Registration Statement No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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.) |
4120 Freidrich Lane, Suite 100
Austin, TX 78744
(512) 264-1542
(Address, including
zip code, and telephone number, including area code, of registrant’s principal executive offices)
R. Daniel Brdar
Chief Executive Officer
Ideal Power Inc.
4120 Freidrich Lane, Suite 100
Austin, TX 78744
Telephone (512) 264-1542
(Name, address including
zip code, and telephone number, including area code, of agent for service)
With copies to:
Paul Hurdlow, Esq.
DLA Piper LLP (US)
401 Congress Avenue, Suite 2500
Austin, TX 78701
Telephone: (512) 457-7020
Approximate date
of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If the only securities
being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box. ¨
If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
x
If this Form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration
statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer ¨
(do not check if smaller
reporting company) |
Smaller reporting company x |
Title of Each Class of Securities to be Registered | |
Amount to be Registered(1) | | |
Proposed Maximum Offering Price Per Share | | |
Proposed Maximum Aggregate Offering Price | | |
Amount of Registration Fee(2) | |
Common Stock, $0.001 par value per share | |
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Preferred Stock, $0.001 par value per share | |
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Warrants | |
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TOTAL | |
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$ | 75,000,000 | | |
$ | 8,715.00 | |
(1) |
In addition, pursuant to Rule 416 under the Securities Act of 1933, as amended or the Securities Act, the shares being registered hereunder include such indeterminate number of shares of common stock as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends, or similar transactions. There are also being registered hereunder an indeterminate amount of our securities as shall be issuable upon conversion, exchange or exercise of any securities that provide for that issuance. |
(2) |
Calculated pursuant to Rule 457(o) under the Securities Act based on the proposed maximum aggregate offering price of all securities listed. |
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment
that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this Registration Statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
The information in this
prospectus is not complete and may be changed. We may not sell these securities or accept an offer to buy these securities until
the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER
1, 2014
PROSPECTUS
![http:||www.sec.gov|Archives|edgar|data|1507957|000141588913002465|idealpowers1aug220131.jpg](image_003.jpg)
IDEAL POWER INC.
$75,000,000
Common Stock
Preferred Stock
Warrants
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We may offer and sell,
from time to time in one or more offerings, any combination of securities that we describe in this prospectus having an aggregate
initial offering price of up to $75,000,000. We may also offer common stock or preferred stock upon exercise of warrants; and common
stock upon conversion of preferred stock or any combination thereof.
We will provide specific
terms of these offerings and securities in one or more supplements to this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with these offerings. The accompanying prospectus supplement, and any documents
incorporated by reference, may also add, update or change information contained in this prospectus. You should read this prospectus,
the accompanying prospectus supplement, any documents incorporated by reference and any related free writing prospectus carefully
before buying any of the securities being offered.
Our common stock is
traded on The NASDAQ Capital Market under the symbol “IPWR.” On November 25, 2014, the last reported sale price of
our common stock on The NASDAQ Capital Market was $7.32. The applicable prospectus supplement will contain information, where applicable,
as to any listing, if any, on The NASDAQ Capital Market or any other securities market or other exchange covered by the applicable
prospectus supplement.
The shares of common
stock offered by us may be sold directly by us, through dealers or agents designated from time to time, to or through underwriters
or dealers or through a combination of these methods on a continuous or delayed basis. See “Plan of Distribution” in
this prospectus. We may also describe the plan of distribution for any particular offering of our securities in a prospectus supplement.
If any agents, underwriters or dealers are involved in the sale of any securities in respect of which this prospectus is being
delivered, we will disclose their names and the nature of our arrangements with them in a prospectus supplement. The net proceeds
we expect to receive from any such sale will also be included in a prospectus supplement.
Investing in our
securities involves various risks. See “Risk Factors” beginning on page 3 of this prospectus and the risks
set forth under the caption “Item 1A. Risk Factors” included in our most recent Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q. Additional risks will be described in the related prospectus supplements under the heading “Risk Factors”.
You should review that section of the related prospectus supplements for a discussion of matters that investors in our securities
should consider.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the
adequacy or accuracy of this prospectus or any accompanying prospectus supplement. Any representation to the contrary is a criminal
offense.
The date of this prospectus is , 2014
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part
of a registration statement that we filed with the U.S. Securities and Exchange Commission or SEC using a “shelf” registration
process. Under the shelf registration process, we may sell any combination of the securities described in this prospectus in one
or more offerings, up to a maximum aggregate initial offering price of $75,000,000.
This prospectus only
provides you with a general description of the securities we may offer. Each time we sell securities described in the prospectus
we will provide a supplement to this prospectus that will contain specific information about the terms of that offering, including
the specific amounts, prices and terms of the securities offered. The prospectus supplement may also add, update or change information
contained in this prospectus. To the extent there is a conflict between the information contained in this prospectus and the accompanying
prospectus supplement, you should rely on the information in the accompanying prospectus supplement, provided that if any statement
in one of these documents is inconsistent with a statement in another document having a later date-for example, a document incorporated
by reference in this prospectus or any accompanying prospectus supplement-the statement in the later-dated document modifies or
supersedes the earlier statement. You should carefully read both this prospectus and any accompanying prospectus supplement or
other offering materials, together with the additional information described under the heading “Where You Can Find More Information.”
You should rely only
on the information contained or incorporated by reference in this prospectus, accompanying prospectus supplements and any related
free writing prospectus. We have not authorized anyone to provide you with different information. No dealer, salesperson or other
person is authorized to give any information or to represent anything not contained in this prospectus, any accompanying prospectus
supplement or any related free writing prospectus.
This prospectus and
any accompanying prospectus supplement, free writing prospectus or other offering materials do not contain all of the information
included in the registration statement as permitted by the rules and regulations of the SEC. For further information, we refer
you to the registration statement on Form S-3, of which this prospectus is a part, including its exhibits. We are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended, and, therefore, file reports and other information
with the SEC. Statements contained in this prospectus and any accompanying prospectus supplement, free writing prospectus or other
offering materials about the provisions or contents of any agreement or other document are only summaries. If SEC rules require
that any agreement or document be filed as an exhibit to the registration statement, you should refer to that agreement or document
for its complete contents.
Neither the delivery
of this prospectus nor any sale made under it implies that there has been no change in our affairs or that the information in this
prospectus is correct as of any date after the date of this prospectus. You should assume that the information in this prospectus,
information incorporated by reference any applicable prospectus supplement or any related free writing prospectus is accurate only
as of the date on the front of the document and that any information we have incorporated by reference is accurate only as of the
date of the document incorporated by reference, regardless of the time of delivery of this prospectus, any accompanying prospectus
supplement or any related free writing prospectus, or any sale of a security.
In this prospectus,
unless otherwise specified or the context requires otherwise, we use the terms “Ideal Power,” the “Company,”
“we,” “us” and “our” to refer to Ideal Power Inc.
OUR BUSINESS
Overview
We
are located in Austin, Texas. We develop and commercialize our Power Packet Switching Architecture, or PPSA technology, which
is designed to improve the performance, size, weight, reliability, flexibility and manufacturing cost of electronic
power converters. The electronic power converter vertical markets include power converters for residential, commercial,
and utility-scale renewable energy systems, distributed wind generation, electric vehicle DC charging, variable speed motor
drives and on-board power converters for electric vehicles. We believe that, due to
the design advantages of our PPSA technology noted above, our technology can provide solutions that are both efficient
and economically advantageous to these markets.
Our current focus is
to provide solutions for high growth markets in battery energy storage systems or BESS, BESS with integrated photovoltaic or PV,
and microgrid applications. We have specifically targeted commercial energy storage, which we feel will have higher economic value
(in $/kW or $/kWh) than other vertical markets for energy storage due to peak demand cost savings and therefore will grow more
rapidly. With our latest products, we are also targeting microgrid solutions for grid resiliency and off-grid power. Assuming we
are successful in commercializing our technology in these initial vertical markets, we then plan to offer solutions to additional
emerging and more mature vertical markets.
Currently, our products
are manufactured by contract manufacturers and then sold by Ideal Power. For certain geographic markets and applications that would
be challenging for us, as a small U.S. company, to serve, we may enter into licensing agreements with leading global electronics
companies. These agreements would allow regional manufacturers to build our products under license for local markets, or we may
license product designs to global brands for specific applications.
To date, our operations
have been funded primarily through the sale of our common stock and convertible debt, as well as through U.S. Department of Energy
grants. Our total revenue generated from inception to date as of September 30, 2014 is $5,572,752 with almost half of that revenue
coming from government grants. We have applied these revenues to research and product development, thereby reducing our capital
requirements. We will continue to pursue research and development grants, where available, for the purpose of developing new products
and improving our current products. We can make no assurances that additional grants will be available in the future.
We have incurred losses
from operations for the years ended December 31, 2013 and 2012 and the nine months ended September 30, 2014. Our net loss was $9.6
million and $4.6 million, respectively, for the years ended December 31, 2013 and 2012 and $4.9 million for the nine months ended
September 30, 2014. Our accumulated deficit was $16.8 million at December 31, 2013 and $21.7 million at September 30, 2014.
Corporate
Information
We
were incorporated in Texas on May 17, 2007. We converted to a Delaware corporation on July 15, 2013. The
address of our corporate headquarters is 4120 Freidrich Lane, Suite 100, Austin, Texas 78744 and our telephone number is (512)
264-1542. Our website can be accessed at www.idealpower.com. The information contained on, or that may be
obtained from, our website is not, and shall not be deemed to be, a part of this prospectus.
RISK FACTORS
Investing in our securities involves significant
risks. You should review carefully the risks and uncertainties described under the heading “Risk Factors” contained
in, or incorporated into, the applicable prospectus supplement and any related free writing prospectus, and under similar headings
in the other documents that are incorporated by reference herein or therein. Each of the referenced risks and uncertainties could
adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment
in our securities.
DISCLOSURE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains
forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingency,
goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are
based on our current expectations and projections about future events and they are subject to risks and uncertainties known and
unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.
In some cases, you
can identify forward-looking statements by terminology, such as “expects,” “anticipates,” “intends,”
“estimates,” “plans,” “believes,” “seeks,” “may,” “should”,
“could” or the negative of such terms or other similar expressions. Accordingly, these statements involve estimates,
assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Any forward-looking
statements are qualified in their entirety by reference to the factors discussed throughout this prospectus.
Forward-looking statements
involve certain risks and uncertainties, many of which are beyond our control. If any of those risks and uncertainties materialize,
actual results could differ materially from those discussed in any such forward-looking statement. Among the factors that could
cause actual results to differ materially from those discussed in forward-looking statements are those discussed under the heading
“Risk Factors” above, those discussed under the heading “Risk Factors” and in other sections of our Annual
Report on Form 10-K for the year ended December 31, 2013, as well as in our other reports filed from time to time with the Securities
Exchange Commission or SEC that are incorporated by reference into this prospectus. See “Where You Can Find More Information”
and “Incorporation of Documents by Reference” for information about how to obtain copies of those documents.
All forward-looking
statements in this prospectus and the documents incorporated by reference into it are made only as of the date of the document
in which they are contained, based on information available to us as of the date of that document, and we caution you not to place
undue reliance on forward-looking statements in light of the risks and uncertainties associated with them. Except as required by
law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events
or otherwise.
USE OF PROCEEDS
Except as otherwise
provided in the applicable prospectus supplement, information incorporated by reference or related free writing prospectus, we
intend to use the net proceeds from the sale of the securities offered by us in this prospectus for general corporate purposes,
which may include working capital, research and development expenditures, sales and marketing expenses, general corporate expenses,
intellectual property acquisition costs and expenses and capital expenditures.
THE SECURITIES WE MAY OFFER
We may issue from time to time, in one or
more offerings the following securities:
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shares of common stock; |
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shares of preferred stock; |
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warrants to purchase shares of preferred stock or common stock; or |
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any combination of common stock, preferred stock, or warrants. |
When we use the term “securities”
in this prospectus, we mean any of the securities we may offer with this prospectus, unless we say otherwise. This prospectus,
including the following summary, describes the general terms that may apply to the securities; the specific terms of any particular
securities that we may offer will be described in a separate supplement to this prospectus, information incorporated by reference
or related free writing prospectus, which may be in addition to or different from the general terms summarized in this prospectus.
The summaries contained
in this prospectus and in any prospectus supplements, information incorporated by reference or related free writing prospectus
may not contain all of the information that you would find useful. Accordingly, you should read the actual documents relating to
any securities sold pursuant to this prospectus. See “Where You Can Find More Information” and “Incorporation
of Documents by Reference” for information about how to obtain copies of those documents.
The terms of any particular
offering, the initial offering price and the net proceeds to us will be contained in the prospectus supplement, information incorporated
by reference or free writing prospectus, relating to each offering. Where applicable, a prospectus supplement, information incorporated
by reference or related free writing prospectus will also describe any material United States federal income tax consequences relating
to the securities offered and indicate whether the securities offered are or will be listed on any securities exchange.
DESCRIPTION OF CAPITAL STOCK
The following is a brief description of
our capital stock. This summary does not purport to be complete in all respects. This description is subject to and qualified entirely
by the terms of our Certificate of Incorporation, our bylaws, and certain provisions of applicable law. See “Where You Can
Find More Information” and “Incorporation of Documents by Reference”.
Authorized Capitalization
We have 60,000,000 shares of authorized
capital stock, consisting of 50,000,000 shares of authorized common stock and 10,000,000 shares of authorized preferred stock,
all with a par value of $0.001 per share. As of November 24, 2014, we had 7,048,235 shares of common stock outstanding and no shares
of preferred stock outstanding. Our authorized but unissued shares of common stock and preferred stock are available
for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock
exchange or automated quotation system on which our securities may be listed or traded.
Common Stock
Holders of our common stock are entitled
to such dividends as may be declared by our board of directors out of funds legally available for such purpose, subject to any
preferential dividend rights of any then outstanding preferred stock. The shares of common stock are neither redeemable nor convertible.
Holders of common stock have no preemptive or subscription rights to purchase any of our securities.
Each holder of our common stock is entitled
to one vote for each such share outstanding in the holder’s name. No holder of common stock is entitled to cumulate
votes in voting for directors.
In the event of our
liquidation, dissolution or winding up, the holders of our common stock are entitled to receive pro rata our assets, which are
legally available for distribution, after payments of all debts and other liabilities and subject to the prior rights of any holders
of preferred stock then outstanding. All of the outstanding shares of our common stock are fully paid and non-assessable. The
shares of common stock offered by this prospectus will also be fully paid and non-assessable.
Our
common stock is listed on The Nasdaq Capital Market under the symbol “IPWR”. We have not applied to list our
common stock on any other exchange or quotation system.
Preferred Stock
Our Certificate of Incorporation permits
us to issue up to 10,000,000 shares of preferred stock in one or more series and with rights and preferences that may be fixed
or designated by our board of directors without any further action by our stockholders, subject to any limitations prescribed under
Delaware law. We currently have no shares of preferred stock outstanding. If preferred stock is issued in the future,
a prospectus supplement, information incorporated by reference or related free writing prospectus, as applicable, will explain
the particular terms of the preferred stock and the extent to which these general provisions may apply. The specific terms of the
preferred stock as described in a prospectus supplement information, incorporated by reference or related free writing prospectus
will supplement and, if applicable, may modify or replace the general terms described in this section. This summary and any description
of preferred stock in the applicable prospectus supplement, information incorporated by reference or related free writing prospectus
is subject to and is qualified in its entirety by reference to all the provisions of any amended and restated certificate of incorporation,
which we will file with the SEC for incorporation by reference into this prospectus. See “Where You Can Find More Information”
and “Incorporation of Documents by Reference” for information on how to obtain a copy of our amended and restated certificate
of incorporation when it is filed.
The issuance of preferred stock with certain
voting, conversion and/or redemption rights may adversely affect the rights of holders of our common stock, including with respect
to voting, dividends and liquidation. Preferred stock may be issued quickly with terms calculated to delay, defer or
prevent a change in control of our Company or to make removal of management more difficult. Additionally, the issuance
of preferred stock may decrease the market price of our common stock.
Stock Options and Warrants
As of September 30, 2014, we have reserved
the following shares of common stock for issuance pursuant to stock option and warrant agreements:
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1,323,259 shares of our common stock are reserved for issuance under various outstanding option agreements, at a weighted average exercise price of $6.378 per share; |
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1,617,376 shares of our common stock, at a weighted average exercise price of $4.456 per share, are reserved for issuance under various outstanding warrant agreements; and |
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219,580 shares of our common stock have been reserved for the issuance of awards under our 2013 Equity Incentive Plan. |
Anti-Takeover Effects of Certain Provisions of Delaware Law
and Our Charter Documents
The following is a summary of certain provisions
of Delaware law, our Certificate of Incorporation and our bylaws. This summary does not purport to be complete and is qualified
in its entirety by reference to the corporate law of Delaware and our Certificate of Incorporation and bylaws.
Effect of Delaware Anti-Takeover Statute. We
are subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203
prohibits a Delaware corporation from engaging in any business combination (as defined below) with any interested stockholder (as
defined below) for a period of three years following the date that the stockholder became an interested stockholder, unless:
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prior to that date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares of voting stock outstanding (but not the voting stock owned by the interested stockholder) those shares owned by persons who are directors and officers and by excluding employee stock plans in which employee participants do not have the right to determine whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
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on or subsequent to that date, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
Section 203 defines “business combination”
to include the following:
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any merger or consolidation involving the corporation and the interested stockholder; |
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any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
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subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
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subject to limited exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or |
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the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203 defines an “interested
stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation,
or who beneficially owns 15% or more of the outstanding voting stock of the corporation at any time within a three-year period
immediately prior to the date of determining whether such person is an interested stockholder, and any entity or person affiliated
with or controlling or controlled by any of these entities or persons.
Our Charter Documents. Our
charter documents include provisions that may have the effect of discouraging, delaying or preventing a change in control or an
unsolicited acquisition proposal that a stockholder might consider favorable, including a proposal that might result in the payment
of a premium over the market price for the shares held by our stockholders. Certain of these provisions are summarized
in the following paragraphs.
Effects of authorized but unissued common
stock and blank check preferred stock. One of the effects of the existence of authorized but unissued common stock
and undesignated preferred stock may be to enable our board of directors to make more difficult or to discourage an attempt to
obtain control of our Company by means of a merger, tender offer, proxy contest or otherwise, and thereby to protect the continuity
of management. If, in the due exercise of its fiduciary obligations, the board of directors were to determine that a
takeover proposal was not in our best interest, such shares could be issued by the board of directors without stockholder approval
in one or more transactions that might prevent or render more difficult or costly the completion of the takeover transaction by
diluting the voting or other rights of the proposed acquirer or insurgent stockholder group, by putting a substantial voting block
in institutional or other hands that might undertake to support the position of the incumbent board of directors, by effecting
an acquisition that might complicate or preclude the takeover, or otherwise.
In addition, our Certificate of Incorporation
grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares of preferred
stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution
to holders of shares of common stock. The issuance also may adversely affect the rights and powers, including voting
rights, of those holders and may have the effect of delaying, deterring or preventing a change in control of our Company.
Cumulative Voting. Our
Certificate of Incorporation does not provide for cumulative voting in the election of directors, which would allow holders of
less than a majority of the stock to elect some directors.
No Stockholder Action by Written Consent. Our
Certificate of Incorporation expressly prohibits stockholders from acting by written consent. This means that stockholders
may only act at annual or special meetings.
Vacancies. Our Certificate
of Incorporation provides that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even
if less than a quorum.
Special Meeting of Stockholders. A
special meeting of stockholders may only be called by the Chairman of the board of directors, the Chief Executive Officer, or the
board of directors at any time and for any purpose or purposes as shall be stated in the notice of the meeting, and shall be called
by the Secretary upon the written request of the holders of record of at least 25% of the outstanding shares of common stock. This
provision could prevent stockholders from calling a special meeting because, unless certain significant stockholders were to join
with them, they might not obtain the percentage necessary to request the meeting. Therefore, stockholders holding less
than 25% of the issued and outstanding common stock, without the assistance of management, may be unable to propose a vote on any
transaction that would delay, defer or prevent a change of control, even if the transaction were in the best interests of our stockholders.
Requirements for Advance Notification
of Stockholder Nominations and Proposals. Our Certificate of Incorporation and bylaws have advance notice procedures
with respect to stockholder proposals and nominations of candidates for election as directors, other than nominations made by or
at the direction of our board of directors or a committee of our board. The business to be conducted at a meeting will
be limited to business properly brought before the meeting, in accordance with our Certificate of Incorporation and bylaws. Failure
to follow the procedures set forth in our Certificate of Incorporation and bylaws will result in the chairman of the meeting disregarding
the nomination or declaring that the proposed business will not be transacted.
Limitations on Directors’ Liability
Our certificate of
incorporation and bylaws contain provisions indemnifying our directors and officers to the fullest extent permitted by Delaware
law.
In addition, as permitted
by Delaware law, our certificate of incorporation provides that no director will be liable to us or our stockholders for monetary
damages for breach of the director’s fiduciary duty as a director. The effect of this provision is to restrict our rights
and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of the director’s
fiduciary duty as a director, except that a director will be personally liable for:
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any breach of his or her duty of loyalty to us or our stockholders; |
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acts or omissions not in good faith which involve intentional misconduct or a knowing violation of law; |
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the payment of dividends or the redemption or purchase of stock in violation of Delaware law; or |
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any transaction from which the director derived an improper personal benefit. |
This provision does not affect a director’s
liability under the federal securities laws.
Disclosure of SEC Position on Indemnification for Securities
Act Liabilities
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted for directors, officers and persons controlling us, we understand
that it is the SEC’s opinion that such indemnification is against public policy as expressed in the Securities Act and may
therefore be unenforceable.
DESCRIPTION OF WARRANTS
We may issue warrants
for the purchase of common stock and/or preferred stock in one or more series. We may issue warrants independently or together
with common stock and/or preferred stock, and the warrants may be attached to or separate from these securities.
We will evidence each
series of warrants by warrant certificates that we may issue under a separate agreement. We may enter into the warrant agreement
with a warrant agent. Each warrant agent may be a bank that we select which has its principal office in the United States and a
combined capital and surplus of at least $50,000,000. We may also choose to act as our own warrant agent. We will indicate the
name and address of any such warrant agent in the applicable prospectus supplement, information incorporated by reference or related
free writing prospectus relating to a particular series of warrants.
We will describe in
the applicable prospectus supplement, information incorporated by reference or related free writing prospectus, as applicable,
the terms of the series of warrants, including, but not limited to:
· |
the offering price and aggregate number of warrants offered; |
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the currency for which the warrants may be purchased; |
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security; |
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if applicable, the date on and after which the warrants and the related securities will be separately transferable; |
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in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; |
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the warrant agreement under which the warrants will be issued; |
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
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anti-dilution provisions of the warrants, if any; |
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the terms of any rights to redeem or call the warrants; |
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
· |
the dates on which the right to exercise the warrants will commence and expire or, if the warrants are not continuously exercisable during that period, the specific date or dates on which the warrants will be exercisable; |
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the manner in which the warrant agreement and warrants may be modified; |
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the identities of the warrant agent and any calculation or other agent for the warrants; |
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federal income tax consequences of holding or exercising the warrants; |
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the terms of the securities issuable upon exercise of the warrants; |
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any securities exchange or quotation system on which the warrants or any securities deliverable upon exercise of the warrants may be listed; and |
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any other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before exercising their
warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including
in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon
our liquidation, dissolution or winding up or to exercise voting rights, if any.
This summary and any
description of warrants in the applicable prospectus supplement, information incorporated by reference or related free writing
prospectus is subject to and is qualified in its entirety by reference to all the provisions of any specific warrant document or
agreement, which we will file with the SEC for incorporation by reference into this prospectus. See “Where You Can Find More
Information” and “Incorporation of Documents by Reference” for information on how to obtain a copy of a warrant
document when it is filed.
Exercise of Warrants
Each warrant will entitle
the holder to purchase the securities that we specify in the applicable prospectus supplement, information incorporated by reference
or related free writing prospectus at the exercise price that we describe in the applicable prospectus supplement, information
incorporated by reference or related free writing prospectus. Unless we otherwise specify in the applicable prospectus supplement,
information incorporated by reference or related free writing prospectus, holders of the warrants may exercise the warrants at
any time up to 5:00 p.m. Eastern Time on the expiration date that we set forth in the applicable prospectus supplement, information
incorporated by reference or related free writing prospectus. After the close of business on the expiration date, unexercised warrants
will become void.
Holders of the warrants
may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with specified
information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable
prospectus supplement, information incorporated by reference or related free writing prospectus. We will set forth on the reverse
side of the warrant certificate, and in the applicable prospectus supplement, information incorporated by reference or related
free writing prospectus, the information that the holder of the warrant will be required to deliver to the warrant agent.
Until the warrant is
properly exercised, no holder of any warrant will be entitled to any rights of a holder of the securities purchasable upon exercise
of the warrant.
Upon receipt of the required payment and
the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office
indicated in the applicable prospectus supplement, information incorporated by reference or related free writing prospectus, we
will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants represented by the warrant
certificate are exercised, then we will issue a new warrant certificate for the remaining amount of warrants. If we so indicate
in the applicable prospectus supplement, information incorporated by reference or related free writing prospectus, holders of the
warrants may surrender securities as all or part of the exercise price for warrants.
Enforceability of Rights By Holders of Warrants
Any warrant agent will
act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship of agency or
trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of warrants.
A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or warrant,
including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder
of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal
action its right to exercise, and receive the securities purchasable upon exercise of, its warrants in accordance with their terms.
Warrant Agreement Will Not Be Qualified Under Trust Indenture
Act
No warrant agreement
will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture Act.
Therefore, holders of warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect
to their warrants.
Calculation Agent
Calculations relating
to warrants may be made by a calculation agent, an institution that we may appoint as our agent for this purpose. The prospectus
supplement for a particular warrant will name the institution that we have appointed, if applicable, to act as the calculation
agent for that warrant as of the original issue date for that warrant. We may appoint a different institution to serve as calculation
agent from time to time after the original issue date without the consent or notification of the holders.
The calculation agent’s
determination of any amount of money payable or securities deliverable with respect to a warrant will be final and binding in the
absence of manifest error.
PLAN OF DISTRIBUTION
We may sell the securities
offered by this prospectus from time to time in one or more transactions, including without limitation:
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directly to one or more purchasers; |
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through agents; |
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to or through underwriters, brokers or dealers; |
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through a rights offering; or |
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through a combination of any of these methods. |
A distribution of the
securities offered by this prospectus may also be effected through the issuance of derivative securities, including without limitation,
warrants, subscriptions, exchangeable securities, forward delivery contracts and the writing of options.
In addition, the manner
in which we may sell some or all of the securities covered by this prospectus, include, without limitation, through:
|
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a block trade in which a broker-dealer will attempt to sell as agent, but may position or resell a portion of the block, as principal, in order to facilitate the transaction; |
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purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account; |
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ordinary brokerage transactions and transactions in which a broker solicits purchasers; |
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sales “at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise; and |
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sales in other ways not involving market makers or established trading markets, including direct sales to purchasers. |
We may also enter into
hedging transactions. For example, we may:
|
· |
enter into transactions with a broker-dealer or affiliate thereof in connection with which such broker-dealer or affiliate will engage in short sales of the common shares pursuant to this prospectus, in which case such broker-dealer or affiliate may use common shares received from us, as applicable, to close out its short positions; |
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enter into option or other types of transactions that require us to deliver common shares to a broker-dealer or an affiliate thereof, who will then resell or transfer the common shares under this prospectus; or |
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· |
loan or pledge the common shares to a broker-dealer or an affiliate thereof, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares pursuant to this prospectus. |
In addition, we may
enter into derivative or hedging transactions with third parties, or sell securities not covered by this prospectus to third parties
in privately negotiated transactions. In connection with such a transaction, the third parties may sell securities covered by and
pursuant to this prospectus and an applicable prospectus supplement, information incorporated by reference, related free writing
prospectus, or pricing supplement, as the case may be. If so, the third party may use securities borrowed from us or others to
settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge
securities covered by this prospectus and an applicable prospectus supplement, information incorporated by reference or related
free writing prospectus to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge,
sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement, information incorporated by reference,
related free writing prospectus, or pricing supplement, as the case may be.
We will describe the
terms of the offering of the securities in a prospectus supplement, information incorporated by reference or related free writing
prospectus, including:
|
· |
the name or names of any underwriters or agents and the amounts of securities underwritten or purchased by each of them, if any; |
|
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the public offering price or purchase price of the securities and the net proceeds to be received by us from the sale; |
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any delayed delivery arrangements; |
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any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation; |
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any discounts or concessions allowed or reallowed or paid to dealers; and |
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any securities exchange or markets on which the securities may be listed. |
The offer and sale
of the securities described in this prospectus by us, the underwriters or the third parties described above may be effected from
time to time in one or more transactions, including privately negotiated transactions, either:
|
· |
at a fixed price or prices, which may be changed; |
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at market prices prevailing at the time of sale; |
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at prices related to the prevailing market prices; or |
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at negotiated prices. |
To the extent required, this prospectus
may be amended or supplemented from time to time to describe a specific plan of distribution.
General
Any public offering
price and any discounts, commissions, concessions or other items constituting compensation allowed or reallowed or paid to underwriters,
dealers, agents or remarketing firms may be changed from time to time. Underwriters, dealers, agents and remarketing firms that
participate in the distribution of the offered securities may be “underwriters” as defined in the Securities Act. Any
discounts or commissions they receive from us and any profits they receive on the resale of the offered securities may be treated
as underwriting discounts and commissions under the Securities Act. We will identify any underwriters, agents or dealers and describe
their commissions, fees or discounts in the applicable prospectus supplement, information incorporated by reference, related free
writing prospectus or pricing supplement, as the case may be.
Underwriters and Agents
If underwriters are
used in a sale, they will acquire the offered securities for their own account. The underwriters may resell the offered securities
in one or more transactions, including negotiated transactions. These sales may be made at a fixed public offering price or prices,
which may be changed, at market prices prevailing at the time of the sale, at prices related to such prevailing market price or
at negotiated prices. We may offer the securities to the public through an underwriting syndicate or through a single underwriter.
The underwriters in any particular offering will be mentioned in the applicable prospectus supplement, information incorporated
by reference, related free writing prospectus or pricing supplement, as the case may be.
Unless otherwise specified
in connection with any particular offering of securities, the obligations of the underwriters to purchase the offered securities
will be subject to certain conditions contained in an underwriting agreement that we will enter into with the underwriters at the
time of the sale to them. The underwriters will be obligated to purchase all of the securities of the series offered if any of
the securities are purchased, unless otherwise specified in connection with any particular offering of securities. Any initial
offering price and any discounts or concessions allowed, reallowed or paid to dealers may be changed from time to time.
We may designate agents
to sell the offered securities. Unless otherwise specified in connection with any particular offering of securities, the agents
will agree to use their best efforts to solicit purchases for the period of their appointment. We may also sell the offered securities
to one or more remarketing firms, acting as principals for their own accounts or as agents for us. These firms will remarket the
offered securities upon purchasing them in accordance with a redemption or repayment pursuant to the terms of the offered securities.
A prospectus supplement or pricing supplement, as the case may be will identify any remarketing firm and will describe the terms
of its agreement, if any, with us and its compensation.
In connection with
offerings made through underwriters or agents, we may enter into agreements with such underwriters or agents pursuant to which
they will receive our outstanding securities in consideration for the securities being offered to the public for cash. In connection
with these arrangements, the underwriters or agents may also sell securities covered by this prospectus to hedge their positions
in these outstanding securities, including in short sale transactions. If so, the underwriters or agents may use the securities
received from us under these arrangements to close out any related open borrowings of securities.
Dealers
We may sell the offered
securities to dealers as principals. We may negotiate and pay dealers’ commissions, discounts or concessions for their services.
The dealer may then resell such securities to the public either at varying prices to be determined by the dealer or at a fixed
offering price agreed to with us at the time of resale. Dealers engaged by us may allow other dealers to participate in resales.
Direct Sales
We may choose to sell
the offered securities directly. In this case, no underwriters or agents would be involved.
Institutional Purchasers
We may authorize agents,
dealers or underwriters to solicit certain institutional investors to purchase offered securities on a delayed delivery basis pursuant
to delayed delivery contracts providing for payment and delivery on a specified future date. The applicable prospectus supplement,
information incorporated by reference, related free writing prospectus or pricing supplement, as the case may be, will provide
the details of any such arrangement, including the offering price and commissions payable on the solicitations.
We will enter into
such delayed contracts only with institutional purchasers that we approve. These institutions may include commercial and savings
banks, insurance companies, pension funds, investment companies and educational and charitable institutions.
Indemnification; Other Relationships
We may have agreements
with agents, underwriters, dealers and remarketing firms to indemnify them against certain civil liabilities, including liabilities
under the Securities Act. Agents, underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions
with, or perform services for, us in the ordinary course of business. This includes commercial banking and investment banking transactions.
Market-Making, Stabilization and Other
Transactions
There is currently
no market for any of the offered securities, other than our common stock which is listed on The NASDAQ Capital Market. If the offered
securities are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon
prevailing interest rates, the market for similar securities and other factors. While it is possible that an underwriter could
inform us that it intends to make a market in the offered securities, such underwriter would not be obligated to do so, and any
such market-making could be discontinued at any time without notice. Therefore, no assurance can be given as to whether an active
trading market will develop for the offered securities. We have no current plans for listing of the preferred stock or warrants
on any securities exchange or quotation system; any such listing with respect to any particular preferred stock or warrants will
be described in the applicable prospectus supplement, information incorporated by reference, related free writing prospectus or
pricing supplement, as the case may be.
In connection with
any offering of common stock, the underwriters may purchase and sell common stock in the open market. These transactions may include
short sales, syndicate covering transactions and stabilizing transactions. Short sales involve syndicate sales of common stock
in excess of the number of shares to be purchased by the underwriters in the offering, which creates a short position. “Covered”
short sales are sales of shares made in an amount up to the number of shares represented by the underwriters’ over-allotment
option. In determining the source of shares to close out the covered syndicate short position, the underwriters will consider,
among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase
shares through the over-allotment option. Transactions to close out the covered syndicate short involve either purchases of the
common stock in the open market after the distribution has been completed or the exercise of the over-allotment option. The underwriters
may also make “naked” short sales of shares in excess of the over-allotment option. The underwriters must close out
any naked short position by purchasing common stock in the open market. A naked short position is more likely to be created if
the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing
that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of bids for or purchases of
shares in the open market while the offering is in progress for the purpose of pegging, fixing or maintaining the price of the
securities.
In connection with
any offering, the underwriters may also engage in penalty bids. Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate covering transaction
to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price
of the securities to be higher than it would be in the absence of the transactions. The underwriters may, if they commence these
transactions, discontinue them at any time.
LEGAL MATTERS
The validity of the issuance of the securities
offered hereby will be passed upon for us by DLA Piper LLP (US), Austin, Texas.
EXPERTS
The audited
financial statements as of December 31, 2013 and 2012 and for the years then ended incorporated by reference in this prospectus
and elsewhere in the registration statement have been so incorporated by reference in reliance upon the report of Gumbiner Savett
Inc., an independent registered public accounting firm, upon the authority of said firm as experts in accounting and auditing in
giving said report.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus constitutes
a part of a registration statement on Form S-3 filed under the Securities Act. As permitted by the SEC’s rules, this prospectus
and any prospectus supplement, which form a part of the registration statement, do not contain all the information that is included
in the registration statement. You will find additional information about us in the registration statement. Any statements made
in this prospectus or any prospectus supplement concerning legal documents are not necessarily complete and you should read the
documents that are filed as exhibits to the registration statement or otherwise filed with the SEC for a more complete understanding
of the document or matter.
We file annual, quarterly
and current reports, proxy statements and other information with the SEC. You may read, without charge, and copy the documents
we file at the SEC’s public reference rooms in Washington, D.C. at 100 F Street, NE, Room 1580, Washington, DC 20549. You
can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also available to the public at no cost from the SEC’s
website at http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY
REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with the SEC, which means that we can disclose important information to you by referring
you to those documents filed separately with the SEC. The information incorporated by reference herein is considered part of this
prospectus. Any statement contained in a document which is incorporated by reference in this prospectus is automatically updated
and superseded if information contained in this prospectus, or information that we later file with the SEC prior to the termination
of this offering, modifies or replaces this information. The following documents filed with the SEC are incorporated by reference
in this prospectus, except for any document or portion thereof deemed to be “furnished” and not filed in accordance
with SEC rules:
● |
our Annual Report on Form 10-K for the fiscal year ended December 31, 2013; |
● |
our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014; |
● |
our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014; |
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our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014; |
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our Current Report on Form 8-K filed on January 8, 2014; |
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our Current Report on Form 8-K filed on March 6, 2014; |
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our Current Report on Form 8-K filed on May 13, 2014; |
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our Current Report on Form 8-K filed on May 29, 2014; |
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our Current Report on Form 8-K filed on August 13, 2014; |
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our Current Report on Form 8-K filed on September 19, 2014; |
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our Current Report on Form 8-K filed on November 12, 2014; |
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our Definitive Proxy Statement on Schedule 14A filed on April 21 2014; |
● |
the description of our common stock set forth in the prospectus filed pursuant to Rule
424(b)(3) on November 27, 2013, including any amendments or reports filed for the purpose of updating such description, as supplemented
by the “Description of Capital Stock” found on page 7 of this prospectus; and |
● |
all documents filed by Ideal Power Inc. under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the filing date of this initial registration statement and prior to the date of effectiveness of this registration statement, and on or after the date of this prospectus and before the termination of this offering shall be deemed to be incorporated by reference into this prospectus from the respective dates of filing of such documents. |
As explained above
in “Where You Can Find More Information,” these incorporated documents (as well as other documents filed by us under
the Exchange Act) are available at the SEC and may be accessed in a number of ways, including online via the Internet.
We will provide
without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon his or her written or
oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference into this prospectus
excluding exhibits to those documents unless they are specifically incorporated by reference into those documents. Written or telephone
requests should be directed to:
Ideal Power Inc.
4120 Freidrich Lane, Suite 100
Austin, TX 78744
Attn.: Chief Executive Officer
Tel: (512) 264-1542
We also maintain a
web site at www.idealpower.com. The information on our website is not considered a part of, or incorporated by reference in, this
prospectus or any other document we file with or furnish to the SEC.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table
sets forth expenses payable by the Company in connection with the issuance and distribution of the securities being registered.
All the amounts shown are estimates, except for the SEC registration fee:
SEC registration fee | |
$ | 8,715.00 | |
Transfer agent’s fees and expenses | |
$ | * | |
Legal fees and expenses | |
$ | * | |
Printing fees and expenses | |
$ | * | |
Accounting fees and expenses | |
$ | * | |
Miscellaneous fees and expenses | |
$ | * | |
| |
$ | | |
Total | |
$ | * | |
* Estimated expenses are not presently known. The foregoing
sets forth the general categories of expenses that we anticipate we will incur in connection with the offering of securities under
this registration statement. An estimate of the aggregate expenses in connection with the issuance and distribution of the securities
being offered will be included in the applicable prospectus supplement, information incorporated by reference or related free
writing prospectus.
Item 15. Indemnification of Officers
and Directors
Section 145 of the
Delaware General Corporation Law provides, in general, that a corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in
which such person is made a party by reason of such person being or having been a director, officer, employee or agent to the corporation.
In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorneys’
fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such
person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification will be made in respect of any claim, issue or matter as to which such person will
have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware
or any other court in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such
expenses. The Delaware General Corporation Law provides that Section 145 is not exclusive of other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Our certificate of
incorporation and bylaws provide that we will indemnify our directors, officers, employees and agents to the extent and in the
manner permitted by the provisions of the Delaware General Corporation Law, as amended from time to time, subject to any permissible
expansion or limitation of such indemnification, as may be set forth in any stockholders’ or directors’ resolution
or by contract. Any repeal or modification of these provisions approved by our stockholders will be prospective only and will not
adversely affect any limitation on the liability of any of our directors or officers existing as of the time of such repeal or
modification.
We have also obtained
insurance covering our directors and officers for liability arising out of their respective actions.
Item 16. Exhibits
Exhibit No. |
Description |
1.1 |
Form of Underwriting Agreement** |
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3.1 |
Delaware Certificate of Conversion including Certificate of Incorporation(1) |
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3.2 |
Bylaws of Ideal Power Inc.(2) |
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4.1 |
Form of Specimen Stock Certificate Representing Common Stock** |
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4.2 |
Form of Warrant and Warrant Agreement for Common Stock** |
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4.3 |
Form of Warrant and Warrant Agreement for Preferred Stock** |
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4.4 |
Form of Certificate of Designations, Rights and Preferences of Preferred Stock** |
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5.1 |
Opinion of DLA Piper LLP (US)* |
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23.1 |
Consent of Gumbiner Savett Inc., Independent Registered Public Accounting Firm* |
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23.2 |
Consent of DLA Piper LLP (US)(included in Exhibit 5.1)* |
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24.1 |
Power of Attorney (included on signature page of this Form S-3)* |
* |
Filed herewith. |
** |
To the extent applicable, to be filed as an exhibit to a document filed under the Exchange Act and incorporated by reference herein. |
(1) |
Incorporate by reference to Exhibit 3.1 to the Registrant’s Form S-1 (Registration No. 333-190414) filed August 6, 2013. |
(2) |
Incorporate by reference to Exhibit 3.2 to the Registrant’s Form S-1 (Registration No. 333-190414) filed August 6, 2013. |
Item 17. Undertakings
The undersigned registrant
hereby undertakes:
(1) To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include
any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect
in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total
dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To
include any material information with respect to the plan of distribution not previously disclosed in this registration statement
or any material change to such information in this registration statement;
provided, however, that the undertakings
set forth in paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934, as amended or the Exchange Act, that are incorporated by reference
in this registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration
statement;
(2) That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove
from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
(4) That,
for the purpose of determining liability under the Securities Act to any purchaser:
(i) Each prospectus
filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the
filed prospectus was deemed part of and included in the registration statement; and
(ii) Each prospectus
required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required
by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier
of the date of the Securities Act prospectus is first used after effectiveness or the date of the first contract of sale of securities
in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to
the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose
of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities
in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of
the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell
such securities to such purchaser:
(i) Any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion of
any other free writing prospectus relating to the offering containing material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That, for purposes
of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(7) That, insofar as
indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Austin, State of Texas, on December 1, 2014.
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IDEAL POWER INC. |
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By: |
/s/ R. Daniel Brdar |
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R. Daniel Brdar |
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Chief Executive Officer
(Principal Executive Officer) |
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By: |
/s/ Timothy Burns |
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Timothy Burns
Chief Financial Officer
(Principal Financial and Accounting Officer) |
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KNOW ALL MEN BY THESE
PRESENTS, that each person whose signature appears below constitutes and appoints R. Daniel Brdar his true and lawful attorney-in-fact
and agent with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities
to sign any or all amendments (including, without limitation, post-effective amendments) to this Registration Statement, any related
Registration Statement filed pursuant to Rule 462(b) under the Securities Act of 1933 and any or all pre- or post-effective amendments
thereto, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully for all intents and purposes as he might or
could do in person, hereby ratifying and confirming that said attorney-in-fact and agent, or any substitute or substitutes for
him, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ R. Daniel Brdar |
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Chief Executive Officer and Chairman of the Board |
December 1, 2014 |
R. Daniel Brdar |
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(Principal Executive Officer) |
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/s/ Timothy Burns |
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Chief Financial Officer |
December 1, 2014 |
Timothy Burns |
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(Principal Financial and Accounting Officer) |
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/s/ William Alexander |
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Director |
December 1, 2014 |
William Alexander |
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/s/ Mark Baum |
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Director |
December 1, 2014 |
Mark Baum |
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/s/ Lon Bell |
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Director |
December 1, 2014 |
Lon Bell |
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/s/ David Eisenhaure |
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Director |
December 1, 2014 |
David Eisenhaure |
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DLA Piper LLP (US)
401 Congress Avenue, Suite 2500
Austin, TX 78701-3799
O 512.457.7000
F 512.457.7001
W www.dlapiper.com |
December 1, 2014 |
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Ideal Power Inc.
4120 Freidrich Lane – Suite 100
Austin, TX 78744 |
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| Re: | Registration Statement on Form S-3 |
Ladies and Gentlemen:
We serve as counsel to Ideal Power Inc., a Delaware corporation
(the “Company”), and have been requested to render this opinion in connection with the Registration Statement
on Form S-3 of the Company (as amended, the “Registration Statement”), filed with the Securities and
Exchange Commission (the “Commission”) on December 1, 2014, including the preliminary prospectus included
therein at the time the Registration Statement is declared effective (the “Prospectus”), under the Securities
Act of 1933, as amended (the “Securities Act”), for registration by the Company of Securities (as defined
below).
As used herein, the term “Securities”
includes (i) shares of preferred stock, par value $0.001 per share (the “Preferred Stock”), (ii) shares
of common stock, par value $0.001 per share (the “Common Stock”), and (iii) warrants to purchase
Preferred Stock (the “Preferred Stock Warrants”) or Common Stock (the “Common Stock Warrants”),
as designated by the Company at the time of the offering (collectively, the “Warrants”). The
Registration Statement provides that the Securities may be offered separately or together, in separate series, in amounts, at prices
and on terms to be set forth in one or more supplements to the Prospectus (each, a “Prospectus Supplement”)
or any related free writing prospectus (each, a “Free Writing Prospectus”).
The Securities may be issued from time to time on a delayed
or continuous basis pursuant to Rule 415 of the Rules and Regulations promulgated under the Securities Act, at a maximum aggregate
offering price of $75,000,000.
In rendering the opinion expressed herein, we have
reviewed originals or copies, certified or otherwise identified to our satisfaction, of the following documents (the
“Documents”): (i) the Registration Statement; (ii) the certificate of incorporation (the
“Charter”) and by-laws (the “By-Laws”), each as amended, of the Company,
certified as true, accurate and complete by an officer of the Company (collectively, the “Organizational
Documents”); (iii) a Unanimous Written Consent of the Board of Directors of the Company, dated November 30, 2014,
certified as true, accurate and complete, and in full force and effect, by an officer of the Company; and (iv) such other
certificates, documents and matters as we have deemed necessary and appropriate to render the opinions set forth in this
opinion, subject to the limitations, assumptions, and qualifications noted below.
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Ideal Power Inc.
December 1, 2014
Page Two
In examining the Documents, we have assumed, without independent
investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any of the aforesaid
documents, the authenticity of all documents submitted to us as originals, and the conformity with originals of all documents submitted
to us as copies (and the authenticity of the originals of such copies), the absence of other agreements or understandings among
the parties that would modify the terms of the proposed transactions or the respective rights or obligations of the parties thereunder
and the accuracy and completeness of all public records reviewed by us. In making our examination of documents executed
by parties other than the Company, we have assumed that such parties had the power and authority (corporate, trust, partnership
or other) to enter into and perform all obligations thereunder, and we have also assumed the due authorization by all requisite
action (corporate, trust, partnership or other) and the valid execution and delivery by such parties of such documents and the
validity, binding effect and enforceability thereof with respect to such parties. Insofar as this opinion relates to
factual matters, we have assumed without independent investigation that the statements of the Company contained in the Registration
Statement are true, correct and complete as to all factual matters stated therein.
We further assume that:
(1) The issuance, sale, amount and terms of the Securities
to be offered from time to time by the Company will be authorized and determined by proper action of the Board of Directors of
the Company (each, a “Board Action”) in accordance with the Company’s Charter, By-Laws and applicable
law, in each case so as not to result in a default under or breach of any instrument, document or agreement binding upon the Company
and so as to comply with any requirement or restriction imposed by any court or governmental or regulatory body having jurisdiction
over the Company.
(2) The Company will not issue any Securities in excess
of the number or amount authorized by a Board Action or in excess of the maximum aggregate offering price of $75,000,000.
(3) Prior to the issuance of any shares of Preferred
Stock (including Preferred Stock that is the subject of Preferred Stock Warrants), or Common Stock (including Common Stock that
is the subject of Common Stock Warrants or any convertible Preferred Stock), there will exist, under the Company’s Charter,
the requisite number of authorized but unissued shares of Preferred Stock (and securities of any class into which any of the Preferred
Stock may be convertible), or Common Stock, as the case may be, and that all actions necessary to the creation of any such Preferred
Stock (and securities of any class into which any Preferred Stock may be convertible), whether by certificates of designation or
by classification or reclassification of existing capital stock and the filing of amendments to the Company’s Charter, will
have been taken.
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Ideal Power Inc.
December 1, 2014
Page Three
(4) For shares of Preferred Stock or Common Stock represented
by certificates (“Certificates”), appropriate Certificates representing shares of Preferred Stock or
Common Stock will be executed and delivered upon issuance and sale of any such shares of Preferred Stock or Common Stock, as the
case may be, and will comply with the Company’s Charter and By-Laws and applicable law. For shares of Preferred
Stock or Common Stock not represented by certificates, the applicable Board Action shall have been taken and, upon request of a
stockholder of the Company, appropriate written statements (“Written Statements”) will be prepared and
delivered to such stockholder upon issuance and sale of any such shares of Preferred Stock or Common Stock, as the case may be,
and will comply with the Company’s Charter and By-Laws and applicable law.
(5) Any Warrants will be issued under a valid and legally
binding warrant agreement (a “Warrant Agreement”) that conforms to the description thereof set forth
in the Prospectus, the applicable Prospectus Supplement and any related Free Writing Prospectus and will comply with the Company’s
Charter and By-Laws and applicable law.
(6) The underwriting or other agreements for offerings
of the Securities (each, an “Underwriting Agreement,” and collectively, the “Underwriting
Agreements”) will be valid and legally binding contracts that conform to the description thereof set forth in the
Prospectus, the applicable Prospectus Supplement and any related Free Writing Prospectus.
(7) The Registration Statement will be declared effective
and will remain effective under the Securities Act and appropriate Prospectus Supplements will have been prepared and filed with
the Commission in accordance with the Securities Act and the Rules and Regulations promulgated thereunder describing the terms
of each particular issue of Securities offered and the terms of the offering thereunder.
(8) All Securities will be issued and sold in compliance
with applicable federal and state securities laws and in the manner stated in the Registration Statement and the applicable Prospectus
Supplement and any related Free Writing Prospectus.
Based upon the foregoing, and subject to the assumptions, limitations
and qualifications stated herein, it is our opinion that:
(a) With respect to the Common Stock,
when (i) specifically authorized for issuance by a Board Action, (ii) the terms of the sale of the Common Stock have been duly
established in conformity with the Organizational Documents and assuming such terms and sale do not violate any applicable law
and comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company,
(iii) the Common Stock has been issued and sold as contemplated by the Registration Statement, the Prospectus, the applicable Prospectus
Supplement and any related Free Writing Prospectus, and, if applicable, an Underwriting Agreement, and (iv) the Company has received
the consideration provided for in the authorizing Board Action and such consideration per share is not less than the par value
per share of the Common Stock, such shares of Common Stock will be validly issued, fully paid and non-assessable.
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Ideal Power Inc.
December 1, 2014
Page Four
(b) With respect to the Preferred
Stock, when (i) specifically authorized for issuance by a Board Action, (ii) appropriate Certificate(s) of Designation relating
to a class or series of the Preferred Stock to be sold under the Registration Statement have been duly authorized and adopted and
filed and become effective with the Secretary of State of the State of Delaware, (iii) the terms of the issuance and sale of shares
of such class or series of Preferred Stock have been duly established in conformity with the Organizational Documents and assuming
such terms and sale do not violate any applicable law and comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company, (iv) shares of such class or series of Preferred Stock have been duly issued and sold
as contemplated by the Registration Statement, the Prospectus, the applicable Prospectus Supplement and any related Free Writing
Prospectus, and, if applicable, an Underwriting Agreement, and (v) the Company has received the consideration provided for in the
authorizing Board Action and such consideration per share is not less than the par value per share of the Preferred Stock, such
Preferred Stock will be validly issued, fully paid and non-assessable.
(c) With respect to the Warrants, when
(i) specifically authorized for issuance by a Board Action, (ii) the Warrant Agreement relating to the Warrants has been duly authorized,
executed and delivered, (iii) the terms of the Warrants and of their issuance and sale have been duly established in conformity
with the Warrant Agreements and assuming such terms and sale do not violate any applicable law and comply with any requirement
or restriction imposed by any court or governmental body having jurisdiction over the Company, (iv) the Warrants have been duly
executed and countersigned in accordance with the Warrant Agreement and issued and sold as contemplated by the Registration Statement,
the Prospectus, the applicable Prospectus Supplement and any related Free Writing Prospectus, and, if applicable, an Underwriting
Agreement, and (v) the Company has received the consideration provided for in the authorizing Board Action the Warrants will constitute
valid and binding obligations of the Company in accordance with the Warrant Agreement’s terms.
In addition to the qualifications assumptions and limitations
set forth above, the foregoing opinion is further qualified as follows:
(1) We express no opinion other than
as to the federal laws of the United States of America and the Delaware General Corporation Law (including the statutory provisions,
the applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing).
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Ideal Power Inc.
December 1, 2014
Page Five
(2) We express no opinion as to compliance
with the securities (or “blue sky”), broker licensing, real estate syndication or mortgage lending laws of any jurisdiction.
(3) The opinion stated herein relating
to the validity and binding nature of obligations of the Company is subject to (i) the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, fraudulent conveyance, moratorium
or similar laws affecting creditors’ rights generally and (ii) the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
This opinion is to be used only in connection with the offer
and sale of the Securities while the Registration Statement is in effect and many not be used, quoted or relied upon for any other
purpose nor may this opinion be furnished to, quoted to or replied upon by any other person or entity, for any purpose, without
our prior written consent.
We hereby consent to the filing of this opinion with the Commission
as Exhibit 5.1 to the Registration Statement and to the reference to our firm under the heading “Legal Matters”
in the Registration Statement. In giving our consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act or the rules and regulations promulgated thereunder.
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Very truly yours,
/s/ DLA Piper LLP (US)
DLA PIPER LLP (US) |
Exhibit 23.1
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CONSENT OF INDEPENDENT REGISTRERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors
Ideal Power Inc.
We consent to the incorporation by reference in this Registration
Statement on Form S-3 of Ideal Power Inc. (the “Company”) of our report dated March 28, 2014 with respect to the audited
financial statements of the Company for the years ended December 31, 2013 and 2012, and to the reference to our firm under the
heading “Experts” in the prospectus.
/s/ Gumbiner Savett Inc.
December 1, 2014
Santa Monica, California
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