ipwr20231231

ipwr20231231_10k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001‑36216

IDEAL POWER INC.

(Exact name of registrant as specified in its charter)

DELAWARE	14‑1999058
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5508 Highway 290 West, Suite 120

Austin, Texas 78735

(Address and zip code of principal executive offices)

(512) 264‑1542

(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, par value $0.001 per share		IPWR		The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark whether 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $69.5 million as of June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, based upon the last sales price reported for such date on The Nasdaq Capital Market. For purposes of the foregoing calculation, all directors and executive officers of the registrant and holders of more than 10% of the registrant’s common equity are assumed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of March 28, 2024, the issuer had 7,371,699 shares of common stock, par value $0.001, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required by Part III of this Annual Report on Form 10-K is incorporated herein by reference from the registrant’s definitive proxy statement relating to the 2024 annual meeting of stockholders, which shall be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2023.

PART I.	4
ITEM 1: BUSINESS	4
ITEM 1A: RISK FACTORS	9
ITEM 1B: UNRESOLVED STAFF COMMENTS	17
ITEM 1C: CYBERSECURITY	17
ITEM 2: PROPERTIES	17
ITEM 3: LEGAL PROCEEDINGS	17
ITEM 4: MINE SAFETY DISCLOSURES	17
PART II.	18
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	18
ITEM 6: [RESERVED]	18
ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	23
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	38
ITEM 9A: CONTROLS AND PROCEDURES	38
ITEM 9B: OTHER INFORMATION	39
ITEM 9C: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.	39
PART III.	40
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	40
ITEM 11: EXECUTIVE COMPENSATION	40
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	40
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	40
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES	40
PART IV.	41
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES	41
ITEM 16: FORM 10-K SUMMARY	43
Signatures	44

For the Year Ended December 31,
2024	$	80,552
2025		82,587
2026		56,132
Total lease payments		219,271
Less: imputed interest		(16,284	)
Total lease liability	$	202,987

	December 31,
	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	8,474,835		$	16,345,623
Accounts receivable, net		70,000			65,936
Inventory		81,450			—
Prepayments and other current assets		482,890			491,365
Total current assets		9,109,175			16,902,924

Property and equipment, net		359,225			200,103
Intangible assets, net		2,580,066			2,036,431
Right of use asset		186,570			248,720
Other assets		13,034			11,189
Total assets	$	12,248,070		$	19,399,367
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	405,098		$	130,503
Accrued expenses		455,112			254,218
Current portion of lease liability		70,683			64,597
Total current liabilities		930,893			449,318

Long-term lease liability		132,304			202,987
Other long-term liabilities		1,125,173			838,458
Total liabilities		2,188,370			1,490,763

Commitments and contingencies (Note 8)

Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2023 and 2022		—			—
Common stock, $0.001 par value; 50,000,000 shares authorized; 5,998,018 shares issued and 5,996,697 shares outstanding at December 31, 2023 and 5,926,001 shares issued and 5,924,680 shares outstanding at December 31, 2022		5,998			5,926
Additional paid-in capital		107,116,362			105,011,318
Treasury stock, at cost; 1,321 shares at December 31, 2023 and 2022, respectively		(13,210	)		(13,210	)
Accumulated deficit		(97,049,450	)		(87,095,430	)
Total stockholders’ equity		10,059,700			17,908,604
Total liabilities and stockholders’ equity	$	12,248,070		$	19,399,367

	For the Year Ended
	December 31,
	2023			2022
Commercial revenue	$	161,483		$	—
Grant revenue		37,388			203,269
Total revenue		198,871			203,269

Cost of commercial revenue		123,225			—
Cost of grant revenue		37,388			203,269
Total cost of revenue		160,613			203,269

Gross profit		38,258			—

Operating expenses:
Research and development		5,743,211			3,366,776
General and administrative		3,533,383			3,123,852
Sales and marketing		1,113,752			852,331
Total operating expenses		10,390,346			7,342,959

Loss from operations		(10,352,088	)		(7,342,959	)

Interest income, net		398,068			153,609

Net loss	$	(9,954,020	)	$	(7,189,350	)

Net loss per share – basic and diluted	$	(1.61	)	$	(1.17	)

Weighted average number of shares outstanding – basic and diluted		6,190,746			6,157,866

					Additional											Total
	Common Stock				Paid-In			Treasury Stock					Accumulated			Stockholders’
	Shares		Amount		Capital			Shares		Amount			Deficit			Equity
Balances at December 31, 2021		5,893,767	$	5,894	$	104,063,321			1,321	$	(13,210	)	$	(79,906,080	)	$	24,149,925
Exercise of options		1,351		1		(1	)		—		—			—			—
Stock issued for services		10,000		10		100,090			—		—			—			100,100
Vesting of restricted stock units		20,883		21		(127,893	)		—		—			—			(127,872	)
Stock-based compensation		—		—		975,801			—		—			—			975,801
Net loss for the year ended December 31, 2022		—		—		—			—		—			(7,189,350	)		(7,189,350	)
Balances at December 31, 2022		5,926,001		5,926		105,011,318			1,321		(13,210	)		(87,095,430	)		17,908,604
Vesting of restricted stock units		72,017		72		(216,336	)		—		—			—			(216,264	)
Stock-based compensation		—		—		2,321,380			—		—			—			2,321,380
Net loss for the year ended December 31, 2023		—		—		—			—		—			(9,954,020	)		(9,954,020	)
Balances at December 31, 2023		5,998,018	$	5,998	$	107,116,362			1,321	$	(13,210	)	$	(97,049,450	)	$	10,059,700

Leasehold improvements	Shorter of lease term or useful life (in years)
Machinery and equipment		5
Furniture, fixtures and IT equipment	3	–	5

SEC Form 10-K filed by Ideal Power Inc.