Energous Corp Fair Value Disclosure
Note 15 - 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 December 31, 2025 and 2024 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):
Balance as of December 31, 2025 | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: |
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Cash equivalents | $ | 10,401 | $ | — | $ | — | $ | 10,401 | ||||
Liabilities: |
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| |
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Warrant liability | $ | — | $ | — | $ | — | $ | — | ||||
Balance as of December 31, 2024 | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: |
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Cash equivalents | $ | 1,353 | $ | — | $ | — | $ | 1,353 | ||||
Liabilities: |
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Warrant liability | $ | — | $ | — | $ | 358 | $ | 358 | ||||
There were no transfers among Level 1, Level 2, or Level 3 categories during the periods presented.
2023 Warrants
The Company utilized 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 was determined using Level 3 inputs. Inherent in a Monte Carlo simulation model are assumptions related to expected share-price volatility, expected life, risk-free interest rate, and dividend yield.
The key inputs into the Monte Carlo simulation model for the 2023 Warrants are as follows:
As of September 11, | As of December 31, | ||||||
| 2025 (exercise date) | | 2024 | | |||
Share price | $ | 7.66 | $ | 30.30 | |||
Exercise price | $ | 6.76 | $ | 9.00 | |||
Term (in years) |
|
| 4.24 | ||||
Volatility |
| 140 | % |
| 90 | % | |
Risk-free rate |
| 3.5 | % |
| 4.3 | % | |
Dividend yield |
| 0 | % |
| 0 | % | |
Note 15 - Fair Value Measurements, continued
The decrease in the fair value of the 2023 Warrant liability was determined to be $0.3 million during both the years ended December 31, 2025 and 2024 (see Note 14 – Warrant Liability).
| For the year ended December 31, | |||||
| 2025 | | 2024 | |||
Beginning value | $ | 358 | $ | 620 | ||
| (257) |
| (262) | |||
Warrants exercised |
| (101) |
| — | ||
Ending value | $ | — | $ | 358 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 28, 2024 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.