31, 2022	40,732,683	$ 771	384,284,669	(343,552,757)
Ending balance (in shares) at Mar. 31, 2022		77,055,028
Beginning balance at Dec. 31, 2021	46,984,278	$ 767	383,383,550	(336,400,039)
Beginning balance (in shares) at Dec. 31, 2021		76,667,205
Ending balance at Dec. 31, 2022	24,645,475	$ 789	387,319,985	(362,675,299)
Ending balance (in shares) at Dec. 31, 2022		78,944,954
Stock-based compensation - options	21,095		21,095
Stock-based compensation - restricted stock units ("RSUs")	476,242		476,242
Stock-based compensation - employee stock purchase plan ("ESPP")	24,740		24,740
Issuance of shares for RSUs		$ 2	(2)
Issuance of shares for RSUs (in shares)		186,878
Proceeds from contributions to the ESPP	65,134		65,134
Issuance of shares in an at-the-market ("ATM") placement, net of $68,637 in issuance costs	2,674,697	$ 37	2,674,660
Issuance of shares in an at-the-market ("ATM") placement, net of issuance costs (in shares)		3,650,198
Issuance of shares in a sale of common stock, net of $3,166,139 in issuance costs and fair value of a liability warrant	133,861	$ 83	133,778
Issuance of shares in a sale of common stock, net of issuance costs and fair value of liability warrant(in shares)		8,250,000
Net loss	(6,652,507)			(6,652,507)
Ending balance at Mar. 31, 2023	$ 21,388,737	$ 911	$ 390,715,632	$ (369,327,806)
Ending balance (in shares) at Mar. 31, 2023		91,032,030

XML

Condensed Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (6,652,507)	$ (7,152,718)
Adjustments to reconcile net loss to Net cash used in operating activities:
Depreciation and amortization	45,797	70,119
Stock based compensation	522,077	796,906
Changes in operating lease right-of-use assets	181,357	186,736
Inventory net realizable adjustment	111,019
Bad debt expense	(12,500)
Offering costs allocated to warrants	591,670
Changes in operating assets and liabilities:
Accounts receivable	54,918	84,678
Inventory	(76,795)	(68,480)
Prepaid expenses and other current assets	178,072	443,216
Accounts payable	450,253	(271,044)
Accrued expenses	(420,368)	(180,535)
Accrued severance expense	(166,906)	(65,566)
Operating lease liabilities	(176,606)	(203,010)
Deferred revenue	6,164	2,727
Net cash used in operating activities	(5,364,355)	(6,356,971)
Cash flows from investing activities:
Purchases of property and equipment		(44,489)
Net cash used in investing activities		(44,489)
Cash flows from financing activities:
Net proceeds from an ATM offering	2,674,697
Net proceeds from a sale of common stock and warrant issuance	2,677,191
Proceeds from contributions to employee stock purchase plan	65,134	104,217
Net cash provided by financing activities	5,417,022	104,217
Net increase (decrease) in cash and cash equivalents	52,667	(6,297,243)
Cash and cash equivalents – beginning	26,287,293	49,071,414
Cash and cash equivalents – ending	26,339,960	42,774,171
Restricted Stock Units (RSUs) [Member]
Supplemental disclosure of non-cash investing and financing activities:
Common stock issued	$ 2	$ 4

XML

Business Organization, Nature of Operations

3 Months Ended

Mar. 31, 2023

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Business Organization, Nature of Operations

Note 1 - Business Organization, Nature of Operations

Energous Corporation (the “Company”) was incorporated in Delaware on October 30, 2012. The Company has developed its WattUp® wireless power technology, consisting of proprietary semiconductor chipsets, software controls, hardware designs and antennas, that enables radio frequency (“RF”) based charging for electronic devices. The WattUp technology has a broad spectrum of capabilities, including near-field wireless charging and at-a-distance wireless charging at various distances. The Company believes its proprietary WattUp technologies are well suited for many applications, including building and home automation, electronic shelf labels, industrial IoT sensors, surface and implanted medical devices, tracking devices, hearables, wearables, consumer electronics and public safety applications. Potential future applications include smartphones, commercial and industrial robotics, as well as automotive solutions and other devices with charging requirements that would otherwise require battery replacement or a wired power connection.

XML

Liquidity and Management Plans

3 Months Ended

Mar. 31, 2023

Liquidity And Management Plan Disclosure [Abstract]

Liquidity and Management Plans

Note 2 – Liquidity and Management Plans

During the three months ended March 31, 2023 and 2022, the Company recorded revenue of $96,676 and $215,961, respectively. During the three months ended March 31, 2023 and 2022, the Company recorded net losses of $6,652,507 and $7,152,718, respectively. Net cash used in operating activities was $5,364,355 and $6,356,971 for the three months ended March 31, 2023 and 2022, respectively. The Company is currently meeting its liquidity requirements through the proceeds of securities offerings that raised net proceeds of $27,043,751 during 2021, $744,787 during 2022 and $5,351,888 during the first quarter of 2023, along with proceeds from contributions to the Company’s employee stock purchase plan (the “ESPP”) and payments received from customers.

As of March 31, 2023, the Company had cash and cash equivalents of $26,339,960. The Company expects that cash and cash equivalents as of March 31, 2023, together with anticipated revenues, will be sufficient to fund the Company’s operations through May 2024.

Research and development of new technologies is by its nature unpredictable. Although the Company intends to continue its research and development activities, 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.

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.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 3 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements are presented in U.S. dollars and 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”).

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, 2022 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 30, 2023.  The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2022 audited financial statements.

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.  

Note 3 – Summary of Significant Accounting Policies, continued

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 and Cash Equivalents

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.

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 proceeds.

Fair Value

The Company follows ASC 820, Fair Value Measurements (“ASC 820”), which establishes a common definition of fair value to be applied when 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.

Note 3 – Summary of Significant Accounting Policies, continued

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

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses, other current assets, and accounts payable & accrued expenses, are an approximate of their fair values because of the short maturity of these instruments. The Company’s derivative liabilities recognized at fair value on a recurring basis are 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, 2023 and 2022, the Company recognized $96,676 and $215,961, 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. The Company records the expenses related to these product development projects in research and development expense, in the periods such expenses were incurred.

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.

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 $3,078,524 and $3,527,146 for the three months ended March 31, 2023 and 2022, 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.

Note 3 – Summary of Significant Accounting Policies, continued

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, 2023, 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, 2023 and 2022. The Company files income tax returns with the United States and California governments.

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 12,890,622 and 5,682,499, as outlined in the table below, for the three months ended March 31, 2023 and 2022, respectively, because their inclusion would be anti-dilutive.

	For the Three Months Ended March 31,
	2023		2022
Warrants issued to investors		9,916,666		3,284,789
Options to purchase common stock		300,000		825,006
RSUs		2,673,956		1,572,704
Total potentially dilutive securities		12,890,622		5,682,499

The table above includes 1,666,666 warrants expiring on March 1, 2024, which have an exercise price of $10.00 and 8,250,000 warrants expiring on March 28, 2029, which have an exercise price of $0.40.

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 4 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.

Management’s Evaluation of Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of March 31, 2023, through the date which the financial statements are available to be issued.

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 4 – 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 $2,071,336 and operating lease liability of $2,071,336, using a present value discount rate of 3.0%. Upon expiration of the original lease on September 30, 2022, the new monthly lease payment starting October 1, 2022 is $58,903, subject to annual escalations up to a maximum monthly lease payment of $62,490.

Costa Mesa Lease

On September 22, 2021, the Company signed a new lease for office space for its engineers based in Costa Mesa, California. Per the lease, the lease commencement date is October 1, 2021 and the expiration date is September 30, 2023. The Company did not have control of the new office space until October 2021, at which time the Company recorded a new ROU lease asset of $104,563 and operating lease liability of $104,563. The new Costa Mesa lease has an initial monthly lease payment of $4,369 starting October 1, 2021 and is subject to an annual escalation up to a maximum monthly lease payment of $4,522.

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 $1,858,460 during the period from the second quarter of 2023 to the third quarter of 2025. As of March 31, 2023, the Company has total operating lease ROU assets of $1,778,512, current portion of operating lease liabilities of $702,780 and long-term portion of operating lease liabilities of $1,090,639. The weighted average remaining lease term is 2.5 years as of March 31, 2023.

A reconciliation of undiscounted cash flows to lease liabilities recognized as of March 31, 2023 is as follows:

	Amount
	(unaudited)
2023		562,555
2024		733,497
2025		562,408
Total future lease payments		1,858,460
Present value discount (2.9% weighted average)		(65,041	)
Total operating lease liabilities	$	1,793,419

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 $233,000 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.

Note 4 – Commitments and Contingencies, continued

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

During the three months ended March 31, 2023 and 2022, the Company recorded $62,001 and $125,468 in expense, respectively, under the Bonus Plan. As of December 31, 2022, $688,364 was accrued and unpaid under the Bonus Plan, of which $560,533 was paid during the three months ended March 31, 2023. The remaining $109,452 from 2022 is expected to be paid during the second quarter of 2023. As of March 31, 2023, the Company had accrued $171,453 under the Bonus Plan, including the $109,452 remaining accrual from 2022 and the additional $62,001 accrued during the first quarter of 2023, which is expected to be paid between the second quarter of 2023 and the first 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”).

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 12 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 12 month period following the Executive’s termination.

Executive Employee Agreement – Cesar Johnston

On December 9, 2021, the Company announced that Cesar Johnston had been appointed as the Company’s Chief Executive Officer. In connection with Mr. Johnston’s appointment as Chief Executive Officer, the Company and Mr. Johnston executed an offer letter dated as of December 6, 2021.

Under the terms of his offer letter, Mr. Johnston will receive an annual base salary of $400,000 per year. Beginning in year 2022, he is eligible to receive a discretionary annual bonus of up to 100% of his base salary, at the recommendation of the Company’s Compensation Committee, with the approval of the Company’s Board. In addition, as an inducement to accept his appointment as Chief Executive Officer, Mr. Johnston received, subject to continued employment, (a) a special one-time sign-on bonus in the amount of $120,000, payable in two equal installments of $60,000 each on the first payroll date in 2022 and the first payroll date after December 6, 2022, (b) a grant of 150,000 RSUs to acquire shares of the Company’s common stock, one third of which vested on December 6, 2022 and the remaining two thirds of which vest in eight equal installments of 12,500 each on each quarterly anniversary thereafter and (c) a grant of an option to purchase 300,000 shares of the Company’s common stock at an exercise price equal to the fair market value of the Company’s common stock on the grant date, half of which shall vest on December 31, 2023, a quarter of which shall vest on December 31, 2024 and the remainder of which shall vest on December 31, 2025.

Also pursuant to the terms of his offer letter, Mr. Johnston is eligible for (a) an additional equity award in the amount of 287,000 PSUs to acquire shares of the Company’s common stock, to vest at various amounts to be agreed upon each year by the Board over a three year period commencing January 1, 2022 and ending December 31, 2024, upon the achievement of performance criteria to be mutually established by Mr. Johnston and the Compensation Committee, and (b) an additional equity award of up to 25,000 PSUs per calendar year for each of 2022, 2023 and 2024, based on outperformance of agreed upon goals per calendar year, as determined by the Compensation Committee with approval of the Board. On July 20, 2022, the Board approved, by unanimous written consent, the grant to Mr. Johnston of up to 287,000 PSUs pursuant to the terms of Mr. Johnston’s offer letter. The 287,000 PSUs that have been approved shall vest as follows: (a) up to 187,000 PSU shares shall 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 50,000 PSU shares shall 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. As of March 31, 2023, the Board had not yet approved the performance criteria applicable to the up to additional 50,000 PSU shares that will vest on each of December 31, 2023 and 2024; therefore, these PSUs have not been considered granted.

Note 4 – Commitments and Contingencies, continued

In connection with Mr. Johnston’s appointment as Chief Executive Officer, the Company and Mr. Johnston additionally entered into an amended and restated severance and change in control agreement, dated as of December 6, 2021. In the event of a termination that is not a change-in-control qualifying termination, Mr. Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to 100% of his target bonus plus, if agreed by the Compensation Committee, a discretionary bonus for the year in which the termination occurs, (b) any outstanding unvested equity awards held by Mr. Johnston that would vest in the next 18 months of continuing employment (other than any equity awards that vest upon satisfaction of performance criteria) will accelerate and become vested and (c) if Mr. Johnston timely elects continued coverage under COBRA, the Company or its successor will pay the full amount of Mr. Johnston’s COBRA premiums on his behalf for 18 months.

Mr. Johnston’s agreement additionally provides that, in the event of a change-in-control qualifying termination, Mr. Johnston is entitled to (a) a one-time lump sum payment by the Company in an amount equal to 18 months of his monthly base salary plus an amount equal to 150% of his target bonus plus a prorated bonus for the year in which the termination occurs, (b) any outstanding unvested equity awards held by Mr. Johnston (including any equity awards that vest upon satisfaction of performance criteria) will accelerate in full and become vested and (c) if Mr. Johnston timely elects continued coverage under COBRA, the Company or its successor will pay the full amount of Mr. Johnston’s COBRA premiums on his behalf for 18 months.

Mr. Johnston is also eligible to receive all customary and usual benefits generally available to senior executives of the Company.

Executive Transition Agreement – Stephen Rizzone

On April 3, 2015, the Company entered into an Amended and Restated Executive Employment Agreement with Stephen R. Rizzone, the Company’s former President and Chief Executive Officer (“Employment Agreement”).

The Employment Agreement effective as of January 1, 2015, had an initial term of four years and automatically renewed each year after the initial term. The Employment Agreement provided for an annual base salary of $365,000, and Mr. Rizzone was eligible to receive quarterly cash bonuses from the MBO Bonus Plan with a total target amount equal to 100% of his base salary based upon achievement of performance-based objectives established by the Board.

On July 9, 2021, the Company announced that Stephen R. Rizzone had retired from his position as the Company’s President and Chief Executive Officer and as a member of the Board.

In connection with Mr. Rizzone’s retirement, the Company and Mr. Rizzone entered into an Executive Transition Agreement (the “Separation Agreement”), providing for continued employment through August 31, 2021. Upon his termination of employment, the Separation Agreement provides severance payments and benefits to Mr. Rizzone consistent with the terms of his existing employment agreement with the Company, including without limitation: compensation-based payments of $1,460,000 in the aggregate, payable under a certain payment scheme as set forth therein, an additional lump sum cash payment of $2,000,000, a pro-rated bonus payment for the two months of employment during the current quarterly bonus period payable at the same time bonus payments are made to other executives of the Company, settlement of deferred vested RSUs and an extension of the exercise periods of all stock options held by Mr. Rizzone until the one year anniversary of his termination date, and additional benefits related to Mr. Rizzone’s medical insurance. In addition, the Company agreed to pay-off all amounts owed under a lease agreement relating to a company car and that Mr. Rizzone would receive the title to the vehicle. All compensation under the Separation Agreement has been or will be subject to applicable withholding.

As of March 31, 2023, the Company had unpaid accrued severance expense of $249,610 pertaining to Mr. Rizzone’s Separation Agreement which is expected to be paid through August 31, 2023.

Executive Transition Agreement – Neeraj Sahejpal

On April 29, 2022, the Company announced the departure of Neeraj Sahejpal, former Senior Vice President of Marketing and Business Development, effective April 30, 2022. Pursuant to the terms of Mr. Sahejpal’s severance and change of control agreement with the Company, Mr. Sahejpal received payments and benefits including compensation equal to twelve months of Mr. Sahejpal’s then-current salary of $261,250, twelve months of maximum potential bonus of $261,250, and twelve months of COBRA reimbursements. In addition, all RSUs held by Mr. Sahejpal that were due to vest in the twelve months after his departure, totaling RSUs covering 85,943 shares, were accelerated.

Note 4 – Commitments and Contingencies, continued

As of March 31, 2023, the Company had no unpaid accrued severance expense pertaining to Mr. Sahejpal’s agreement.

Strategic Alliance Agreement

In November 2016, the Company and Dialog Semiconductor plc (“Dialog”), a related party (see Note 7—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 will 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 has an initial term of seven years, with automatic renewal annually thereafter unless terminated by either party upon 180 days’ prior written notice. The Company may 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 breaches certain exclusivity obligations. Dialog may terminate the Alliance Agreement if sales of Licensed Products do 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 agree to terminate the requirement.

On September 20, 2021, the Company was notified by Dialog, recently acquired by Renesas Electronics Corporation, 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 9 – Related Party Transactions for expenses incurred by the Company from Renesas Electronics Corporation).

XML

Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders' Equity

Note 5 – Stockholders’ Equity

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, and contains two prospectuses: a base prospectus, which covers the offering, issuance and sale by the Company of up to $75,000,000 of its common stock, preferred stock, debt securities, warrants to purchase our common stock, preferred stock or debt securities, subscription rights to purchase its common stock, preferred stock or debt securities and/or units consisting of some or all of these securities; and 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 $40,000,000 of its common stock that may be issued and sold under the At Market Issuance Sales Agreement, as amended, between the Company, B. Riley Securities, Inc., Roth Capital Partners LLC and Ladenburg Thalmann & Co. Inc. (the “ATM Program”). The $40,000,000 of common stock to be offered, issued and sold under the ATM Program is included in the $75,000,000 of securities that may be offered, issued and sold by the Company under the base prospectus. Pursuant to this shelf registration statement, the Company sold shares which raised net proceeds of $38,832,711 (net of $1,167,289 in issuance costs) during the third and fourth quarters of 2020 under the ATM Program.

Note 5 – Stockholders’ Equity, continued

On October 4, 2021, the Company filed a prospectus supplement covering the offering, issuance and sale of up to an additional $35,000,000 of shares of the Company’s common stock pursuant to the ATM Program. The Company raised net proceeds of $27,043,751 (net of $868,122 in issuance costs), during 2021 under the ATM Program. During 2022, the Company raised an additional $744,787 (net of $73,403 in issuance costs) under the ATM Program. During the first quarter of 2023, the Company raised $2,674,697 (net of $68,637 in issuance costs) under the ATM Program. As of March 31, 2023, the Company has $3,526,605 remaining on this shelf registration statement.

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. 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 $100,000,000. 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) 8,250,000 shares of its common stock (the “Shares”) and (ii) warrants to purchase up to 8,250,000 shares of its common stock (the “2023 Warrants”), for net proceeds of $2,677,191, 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 $0.40. 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 7 – Warrant Liability and Note 8 – Fair Value Measurements).

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.

XML

Stock Based Compensation

3 Months Ended

Mar. 31, 2023

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

Note 6 – Stock-Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

Effective on June 16, 2021, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 1,500,000 shares, bringing to 8,785,967 the total number of shares approved for issuance under that plan. 

As of March 31, 2023, 1,248,896 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

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

As of March 31, 2023, 546,238 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 1,700,000 shares, bringing to 5,110,104 the total number of shares approved for issuance under that plan.

Note 6 – Stock-Based Compensation, continued

As of March 31, 2023, 2,275,438 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 600,000 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 2,000,000 shares. As of March 31, 2023, 1,041,170 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

Employee Stock Purchase Plan

In April 2015, the Company’s Board approved the ESPP, under which 600,000 shares of common stock have been 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 16, 2021, 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 700,000 shares, bring to 1,550,000 the total number of shares approved for issuance under that plan. Under the ESPP, employees may designate an amount not less than 1% but not more than 10% of their annual compensation for the purchase of Company shares. No more than 7,500 shares may be purchased by an employee under the ESPP during an offering period. An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of the option will be the lesser of 85% of the fair market of the common stock on the first business day of the offering period and 85% of the fair market value of the common stock on the applicable exercise date.

As of March 31, 2023, 201,619 shares of common stock remain eligible to be issued under the ESPP. Employees contributed $65,134 through payroll withholdings to the ESPP as of March 31, 2023 for the current offering period which will end on June 30, 2023 with shares deemed delivered on that date.

Stock Option Activity

In February 2022, the Board granted our Chief Executive Officer 300,000 stock options under the 2013 Equity Incentive Plan at an exercise price of $1.27 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.

The Company estimated the fair value of stock options granted during the second quarter of 2022 using the Black-Scholes option pricing model. No stock options were granted during the three months ended March 31, 2023. The fair values of stock options granted during the second quarter of 2022 were estimated using the following assumptions:

	Three Months Ended June 30, 2022
Stock price	$	1.27
Dividend yield		0	%
Expected volatility		108	%
Risk-free interest rate		1.92	%
Expected life	5.6 years

Note 6 – Stock-Based Compensation, continued

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2023:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Intrinsic Value
Outstanding at January 1, 2023		300,262		$	1.27		8.9	$	–
Granted		–			–		–		–
Exercised		–			–		–		–
Forfeited		(262	)		2.49		–		–
Outstanding at March 31, 2023		300,000		$	1.27		8.7	$	–
Exercisable at January 1, 2023		262		$	2.49		0.3	$	–
Vested		–			–		–		–
Exercised		–			–		–		–
Forfeited		(262	)		2.49		–		–
Exercisable at March 31, 2023		–		$	–		–	$	–

As of March 31, 2023, the unamortized fair value of options was $212,594. The unamortized amount will be expensed over a weighted average period of 2.4 years.

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 Chief Executive Officer, Cesar Johnston, up to 287,000 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 4 – Commitments and Contingencies). The up to 287,000 PSUs that have been approved shall vest as follows: (a) up to 187,000 PSU shares shall 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 50,000 PSU shares shall 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. On December 31, 2022, 135,575 PSUs were achieved, vested and deemed delivered on that date. As of March 31, 2023, the performance criteria for an additional up to 100,000 PSUs had not been approved by the Board.

There was no PSU activity for the three months ended March 31, 2023 and 2022.

RSUs

During the three months ended March 31, 2023, the Compensation Committee granted various employees RSUs covering 48,750 shares of common stock under the 2013 Equity Incentive Plan. The awards vest over four years.

During the three months ended March 31, 2023, the Compensation Committee granted various non-employees RSUs covering 124,452 shares of common stock under the 2014 Non-Employee Equity Compensation Plan. The awards vest over terms ranging from one to four years.

During the three months ended March 31, 2023, the Compensation Committee granted various employees RSUs covering 535,000 shares of common stock under the 2017 Equity Inducement Plan. The awards vest over four years.

Note 6 – Stock-Based Compensation, continued

As of March 31, 2023, the unamortized fair value of the RSUs was $2,469,552. The unamortized amount will be expensed over a weighted average period of 2.0 years. A summary of the activity related to RSUs for the three months ended March 31, 2023 is presented below:

	Total			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2023		2,165,132		$	1.63
RSUs granted		708,202			0.69
RSUs forfeited		(12,500	)		1.27
RSUs vested		(186,878	)		2.08
Outstanding at March 31, 2023		2,673,956		$	1.35

Employee Stock Purchase Plan (“ESPP”)

The current offering period under the ESPP started on January 1, 2023 and will conclude on June 30, 2023. During the year ended December 31, 2022, there were two offering periods. The first offering period began on January 1, 2022 and concluded on June 30, 2022. The second offering period began on July 1, 2022 and concluded on December 31, 2022.

The weighted-average grant-date fair value of the purchase option for each designated share purchased under the ESPP was approximately $0.27 and $0.40 for the three months ended March 31, 2023 and 2022, 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 $24,740 and $40,973 for the three months ended March 31, 2023 and 2022, respectively.

The Company estimated the fair value of ESPP purchase options granted during the three months ended March 31, 2023 and 2022 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,
	2023			2022
Stock price	$	0.836		$	1.25
Dividend yield		0	%		0	%
Expected volatility		59	%		61	%
Risk-free interest rate		4.42	%		0.19	%
Expected life	6 months			6 months

Stock-Based Compensation Expense

The following tables summarize total stock-based compensation costs recognized for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Stock options	$	21,095	$	10,313
RSUs		476,242		745,620
ESPP		24,740		40,973
Total	$	522,077	$	796,906

Note 6 – Stock-Based Compensation, continued

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

	Three Months Ended March 31,
	2023		2022
Research and development	$	208,731	$	353,043
Sales and marketing		104,903		180,377
General and administrative		208,443		263,486
Total	$	522,077	$	796,906

XML

Warrant Liability

3 Months Ended

Mar. 31, 2023

Warrants And Rights Note Disclosure [Abstract]

Warrant Liability

Note 7 – Warrant Liability

2023 Warrants

In March 2023, the Company issued 8,250,000 warrants to purchase up to 8,250,000 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 is exercisable for one share of the Company’s common stock at a price of $0.40 per share (“Exercise Price”), subject to adjustment in certain circumstances including in the event of stock dividends and splits, or a recapitalization, merger, consolidation, tender offer, reorganization, or other change in control of the Company. 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 2023 Warrants 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 of the 2023 Warrants, 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 $3,135,000. As of March 31, 2023, all 2023 Warrants were outstanding.

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8 – 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, 2023 and December 31, 2022 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value:

	Balance as of March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	26,339,960	$	–	$	–	$	26,339,960
Liabilities:
Warrant liability	$	–	$	–	$	3,135,000	$	3,135,000
	Balance as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	26,287,293	$	–	$	–	$	26,287,293
Liabilities:
Warrant liability	$	–	$	–	$	–	$	–

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:

	At March 31, 2023
Share price	$	0.54
Exercise price	$	0.40
Term (in years)		6
Volatility		65	%
Risk-free rate		3.6	%
Dividend yield		0	%

The change in the fair value of the 2023 Warrant liability was determined to be zero during the three months ended March 31, 2023 (see Note 7 – Warrant Liability).

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Note 9 – 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 4 – 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 1,739,691 shares and received warrants to purchase up to 1,417,565 shares. As of March 31, 2023, none of the warrants remain outstanding. As of March 31, 2023, Dialog owns approximately 1.9% of the Company’s outstanding common shares. The Company did not record any revenue during the three months ended March 31, 2023 and 2022. The Company incurred $124,055 and $0 in chip test development expense from Renesas Electronics Corporation, which acquired Dialog in August 2021 (“Renesas”), during the three months ended March 31, 2023 and 2022, respectively.

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

XML

Customer Concentrations

3 Months Ended

Mar. 31, 2023

Risks And Uncertainties [Abstract]

Customer Concentrations

Note 10 – Customer Concentrations

Two customers accounted for approximately 84% of the Company’s revenue for the three months ended March 31, 2023, and two customers accounted for approximately 53% of the Company’s revenue for the three months ended March 31, 2022. Two customers accounted for approximately 80% of the Company’s accounts receivable balance as of March 31, 2023. One customer accounted for approximately 87% of the Company’s accounts receivable balance as of December 31, 2022.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying financial statements are presented in U.S. dollars and 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”).

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, 2022 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 30, 2023.  The accounting policies used in preparing these unaudited condensed interim financial statements are consistent with those described in the Company’s December 31, 2022 audited financial statements.

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 and Cash Equivalents

Cash and Cash Equivalents

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.

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 proceeds.

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.

Note 3 – Summary of Significant Accounting Policies, continued

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

The carrying amounts of the Company’s financial assets and liabilities, such as cash, cash equivalents, prepaid expenses, other current assets, and accounts payable & accrued expenses, are an approximate of their fair values because of the short maturity of these instruments. The Company’s derivative liabilities recognized at fair value on a recurring basis are 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, 2023 and 2022, the Company recognized $96,676 and $215,961, 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. The Company records the expenses related to these product development projects in research and development expense, in the periods such expenses were incurred.

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.

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 $3,078,524 and $3,527,146 for the three months ended March 31, 2023 and 2022, 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.

Note 3 – Summary of Significant Accounting Policies, continued

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, 2023, 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, 2023 and 2022. The Company files income tax returns with the United States and California 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 12,890,622 and 5,682,499, as outlined in the table below, for the three months ended March 31, 2023 and 2022, respectively, because their inclusion would be anti-dilutive.

	For the Three Months Ended March 31,
	2023		2022
Warrants issued to investors		9,916,666		3,284,789
Options to purchase common stock		300,000		825,006
RSUs		2,673,956		1,572,704
Total potentially dilutive securities		12,890,622		5,682,499

The table above includes 1,666,666 warrants expiring on March 1, 2024, which have an exercise price of $10.00 and 8,250,000 warrants expiring on March 28, 2029, which have an exercise price of $0.40

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 4 – Commitments and Contingencies, Operating Leases for further discussion of the Company’s operating leases.

Management's Evaluation of Subsequent Events

Management’s Evaluation of Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of March 31, 2023, through the date which the financial statements are available to be issued.

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The computation of diluted loss per share excludes potentially dilutive securities of 12,890,622 and 5,682,499, as outlined in the table below, for the three months ended March 31, 2023 and 2022, respectively, because their inclusion would be anti-dilutive.

	For the Three Months Ended March 31,
	2023		2022
Warrants issued to investors		9,916,666		3,284,789
Options to purchase common stock		300,000		825,006
RSUs		2,673,956		1,572,704
Total potentially dilutive securities		12,890,622		5,682,499

XML

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Commitments And Contingencies Disclosure [Abstract]

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, 2023 is as follows:

	Amount
	(unaudited)
2023		562,555
2024		733,497
2025		562,408
Total future lease payments		1,858,460
Present value discount (2.9% weighted average)		(65,041	)
Total operating lease liabilities	$	1,793,419

XML

Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Summary of Fair Values of Stock Options Granted

The fair values of stock options granted during the second quarter of 2022 were estimated using the following assumptions:

	Three Months Ended June 30, 2022
Stock price	$	1.27
Dividend yield		0	%
Expected volatility		108	%
Risk-free interest rate		1.92	%
Expected life	5.6 years

Summary of Stock Option Activity

The following is a summary of the Company’s stock option activity during the three months ended March 31, 2023:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Intrinsic Value
Outstanding at January 1, 2023		300,262		$	1.27		8.9	$	–
Granted		–			–		–		–
Exercised		–			–		–		–
Forfeited		(262	)		2.49		–		–
Outstanding at March 31, 2023		300,000		$	1.27		8.7	$	–
Exercisable at January 1, 2023		262		$	2.49		0.3	$	–
Vested		–			–		–		–
Exercised		–			–		–		–
Forfeited		(262	)		2.49		–		–
Exercisable at March 31, 2023		–		$	–		–	$	–

Schedule of Restricted Stock Units Activity

A summary of the activity related to RSUs for the three months ended March 31, 2023 is presented below:

	Total			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2023		2,165,132		$	1.63
RSUs granted		708,202			0.69
RSUs forfeited		(12,500	)		1.27
RSUs vested		(186,878	)		2.08
Outstanding at March 31, 2023		2,673,956		$	1.35

Summary of Stock-based Compensation Costs Recognized

The following tables summarize total stock-based compensation costs recognized for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Stock options	$	21,095	$	10,313
RSUs		476,242		745,620
ESPP		24,740		40,973
Total	$	522,077	$	796,906

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:

	Three Months Ended March 31,
	2023		2022
Research and development	$	208,731	$	353,043
Sales and marketing		104,903		180,377
General and administrative		208,443		263,486
Total	$	522,077	$	796,906

Employee Stock Purchase Plan [Member]

Summary of Fair Values of Stock Options Granted

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

	Three Months Ended March 31,
	2023			2022
Stock price	$	0.836		$	1.25
Dividend yield		0	%		0	%
Expected volatility		59	%		61	%
Risk-free interest rate		4.42	%		0.19	%
Expected life	6 months			6 months

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

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, 2023 and December 31, 2022 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value:

	Balance as of March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	26,339,960	$	–	$	–	$	26,339,960
Liabilities:
Warrant liability	$	–	$	–	$	3,135,000	$	3,135,000
	Balance as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	26,287,293	$	–	$	–	$	26,287,293
Liabilities:
Warrant liability	$	–	$	–	$	–	$	–

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:

	At March 31, 2023
Share price	$	0.54
Exercise price	$	0.40
Term (in years)		6
Volatility		65	%
Risk-free rate		3.6	%
Dividend yield		0	%

XML

Liquidity and Management Plans - Additional Information (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Liquidity And Management Plans [Line Items]
Engineering product development	$ 96,676	$ 215,961
Net loss	(6,652,507)	(7,152,718)
Net cash provided by (used in) operating activities	(5,364,355)	(6,356,971)
Net proceeds of securities offerings	5,351,888		$ 744,787	$ 27,043,751
Cash and cash equivalents, at carrying value, total	26,339,960		$ 26,287,293
Technology Service [Member]
Liquidity And Management Plans [Line Items]
Engineering product development	$ 96,676	$ 215,961

XML

Significant Accounting Policies - Additional Information (Detail) - USD ($)		3 Months Ended
	Apr. 30, 2015	Mar. 31, 2023	Mar. 31, 2022	Mar. 28, 2023
Summary Of Significant Accounting Policies [Line Items]
Revenue		$ 96,676	$ 215,961
Research and development expense, total		3,078,524	3,527,146
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		12,890,622	5,682,499
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 0.40
Warrants Issued to Investors [Member]
Summary Of Significant Accounting Policies [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount		9,916,666	3,284,789
Warrants Issued to Investors [Member] | Expiring at March 1 2024 [Member]
Summary Of Significant Accounting Policies [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount		1,666,666
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 10.00
Warrants Issued to Investors [Member] | Expiring on March 28 2029 [Member]
Summary Of Significant Accounting Policies [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount		8,250,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.40
Employee Stock Purchase Plan [Member]
Summary Of Significant Accounting Policies [Line Items]
Common stock purchase price discount percentage	85.00%	15.00%
Product Development Projects Revenue [Member]
Summary Of Significant Accounting Policies [Line Items]
Revenue		$ 96,676	$ 215,961

XML

Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Summary Of Significant Accounting Policies [Line Items]
Total potentially dilutive securities	12,890,622	5,682,499
Warrants Issued to Investors [Member]
Summary Of Significant Accounting Policies [Line Items]
Total potentially dilutive securities	9,916,666	3,284,789
Employee Stock Option [Member]
Summary Of Significant Accounting Policies [Line Items]
Total potentially dilutive securities	300,000	825,006
Restricted Stock Units (RSUs) [Member]
Summary Of Significant Accounting Policies [Line Items]
Total potentially dilutive securities	2,673,956	1,572,704

XML

Commitments and Contingencies - Operating Leases - Additional Information (Detail) - USD ($)		1 Months Ended
	Oct. 01, 2021	Oct. 31, 2022	Mar. 31, 2023	Dec. 31, 2022	May 20, 2022	Oct. 31, 2021
Commitments And Contingencies [Line Items]
ROU lease assets			$ 1,778,512	$ 1,959,869
Operating lease liability			702,780	705,894
Total operating lease payments			1,858,460
Long-term portion of operating lease liabilities			1,090,639	$ 1,264,131
Accounting Standards Update 2016-02
Commitments And Contingencies [Line Items]
ROU lease assets			1,778,512
Operating lease liability			702,780
Total operating lease payments			1,858,460
Long-term portion of operating lease liabilities			$ 1,090,639
Weighted average remaining lease term			2 years 6 months
San Jose, California [Member]
Commitments And Contingencies [Line Items]
Operating lease, renewal term					3 years
ROU lease assets					$ 2,071,336
Operating lease liability					$ 2,071,336
Operating lease present value discount rate					3.00%
Operating lease payment		$ 58,903
San Jose, California [Member] | Maximum [Member]
Commitments And Contingencies [Line Items]
Maximum monthly lease payment		$ 62,490
Costa Mesa California
Commitments And Contingencies [Line Items]
ROU lease assets						$ 104,563
Operating lease liability						$ 104,563
Operating lease payment	$ 4,369
Costa Mesa California | Maximum [Member]
Commitments And Contingencies [Line Items]
Maximum monthly lease payment	$ 4,522

XML

Commitments and Contingencies - Schedule of Reconciliation of Undiscounted Cash Flows to Lease Liabilities Recognized (Detail)	Mar. 31, 2023 USD ($)
Operating Leases Future Minimum Payments Due [Abstract]
2023	$ 562,555
2024	733,497
2025	562,408
Total future lease payments	1,858,460
Present value discount (2.9% weighted average)	(65,041)
Total operating lease liabilities	$ 1,793,419

XML

Commitments and Contingencies - Hosted Design Software Agreement - Additional Information (Detail) - USD ($)		1 Months Ended
	Jun. 25, 2015	Jun. 30, 2021
Commitments And Contingencies Disclosure [Abstract]
Initial term of agreement	3 years
Quarterly payments for service agreement		$ 233,000

XML

Commitments and Contingencies - MBO Bonus Plan - Additional Information (Detail) - Executive Officers [Member] - USD ($)	3 Months Ended			12 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2024	Dec. 31, 2022
Commitments And Contingencies [Line Items]
Accrued bonus expense		$ 560,533			$ 109,452
Forecast
Commitments And Contingencies [Line Items]
Accrued bonus expense	$ 109,452
Accrued Expenses [Member]
Commitments And Contingencies [Line Items]
Accrued bonus expense		$ 62,001	$ 125,468
Bonus accrued but not yet paid					$ 688,364
Accrued Expenses [Member] | Forecast
Commitments And Contingencies [Line Items]
Accrued bonus expense				$ 171,453

XML

Commitments and Contingencies - Executive Employee Agreement - Cesar Johnston - Additional Information (Detail)					3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2024 shares	Dec. 31, 2023 shares	Jul. 20, 2022 shares	Dec. 09, 2021 USD ($) Installment shares	Mar. 31, 2023 shares	Sep. 30, 2022 shares	Dec. 31, 2024 shares	Dec. 31, 2023 shares	Dec. 31, 2022 shares
Performance Share Units [Member]
Commitments And Contingencies [Line Items]
Shares vested									135,575
Performance Share Units [Member] | Maximum [Member] | Share Based Compensation [Member]
Commitments And Contingencies [Line Items]
Shares vested					100,000
Mr. Johnston [Member]
Commitments And Contingencies [Line Items]
Salary | $				$ 400,000
Annual bonus, percentage				100.00%
One time sign on bonus amount | $				$ 120
Bonus payable, number of installments | Installment				2
Bonus payable installment amount | $				$ 60
Debt description					a grant of 150,000 RSUs to acquire shares of the Company’s common stock, one third of which vested on December 6, 2022 and the remaining two thirds of which vest in eight equal installments of 12,500 each on each quarterly anniversary thereafter
Options granted				300,000
Target bonus percentage				100.00%
Mr. Johnston [Member] | Johnston A&R CIC Agreement [Member]
Commitments And Contingencies [Line Items]
Target bonus percentage				150.00%
Mr. Johnston [Member] | Performance Share Units [Member]
Commitments And Contingencies [Line Items]
Additional equity award				287,000
Vesting percentage				33.30%
Vesting period				3 years
Additional equity award per year.				25,000
Shares granted			287,000			287,000			287,000
Shares vested						287,000
Mr. Johnston [Member] | Performance Share Units [Member] | Forecast | Share Based Compensation [Member]
Commitments And Contingencies [Line Items]
Shares vested	50,000	50,000
Mr. Johnston [Member] | Performance Share Units [Member] | Maximum [Member]
Commitments And Contingencies [Line Items]
Shares vested									187,000
Mr. Johnston [Member] | Performance Share Units [Member] | Maximum [Member] | Forecast
Commitments And Contingencies [Line Items]
Shares vested	50,000	50,000					50,000	50,000

XML

Commitments and Contingencies - Employee Agreement - Stephen Rizzone - Additional Information (Detail) - USD ($)				3 Months Ended
	Jul. 09, 2021	Jun. 25, 2015	Jan. 01, 2015	Mar. 31, 2023	Dec. 31, 2022
Commitments And Contingencies [Line Items]
Initial term of agreement		3 years
Accrued severance expense				$ 249,610	$ 416,516
Mr. Rizzone [Member]
Commitments And Contingencies [Line Items]
Agreement effective date			Jan. 01, 2015
Initial term of agreement			4 years
Officers' compensation				$ 365,000
Employment agreement percentage of base salary				100.00%
Accrued severance expense				$ 249,610
Mr. Rizzone [Member] | Separation Agreement [Member]
Commitments And Contingencies [Line Items]
Compensation-based payments	$ 1,460,000
Additional lump sum cash payment	$ 2,000,000
Description of other commitments	a pro-rated bonus payment for the two months of employment during the current quarterly bonus period payable at the same time bonus payments are made to other executives of the Company, settlement of deferred vested RSUs and an extension of the exercise periods of all stock options held by Mr. Rizzone until the one year anniversary of his termination date, and additional benefits related to Mr. Rizzone’s medical insurance.

XML

Commitments and Contingencies - Employee Agreement - Neeraj Sahejpal - Additional Information (Detail) - USD ($)	Apr. 29, 2022	Mar. 31, 2023	Dec. 31, 2022
Commitments And Contingencies [Line Items]
Accrued severance expense		$ 249,610	$ 416,516
Mr. Neeraj Sahejpal [Member]
Commitments And Contingencies [Line Items]
Salary	$ 261,250
Potential bonus	$ 261,250
Accrued severance expense		$ 0
Mr. Neeraj Sahejpal [Member] | Restricted Stock Units (RSUs) [Member]
Commitments And Contingencies [Line Items]
Shares vested	85,943

XML

Commitments and Contingencies - Strategic Alliance Agreement - Additional Information (Detail)		1 Months Ended
	Jun. 25, 2015	Nov. 30, 2016
Commitments And Contingencies [Line Items]
Initial term of agreement	3 years
Strategic Alliance Agreement [Member]
Commitments And Contingencies [Line Items]
Initial term of agreement		7 years

XML

Stockholders' Equity - Additional Information (Detail)					3 Months Ended			12 Months Ended
	Mar. 28, 2023 USD ($) $ / shares shares	Dec. 16, 2021 USD ($)	Oct. 04, 2021 USD ($)	Sep. 24, 2020 USD ($)	Mar. 31, 2023 USD ($) Vote shares	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020
Class of Stock [Line Items]
Number of common stock voting entitlement per share | Vote					1
Securities reserved for issuance	$ 2,677,191	$ 100,000,000
At-the-market ("ATM") funds receivable						$ 38,832,711	$ 38,832,711
Accounting issuance costs will be paid				$ 1,167,289
Issuance of shares in an at-the-market ("ATM") placement, net of $68,637 in issuance costs					$ 2,674,697
Common stock, shares issued | shares	8,250,000				91,032,030			78,944,954
Class of warrant or right, number of securities called by warrants or rights | shares	8,250,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 0.40
Warrants exercisable term	6 years
Common stock outstanding abstract					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
Maximum [Member]
Class of Stock [Line Items]
Securities reserved for issuance				75,000,000
Sales Agreement [Member]
Class of Stock [Line Items]
Sale of stock, Description										The $40,000,000 of common stock to be offered, issued and sold under the ATM Program is included in the $75,000,000 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 $68,637 in issuance costs					$ 2,674,697			$ 744,787	$ 27,043,751
Net of issuance costs from offering of shares					68,637			$ 73,403	$ 868,122
Remaining securities under agreements to Repurchase on shelf registration statement					$ 3,526,605
Sales Agreement [Member] | Maximum [Member]
Class of Stock [Line Items]
Proceeds from (Payments for) in Securities Sold under Agreements			$ 35,000,000	$ 40,000,000

XML

Stock Based Compensation - Equity Incentive Plan - Additional Information (Detail) - USD ($)			3 Months Ended
	Mar. 31, 2023	Apr. 30, 2015	Mar. 31, 2023	Jul. 20, 2022	Jun. 16, 2021	May 26, 2020	Dec. 28, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee contribution through payroll withholdings	$ 65,134		$ 65,134
Employee Stock Purchase 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					1,550,000
Common stock, capital shares reserved for future issuance		600,000			700,000
Common stock remain eligible to be issued	201,619		201,619
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		7,500
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%
Share-based compensation arrangement by share-based payment award, terms of award	In April 2015, the Company’s Board approved the ESPP, under which 600,000 shares of common stock have been 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 16, 2021, 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 700,000 shares, bring to 1,550,000 the total number of shares approved for issuance under that plan. Under the ESPP, employees may designate an amount not less than 1% but not more than 10% of their annual compensation for the purchase of Company shares. No more than 7,500 shares may be purchased by an employee under the ESPP during an offering period. An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of the option will be the lesser of 85% of the fair market of the common stock on the first business day of the offering period and 85% of the fair market value of the common stock on the applicable exercise date.
2013 Equity Incentive 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					8,785,967
Common stock, capital shares reserved for future issuance					1,500,000
Common stock remain eligible to be issued	1,248,896		1,248,896
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						1,650,000
Common stock, capital shares reserved for future issuance						800,000
Common stock remain eligible to be issued	546,238		546,238
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					5,110,104
Common stock, capital shares reserved for future issuance					1,700,000
Common stock remain eligible to be issued	2,275,438		2,275,438
2017 Equity Inducement Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance				2,000,000
Common stock remain eligible to be issued	1,041,170		1,041,170
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							600,000

XML

Stock Based Compensation - Stock Option Award Activity - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 28, 2022	Mar. 31, 2023
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options		$ 212,594
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition		2 years 4 months 24 days
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		0
Exercise price per share of shares granted		$ 0
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		0
2013 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	300,000
Exercise price per share of shares granted	$ 1.27
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

XML

Stock Based Compensation - Summary of Fair Values of Stock Options Granted (Detail) - Employee Stock Option [Member] - $ / shares	3 Months Ended
	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price		$ 1.27
Dividend yield		0.00%
Expected volatility		108.00%
Risk-free interest rate		1.92%
Expected life		5 years 7 months 6 days
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price	$ 0.836		$ 1.25
Dividend yield	0.00%		0.00%
Expected volatility	59.00%		61.00%
Risk-free interest rate	4.42%		0.19%
Expected life	6 months		6 months

XML

Stock Based Compensation - Summary of Stock Option Activity (Detail) - Employee Stock Option [Member] - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Outstanding	300,262
Shares granted	0
Number of Options, Exercised	0
Number of Options, Forfeited	(262)
Number of Options, Outstanding	300,000	300,262
Number of Options, Exercisable	262
Number of Options, Vested	0
Number of Options, Exercised	0
Number of Options, Forfeited	(262)
Number of Options, Exercisable	0	262
Weighted Average Exercise Price, Outstanding	$ 1.27
Weighted Average Exercise Price, Granted	0
Weighted Average Exercise Price, Exercised	0
Weighted Average Exercise Price, Forfeited	2.49
Weighted Average Exercise Price, Outstanding	1.27	$ 1.27
Weighted Average Exercise Price, Exercisable	2.49
Weighted Average Exercise Price, Vested	0
Weighted Average Exercise Price, Exercised	0
Weighted Average Exercise Price, Forfeited	2.49
Weighted Average Exercise Price, Exercisable	$ 0	$ 2.49
Weighted Average Remaining Life In Years, Outstanding	8 years 8 months 12 days	8 years 10 months 24 days
Weighted Average Remaining Life In Years, Exercisable		3 months 18 days
Intrinsic Value, Outstanding	$ 0	$ 0
Intrinsic Value, Exercisable	$ 0	$ 0

XML

Stock Based Compensation - Performance Share Units - Additional Information (Detail) - Performance Share Units [Member] - shares				3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Jul. 20, 2022	Mar. 31, 2023	Sep. 30, 2022	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
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 vested in period								135,575
Maximum [Member] | Share Based Compensation [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 vested in period				100,000
Mr. Johnston [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			287,000		287,000			287,000
Share based compensation arrangement by share based payment award equity instruments other than options vested in period					287,000
Mr. Johnston [Member] | Forecast | Share Based Compensation [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 vested in period	50,000	50,000
Mr. Johnston [Member] | Maximum [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 vested in period								187,000
Mr. Johnston [Member] | Maximum [Member] | Forecast
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 vested in period	50,000	50,000				50,000	50,000

XML

Stock Based Compensation - Restricted Stock Units - Additional Information (Detail) - Restricted Stock Units (RSUs) [Member]	3 Months Ended
	Mar. 31, 2023 USD ($) shares
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 | $	$ 2,469,552
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition	2 years
2013 Equity Incentive Plan [Member]
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 [Member] | Employee [Member] | Common Stock [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	48,750
Non-Employee Equity Compensation Plan 2014 [Member] | Minimum [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] | Maximum [Member]
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
Non-Employee Equity Compensation Plan 2014 [Member] | Common Stock [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	124,452
2017 Equity Inducement Plan [Member]
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
2017 Equity Inducement Plan [Member] | Employee [Member] | Common Stock [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	535,000

XML

Stock Based Compensation - Schedule of Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs) [Member]	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Outstanding | shares	2,165,132
Shares Granted | shares	708,202
Shares Forfeited | shares	(12,500)
Shares Vested | shares	(186,878)
Number of Options, Outstanding | shares	2,673,956
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 1.63
Weighted Average Grant Date Fair Value, Shares Granted | $ / shares	0.69
Weighted Average Grant Date Fair Value, Shares Forfeited | $ / shares	1.27
Weighted Average Grant Date Fair Value, Shares Vested | $ / shares	2.08
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 1.35

XML

Stock Based Compensation - Employee Stock Purchase Plan - Additional Information (Detail) - Employee Stock Purchase Plan [Member] - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
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	$ 0.27	$ 0.40
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	$ 24,740	$ 40,973

XML

Stock Based Compensation - Summary of Stock-based Compensation Costs Recognized (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock options	$ 21,095	$ 10,313
Total	522,077	796,906
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	476,242	745,620
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	$ 24,740	$ 40,973

XML

Stock Based Compensation - Summary of Stock-based Compensation Reflected within Statements of Operations (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based Compensation, Total	$ 522,077	$ 796,906
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	208,731	353,043
Selling and Marketing Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	104,903	180,377
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation-based payments	$ 208,443	$ 263,486

XML

Warrant Liability - Additional Information (Detail) - USD ($)		3 Months Ended
	Mar. 28, 2023	Mar. 31, 2023
Class Of Warrant Or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights	8,250,000
Warrants exercisable term	6 years
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.40
Warrants Two Thousand Twenty Three
Class Of Warrant Or Right [Line Items]
Warrant liability		$ 3,135,000
Common Stock [Member] | Warrants Two Thousand Twenty Three
Class Of Warrant Or Right [Line Items]
Number of warrants issued		8,250,000
Class of warrant or right, number of securities called by warrants or rights		8,250,000
Warrants exercisable term		6 years
Warrants of exercisable beginning		Mar. 28, 2023
Each warrant of exercisable		1
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.40

XML

Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Liabilities:
Warrant liability	$ 3,135,000
Fair Value Measurements Recurring [Member]
Assets:
Cash and cash equivalents	26,339,960	$ 26,287,293
Liabilities:
Warrant liability	3,135,000
Level 1 [Member] | Fair Value Measurements Recurring [Member]
Assets:
Cash and cash equivalents	26,339,960	$ 26,287,293
Level 3 [Member] | Fair Value Measurements Recurring [Member]
Liabilities:
Warrant liability	$ 3,135,000

XML

Fair Value Measurements - Schedule of Estimated Fair Value of the Warrant Liability (Detail) - Warrants Two Thousand Twenty Three - Level 3 [Member]	Mar. 31, 2023 $ / shares
Share Price [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding measurement input	0.54
Exercise Price [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding measurement input	0.40
Term [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding measurement input term	6 years
Volatility [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding measurement input	0.65
Risk-Free Rate [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding measurement input	0.036
Dividend Yield [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding measurement input	0

XML

Fair Value Measurements - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2023 USD ($)
Fair Value Disclosures [Abstract]
Fair value adjustment of warrants	$ 0

XML

Related Party Transactions - Additional Information (Detail) - USD ($)	3 Months Ended		8 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jun. 28, 2017	Mar. 28, 2023
Related Party Transaction [Line Items]
Class of warrant or right, number of securities called by warrants or rights				8,250,000
Cost of revenue	$ 138,813	$ 203,249
Dialog Semiconductor Plc [Member]
Related Party Transaction [Line Items]
Equity method investment, ownership percentage	1.90%
Dialog Semiconductor Plc [Member]
Related Party Transaction [Line Items]
Warrants outstanding	0
Revenue from related parties	$ 0	0
Dialog Semiconductor Plc [Member] | Chip Development Expense [Member]
Related Party Transaction [Line Items]
Cost of revenue	$ 124,055	$ 0
Private Placements [Member] | Dialog Semiconductor Plc [Member]
Related Party Transaction [Line Items]
Stock issued during period, shares, new issues			1,739,691
Private Placements [Member] | Warrants Issued to Investors [Member] | Dialog Semiconductor Plc [Member]
Related Party Transaction [Line Items]
Class of warrant or right, number of securities called by warrants or rights			1,417,565

XML

Customer Concentrations - Additional Information (Detail) - Customer Concentration Risk [Member] - Customer	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Revenues [Member] | Three Customer [Member]
Concentration Risk [Line Items]
Number of customers	2	2
Concentration percentage	84.00%	53.00%
Accounts Receivable [Member] | Four Customer [Member]
Concentration Risk [Line Items]
Number of customers	2		1
Concentration percentage	80.00%		87.00%