SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________________________

    

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): August 13, 2020

________________________________________________________________

 

IDEAL POWER INC.

(Exact name of registrant as specified in Charter)

  

Delaware   001-36216   14-1999058

(State or other jurisdiction of

incorporation or organization)

  (Commission File No.)   (IRS Employee Identification No.)

  

4120 Freidrich Lane, Suite 100

Austin, Texas, 78744

(Address of Principal Executive Offices)

 

512-264-1542

(Issuer Telephone number)

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2 below).

  

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

 

  ¨ Pre-commencement communications pursuant to Rule 13e-(c) under the Exchange Act (17 CFR 240.13(e)-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol Name of each exchange on which registered
Common stock IPWR NASDAQ Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if 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. ¨

  

 

 

 

 

 

ITEM 2.02RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On August 13, 2020, Ideal Power Inc. (the “Company”) issued a press release announcing its financial results for the three and six months ended June 30, 2020. The press release is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in its entirety into this Item 2.02. The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

 

The Company will host a conference call with investors to discuss the results. The conference call will begin at 4:30 p.m. Eastern time on Thursday, August 13, 2020. The call may be accessed in the U.S. by dialing 1-866-248-8441 and entering the conference ID: 8018042. A webcast of the call may be found at http://public.viavid.com/player/index.php?id=140862. The webcast replay will be available on the Company’s website, www.idealpower.com.

 

The information furnished under this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

 

Item 9.01Financial Statements and Exhibits

 

Exhibit 99.1 Press release issued August 13, 2020

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Dated: August 13, 2020 IDEAL POWER INC.  
       
       
  By:   /s/ Timothy Burns  
    Timothy Burns  
    Chief Financial Officer  

 

 

 

 

 

Exhibit 99.1

 

 

Ideal Power Reports Second Quarter 2020 Financial Results

 

Continued Progress through Phase Two of B-TRAN™ Commercialization Plan

 

AUSTIN, TX – August 13, 2020 -- Ideal Power Inc. (Nasdaq: IPWR), pioneering the development and commercialization of highly efficient and broadly patented B-TRAN™ bi-directional power switches, reported results for its second quarter ended June 30, 2020.

 

“During the second quarter of 2020, we significantly advanced Phase Two of our B-TRAN™ commercialization plan, which entails the fabrication of parts and the delivery of samples to potential partners for evaluation," said Dan Brdar, President and Chief Executive Officer of Ideal Power. "We signed a $1.2 million contract to partner with Diversified Technologies (“DTI”), a developer and marketer of high voltage, high power pulse modulators, DC power supplies, and control systems for the U.S. Departments of Energy and Defense and other prestigious customers, to develop and demonstrate B-TRAN™ enabled high efficiency 12kV medium voltage direct current circuit breakers for the U.S. Navy as part of their ship electrification program, our first award for a government-funded technology project. We also made strong progress on our engineering sampling program, completing the fabrication qualification process as well as another B-TRAN™ run with Teledyne, our domestic semiconductor fabrication partner, and are preparing for dies to be packaged for internal testing and characterization. Overall, we are tracking to plan and are focused for the remainder of the year on completing a first run of packaged B-TRAN™ devices under our DTI partnership and on putting engineering prototype samples packaged with a driver into potential customers’ hands.”

 

Key Recent Operational Highlights

 

·Signed a $1.2 million contract to partner with Diversified Technologies, Inc. (DTI) /a developer and marketer of high voltage, high power pulse modulators, DC power supplies, and control systems for the U.S. Departments of Energy and Defense, leading universities, and private sector companies, on the demonstration of B-TRAN™ enabled high efficiency direct current circuit breakers. This contract is part of a two-year, $3.0 million contract awarded to DTI by United States Naval Sea Systems Command (“NAVSEA”) to support its ship electrification program. Ideal Power kicked off its part of the program in late June.
·Completed the fabrication qualification process with Teledyne, the Company’s domestic semiconductor fabrication partner. The dies produced during this process will be packaged and utilized for internal testing and characterization.
·Released next-generation parts to Teledyne for fabrication under the NAVSEA program and potential early customer samples.
·In collaboration with University of Texas at Austin’s Microelectronic Research Center, began design of a new current source driver to be used in our engineering prototype sampling program.
·B-TRAN™ Patent Estate: Currently have 56 issued B-TRAN™ patents with 20 of those issued outside of the United States and 27 pending B-TRAN™ patents. Current geographic coverage includes North America, China, Japan and Europe, with potential to expand coverage into South Korea and India.
·In August, Ideal Power raised an estimated $2.5 million in net proceeds from an early warrant exercise transaction with certain of the Company’s Series A warrant holders, in which Series A warrant holders were issued new Series C warrants to purchase up to an aggregate of 705,688 shares of the Company’s common stock at an exercise price of $8.90 per share, through a private placement, as an incentive for such Series A warrant holders to exercise their Series A warrants early. The transaction strengthened the Company’s cash position and enabled an orderly exercise of warrants for holders.

 

 

 

 

Second Quarter 2020 Financial Results

 

·Research and development expenses in the second quarter of 2020 were $0.3 million, flat compared to $0.3 million in the second quarter of 2019.
·General and administrative expenses in the second quarter of 2020 were $0.5 million compared to $0.6 million in the second quarter of 2019. The decrease was due to lower legal fees and facilities costs.
·Net loss in the second quarter of 2020 was $0.8 million compared to $1.3 million in the second quarter of 2019. The decrease in net loss was due to the sale of the PPSA™ operations in September 2019 and lower general and administrative expenses. The second quarter of 2019 included a $0.3 million loss from discontinued operations.
·Cash used in operating activities for the first six months of 2020 was $1.5 million compared to $1.8 million in the first six months of 2019. Cash flows from operating activities in the six months of 2019 included $0.5 million of cash used in discontinued operations.
·Cash and cash equivalents totaled $1.8 million as of June 30, 2020. Subsequent to June 30, 2020, the Company raised an estimated $2.5 million in net proceeds from an early warrant exercise transaction.
·Long-term debt outstanding was $0.1 million relating to a Payroll Protection Program loan received in the second quarter of 2020 to temporarily subsidize payroll and facilities costs in a business landscape impacted by the COVID-19 pandemic.

 

Second Quarter 2020 Conference Call Details

 

Ideal Power CEO and President Dan Brdar and CFO Tim Burns will host the conference call, followed by a question and answer period.

 

To access the call, please use the following information:

 

Date: Thursday, August 13, 2020  
Time: 4:30 p.m. EST, 1:30 p.m. PST  
Toll-free dial-in number: 1- 866-248-8441  
International dial-in number: 1-323-347-3612  
Conference ID: 8018042  

 

 

 

 

 

Please call the conference telephone number 5 to 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact LHA Investor Relations at 1-212-838-3777.

 

The conference call will be broadcast live and available for replay at http://public.viavid.com/player/index.php?id=140862 and via the investor relations section of the Company’s website at www.IdealPower.com.

 

A replay of the conference call will be available after 7:30 p.m. Eastern time on August 13, 2020 through September 13, 2020.

 

Toll Free Replay Number: 1-844-512-2921
International Replay Number: 1-412-317-6671
Replay ID: 8018042

 

About Ideal Power Inc.

Ideal Power (NASDAQ: IPWR) is pioneering the development of its broadly patented bi-directional power switches, creating highly efficient and ecofriendly energy control solutions for industrial, alternative energy, military and automotive applications. The Company is focused on its patented Bi-directional, Bi-polar Junction Transistor (B-TRAN™) semiconductor technology. B-TRAN™ is a unique double-sided bi-directional AC switch able to deliver substantial performance improvements over today's conventional power semiconductors. Ideal Power believes B-TRAN™ modules will reduce conduction and switching losses, complexity of thermal management and operating cost in medium voltage AC power switching and control circuitry. For more information, visit www.IdealPower.com.

 

Safe Harbor Statement
All statements in this release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While Ideal Power’s management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the impact of COVID-19 on our business, financial condition and results of operations, the success of our B-TRAN™ technology, including the success of of our contract with DTI, whether the patents for our technology provide adequate protection and whether we can be successful in maintaining, enforcing and defending our patents and our inability to predict with precision or certainty the pace of development and commercialization of our B-TRAN™ technology, our ability to secure additional financing on commercially reasonable terms, or at all, especially in light of the market volatility uncertainty as a result of the COVID-19 pandemic and uncertainties set forth in our quarterly, annual and other reports filed with the Securities and Exchange Commission. Furthermore, we operate in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking statements.


 

Ideal Power Investor Relations Contact: 
LHA Investor Relations

Carolyn Capaccio, CFA; Keith Fetter

T: 212-838-3777

IdealPowerIR@lhai.com

 

 

 

   

IDEAL POWER INC.

Balance Sheets

 

   June 30,
2020
   December 31,
2019
 
   (unaudited)     
ASSETS          
Current assets:          
Cash and cash equivalents  $1,793,582   $3,057,682 
Prepayments and other current assets   223,838    248,148 
Total current assets   2,017,420    3,305,830 
           
Property and equipment, net   46,078    47,302 
Intangible assets, net   1,594,085    1,634,378 
Right of use asset   171,849    260,310 
Other assets       17,920 
Total assets  $3,829,432   $5,265,740 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $47,333   $182,956 
Accrued expenses   327,328    319,135 
Current portion of lease liability   176,989    183,119 
Total current liabilities   551,650    685,210 
           
Long-term debt   96,407     
Long-term lease liability       82,055 
Other long-term liabilities   603,917    609,242 
Total liabilities   1,251,974    1,376,507 
           
Commitments and contingencies          
           
Stockholders’ equity:          
Common stock, $0.001 par value; 50,000,000 shares authorized; 2,353,306 shares issued and 2,351,985 shares outstanding at June 30, 2020, and 2,101,272 shares issued and 2,099,951 shares outstanding at December 31, 2019, respectively   2,353    2,101 
Additional paid-in capital   71,693,988    71,242,256 
Treasury stock, at cost, 1,321 shares at June 30, 2020 and December 31, 2019   (13,210)   (13,210)
Accumulated deficit   (69,105,673)   (67,341,914)
Total stockholders’ equity   2,577,458    3,889,233 
Total liabilities and stockholders’ equity  $3,829,432   $5,265,740 

  

 

 

 

IDEAL POWER INC.

Statements of Operations

(unaudited) 

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
Grant revenue  $6,515   $   $6,515   $ 
Cost of grant revenue   6,515        6,515     
Gross profit                
                     
Operating expenses:                    
Research and development   316,325    335,752    666,989    553,968 
General and administrative   515,878    580,663    1,095,648    1,049,053 
Total operating expenses   832,203    916,415    1,762,637    1,603,021 
                     
Loss from continuing operations before interest   (832,203)   (916,415)   (1,762,637)   (1,603,021)
Interest (income) expense, net   1,055    (6,809)   1,122    309 
Loss from continuing operations   (833,258)   (909,606)   (1,763,759)   (1,603,330)
Loss from discontinued operations       (342,076)       (689,251)
Net loss  $(833,258)  $(1,251,682)  $(1,763,759)  $(2,292,581)
                     
Loss from continuing operations per share – basic and fully diluted  $(0.28)  $(0.62)  $(0.59)  $(1.10)
Loss from discontinued operations per share – basic and fully diluted       (0.23)       (0.48)
Net loss per share – basic and fully diluted  $(0.28)  $(0.85)  $(0.59)  $(1.58)
                     
Weighted average number of shares outstanding – basic and fully diluted   2,998,350    1,474,001    2,983,372    1,453,648 

   

 

 

 

IDEAL POWER INC.

Statements of Cash Flows

(unaudited)

  

   Six Months Ended
June 30,
 
   2020   2019 
Cash flows from operating activities:          
Loss from continuing operations  $(1,763,759)  $(1,603,330)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   57,248    56,497 
Write-off of capitalized patents   18,235     
Stock-based compensation   226,168    140,190 
Stock issued for services   50,000     
Decrease in operating assets:          
Prepayments and other current assets   42,230    112,347 
Increase (decrease) in operating liabilities:          
Accounts payable   (135,623)   2,836 
Accrued expenses   3,144    (7,588)
Net cash used in operating activities   (1,502,357)   (1,299,048)
Net cash used in operating activities – discontinued operations       (465,328)
           
Cash flows from investing activities:          
Purchase of property and equipment   (10,678)   (1,194)
Acquisition of intangible assets   (23.288)   (54,710)
Net cash used in investing activities   (33,966)   (55,904)
           
Cash flows from financing activities:          
Proceeds from loans   96,407     
Proceeds from the exercise of warrants   175,816     
Net cash provided by financing activities   272,223     
           
Net decrease in cash and cash equivalents – continuing operations   (1,264,100)   (1,354,952)
Net decrease in cash and cash equivalents – discontinued operations       (465,328)
Cash and cash equivalents at beginning of period   3,057,682    3,258,077 
Cash and cash equivalents at end of period  $1,793,582   $1,437,797 

  

 

 

 

  

IDEAL POWER INC.

Statement of Stockholders’ Equity

For the Three-Month Periods during the Six Months Ended June 30, 2020 and 2019

(unaudited)

 

   Common Stock   Preferred
Stock
   Additional
Paid-In
Capital
   Treasury Stock   Accumulated
Deficit
   Total
Stockholders’
Equity
 
   Shares   Amount   Shares   Amount       Shares   Amount         
Balances at December 31, 2018   1,404,479   $1,404    1,518,430   $1,518   $68,022,484    1,321   $(13,210)  $(63,414,252)  $4,597,944 
Conversion of preferred stock to common stock   70,843    71    (708,430)   (708)   637                 
Stock-based compensation                   (25,814)               (25,814)
Net loss for the three months ended March 31, 2019                               (1,040,899)   (1,040,899)
Balances at March 31, 2019   1,475,322   $1,475    810,000   $810   $67,997,307    1,321   $(13,210)  $(64,455,151)  $3,531,231 
Stock-based compensation                   101,843                101,843 
Net loss for the three months ended June 30, 2019                               (1,251,682)   (1,251,682)
Balances at June 30, 2019   1,475,322   $1,475    810,000   $810   $68,099,150    1,321   $(13,210)  $(65,706,833)  $2,381,392 
                                              
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