ipwr20240331

ipwr20240331_10q.htm

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 March 31, 2024

☐	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 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. 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 May 10, 2024, the issuer had 7,684,238 shares of common stock, par value $0.001, outstanding.


PART I	FINANCIAL INFORMATION	3

Item 1.	Unaudited Condensed Financial Statements	3

	Balance Sheets at March 31, 2024 and December 31, 2023	3
	Statements of Operations for the three months ended March 31, 2024 and 2023	4
	Statements of Cash Flows for the three months ended March 31, 2024 and 2023	5
	Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023	6
	Notes to Unaudited Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4.	Controls and Procedures	15

PART II	OTHER INFORMATION	16

Item 1.	Legal Proceedings	16

Item 1A.	Risk Factors	16

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3.	Defaults Upon Senior Securities	16

Item 4.	Mine Safety Disclosures	16

Item 5.	Other Information	16

Item 6.	Exhibits	17

SIGNATURES		18

	March 31,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	20,235,410		$	8,474,835
Accounts receivable, net		140,000			70,000
Inventory		109,362			81,450
Prepayments and other current assets		271,729			482,890
Total current assets		20,756,501			9,109,175

Property and equipment, net		350,195			359,225
Intangible assets, net		2,601,308			2,580,066
Right of use asset		170,413			186,570
Other assets		12,757			13,034
Total assets	$	23,891,174		$	12,248,070

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	382,012		$	405,098
Accrued expenses		504,418			455,112
Current portion of lease liability		72,263			70,683
Total current liabilities		958,693			930,893

Long-term lease liability		113,744			132,304
Other long-term liabilities		1,108,224			1,125,173
Total liabilities		2,180,661			2,188,370

Commitments and contingencies (Note 5)

Stockholders’ equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 7,382,699 shares issued and 7,381,378 shares outstanding at March 31, 2024 and 5,998,018 shares issued and 5,996,697 shares outstanding at December 31, 2023		7,383			5,998
Additional paid-in capital		121,235,416			107,116,362
Treasury stock, at cost, 1,321 shares at March 31, 2024 and December 31, 2023		(13,210	)		(13,210	)
Accumulated deficit		(99,519,076	)		(97,049,450	)
Total stockholders’ equity		21,710,513			10,059,700
Total liabilities and stockholders’ equity	$	23,891,174		$	12,248,070

	Three Months Ended
	March 31,
	2024			2023
Commercial revenue	$	78,739		$	—
Grant revenue		—			664
Total revenue		78,739			664

Cost of commercial revenue		68,498			—
Cost of grant revenue		—			664
Total cost of revenue		68,498			664

Gross profit		10,241			—

Operating expenses:
Research and development		1,366,893			1,440,028
General and administrative		853,688			894,933
Sales and marketing		316,611			304,326
Total operating expenses		2,537,192			2,639,287

Loss from operations		(2,526,951	)		(2,639,287	)

Interest income, net		57,325			111,302

Net loss	$	(2,469,626	)	$	(2,527,985	)

Net loss per share – basic and diluted	$	(0.39	)	$	(0.41	)

Weighted average number of shares outstanding – basic and diluted		6,319,939			6,178,508

					Additional											Total
	Common Stock				Paid-In			Treasury Stock					Accumulated			Stockholders’
	Shares		Amount		Capital			Shares		Amount			Deficit			Equity
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		6,889		7		(7	)		—		—			—			—
Stock-based compensation		—		—		609,926			—		—			—			609,926
Net loss for the three months ended March 31, 2023		—		—		—			—		—			(2,527,985	)		(2,527,985	)
Balances at March 31, 2023		5,932,890	$	5,933	$	105,621,237			1,321	$	(13,210	)	$	(89,623,415	)	$	15,990,545

Balances at December 31, 2023		5,998,018	$	5,998	$	107,116,362			1,321	$	(13,210	)	$	(97,049,450	)	$	10,059,700
Issuance of common stock and pre-funded warrants		1,366,668		1,367		13,651,296			—		—			—			13,652,663
Exercise of options		8,334		8		86,749			—		—			—			86,757
Vesting of restricted stock units		9,679		10		(10	)		—		—			—			—
Stock-based compensation		—		—		381,019			—		—			—			381,019
Net loss for the three months ended March 31, 2024		—		—		—			—		—			(2,469,626	)		(2,469,626	)
Balances at March 31, 2024		7,382,699	$	7,383	$	121,235,416			1,321	$	(13,210	)	$	(99,519,076	)	$	21,710,513

For the Year Ended December 31,
2024 (remaining)	$	60,711
2025		82,587
2026		56,132
Total lease payments		199,430
Less: imputed interest		(13,423	)
Total lease liability		186,007
Less: current portion of lease liability		(72,263	)
Long-term lease liability	$	113,744

						Weighted
				Weighted		Average
				Average		Remaining
	Stock			Exercise		Life
	Options			Price		(in years)
Outstanding at December 31, 2023		525,948		$	7.69		6.6
Exercised		(8,334	)	$	10.41
Outstanding at March 31, 2024		517,614		$	7.65		5.4
Exercisable at March 31, 2024		479,285		$	7.34		5.2

	RSUs			PSUs
Outstanding at December 31, 2023		171,530			114,000
Granted		50,710			—
Vested		(9,679	)		—
Outstanding at March 31, 2022		212,561			114,000

Exhibit Number		Document

4.1		Form of Pre-Funded Warrant (for March 2024 offering) (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on March 28, 2024)

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: May 15, 2024	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

	March 31,			December 31,
	2024			2023
	(unaudited)
Patents	$	1,601,638		$	1,530,257
Trademarks		18,352			15,794
Other intangible assets		1,843,036			1,843,036
		3,463,026			3,389,087
Accumulated amortization - patents		(290,881	)		(272,872	)
Accumulated amortization - other intangible assets		(570,837	)		(536,149	)
	$	2,601,308		$	2,580,066

SEC Form 10-Q filed by Ideal Power Inc.