Energous (WATT) risk factors, FY2024 10-K

Risks Related to Our Financial Condition

1. 01We have no history of generating meaningful product revenue, and we may never achieve or maintain profitability
2. 02We will 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
3. 03Our short-term or future indebtedness could adversely affect our business, financial condition, and results of operations, as well as the ability to meet payment obligations
4. 04We may be adversely affected by the effects of inflation

Risks Related to Our Technology and Products

1. 05We may not be able to develop all the features we seek to include in our technology
2. 06We have and will continue to make significant investments in our products but may be unable to demonstrate the commercial feasibility of the full capability of our technology or achieve profitability
3. 07Expanding our business operations as we intend will impose new demands on our financial, technical, operational and management resources
4. 08If 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
5. 09Our products, or the products of our licensing partners, could be susceptible to errors, defects, or unintended performance problems that could result in lost revenue, liability or delayed or limited market acceptance
6. 10As 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
7. 11Laboratory 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
8. 12Safety concerns and legal action by private parties may affect our business
9. 13If the quality of our products does not meet the expectations of our licensing partners or the end users of our licensing partners’ products or regulatory or industry standards, then our sales and operating earnings, and ultimately our reputation, could be negatively impacted
10. 14If our products do not effectively interoperate with wireless networks and the wireless devices that integrate them, future sales of our products could be negatively affected
11. 15We require third-party components, including components from limited or sole source suppliers, to build our products. The unavailability of these components could substantially disrupt our ability to manufacture our products and fulfill sales orders
12. 16Our dependence on commodities and certain components subjects us to cost volatility and potential availability constraints
13. 17Changes in U.S. and international trade policies may adversely impact our business
14. 18Our products rely on the availability of unlicensed RF spectrum and if such spectrum were to become unavailable through overuse or licensing, the performance of our products could suffer and our revenues from their sales could decrease
15. 19Reliance upon a few major customers may adversely affect our revenue and operating results
16. 20If our licensing partners do not effectively manage inventory of their products which integrate our technology, fail to timely resell such products or overestimate expected future demand, they may reduce purchases in future periods, causing our revenues and operating results to fluctuate or decline
17. 21If we are not able to effectively forecast demand or manage our inventory, we may be required to record write-downs for excess or obsolete inventory

Risks Related to Our Intellectual Property and Other Legal Risks

1. 22It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection
2. 23We depend upon a combination of patents, trade secrets, copyright and trademark laws to protect our intellectual property and technology
3. 24We may be subject to patent infringement or other intellectual property lawsuits that could be costly to defend
4. 25We could become subject to product liability claims, product recalls, and warranty claims that could be expensive, divert management’s attention and harm our business
5. 26Our business is subject to data security risks, including security breaches
6. 27If we are not able to satisfy data protection, security, privacy and other government- and industry-specific requirements or regulations, our business, results of operations and financial condition could be harmed
7. 28If we are not able to secure advantageous license agreements for our technology, our business and results of operations will be adversely affected

Risks Related to Regulation of Our Business

1. 29Domestic and international regulators may deny approval for our technology, and future legislative or regulatory changes may impair our business

Risks Related to Personnel

1. 30We 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
2. 31Our success and growth depend on our ability to attract, integrate and retain high-level engineering talent
3. 32We are subject to risks associated with our utilization of engineering consultants

Risks Related to Ownership of Our Common Stock

1. 33We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors
2. 34If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy of our financial reports
3. 35Our stock price is likely to continue to be volatile
4. 36We have not paid dividends in the past and have no immediate plans to pay dividends
5. 37We 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
6. 38We may be subject to securities litigation, which is expensive and could divert management attention
7. 39Our 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
8. 40Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable
9. 41Our 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
10. 42We may not satisfy Nasdaq’s requirements for continued listing of our common stock. If we cannot satisfy these requirements, Nasdaq could delist our common stock
11. 43minimum bid price requirement for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”)
12. 44Adverse macroeconomic conditions, natural disasters or reduced technology spending could adversely affect our business, operating results, and financial condition
13. 45If 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