What is Burak's track record before Energous?

The report alleges Burak previously served in executive roles at Knightscope Inc. and ThinFilm Electronics. It alleges Knightscope followed a similar dilution pattern — same underwriters, similar split history — and that shareholders there suffered a 99% loss. After Burak's departure from ThinFilm Electronics, litigation was filed in Santa Clara County Superior Court (Case No. 20CV367979), with allegations including forecasting errors and deficiencies in internal financial controls. Knightscope separately disclosed material weaknesses in internal controls over financial reporting.

What is the connection between WATT's Chief Accounting Officer and Mallorie Burak?

Gregory Sadikoff, WATT's Chief Accounting Officer, previously worked under Mallorie Burak at Knightscope. The report argues his appointment extends a management network that has overlapped across multiple companies with histories of dilution and shareholder value destruction.

Does WATT's Walmart / Fortune 10 deployment story change the investment case?

Fugazi Research argues it does not materially change the picture. Based on public materials from Wiliot and Avery Dennison, the report contends Energous is providing a lower-value power layer within a broader Wiliot/Walmart/Avery Dennison ecosystem. The company's own figures imply roughly 1,500 transmitters at approximately $200 per unit. Despite highlighting more than 25,000 units shipped, preliminary 2025 revenue was only approximately $5.6 million. The report characterizes this as consistent with low-dollar hardware economics rather than a scalable platform. These competitive assessments are circumstantial.

How concentrated is WATT's customer base?

For the nine months ended September 30, 2025, two customers accounted for more than 81% of Energous's revenue, and three customers accounted for 99% of accounts receivable, per the Form 10-Q. The report argues this makes the already-small revenue base structurally fragile — losing a single customer relationship could be materially damaging.

How does WATT executive pay compare to company revenue?

Per the 2025 proxy, Burak's 2024 total compensation was $849,551 and former CEO Cesar Johnston's was $1,343,485 — combined, more than double the company's approximately $0.8 million in 2024 annual revenue and vastly exceeding its roughly $12,000 in gross profit. Johnston's severance produced a Q1 2024 expense of $1.563 million, approximately 2,442% of that quarter's revenue.

What related-party concerns does the report raise about Energous's origins?

The 2014 S-1/A disclosed several affiliate-linked arrangements at founding: DivineWave Holdings LLC, formed by founder Michael Leabman's parents, held approximately 20.3% of the company; former director Greg Brewer's affiliated entity Absolute Ventures held 668,337 shares purchased for $160,000; Energous leased office space from ProSoft Engineering, which Brewer owned; MS Investments, affiliated with one of the company's legal firms, purchased 20,050 shares for $4,800; and MDB Capital Group received a consulting warrant for 278,228 shares at a $0.04 exercise price.

$WATT: A Decade of Promises, A Business Funded by Dilution

Energous Corporation has raised cash through equity actions 21 times since 2019, executed a 30-to-1 reverse split in August 2025 to stay Nasdaq-compliant, and then watched its split-adjusted share count expand roughly 458% anyway — all while generating $2.6 million in revenue against an $8.3 million net loss in the first nine months of 2025. Fugazi Research published a short thesis arguing the company's operating model is structurally dependent on equity issuance and has been for years. The firm discloses a short position in WATT. Against a market cap of approximately $40 million, WATT still has roughly $64.7 million of remaining ATM capacity — more than 1.5 times the company's current market value — already in place.

Ticker: WATT (Energous Corporation)
Research Firm: Fugazi Research
Report URL: https://www.fugaziresearch.com/p/watt-a-decade-of-promises-a-business?ref=shortreport.fyi
Position Disclosure: Fugazi Research discloses a short position in WATT and states it stands to benefit financially if the share price declines.

Thesis

Fugazi Research argues Energous is not a business funded by customers — it is a business funded by shareholders, and that dynamic shows no sign of changing.

Structural Cash Dependence: Per the Form 10-Q for the nine months ended September 30, 2025, WATT generated $2.6 million in revenue against a $8.3 million net loss. Monthly revenue runs roughly $290K versus approximately $1.1 million in monthly cash burn, meaning operations consume nearly four times what they produce.
Equity Issuance as the Engine: Cash rose from $1.4 million at year-end 2024 to $12.9 million by September 30, 2025 — but $21.6 million of that came from ATM sales, warrant exercises, and a registered direct offering, not from customers. The company used approximately $10.0 million in operating activities during the same period.
Serial Dilution History: Energous has raised cash through equity actions 21 times since 2019. One offering period increased outstanding shares by more than 140% in two months. The August 2025 1-for-30 reverse split restored Nasdaq compliance without reducing the 200 million authorized share count. On a split-adjusted basis, shares outstanding grew approximately 458% from December 30, 2024 to March 8, 2026.
Massive Future Dilution Overhang: As of September 30, 2025, the company had approximately $64.7 million of remaining ATM capacity against a market cap of roughly $40 million, plus approximately 1.03 million shares issuable upon warrant exercise and 78,172 shares reserved under the 2024 plan.
Toxic Warrant Terms: March 2023 long-dated warrants carry price-reset features severe enough to be classified as derivative liabilities. The strike has fallen from $8.00 initially to $1.66 by March 2024, $0.30 by December 2024, and $0.28 by June 2025. Per the June 2025 filing, future issuances below the exercise price — including through the ATM — could trigger further downward resets.
Fragile Revenue Base: Two customers accounted for more than 81% of revenue and three customers accounted for 99% of accounts receivable for the nine months ended September 30, 2025. The company has accumulated a deficit of approximately $408 million with roughly $18 million in annual operating expenses against about $0.8 million in 2024 annual revenue.
Governance Concentration: Mallorie Burak serves simultaneously as CEO and CFO on a four-member board that includes her. The report alleges this concentrates capital allocation and financial reporting authority in a single person with limited independent oversight. Burak's 2024 total compensation was $849,551; former CEO Cesar Johnston's was $1,343,485 — both exceeding the company's approximately $0.8 million in 2024 revenue and $12,000 in gross profit.
Management Track Record: The report alleges Burak's prior employer Knightscope followed a similar dilution pattern and left shareholders with a 99% loss. Litigation in Santa Clara County Superior Court (Case No. 20CV367979) followed her departure from ThinFilm Electronics, with allegations including forecasting errors and internal control deficiencies. Knightscope separately disclosed material weaknesses in internal controls. WATT's newly appointed Chief Accounting Officer, Gregory Sadikoff, previously worked under Burak at Knightscope.
Commercial Promises Undelivered: The report argues, based on the pattern of announcements against actual results, that leadership has promoted commercial breakthroughs for nearly a decade without translating them into sustainable revenue. The "Fortune 10 deployment" narrative, in the report's view, reflects a lower-value hardware role — roughly 1,500 transmitters at approximately $200 per unit — within a broader Wiliot/Walmart/Avery Dennison ecosystem rather than a scalable platform. Competitor Powercast has shipped over 30 million units to more than 100 global customers over the same period. These competitive and commercial assessments are circumstantial.

Notable Details

Executive pay in 2024 — $849,551 for Burak and $1,343,485 for then-CEO Cesar Johnston — exceeded the company's total annual revenue of approximately $0.8 million. Gross profit that year was roughly $12,000. Johnston's severance alone generated a Q1 2024 expense of $1.563 million, approximately 2,442% of that quarter's revenue.
In March 2025, Energous amended its headquarters lease, downsized the space, and issued 75,000 shares directly to the landlord as partial consideration — a concrete example of equity substituting for cash in routine business operations.
The March 2023 warrants' strike price has collapsed from $8.00 to $0.28 through contractual reset provisions, and the June 2025 filing confirms that additional stock issuances — including through the ATM — can trigger further resets downward.
The 2014 S-1/A disclosed that MDB Capital Group received a consulting warrant for 278,228 shares at an exercise price of $0.04, MS Investments (an affiliate of one of the company's legal firms) purchased 20,050 shares for $4,800, and Cheryl Sanchez — identified as the sister of a director and stockholder — held a consulting agreement paying $21,550 per month.
DivineWave Holdings LLC, the entity cited as the founding majority shareholder of Energous, was formed by founder Michael Leabman's parents and held approximately 20.3% of the company at the time of the 2014 S-1/A filing.

"Unless that dynamic changes, continued dilution is not a risk; it is the model."

— Fugazi Research, closing verdict on Energous Corporation

FAQs

What is Fugazi Research's thesis on Energous (WATT)?

Fugazi Research argues Energous is not a commercially viable business but a vehicle sustained by repeated equity issuance. The company has raised cash through equity actions 21 times since 2019, executed a 30-to-1 reverse split to maintain its Nasdaq listing, and still generates far less revenue than it burns. The firm holds a short position and stands to profit if shares fall.

How much revenue does Energous (WATT) actually make?

Per the Form 10-Q for the nine months ended September 30, 2025, Energous generated $2.6 million in revenue — roughly $290,000 per month — against approximately $1.1 million in monthly cash burn. Annual revenue in 2024 was approximately $0.8 million, with gross profit of roughly $12,000. The company has accumulated a deficit of approximately $408 million.

What is the ATM facility and why does it matter for WATT shareholders?

An at-the-market (ATM) facility allows a company to sell new shares directly into the market over time. As of September 30, 2025, Energous had approximately $64.7 million of remaining ATM capacity against a market capitalization of roughly $40 million — meaning the company has the registered ability to issue equity worth more than its entire current market value. Fugazi Research argues this is the primary mechanism through which future dilution will occur.

What happened with the WATT reverse stock split?

In August 2025, Energous executed a 1-for-30 reverse stock split to regain compliance with Nasdaq listing requirements. The reverse split did not reduce the company's 200 million authorized share count. On a split-adjusted basis, shares outstanding grew approximately 458% between December 30, 2024 and March 8, 2026, suggesting rapid re-expansion of the share count after the split.

What are the toxic warrants in WATT's capital structure?

In March 2023, Energous issued long-dated warrants with contractual price-reset features, which required the company to classify them as derivative liabilities rather than equity. The strike price has declined from $8.00 at issuance to $1.66 by March 2024, $0.30 by December 2024, and $0.28 by June 2025. Per the June 2025 filing, any future stock issuances below the exercise price — including through the ATM — can trigger additional downward resets.

Who is Mallorie Burak and what is her role at Energous?

Mallorie Burak currently serves as both CEO and CFO of Energous, on a four-member board that includes her. The report alleges this dual role concentrates financial reporting and capital allocation authority without adequate independent oversight. Her 2024 total compensation was $849,551, including a $379,849 salary, a $150,000 guaranteed bonus, stock awards, and additional bonuses — against a year in which the company generated approximately $0.8 million in revenue.

Disclaimer: This summary is not primary research and does not constitute investment advice. It is a brief overview of a detailed equity research report authored by the firm, organization, or source referenced in this article or at https://www.fugaziresearch.com/p/watt-a-decade-of-promises-a-business?ref=shortreport.fyi, which contains extensive evidence, regulatory filings, and analysis; readers are encouraged to review the full report there for a comprehensive understanding. The content provided in this publication is not authored or originated by us — we act solely as a distributor and do not endorse, verify, or take responsibility for the accuracy, completeness, or reliability of the information presented. This publication is for informational purposes only and should not be construed as legal, business, investment, or tax advice. Always conduct independent due diligence and consult qualified professionals before making any decisions based on the information contained herein. We disclaim all liability for any loss or damage arising from reliance on third-party content, and the views expressed are solely those of the respective source and do not necessarily reflect our own.