Energous Corporation — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; comparisons are with FY2020. This is an annual report, not a standalone fourth-quarter filing.
Business context
Energous develops WattUp RF-based wireless power technology, including semiconductor chipsets, software, hardware designs and antennas, for near-field and at-a-distance charging. The company remains at an early commercialization stage, targeting IoT uses such as RF tags and electronic shelf labels. It began shipping its first at-a-distance PowerBridge transmitters for commercial IoT applications in Q4 2021. In December 2021, it received FCC certification for unlimited-distance charging.
Financial performance and position
| Metric | FY2021 / Dec. 31, 2021 | FY2020 / Dec. 31, 2020 |
|---|---|---|
| Revenue | $756,793 | $327,350 |
| Operating expenses | $42.19 million | $32.23 million |
| Operating loss | $41.43 million | $31.90 million |
| Net loss | $41.43 million | $31.83 million |
| Basic and diluted loss per share | $0.64 | $0.76 |
| Net cash used in operating activities | $28.72 million | $24.79 million |
| Cash and cash equivalents | $49.07 million | $50.73 million |
| Current assets / current liabilities | $50.23 million / $4.35 million | $51.44 million / $3.51 million |
| Total assets / stockholders’ equity | $51.37 million / $46.98 million | $53.14 million / $49.05 million |
- Revenue increased about 131%, but remained very small relative to the company’s operating costs. Revenue consisted primarily of product-development project revenue; FY2021 included no Dialog contract-services revenue.
- R&D expense rose to $20.57 million from $17.07 million; sales and marketing rose to $8.60 million from $5.88 million. FY2021 included $4.02 million of severance expense related to former CEO Stephen Rizzone.
- Operating cash use increased by about $3.93 million. Cash was supported by $27.04 million of net proceeds from an ATM stock offering and $0.38 million of employee stock purchase plan proceeds; cash declined by $1.66 million over the year.
- No borrowings are shown on the balance sheet. Reported liabilities were principally operating lease liabilities, accrued expenses and severance; operating lease liabilities totaled $668,720.
- The company reported an accumulated deficit of $336.40 million. Common shares outstanding rose from 61.29 million to 76.67 million during 2021, primarily reflecting equity issuance and stock awards.
- The filing does not provide a clear, decision-useful gross-margin measure for the business.
Material changes, outlook and risks
- Management stated that year-end cash, together with anticipated revenue, was expected to fund operations into March 2023. The company also expected to pursue additional financing; availability and acceptable terms were not assured.
- Dialog terminated the strategic alliance following its acquisition by Renesas. A wind-down period runs through September 2024 for certain existing customer relationships, but exclusivity ended. Energous is building internal capabilities and a contract-manufacturer network.
- Former CEO Stephen Rizzone retired in 2021; Cesar Johnston was appointed CEO in December. The Rizzone separation generated $4.02 million in expense, with $975,439 accrued at year-end.
- COVID-19-related workforce and supply-chain disruption delayed prospective customer adoption; the duration and liquidity impact remained uncertain. Other key risks include unproven market adoption, technical and regulatory execution, competition, customer concentration, dependence on external financing and protection of intellectual property.
- Three customers accounted for approximately 42% of FY2021 revenue; four customers accounted for 68% of year-end receivables.
- No formal financial guidance was provided. The filing describes market opportunity and product plans, but stresses that the market remains nascent and unproven.
- The independent auditor issued an unqualified opinion on the financial statements. Management concluded internal control over financial reporting was effective; the auditor did not express an opinion on internal-control effectiveness.
Key facts for investors to verify
- Whether PowerBridge shipments and FCC approvals translate into repeat customer orders, meaningful product revenue and broader deployments.
- Actual cash burn and financing needs relative to management’s stated runway into March 2023, including subsequent equity issuance and dilution.
- Progress replacing Dialog’s distribution and operational support, and any effect on manufacturing, costs, customer relationships or revenue.
- Customer concentration, milestone-based revenue timing, and the conversion of evaluations and development projects into commercial sales.
- Whether technical performance, international regulatory approvals and market adoption meet the requirements for the targeted IoT applications.