Ideal Power Reports Third Quarter 2020 Financial Results
Ideal Power (Nasdaq: IPWR) announced its third quarter results for 2020, reporting a net loss of $4.9 million, impacted by a $3.7 million non-cash warrant inducement expense. R&D expenses increased to $0.5 million, reflecting investments in B-TRAN™ development. The company achieved a significant milestone under its NAVSEA program, completing the first fabrication run of B-TRAN™ wafers with Teledyne. Cash and equivalents stood at $3.8 million as of September 30, 2020. The company continues to progress towards commercialization, supported by 57 issued patents and an ongoing partnership with the University of Texas at Austin.
- Achieved milestone under NAVSEA program for B-TRAN™ technology.
- Raised $3 million in 2020 via warrant exercises.
- Possesses a robust patent portfolio with 57 issued patents.
- Net loss increased to $4.9 million from $0.8 million year-over-year.
- R&D and G&A expenses rose compared to the prior year, indicating higher operational costs.
AUSTIN, Texas, Nov. 12, 2020 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2020.
“During the third quarter, we maintained our momentum toward our commercialization goals,” stated Dan Brdar, President and Chief Executive Officer of Ideal Power. “Recently, we completed our first milestone with United States Naval Sea Systems Command (NAVSEA) under our partnership with Diversified Technologies, Inc. (DTI) finishing the first wafer fabrication run with Teledyne. Devices are being packaged and will be tested and characterized under the NAVSEA program. We now have both initial driver and packaging designs through our collaboration with The University of Texas at Austin’s Microelectronics Research Center. Overall, we continue to make progress toward commercialization, and are excited about our prospects for B-TRAN™ as a differentiated technology that addresses a large and growing market.”
Key Recent Operational Highlights
- Completed first major milestone under NAVSEA program in partnership with DTI to demonstrate B-TRAN™ enabled high efficiency direct current circuit breakers; received B-TRAN™ wafers from Teledyne’s first fabrication run under the program, which are being tested for selection and packaging into B-TRAN™ devices.
- In collaboration with The University of Texas at Austin’s Microelectronics Research Center:
- Completed design and fabrication of initial version of our new B-TRAN™ driver
- Under the NAVSEA program, completed the initial design of new B-TRAN™ device packaging
- Developed a new high power test rig to enable testing of packaged devices at high voltage and high current conditions as part of the device characterization required under the NAVSEA program and for the generation of a data sheet for the engineering sample program.
- B-TRAN™ Patent Estate: Currently have 57 issued B-TRAN™ patents with 21 of those issued outside of the United States and 25 pending B-TRAN™ patents. Current geographic coverage now includes North America, China, Japan and Europe, with potential to expand coverage into South Korea and India.
- As of September 30, 2020, and inclusive of the previously announced early warrant exercise transaction, we have raised
$3 million in 2020 from warrant exercises.
Third Quarter 2020 Financial Results
- Research and development expenses in the third quarter of 2020 were
$0.5 million compared to$0.3 million in the third quarter of 2019. The increase was due to higher expenses related to B-TRAN wafer fabrication and driver development. - General and administrative expenses in the third quarter of 2020 were
$0.7 million compared to$0.5 million in the third quarter of 2019. - In connection with the early warrant exercise transaction, we recorded a non-cash warrant inducement expense of
$3.7 million within other expenses representing the estimated fair value of the new warrants issued in the transaction. - Net loss in the third quarter of 2020 was
$4.9 million , inclusive of the$3.7 million non-cash warrant inducement expense, compared to$0.8 million in the third quarter of 2019. The third quarter of 2019 included a$0.1 million loss from discontinued operations related to our PPSA operations which we sold in September 2019. - Cash used in operating activities for the first nine months of 2020 was
$2.3 million compared to$2.4 million in the first nine months of 2019. - Cash and cash equivalents totaled
$3.8 million at September 30, 2020. In August 2020, the Company raised net cash proceeds of$2.5 million from the early warrant exercise transaction. - Long-term debt outstanding at September 30, 2020 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. We currently expect this loan to be forgiven.
Third 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, November 12, 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: | 1-323-289-6576 | |
| Conference ID: | 8075834 |
Please call the conference telephone number 5-10 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/index.php?id=142114 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 November 12, 2020 through December 12, 2020.
| Toll Free Replay Number: | 1-844-512-2921 | |
| International Replay Number: | 1-412-317-6671 | |
| Replay ID: | 8075834 |
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 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
| September 30, 2020 | December 31, 2019 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,769,225 | $ | 3,057,682 | ||||
| Accounts receivable, net | 28,623 | – | ||||||
| Prepayments and other current assets | 138,436 | 248,148 | ||||||
| Total current assets | 3,936,284 | 3,305,830 | ||||||
| Property and equipment, net | 41,797 | 47,302 | ||||||
| Intangible assets, net | 1,583,523 | 1,634,378 | ||||||
| Right of use asset | 126,257 | 260,310 | ||||||
| Other assets | – | 17,920 | ||||||
| Total assets | $ | 5,687,861 | $ | 5,265,740 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 66,710 | $ | 182,956 | ||||
| Accrued expenses | 383,374 | 319,135 | ||||||
| Current portion of lease liability | 129,995 | 183,119 | ||||||
| Total current liabilities | 580,079 | 685,210 | ||||||
| Long-term debt | 91,407 | – | ||||||
| Long-term lease liability | – | 82,055 | ||||||
| Other long-term liabilities | 607,974 | 609,242 | ||||||
| Total liabilities | 1,279,460 | 1,376,507 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, | 2,977 | 2,101 | ||||||
| Additional paid-in capital | 78,419,046 | 71,242,256 | ||||||
| Treasury stock, at cost, 1,321 shares at September 30, 2020 and December 31, 2019 | (13,210 | ) | (13,210 | ) | ||||
| Accumulated deficit | (74,000,412 | ) | (67,341,914 | ) | ||||
| Total stockholders’ equity | 4,408,401 | 3,889,233 | ||||||
| Total liabilities and stockholders’ equity | $ | 5,687,861 | $ | 5,265,740 | ||||
IDEAL POWER INC.
Statements of Operations
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Grant revenue | $ | 147,787 | $ | – | $ | 154,302 | $ | – | ||||||||
| Cost of grant revenue | 147,787 | – | 154,302 | – | ||||||||||||
| Gross profit | – | – | – | – | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 494,548 | 250,773 | 1,161,537 | 804,741 | ||||||||||||
| General and administrative | 677,967 | 471,272 | 1,773,615 | 1,520,325 | ||||||||||||
| Total operating expenses | 1,172,515 | 722,045 | 2,935,152 | 2,325,066 | ||||||||||||
| Loss from continuing operations before interest | (1,172,515 | ) | (722,045 | ) | (2,935,152 | ) | (2,325,066 | ) | ||||||||
| Other expenses: | ||||||||||||||||
| Interest expense, net | 1,358 | 2,763 | 2,480 | 3,072 | ||||||||||||
| Warrant inducement expense | 3,720,866 | – | 3,720,866 | – | ||||||||||||
| Total other expenses | 3,722,224 | 2,763 | 3,723,346 | 3,072 | ||||||||||||
| Loss from continuing operations | (4,894,739 | ) | (724,808 | ) | (6,658,498 | ) | (2,328,138 | ) | ||||||||
| Loss from discontinued operations | – | (78,796 | ) | – | (768,047 | ) | ||||||||||
| Loss on sale of discontinued operations | – | (9,107 | ) | – | (9,107 | ) | ||||||||||
| Net loss | $ | (4,894,739 | ) | $ | (812,711 | ) | $ | (6,658,498 | ) | $ | (3,105,292 | ) | ||||
| Loss from continuing operations per share – basic and fully diluted | $ | (1.28 | ) | $ | (0.49 | ) | $ | (2.04 | ) | $ | (1.60 | ) | ||||
| Loss from discontinued operations per share – basic and fully diluted | – | (0.06 | ) | – | (0.53 | ) | ||||||||||
| Net loss per share – basic and fully diluted | $ | (1.28 | ) | $ | (0.55 | ) | $ | (2.04 | ) | $ | (2.13 | ) | ||||
| Weighted average number of shares outstanding – basic and fully diluted | 3,821,717 | 1,474,001 | 3,264,860 | 1,460,507 | ||||||||||||
IDEAL POWER INC.
Statements of Cash Flows
(unaudited)
| Nine Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Loss from continuing operations | $ | (6,658,498 | ) | $ | (2,328,138 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 86,368 | 82,913 | ||||||
| Write-off of capitalized patents | 18,235 | – | ||||||
| Stock-based compensation | 434,782 | 156,882 | ||||||
| Stock issued for services | 50,000 | – | ||||||
| Warrant inducement expense | 3,720,866 | – | ||||||
| Decrease in operating assets: | ||||||||
| Accounts receivable | (28,623 | ) | – | |||||
| Prepayments and other current assets | 127,632 | 204,530 | ||||||
| Increase (decrease) in operating liabilities: | ||||||||
| Accounts payable | (116,246 | ) | 1,337 | |||||
| Accrued expenses | 61,845 | 6,336 | ||||||
| Net cash used in operating activities | (2,303,639 | ) | (1,876,140 | ) | ||||
| Net cash used in operating activities – discontinued operations | – | (557,096 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (12,407 | ) | (4,253 | ) | ||||
| Acquisition of intangible assets | (35,836 | ) | (74,342 | ) | ||||
| Net cash used in investing activities | (48,243 | ) | (78,595 | ) | ||||
| Net cash provided by investing activities – discontinued operations | – | 23,587 | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from loans | 91,407 | – | ||||||
| Proceeds from the exercise of warrants | 2,972,018 | – | ||||||
| Net cash provided by financing activities | 3,063,425 | – | ||||||
| Net increase (decrease) in cash and cash equivalents – continuing operations | 711,543 | (1,954,735 | ) | |||||
| Net decrease in cash and cash equivalents – discontinued operations | – | (533,509 | ) | |||||
| Cash and cash equivalents at beginning of period | 3,057,682 | 3,258,077 | ||||||
| Cash and cash equivalents at end of period | $ | 3,769,225 | $ | 769,833 | ||||
IDEAL POWER INC.
Statement of Stockholders’ Equity
For the Three-Month Periods during the Nine Months Ended September 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 | |||||||||||||||||||
| Stock-based compensation | — | — | — | — | 16,692 | — | — | — | 16,692 | |||||||||||||||||||||||||||
| Net loss for the three months ended September 30, 2019 | — | — | — | — | — | — | — | (812,711 | ) | (812,711 | ) | |||||||||||||||||||||||||
| Balances at September 30, 2019 | 1,475,322 | $ | 1,475 | 810,000 | $ | 810 | $ | 68,115,842 | 1,321 | $ | (13,210 | ) | $ | (66,519,544 | ) | $ | 1,585,373 | |||||||||||||||||||
| 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 | |||||||||||||||||||
| Stock-based compensation | — | — | — | — | 208,614 | — | — | — | 208,614 | |||||||||||||||||||||||||||
| Exercise of warrants | 250,566 | 251 | — | — | 248,365 | — | — | — | 248,616 | |||||||||||||||||||||||||||
| Early warrant exercise transaction | 372,837 | 373 | — | — | 2,547,213 | — | — | — | 2,547,586 | |||||||||||||||||||||||||||
| Warrant inducement expense | — | — | — | — | 3,720,866 | — | — | — | 3,720,866 | |||||||||||||||||||||||||||
| Net loss for the three months ended September 30, 2020 | — | — | — | — | — | — | — | (4,894,739 | ) | (4,894,739 | ) | |||||||||||||||||||||||||
| Balances at September 30, 2020 | 2,976,709 | $ | 2,977 | — | $ | — | $ | 78,419,046 | 1,321 | $ | (13,210 | ) | $ | (74,000,412 | ) | $ | 4,408,401 | |||||||||||||||||||
FAQ
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