SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event
reported): May 4, 2015
IDEAL POWER INC.
(Exact name of registrant as specified
in Charter)
Delaware |
|
001-36216 |
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14-1999058 |
(State or other jurisdiction of
incorporation or organization) |
|
(Commission File No.) |
|
(IRS Employee Identification No.) |
4120 Freidrich Lane, Suite 100
Austin, Texas, 78744
(Address of Principal Executive Offices)
512-264-1542
(Issuer Telephone number)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction
A.2 below).
| ¨ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)). |
| ¨ | Pre-commencement communications pursuant to Rule 13e-(c)
under the Exchange Act (17 CFR 240.13(e)-4(c)) |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 4, 2015, Ideal Power Inc. (the “Company”)
issued a press release announcing its financial results for the quarter ended March 31, 2015. The press release is included as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in its entirety into this Item 2.02. The press
release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors
that could cause actual results to differ materially from those anticipated.
The Company will
host a conference call with investors to discuss the results. The conference call will begin at 4:30 p.m. Eastern time on Monday,
May 4, 2015. The call may be accessed in the U.S. by dialing 1-888-262-8790 and entering the passcode: 3703979. A webcast of the
call may be found at http://public.viavid.com/player/index.php?id=114258. Investors can submit questions to the Company via email
at matt.hayden@mzgroup.us. The webcast replay will be available on the Company’s website, www.idealpower.com.
The information furnished under this Item
2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes
of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the
liabilities of that Section. The information in this Item 2.02, including Exhibit 99.1, shall not be deemed incorporated by reference
into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language
in such filing.
Item 9.01 Financial
Statements and Exhibits
Exhibit 99.1 Press release issued May
4, 2015
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: May 4, 2015
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IDEAL POWER INC. |
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|
|
|
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By: |
/s/ Timothy Burns |
|
|
Timothy Burns |
|
|
Chief Financial Officer |
EXHIBIT INDEX
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Exhibit No. |
Description |
|
|
99.1 |
Press release issued May 4, 2015 |
Exhibit 99.1
Ideal Power Inc. Announces First Quarter 2015 Results
Management to Host Conference Call at 4:30 pm ET
AUSTIN, TX -- (Marketwired) -- 05/04/15 -- Ideal Power Inc.
(NASDAQ: IPWR), a developer of innovative power conversion technologies, today announced results for the three months ended March
31, 2015.
Key Q1 2015 and Subsequent Highlights:
| · | Reported $1.2 million in Q1 product revenue, equaling product revenue
for full year 2014. |
| · | Reported gross margins for Q1 2015 of 15%. |
| · | Signed a multi-year alliance with LG Chem, one of the world’s
largest manufacturers of lithium-ion batteries, to offer paired and optimized Ideal Power power conversion systems (PCS) and LG
Chem batteries to system integrators. This collaboration allows Ideal Power to leverage LG Chem’s extensive customer base
and global reach. |
| · | Signed a multi-year alliance with Gexpro, LG Chem, and Geli. Under
the alliance agreement, Gexpro will build and sell an integrated energy storage solution comprised of LG Chem batteries, Ideal
Power PCS and Geli software controls expediting Gexpro’s entrance into the energy storage market with a compelling fully-integrated
solution to meet customer demands. |
| · | Announced a technology alliance with Aquion Energy for its Aqueous
Hybrid Ion (AHI™) sustainable saltwater batteries used to optimize solar energy storage for grid connected, off-grid and
microgrid applications. Ideal Power’s PCS was tested and validated by Aquion for compatibility and results showed an excellent
match for efficiency, reliability and performance optimization. This agreement further confirms Ideal Power’s PCS works with
multiple battery chemistries. |
| · | Signed an agreement to supply PCS to ONEnergy Inc., an Ontario, Canada
based retailer of electricity and natural gas. ONEnergy has a large installed base of commercial customers in the Northeastern
United States and Canada with a focus on renewable energy and energy efficiency. The initial market for the agreement is Canada. |
| · | Received a multi-unit order from Green Charge Networks for inclusion
in its Intelligent Energy Storage Solution used to reduce peak demand charges for several California School systems. The installations
target $1.5 million in cumulative energy savings over the contract term. |
| · | Backlog of $1.9 million as of March 31, 2015. |
"The first quarter was truly an inflection
point in our business as we delivered strong revenue growth, achieved positive gross margins and signed several significant relationships.
Our growing list of innovative technology partners and system integrators is laying the foundation for, and will drive, our longer
term growth. Building on our previous announcements with Gexpro/Rexel and LG, an integrated energy storage system offering from
Gexpro/Rexel brings a new system integrator to the space with truly global reach. Through our relationship with ONEnergy we will
enter the Canadian market with an established player and expect to enter other international markets by the end of this year,”
commented Dan Brdar, Chairman and CEO.
First Quarter 2015 Financial Results
| · | First quarter 2015 product revenues were $1.2 million compared to
$108,500 in Q1 2014 and $1.2 million for calendar 2014. Revenue consisted primarily of sales of our 30kW battery converter. The
ARPA-E grant program was fully funded in 2014 and, as a result, 2015 revenues are expected to be entirely product related. |
| · | First quarter 2015 gross margins were 15% vs. negative margins of
37% for Q1 2014 |
| · | First quarter 2015 operating expenses were $2.4 million. Research
and development expenses increased to $1 million as a result of the self-funding of our bi-directional switch development efforts,
previously funded by the ARPA-E grant, and further development of new products that we expect will contribute to second half 2015
and longer term revenue growth. |
| · | First quarter 2015 net loss was $2.2 million compared to $1.4 in the
same period a year ago as we accelerated our investment in growing the business for the long term. |
| · | Cash and cash equivalents totaled $6.2 million on March 31, 2015 compared
to $7.9 million on December 31, 2014 with no long-term debt outstanding. |
"We are pleased with our first quarter 2015 financial results.
By achieving 15% gross margins on $1.2 million in revenue we were able to show the leverage inherent to our business model. As
a technology company, we continue to invest heavily in research and development with a focus on future growth and generating incremental
long-term shareholder value," stated Tim Burns, Chief Financial Officer of Ideal Power.
Business Overview
Ideal Power's patented Power Packet Switching Architecture™
(PPSA) technology enables significant improvements over conventional power converters, thus improving efficiency, reliability,
size and installed cost. The Company's products are made from standard industry components, are battery agnostic and are software
driven, which provides ultimate flexibility for customers. Ideal Power's current products include 30kW and 125kW 2-port and multi-port
PCS based on its internationally patented PPSA technology. These products allow the Company to address several multi-billion dollar
vertical markets, including commercial energy storage, integrated storage with solar or wind, and on-grid and off-grid microgrid
applications, in addition to non-renewable energy applications.
Ideal Power has formed key relationships with leaders in target
vertical markets to support their growth initiatives. New channel relationships are expected to significantly increase penetration
into target markets and may be complemented by licensing agreements, enabling high volume and international expansion.
Conference Call Details
CEO Dan Brdar and CFO Tim Burns will host a conference call
with investors. To access the call, please use the following information:
Date: Monday, May 4, 2015
Time: 4:30 PM ET, 1:30 PM PT
US dial-in: 1-888-262-8790
International Dial-In: 1-913-312-0721 Passcode: 3703979 (or reference Ideal Power 2015 Q1 Update Call)
Webcast: http://public.viavid.com/player/index.php?id=114258
The webcast replay will be available on the Company's Web site,
www.idealpower.com
About Ideal Power Inc.
Ideal Power Inc. (NASDAQ: IPWR) has developed a novel, patented
power conversion technology called Power Packet Switching Architecture™ (PPSA). PPSA improves the size, cost, efficiency,
flexibility and reliability of electronic power converters. PPSA can scale across several large and growing markets, including
solar photovoltaic generation, electrified vehicle charging, and commercial grid storage. Ideal Power also has a capital-efficient
business model that can enable it to address these markets simultaneously. Ideal Power has won multiple grants for its PPSA technology,
including a $2.5 million grant from the Department of Energy's Advanced Research Projects Agency - Energy (ARPA-E) program, and
market-leading customers are incorporating PPSA as a key component of their systems. For more information, visit www.IdealPower.com.
Safe Harbor Statement
All statements in this release and on the associated conference
call that are not based on historical fact are "forward looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include our statements concerning the relationship between our expanded
list of commercial partners and our future growth, our expectations about our future revenue mix, and our expectations concerning
new product development and the contribution of new products to future revenue. While management has based any forward looking
statements included in this release on its current expectations, the information on which such expectations were based may change.
These forward looking statements rely on a number of assumptions concerning future events and are subject to a number of risks,
uncertainties and other factors, many of which are outside of our control that could cause actual results to materially differ
from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the risks that: we will not
continue to add new partners to help us broaden our market reach, our commercial relationships with our partners will not enable
future growth or the operating results we currently forecast, unanticipated costs or lower-than-anticipated revenue may adversely
impact our ability to execute our 2015 operating plan with our existing cash resources, our new channel relationships may not be
as successful as we expect and we may not successfully enter into new licensing arrangements regarding our technology, the patents
for our technology may not provide adequate protection and we may not be successful in maintaining, enforcing and defending our
patents, demand for energy storage products may not grow, demand for our products, which we believe are disruptive, may not develop
and we may not be able to compete successfully with other manufacturers and suppliers of energy conversion products, both now and
in the future, as new products are developed and marketed. Furthermore, we operate in a highly competitive and rapidly changing
environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking
statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking
statements.
Ideal Power Media Contact:
Mercom Communications |
www.mercomcapital.com |
Wendy Prabhu |
idealpower@mercomcapital.com |
1.512.215.4452 |
|
Ideal Power Inc. Investor Relations Contact:
MZ North America |
www.mzgroup.us |
Matt Hayden |
matt.hayden@mzgroup.us |
1.949.259.4986 |
|
IDEAL POWER INC.
BALANCE SHEETS
| |
| | |
| |
| |
March 31, | | |
December 31, | |
| |
2015 | | |
2014 | |
ASSETS | |
| | | |
| | |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 6,169,375 | | |
$ | 7,912,011 | |
Accounts receivable, net | |
| 833,470 | | |
| 446,521 | |
Inventories, net | |
| 233,961 | | |
| 251,338 | |
Prepayments and other current assets | |
| 264,090 | | |
| 263,605 | |
Total current assets | |
| 7,500,896 | | |
| 8,873,475 | |
Property and equipment, net | |
| 496,473 | | |
| 374,376 | |
Patents, net | |
| 1,023,768 | | |
| 1,012,964 | |
Other non-current assets | |
| 17,920 | | |
| 17,920 | |
Total assets | |
$ | 9,039,057 | | |
$ | 10,278,735 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 687,404 | | |
$ | 441,636 | |
Accrued expenses | |
| 1,017,229 | | |
| 773,119 | |
Total current liabilities | |
| 1,704,633 | | |
| 1,214,755 | |
| |
| | | |
| | |
Stockholders’ equity: | |
| | | |
| | |
Common stock, $0.001 par value; 50,000,000 shares authorized; 7,066,137 and 7,048,235 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | |
| 7,066 | | |
| 7,048 | |
Additional paid-in capital | |
| 33,175,444 | | |
| 32,712,020 | |
Treasury stock | |
| (2,657 | ) | |
| (2,657 | ) |
Accumulated deficit | |
| (25,845,429 | ) | |
| (23,652,431 | ) |
Total stockholders’ equity | |
| 7,334,424 | | |
| 9,063,980 | |
Total liabilities and stockholders’ equity | |
$ | 9,039,057 | | |
$ | 10,278,735 | |
IDEAL POWER INC.
STATEMENTS OF OPERATIONS
| |
For the Quarter Ended March 31, | |
| |
2015 | | |
2014 | |
Revenues: | |
| | | |
| | |
Products | |
$ | 1,197,991 | | |
$ | 108,500 | |
Grants | |
| - | | |
| 182,595 | |
Total revenue | |
| 1,197,991 | | |
| 291,095 | |
| |
| | | |
| | |
Cost of revenues: | |
| | | |
| | |
Products | |
| 1,019,501 | | |
| 194,341 | |
Grant research and development costs | |
| - | | |
| 202,883 | |
Total cost of revenue | |
| 1,019,501 | | |
| 397,224 | |
| |
| | | |
| | |
Gross
profit (loss) | |
| 178,490 | | |
| (106,129 | ) |
| |
| | | |
| | |
Operating expenses: | |
| | | |
| | |
Research and development | |
| 992,232 | | |
| 309,563 | |
General and administrative | |
| 910,777 | | |
| 744,968 | |
Sales and marketing | |
| 472,952 | | |
| 268,219 | |
Total operating expenses | |
| 2,375,961 | | |
| 1,322,750 | |
| |
| | | |
| | |
Loss from operations | |
| (2,197,471 | ) | |
| (1,428,879 | ) |
| |
| | | |
| | |
Interest income | |
| 4,473 | | |
| 8,137 | |
| |
| | | |
| | |
Net loss | |
$ | (2,192,998 | ) | |
$ | (1,420,742 | ) |
| |
| | | |
| | |
Net loss per share – basic and fully diluted | |
$ | (0.31 | ) | |
$ | (0.20 | ) |
| |
| | | |
| | |
Weighted average number of shares outstanding – basic and fully diluted | |
| 7,055,458 | | |
| 6,999,105 | |
IDEAL POWER INC.
STATEMENTS OF CASH FLOWS
| |
Quarter Ended March 31, | |
| |
2015 | | |
2014 | |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (2,192,998 | ) | |
$ | (1,240,742 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| |
|
|
|
| |
Depreciation and amortization | |
| 32,803 | | |
| 9,084 | |
Write-down of inventory | |
| (16,454 | ) | |
| - | |
Write-off of capitalized patents | |
| 69,482 | | |
| - | |
Stock-based compensation | |
| 353,159 | | |
| 188,574 | |
Fair value of warrants issued for services | |
| 25,470 | | |
| 33,960 | |
Decrease (increase) in operating assets: | |
| | | |
| | |
Accounts receivable | |
| (386,949 | ) | |
| (87,973 | ) |
Inventories | |
| 33,831 | | |
| 12,058 | |
Prepaid expenses | |
| (485 | ) | |
| (34,498 | ) |
Increase (decrease) in operating liabilities: | |
| | | |
| | |
Accounts payable | |
| 245,768 | | |
| (216,955 | ) |
Accrued expenses | |
| 244,110 | | |
| (985 | ) |
Net cash used in operating activities | |
| (1,592,263 | ) | |
| (1,337,477 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Purchase of property and equipment | |
| (150,343 | ) | |
| (37,259 | ) |
Acquisition of patents | |
| (84,843 | ) | |
| (137,809 | ) |
Net cash used in investing activities | |
| (235,186 | ) | |
| (175,068 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Exercise of options and warrants | |
| 84,813 | | |
| (9 | ) |
Net
cash provided by (used in) financing activities | |
| 84,813 | | |
| (9 | ) |
| |
| | | |
| | |
Net decrease in cash and cash equivalents | |
| (1,742,636 | ) | |
| (1,512,554 | ) |
Cash and cash equivalents at beginning of period | |
| 7,912,011 | | |
| 14,137,097 | |
Cash and cash equivalents at end of the period | |
$ | 6,169,375 | | |
$ | 12,624,543 | |
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