UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended June 30, 2021


	☐	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	(I.R.S. Employer
incorporation or organization)	Identification No.)

5508 Highway 290 West, Suite 120

Austin, Texas 78735

(Address of principal executive offices)

(Zip Code)

(512) 264-1542

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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

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 than 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. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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 issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

As of August 11, 2021, the issuer had 5,872,046 shares of common stock, par value $.001, outstanding.


PART I	FINANCIAL INFORMATION	3

Item 1.	Condensed Financial Statements	3

	Balance Sheets at June 30, 2021 (Unaudited) and December 31, 2020	3
	Statements of Operations for the three and six months ended June 30, 2021 and 2020 (Unaudited)	4
	Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (Unaudited)	5
	Statements of Stockholders’ Equity for the three-month periods ended during the six months ended June 30, 2021 and 2020 (Unaudited)	6
	Notes to Unaudited Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

Item 4.	Controls and Procedures	17

PART II	OTHER INFORMATION	18

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Mine Safety Disclosures	18

Item 5.	Other Information	18

Item 6.	Exhibits	19

SIGNATURES		20


	June 30,		December 31,
	2021		2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	25,716,977	$	3,157,256
Accounts receivable, net		132,371		170,287
Prepayments and other current assets		135,835		118,883
Total current assets		25,985,183		3,446,426

Property and equipment, net		58,576		37,125
Intangible assets, net		2,048,537		1,568,903
Right of use asset		335,211		79,719
Other assets		11,189		—
Total assets	$	28,438,696	$	5,132,173

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	159,107	$	101,984
Accrued expenses		546,071		475,487
Current portion of lease liability		37,393		82,055
Total current liabilities		742,571		659,526

Long-term debt		—		91,407
Long-term lease liability		297,883		—
Other long-term liabilities		951,717		552,031
Total liabilities		1,992,171		1,302,964

Commitments and contingencies (Note 6)

Stockholders’ equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 5,873,367 shares issued and 5,872,046 shares outstanding at June 30, 2021 and 3,265,740 shares issued and 3,264,419 shares outstanding at December 31, 2020		5,873		3,266
Additional paid-in capital		103,700,516		78,974,964
Treasury stock, at cost, 1,321 shares at June 30, 2021 and December 31, 2020		(13,210)		(13,210)
Accumulated deficit		(77,246,654)		(75,135,811)
Total stockholders’ equity		26,446,525		3,829,209
Total liabilities and stockholders’ equity	$	28,438,696	$	5,132,173


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Grant revenue	$	84,705	$	6,515	$	326,766	$	6,515
Cost of grant revenue		84,705		6,515		326,766		6,515
Gross profit		—		—		—		—

Operating expenses:
Research and development		560,693		316,325		821,573		666,989
General and administrative		603,518		515,878		1,204,204		1,095,648
Sales and marketing		112,033		—		174,611		—
Total operating expenses		1,276,244		832,203		2,200,388		1,762,637

Loss from operations		(1,276,244)		(832,203)		(2,200,388)		(1,762,637)

Other (income) expenses:
Interest expense, net		1,856		1,055		1,862		1,122
Gain on forgiveness of long-term debt		(91,407)		—		(91,407)		—
Total other (income) expenses		(89,551)		1,055		(89,545)		1,122

Net loss	$	(1,186,693)	$	(833,258)	$	(2,110,843)	$	(1,763,759)

Net loss per share – basic and fully diluted	$	(0.19)	$	(0.28)	$	(0.37)	$	(0.59)

Weighted average number of shares outstanding – basic and fully diluted		6,125,874		2,998,350		5,737,109		2,983,372


				Additional							Total
	Common Stock			Paid-In		Treasury Stock			Accumulated		Stockholders’
	Shares	Amount		Capital		Shares	Amount		Deficit		Equity
Balances at December 31, 2019	2,101,272	$	2,101	$	71,242,256	1,321	$	(13,210)	$	(67,341,914)	$	3,889,233
Stock-based compensation	—		—		116,497	—		—		—		116,497
Net loss for the three months ended March 31, 2020	—		—		—	—		—		(930,501)		(930,501)
Balances at March 31, 2020	2,101,272		2,101		71,358,753	1,321		(13,210)		(68,272,415)		3,075,229
Stock-based compensation	—		—		109,671	—		—		—		109,671
Stock issued for services	26,316		26		49,974	—		—		—		50,000
Exercise of warrants	225,718		226		175,590	—		—		—		175,816
Net loss for the three months ended June 30, 2020	—		—		—	—		—		(833,258)		(833,258)
Balances at June 30, 2020	2,353,306	$	2,353	$	71,693,988	1,321	$	(13,210)	$	(69,105,673)	$	2,577,458

Balances at December 31, 2020	3,265,740	$	3,266	$	78,974,964	1,321	$	(13,210)	$	(75,135,811)	$	3,829,209
Issuance of shares of common stock in public offering	1,352,975		1,353		21,203,256	—		—		—		21,204,609
Exercise of options and warrants	1,250,652		1,250		3,299,976	—		—		—		3,301,226
Stock issued for services	4,000		4		68,676	—		—		—		68,680
Stock-based compensation	—		—		61,933	—		—		—		61,933
Net loss for the three months ended March 31, 2021	—		—		—	—		—		(924,150)		(924,150)
Balances at March 31, 2021	5,873,367	$	5,873	$	103,608,805	1,321	$	(13,210)	$	(76,059,961)	$	27,541,507
Stock-based compensation	—		—		91,711	—		—		—		91,711
Net loss for the three months ended June 30, 2021	—		—		—	—		—		(1,186,693)		(1,186,693)
Balances at June 30, 2021	5,873,367	$	5,873	$	103,700,516	1,321	$	(13,210)	$	(77,246,654)	$	26,446,525


For the Year Ended December 31,
2021	$	18,824
2022		76,482
2023		78,517
2024		80,552
2025		82,587
2026		56,132
Total lease payments	$	393,094
Less: imputed interest		(57,818)
Total lease liability	$	335,276


				Weighted
		Weighted		Average
		Average		Remaining
	Stock	Exercise		Life
	Options	Price		(in years)
Outstanding at December 31, 2020	391,650	$	5.70	8.1
Granted	81,821	$	11.61
Exercised	(17,534)	$	3.79
Outstanding at June 30, 2021	455,937	$	6.83	7.9
Exercisable at June 30, 2021	363,945	$	6.10	7.5


Exhibit Number		Document

10.1		Amended & Restated Ideal Power Inc. 2013 Equity Incentive Plan (1)+

31.1		Certification of Principal Executive Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Certification pursuant to 18 U.S.C. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

10.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101).


Dated August 13, 2021	IDEAL POWER INC.

	By:	/s/ R. Daniel Brdar
		R. Daniel Brdar
		Chief Executive Officer

	By:	/s/ Timothy W. Burns
		Timothy W. Burns
		Chief Financial Officer

SEC Form 10-Q filed by Ideal Power Inc.