UNITED STATES
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 15, 2015
|
IDEAL POWER INC.
(Exact name of registrant as specified
in its charter)
|
Delaware |
001-36216 |
14-1999058 |
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
4120 Freidrich Lane, Suite 100
Austin, Texas 78744
(Address of principal executive offices,
and including zip code)
(512) 264-1542
(Registrant’s telephone number,
including area code)
|
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 CFR 240.14a-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-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry
into Material Definitive Agreement |
On May 15, 2015, Ideal Power
Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Roth
Capital Partners, LLC, as representative of the several underwriters identified therein (the “Underwriters”)
relating to the Company’s public offering of 1,935,500 shares of the Company’s common stock, par value $0.001 per
share to be issued by the Company pursuant to the Company’s effective shelf registration statement on Form S-3
(Registration No. 333-200661) (the “Offering”) previously filed with the Securities and Exchange Commission (the
“SEC”). Pursuant to the Underwriting Agreement, the shares will be offered to the public at a public offering
price of $7.75 per share, which will result in $15.0 million of gross proceeds to the Company before deducting the
underwriting discount and estimated Offering expenses payable by the Company. The Offering is expected to close on or about May 20,
2015, subject to customary closing conditions. The shares of common stock will be listed on The NASDAQ Capital Market. The
Underwriters have a 30-day option to purchase up to an additional 290,325 shares of common stock. All of the shares in the
Offering are being sold by the Company.
The Offering is being made pursuant
to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-200661) previously filed with
the Securities and Exchange Commission (“SEC”). The Company has filed a preliminary prospectus supplement, dated
May 14, 2015, and will file a final prospectus supplement relating to the issuance and sale of the shares with the SEC.
The Underwriting Agreement contains customary
representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the
Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the
parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were
made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement
and may be subject to limitations agreed upon by the contracting parties.
The Underwriting Agreement is filed as
Exhibit 1.1 hereto and is incorporated herein by reference. The foregoing description of the terms of the Underwriting Agreement
is qualified in its entirety by reference to such exhibit. A copy of the opinion of DLA Piper LLP (US) relating to the legality
of the issuance and sale of the shares in the Offering is attached as Exhibit 5.1 hereto.
| Item 7.01 | Regulation FD Disclosure. |
On May 14, 2015, the Company issued a
press release regarding the launch of the Offering. On May 15, 2015, the Company issued a press release announcing that it had priced
the Offering. A copy of these press releases are attached as Exhibits 99.1 and 99.2 to this Current Report and incorporated
herein by reference.
This Current Report contains
forward-looking statements that involve risk and uncertainties, such as statements related to the anticipated closing of the
Offering and the amount of net proceeds expected from the Offering. The risks and uncertainties involved include the
Company’s ability to satisfy certain conditions to closing on a timely basis or at all, as well as other risks detailed
from time to time in the Company’s Securities and Exchange Commission filings, including in its annual filing on Form
10-K filed with the SEC on March 25, 2015, the preliminary prospectus supplement filed with the SEC on May 14, 2015 and the
final prospectus supplement to be filed with the SEC.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit
No.
|
|
Description
|
1.1 |
|
Underwriting Agreement, between the Company and Roth Capital Partners, LLC, as the representative of the Underwriters, dated May 15, 2015 |
|
|
|
5.1 |
|
Opinion of DLA Piper LLP (US) |
|
|
|
23.1 |
|
Consent of DLA Piper LLP (US) (contained in Exhibit 5.1) |
|
|
|
99.1 |
|
Press Release dated May 14, 2015 |
|
|
|
99.2 |
|
Press Release dated May 15, 2015 |
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 15, 2015 |
IDEAL POWER INC. |
|
|
|
/s/ Timothy W. Burns |
|
Timothy W. Burns |
|
Chief Financial Officer |
EXHIBIT INDEX
Exhibit
No.
|
|
Description
|
1.1 |
|
Underwriting Agreement, between the Company and Roth Capital Partners, LLC, as the representative of the Underwriters, dated May 15, 2015 |
|
|
|
5.1 |
|
Opinion of DLA Piper LLP (US) |
|
|
|
23.1 |
|
Consent of DLA Piper LLP (US) (contained in Exhibit 5.1) |
|
|
|
99.1 |
|
Press Release dated May 14, 2015 |
|
|
|
99.2 |
|
Press Release dated May 15, 2015 |
|
|
|
Exhibit 1.1
IDEAL POWER INC.
1,935,500
Shares of Common Stock
UNDERWRITING AGREEMENT
May 15, 2015
Roth Capital Partners, LLC
888 San Clemente Drive
Newport Beach, CA 92660
As Representative of the Several Underwriters
Named on Schedule I hereto
Ladies and Gentlemen:
Ideal Power Inc.,
a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue
and sell to the underwriters named in Schedule I hereto (the “Underwriters,” or each, an “Underwriter”),
for whom Roth Capital Partners, LLC is acting as representative (the “Representative”), an aggregate of 1,935,500
shares (the “Firm Shares”) of common stock, par value $0.001 per share (the “Common Stock”),
of the Company. The Company has granted the Underwriters the option to purchase an aggregate of up to 290,325
shares (the “Option Shares”) of Common Stock as may be necessary to cover over-allotments made in connection
with the offering. The Firm Shares and the Option Shares are collectively referred to as the “Securities”.
The Company and the
several Underwriters hereby confirm their agreement as follows:
1.
Registration Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form S-3 (File No. 333-200661) under the Securities Act of 1933,
as amended (the “Securities Act”) and the rules and regulations of the Commission thereunder (the “Rules
and Regulations”), and such amendments to such registration statement (including post effective amendments) as may have
been required to the date of this Agreement and a preliminary prospectus supplement or “red herring” pursuant to Rule
424(b) under the Securities Act. Such registration statement, as amended (including any post effective amendments), has been declared
effective by the Commission. Such registration statement, including amendments thereto (including post effective amendments thereto)
as of the latest time of effectiveness thereof (the “Effective Time”), the exhibits and any schedules thereto
and the documents and information otherwise deemed to be a part thereof or included therein by the Securities Act or otherwise
pursuant to the Rules and Regulations, is herein called the “Registration Statement.” If the Company has filed
or files an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration
Statement”), then any reference herein to the term Registration Statement shall include such Rule 462 Registration Statement.
The Company is filing
with the Commission pursuant to Rule 424 under the Securities Act a final prospectus supplement relating to the Securities to
a form of prospectus included in the Registration Statement. The form of prospectus included in the Registration Statement at
the time it was declared effective, as it may have been amended, modified or supplemented and filed with the Commission after
such effective date and prior to the date hereof pursuant to Rule 424(b)(3), is hereinafter called the “Base Prospectus,”
and such final prospectus supplement, as filed, along with the Base Prospectus, is hereinafter called the “Final Prospectus.”
Such Final Prospectus and any preliminary prospectus supplement or “red herring” relating to the Securities in the
form in which they shall be filed with the Commission pursuant to Rule 424(b) under the Securities Act (including the Base Prospectus
as so supplemented) is hereinafter called a “Prospectus.”
For purposes of this
Agreement, all references to the Registration Statement, the Rule 462 Registration Statement, the Base Prospectus, the Final Prospectus,
the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Interactive Data Electronic Applications system. All references in this Agreement to amendments or supplements
to the Registration Statement, the Rule 462 Registration Statement, the Base Prospectus, the Final Prospectus or the Prospectus
shall be deemed to mean and include the subsequent filing of any document under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), that is deemed to be incorporated therein by reference therein or otherwise deemed by
the Rules and Regulations to be a part thereof.
2.
Representations and Warranties of the Company Regarding the Offering.
(a)
The Company represents and warrants to, and agrees with, the several Underwriters, as of the date hereof and as of the
Closing Date (as defined in Section 4(c) below) and as of each Option Closing Date (as defined in Section 4(b) below), except
as otherwise indicated, as follows:
(i)
At each time of effectiveness, at the date hereof and at the Closing Date and on each Option Closing Date, if any, the
Registration Statement and any post-effective amendment thereto complied or will comply in all material respects with the requirements
of the Securities Act and the Rules and Regulations and did not, does not and will not, as the case may be, contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading. The Time of Sale Disclosure Package (as defined in Section 2(a)(iii)(A)(1) below) as of the date hereof,
at the Closing Date and on each Option Closing Date, if any, and the Prospectus, as amended or supplemented, as of its date, at
the time of filing pursuant to Rule 424(b) under the Securities Act and at the Closing Date and on each Option Closing Date, if
any, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The representations and warranties set forth in the two immediately preceding sentences shall not apply to statements in or omissions
from the Registration Statement, the Time of Sale Disclosure Package or any Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by any Underwriter specifically for use in the preparation thereof, which written
information is described in Section 8(f). The Registration Statement contains all exhibits and schedules required to be filed
by the Securities Act or the Rules and Regulations. No order preventing or suspending the effectiveness or use of the Registration
Statement or any Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge
of the Company, are contemplated or threatened by the Commission.
(ii)
The Company has not distributed any prospectus or other offering material in connection with the offering and sale of the
Securities other than the Time of Sale Disclosure Package and the roadshow or investor presentations delivered to and approved
by the Representative for use in connection with the marketing of the offering of the Securities (the “Marketing Materials”).
(iii)
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging
Growth Company”).
(iv)
The Company (i) has not alone engaged in any Testing-the-Waters Communication and (ii) has not authorized anyone
to engage in Testing-the-Waters Communications. The Company has not distributed any Testing-the-Waters Communication that is a
written communication within the meaning of Rule 405 under the Securities Act (“Written Testing-the-Waters Communications”).
“Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in
reliance on Section 5(d) of the Securities Act.
(v)
(A) The Company has provided a copy to the Underwriters of each Issuer Free Writing Prospectus (as defined below) used
in the sale of the Securities. The Company has filed all Issuer Free Writing Prospectuses required to be so filed with the
Commission, and no order preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is in effect
and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated
or threatened by the Commission. When taken together with the rest of the Time of Sale Disclosure Package or the Final Prospectus, no
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and
sale of the Securities, has, does or will include (1) any untrue statement of a material fact or omission to state any
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading, or (2) information that conflicted, conflicts or will conflict with the information contained in the Registration
Statement or the Final Prospectus. The representations and warranties set forth in the immediately preceding sentence shall not
apply to statements in or omissions from the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written information furnished to the Company by any Underwriter specifically
for use in the preparation thereof. As used in this paragraph and elsewhere in this Agreement:
(1) “Time
of Sale Disclosure Package” means the Base Prospectus, the Prospectus most recently filed with the Commission before
the time of this Agreement, including any preliminary prospectus supplement deemed to be a part thereof, each Issuer Free Writing
Prospectus, and the description of the transaction provided by the Underwriters included on Schedule II.
(2) “Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 under the Securities
Act, relating to the Securities that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing
pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under
the Securities Act. For the avoidance of doubt, the term “Issuer Free Writing Prospectus” shall not include any “free
writing prospectus” (as defined in Rule 405 under the Securities Act) that was prepared by any Underwriter or provided to
any person by any Underwriter without the knowledge and consent of the Company.
(B) At
the time of filing of the Registration Statement and at the date hereof, the Company was not and is not an “ineligible issuer,”
as defined in Rule 405 under the Securities Act or an “excluded issuer” as defined in Rule 164 under the Securities
Act. The Company meets the requirements for the use of Form S-3 under the Securities Act. The Company has filed in a timely manner
all reports required to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the twelve (12) months
preceding the date hereof.
(C) Each
Issuer Free Writing Prospectus satisfied, as of its issue date and at all subsequent times through the Prospectus Delivery Period
(as defined below in Section 4(a)(i)), all other conditions as may be applicable to its use as set forth in Rules 164 and 433
under the Securities Act, including any legend, record-keeping or other requirements.
(vi)
The financial statements of the Company, together with the related notes and schedules, included or incorporated by reference
in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act and fairly present in all material respects the financial
condition of the Company as of the dates indicated and the results of operations and changes in cash flows for the periods therein
specified in conformity with U.S. generally accepted accounting principles consistently applied throughout the periods involved
except, in the case of the Company’s quarterly financial statements, the absence of footnotes and normal year-end adjustments;
and the supporting schedules included or incorporated by reference in the Registration Statement present fairly the information
required to be stated therein No other financial statements, pro forma financial information or schedules are required under the
Securities Act to be included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package
or the Final Prospectus.
(vii)
To the Company’s knowledge, Gumbiner Savett Inc., which has expressed its opinion with respect to the financial statements
and schedules incorporated by reference as a part of the Registration Statement and incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus, is an independent public accounting firm with respect
to the Company within the meaning of the Securities Act and the Rules and Regulations.
(viii)
The Company had a reasonable basis for, and made in good faith, each “forward-looking statement” (within the
meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) contained or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package, the Final Prospectus or the Marketing Materials, in each case at
the time such “forward-looking statement” was made.
(ix)
All statistical or market-related data included or incorporated by reference in the Registration Statement, the Time of
Sale Disclosure Package or the Final Prospectus, or included in the Marketing Materials, are based on or derived from sources
that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use
of such data from such sources, to the extent required.
(x)
The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the NASDAQ Capital Market.
There is no action pending by the Company or, to the Company’s knowledge, by the NASDAQ Capital Market to delist the Common
Stock from the NASDAQ Capital Market, nor has the Company received any notification that the NASDAQ Capital Market is currently
contemplating terminating such listing. The Company has submitted a Notification Form: Listing of Additional Shares with the NASDAQ
Capital Market with respect to the Securities.
(xi)
The Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would
reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(xii)
The Company is not and, after giving effect to the offering and sale of the Securities and the application of the net proceeds
thereof, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.
(b)
Any certificate signed by any officer of the Company and delivered to the Underwriters or to the Underwriters’ counsel
shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
3.
Representations and Warranties Regarding the Company.
(a)
The Company represents and warrants to and agrees with, the several Underwriters, as of the date hereof and as of the Closing
Date (as defined in Section 4(c) below) and as of each Option Closing Date (as defined in Section 4(b) below), except as set forth
in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, as follows:
(i)
The Company has been duly organized and is validly existing as a corporation or other entity in good standing under the
laws of its jurisdiction of organization. The Company has the power and authority (corporate or otherwise) to own its properties
and conduct its business as currently being carried on and as described in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, and is duly qualified to do business as a foreign corporation or other entity in good standing in
each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification necessary
and in which the failure to so qualify would have or is reasonably likely to result in a material adverse effect upon the business,
prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company, or in its ability
to perform its obligations under this Agreement (“Material Adverse Effect”). The Company does not have any
subsidiaries.
(ii)
The Company has the corporate power and authority to enter into this Agreement and to authorize, issue and sell the Securities
as contemplated by this Agreement. This Agreement has been duly authorized, executed and delivered by the Company, and constitutes
a valid, legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as
rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles
of equity.
(iii)
The execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated
will not (A) result in a breach or violation of any of the terms and provisions of, or constitute a default under, any law, order,
rule or regulation to which the Company is subject, or by which any property or asset of the Company is bound or affected, except
to the extent such breach, violation or default is not reasonably likely to have a Material Adverse Effect, (B) conflict with,
result in any violation or breach of, or constitute a default (or an event that with notice or lapse of time or both would become
a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) (a “Default Acceleration Event”) of, any agreement, lease, credit facility, debt, note,
bond, mortgage, indenture or other instrument (the “Contracts”) or obligation or other understanding to which
the Company is a party or by which any property or asset of the Company is bound or affected, except to the extent that such conflict,
default or Default Acceleration Event is not reasonably likely to result in a Material Adverse Effect, or (C) result in a breach
or violation of any of the terms and provisions of, or constitute a default under, the Company’s Certificate of Incorporation,
as amended, or by-laws, as amended.
(iv)
The Company is not in violation, breach or default under its Certificate of Incorporation, as amended, by-laws, as amended,
or other equivalent organizational or governing documents.
(v)
No consents, approvals, orders, authorizations or filings are required on the part of the Company in connection with the
execution, delivery or performance of this Agreement and the issue and sale of the Securities, except (A) the registration under
the Securities Act of the Securities, (B) such consents, approvals, authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws and the rules of the Financial Industry Regulatory Authority, Inc.
(“FINRA”) in connection with the purchase and distribution of the Securities by the several Underwriters, (C)
the necessary filings and approvals from the NASDAQ Capital Market to list the Securities and (D) such consents, approvals, orders,
authorizations and filings the failure of which to make or obtain is not reasonably likely to result in a Material Adverse Effect.
(vi)
The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus. All of the issued and outstanding shares of capital stock of the Company are duly authorized and validly issued,
fully paid and nonassessable, and have been issued in compliance with all applicable securities laws, and conform in all material
respects to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. Except
for the issuances of options or restricted stock in the ordinary course of business, since the respective dates as of which information
is provided in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus, the Company has not entered
into or granted any convertible or exchangeable securities, options, warrants, agreements, contracts or other rights in existence
to purchase or acquire from the Company any shares of the capital stock of the Company. The Securities, when issued and paid for
as provided herein, will be duly authorized and validly issued, will be fully paid and nonassessable, will be issued in compliance
with all applicable securities laws, and will be free of preemptive, registration or similar rights and will conform to the description
of the capital stock of the Company contained in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
The Securities, when issued, will conform in all material respects to the descriptions thereof set forth in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus.
(vii)
The Company has (A) filed all foreign, federal, state and local returns (as hereinafter defined) required to be filed with
taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof and (B) paid all taxes
(as hereinafter defined) shown as due and payable on such returns that were filed and has paid all taxes imposed on or assessed
against the Company, except, in all cases, for any such amounts that the Company is contesting in good faith and except in any
case in which the failure to so file or pay would not reasonably be expected to have a Material Adverse Effect. The provisions
for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient
for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated
financial statements. No issues have been raised and are currently pending by any taxing authority in connection with any of the
returns or taxes asserted as due from the Company, and no waivers of statutes of limitation with respect to the returns or collection
of taxes have been given by or requested from the Company. The term “taxes” mean all federal, state, local,
foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits,
customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties,
additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations,
reports, statements, and other documents required to be filed in respect to taxes.
(viii)
Since the respective dates as of which information is given (including by incorporation by reference) in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, (a) The Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b)
the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (c)
there has not been any change in the capital stock of the Company (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants or the issuance of restricted
stock awards or restricted stock units under the Company’s existing stock awards plan, or any new grants thereof in the
ordinary course of business), (d) there has not been any material change in the Company’s long-term or short-term debt,
and (e) there has not been the occurrence of any Material Adverse Effect.
(ix)
There is not pending or, to the knowledge of the Company, threatened, any action, suit or proceeding to which the Company
is a party or of which any property or assets of the Company is the subject before or by any court or governmental agency, authority
or body, or any arbitrator or mediator, which is reasonably likely to result in a Material Adverse Effect or adversely affect
the consummation of the transactions contemplated by this Agreement.
(x)
The Company holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders (“Permits”) of any governmental or self-regulatory agency, authority or body required
for the conduct of its business, and all such Permits are in full force and effect, in each case except where the failure to hold,
or comply with, any of them is not reasonably likely to result in a Material Adverse Effect.
(xi)
The Company has good and marketable title to all property (whether real or personal) described in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus as being owned by them that is material to the business of the Company,
in each case free and clear of all liens, claims, security interests, other encumbrances or defects, except those that are not
reasonably likely to result in a Material Adverse Effect. The property held under lease by the Company is held by them under valid,
subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the Company.
(xii)
The Company owns or possesses or has valid right to use all patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights
(“Intellectual Property”) necessary for the conduct of the business of the Company as currently carried on
and as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus; provided that this Section
3(a)(xii) shall not be construed as a non-infringement representation, such representation being exclusively set forth in the
following sentence. To the knowledge of the Company, no action or use by the Company will involve or give rise to any infringement
of, or license or similar fees for, any Intellectual Property of others, except where such action, use, license or fee is not
reasonably likely to result in a Material Adverse Effect. Except as disclosed in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, the Company has not received any notice alleging any such infringement or fee.
(xiii)
The Company has complied with, is not in violation of, and has not received any notice of violation relating to any law,
rule or regulation relating to the conduct of its business, or the ownership or operation of its property and assets, including,
without limitation, (A) the Currency and Foreign Transactions Reporting Act of 1970, as amended, or any money laundering laws,
rules or regulations, (B) any laws, rules or regulations related to health, safety or the environment, including those relating
to the regulation of hazardous substances, (C) the Sarbanes-Oxley Act and the rules and regulations of the Commission thereunder,
(D) the Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder, and (E) the Employment Retirement Income
Security Act of 1974 and the rules and regulations thereunder, in each case except where the failure to be in compliance is not
reasonably likely to result in a Material Adverse Effect.
(xiv)
The Company nor, to the knowledge of the Company, any director, officer, employee, representative, agent or affiliate of
the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the
Securities contemplated hereby, or lend, contribute or otherwise make available such proceeds to any person or entity, for the
purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(xv)
The Company carries, or is covered by, insurance in such amounts and covering such risks as, in the Company’s reasonable
judgment, is adequate for the conduct of its business and the value of its properties and as is customary for similarly sized
companies engaged in similar businesses in similar industries.
(xvi)
No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent, that is reasonably
likely to result in a Material Adverse Effect.
(xvii)
Neither the Company nor, to its knowledge, any other party is in violation, breach or default of any Contract, which
violation, breach or default is reasonably likely to result in a Material Adverse Effect.
(xviii)
No supplier, customer, distributor or sales agent of the Company has notified the Company that it intends to discontinue
or decrease the rate of business done with the Company, except where such decrease is not reasonably likely to
result in a Material Adverse Effect.
(xix)
There are no claims, payments, issuances, arrangements or understandings for services in the nature of a finder’s,
consulting or origination fee with respect to the introduction of the Company to any Underwriter or the sale of the Securities
hereunder or any other arrangements, agreements, understandings, payments or issuances with respect to the Company that may affect
the Underwriters’ compensation, as determined by FINRA.
(xx)
Except as set forth or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person,
as a finder’s fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing
to the Company persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any
direct or indirect affiliation or association with any FINRA member within the 12-month period prior to the date on which the
Registration Statement was filed with the Commission (“Filing Date”) or thereafter.
(xxi)
None of the net proceeds of the offering will be paid by the Company to any participating FINRA member or any affiliate
or associate of any participating FINRA member, except as specifically authorized herein.
(xxii)
Except as set forth or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, to the Company’s knowledge, no (i) officer or director of the Company, (ii) owner of 5% or more of the Company’s
unregistered securities or (iii) owner of any amount of the Company’s unregistered securities acquired within the 180-day
period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member. The Company will
advise the Representative and counsel for the Underwriters if the Company becomes aware that any officer, director or stockholder
of the Company is or becomes an affiliate or associated person of a FINRA member participating in the offering.
(xxiii)
Other than the Underwriters, no person has the right to act as an underwriter or as a financial advisor to the Company
in connection with the transactions contemplated hereby.
(xxiv)
The statements set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus under the
caption “Description of Capital Stock” and “Underwriting,” insofar as they purport to describe the provisions
of the laws and documents referred to therein are accurate, complete and fair and insofar as they purport to constitute a summary
of the terms of the Securities, are accurate, complete and fair.
(xxv)
Except as set forth or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the
right (other than rights which have been waived in writing or otherwise satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by the Company under the Securities Act.
(xxvi)
Except as set forth or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date of
the Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, stock option plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(xxvii)
The Company (i) is in compliance with all, and have not violated any, laws, regulations, ordinances, rules, orders,
judgments, decrees, permits or other legal requirements of any governmental authority, including without limitation any international,
national, state, provincial, regional, or local authority, relating to the protection of human health or safety, the environment,
or natural resources, or to hazardous or toxic substances or wastes, pollutants or contaminants (including, without limitation,
all health and safety laws) (“Environmental Laws”) applicable to such entity, which compliance includes, without
limitation, obtaining, maintaining and complying with all permits and authorizations and approvals required by Environmental Laws
to conduct their respective businesses as described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, except where the failure to comply would not, singularly or in the aggregate, have a Material Adverse Effect, and
(ii) has not received written notice of any actual or alleged violation of Environmental Laws, or of any potential liability
for or other obligation concerning the presence, disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants.
| (A) | There are no proceedings that are pending, or known
to the Company to be contemplated, against the Company under Environmental Laws in which a governmental authority is also a party. |
| (B) | The Company is not aware of any existing liabilities
concerning hazardous or toxic substances or wastes, pollutants or contaminants that could reasonably be expected to have a Material
Adverse Effect. |
| (C) | To the knowledge of the Company,
no property which is or has been owned, leased, used, operated or occupied by the Company
has been designated as a Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.),
or otherwise designated as a contaminated site under applicable state or local law. |
(xxviii)
The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f)
under the Exchange Act) that complies in all material respects with the requirements of the Exchange Act and has been designed
by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting is
effective and the Company is not aware of any material weaknesses in its internal control over financial reporting.
(xxix)
Since the date of the latest audited financial statements included or incorporated by reference in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus, there has been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.
(xxx)
The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange
Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure
that material information required to be disclosed to the Company is made known to the Company’s principal executive officer
and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.
(xxxi)
The operations of the Company are being conducted in material compliance with applicable employment laws, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Employee Benefit Laws”) and no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the Company with respect to the Employee Benefit Laws is
pending or, to the knowledge of the Company, threatened which if determined against the Company would result in a Material Adverse
Effect.
(xxxii)
Neither the Company nor any director, officer, or employee, nor, to the Company’s knowledge (A) any of its affiliates,
or (B) any agent or representative of the Company or of any of its affiliates, has taken any action in furtherance of an offer,
payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value,
directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned
or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf
of any of the foregoing, or any political party or party official or candidate for political office) to influence official action
or secure an improper advantage; and the Company and affiliates conduct their businesses in compliance in all material respects
with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed
to promote and achieve compliance in all material respects with such laws and with the representation and warranty contained herein.
4. Purchase, Sale and Delivery of Securities.
(a) On the basis
of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to issue and sell the Firm Shares to the several Underwriters, and the Underwriters agree, severally and not
jointly, to purchase the respective numbers of Firm Shares set forth opposite the names of the Underwriters in Schedule I
hereto. The purchase price for each Firm Share shall be $7.285 per share (the “Purchase Price”).
(b) The Company hereby
grants to the Underwriters the option to purchase some or all of the Option Shares and, upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Underwriters shall have the right to purchase all or any portion
of the Option Shares at the Purchase Price as may be necessary to cover over-allotments made in connection with the transactions
contemplated hereby. This option may be exercised by the Underwriters at any time and from time to time on or before the thirtieth
(30th) day following the date hereof, by written notice to the Company (the “Option Notice”). The Option
Notice shall set forth the aggregate number of Option Shares as to which the option is being exercised, and the date and time
when the Option Shares are to be delivered (such date and time being herein referred to as the “Option Closing Date”);
provided, however, that the Option Closing Date shall not be earlier than the Closing Date (as defined below) nor
earlier than the first business day after the date on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised unless the Company and the Underwriters otherwise agree in writing.
Such Option Shares shall be purchased, severally and not jointly, from the Company for the account of each Underwriter in the
same proportion as the number of shares of Firm Shares set forth opposite such Underwriter’s name on Schedule I bears
to the total number of shares of Firm Shares (subject to adjustment by the Underwriters to eliminate fractions).
Payment of the purchase
price for and delivery of the Option Shares shall be made on an Option Closing Date in the same manner and at the same office
as the payment for the Firm Shares as set forth in subparagraph (c) below.
(c) The Firm Shares
will be delivered by the Company to the Representative, for the respective accounts of the several Underwriters, against payment
of the purchase price therefor by wire transfer of same day funds payable to the order of the Company at the offices of Roth Capital
Partners, LLC, 888 San Clemente Drive, Newport Beach, CA 92660, or such other location as may be mutually acceptable, at 6:00
a.m. PDT, on the third (or if the Firm Shares are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30
p.m. Eastern time, the fourth) full business day following the date hereof, or at such other time and date as the Representative
and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, or, in the case of the Option Shares, at such date
and time set forth in the Option Notice. The time and date of delivery of the Firm Shares is referred to herein as the “Closing
Date.” On the Closing Date or any Option Closing Date, the Company shall deliver the Firm Shares or the Option Shares,
as applicable, which shall be registered in the name or names and shall be in such denominations as the Representative may request
at least one (1) business day before the Closing Date, to the respective accounts of the several Underwriters, which delivery
shall be made through the facilities of the Depository Trust Company’s DWAC system.
5. Covenants.
(a) The Company covenants
and agrees with the several Underwriters as follows:
(i) To prepare
the Prospectus in a form approved by the Representative and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission’s close of business on the second business day following the execution and delivery of
this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Securities Act.
(ii) During the
period beginning on the date hereof and ending on the date that the Prospectus is no longer required by law to be delivered in
connection with sales by an underwriter or dealer (the “Prospectus Delivery Period”), prior to amending or
supplementing the Registration Statement, including any Rule 462 Registration Statement, the Time of Sale Disclosure Package or
the Prospectus, the Company shall furnish to the Representative for review and comment a copy of each such proposed amendment
or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representative reasonably
objects.
(iii) From the
date of this Agreement until the end of the Prospectus Delivery Period, the Company shall promptly advise the Representative in
writing (A) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (B)
of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement
to the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order preventing or suspending its use or the use of
the Time of Sale Disclosure Package or any Issuer Free Writing Prospectus, or of any proceedings to remove, suspend or terminate
from listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated
for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter
any such stop order at any time during the Prospectus Delivery Period, the Company will use its reasonable efforts to obtain the
lifting of such order at the earliest possible moment. Additionally, the Company agrees that during the Prospectus Delivery Period
it shall comply with the provisions of Rules 424(b), 430A and 430B, as applicable, under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the
Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).
(iv) (A) During
the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, as now and hereafter
amended, so far as necessary to permit the continuance of sales of or dealings in the Securities as contemplated by the provisions
hereof, the Time of Sale Disclosure Package, the Registration Statement and the Prospectus. If, during the Prospectus Delivery
Period, any event occurs the result of which would cause the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package) to include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which such statement was made, not misleading,
or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Representative or
counsel to the Underwriters to amend the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet
available to prospective purchasers, the Time of Sale Disclosure Package) to comply with the Securities Act, or to file under
the Exchange Act any document that would be deemed to be incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Company will promptly notify the Representative, allow the Representative the opportunity
to provide reasonable comments on such amendment, prospectus supplement or document, and will amend the Registration Statement
or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance.
(B) If during the
Prospectus Delivery Period there occurred or occurs an event or development the result of which is that such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration Statement or any Prospectus or included
or would include, when taken together with the Time of Sale Disclosure Package, an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing
at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement,
at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(v) The Company
shall take or cause to be taken all necessary action to qualify the Securities for sale under the securities laws of such jurisdictions
as the Representative reasonably designates and to continue such qualifications in effect so long as required for the distribution
of the Securities, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process
in any state or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.
(vi) The Company
will furnish to the Underwriters and counsel for the Underwriters copies of the Registration Statement, each Prospectus, any Issuer
Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities
as the Underwriters may from time to time reasonably request.
(vii) The Company
will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after
the end of the Company’s current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period
that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(viii) The Company,
whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to be
paid (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection with the delivery
to the Underwriters of the Securities, (B) all expenses and fees (including, without limitation, fees and expenses of the Company’s
counsel) in connection with the preparation, printing, filing, delivery, and shipping of the Registration Statement (including
the financial statements therein and all amendments, schedules, and exhibits thereto), the Securities, the Time of Sale Disclosure
Package, the Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or supplement thereto, (C) all reasonable
filing fees and reasonable fees and disbursements of the Underwriters’ counsel incurred in connection with the qualification
of the Securities for offering and sale by the Underwriters or by dealers under the securities or blue sky laws of the states
and other jurisdictions that the Representative shall designate, (D) the fees and expenses of any transfer agent or registrar
for the Securities, (E) the reasonable filing fees and reasonable fees and disbursements of Underwriters’ counsel incident
to any required review and approval by FINRA of the terms of the sale of the Securities, (F) listing fees, if any, and (G) all
other costs and expenses incident to the performance of its obligations hereunder that are not otherwise specifically provided
for herein. The Company will reimburse the Representative for its reasonable out-of-pocket expenses, including its legal fees
and disbursements, in connection with the purchase and sale of the Securities contemplated hereby up to an aggregate of $100,000
(including pursuant to clause (E) above) (the “Cap”). In no event may the maximum compensation payable to FINRA
members and independent broker-dealers exceed 8.0% of the gross proceeds of this offering. If this Agreement is terminated by
the Representative in accordance with the provisions of Section 6, Section 9 or Section 10, the Company will reimburse the Representative
for all out-of-pocket fees and disbursements (including, but not limited to, reasonable fees and disbursements of counsel, travel
expenses, postage, facsimile and telephone charges) incurred by the Representative in connection with its investigation, preparing
to market and marketing the Securities or in contemplation of performing its obligations hereunder up to an aggregate amount equal
to the Cap.
(ix) The Company
intends to apply the net proceeds from the sale of the Securities to be sold by it hereunder for the purposes set forth in the
Time of Sale Disclosure Package and in the Final Prospectus.
(x) The Company
has not taken and will not take, directly or indirectly, during the Prospectus Delivery Period, any action designed to or which
might reasonably be expected to cause or result in, or that has constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Securities.
(xi) The Company
represents and agrees that, unless it obtains the prior written consent of the Representative, on behalf of the Underwriters,
and each Underwriter, severally and not jointly, represents and agrees that, unless it obtains the prior written consent of the
Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus;
provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the free writing
prospectuses included in Schedule III. Any such free writing prospectus consented to by the Company and the Underwriters
is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated
or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined
in Rule 433, and has complied or will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus,
including timely Commission filing where required, legending and record-keeping.
(xii) The Company
hereby agrees that, without the prior written consent of the Representative, it will not, during the period ending 90 days after
the date hereof (“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to sell, purchase, contract to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock; or (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise; or (iii)
file any registration statement with the Commission relating to the offering of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (other than a registration statement on Form S-4 and Form S-8). The restrictions
contained in the preceding sentence shall not apply to (1) the Securities to be sold hereunder, (2) the issuance of Common Stock
upon the vesting of restricted stock units or awards and exercise of options, warrants or other exchange rights as disclosed as
outstanding in the Registration Statement (excluding exhibits thereto), the Time of Sale Disclosure Package or the Prospectus,
or (3) the issuance of employee stock options not exercisable during the Lock-Up Period and the grant
, redemption, forfeiture or distribution of restricted stock awards, restricted stock units or shares of Common Stock pursuant
to equity incentive plans described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
(xiii) To engage and
maintain, at its expense, a registrar and transfer agent for the Common Stock.
(xiv)
The Company will notify promptly the Representatives if the Company ceases to be an Emerging Growth Company at any time
prior to the later of (i) completion of the distribution of the Securities within the meaning of the Securities Act and (ii) completion
of the Lock-Up Period referred to in Section 5(xii) hereof.
(xv)
To use its reasonable best efforts to list the Securities on the NASDAQ Capital Market.
| (xvi) | To not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any securities of the Company to facilitate the sale or
resale of the Securities. |
6.
Conditions of the Underwriters’ Obligations. The respective obligations of the several Underwriters hereunder
to purchase the Securities are subject to the accuracy, as of the date hereof, at the Closing Date and on each Option Closing
Date (as if made on the Closing Date or such Option Closing Date, as applicable), of and compliance in all material respects with
all representations, warranties and agreements of the Company contained herein, the performance by the Company of its obligations
hereunder and the following additional conditions:
(a) If filing of
the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required under the Securities
Act or the Rules and Regulations, the Company shall have filed the Prospectus (or such amendment or supplement) or such Issuer
Free Writing Prospectus with the Commission in the manner and within the time period so required (without reliance on Rule 424(b)(8)
or 164(b) under the Securities Act); the Registration Statement shall remain effective; no stop order suspending the effectiveness
of the Registration Statement or any part thereof, any Rule 462 Registration Statement, or any amendment thereof, nor suspending
or preventing the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have
been issued; no proceedings for the issuance of such an order shall have been initiated or threatened by the Commission; any request
of the Commission or the Representative for additional information (to be included in the Registration Statement, the Time of
Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or otherwise) shall have been complied with to the
Representative’s satisfaction.
(b) The Securities
shall be qualified for listing on the NASDAQ Capital Market.
(c) FINRA shall have
raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(d) None of the Underwriters
shall have reasonably determined, and advised the Company, that the Registration Statement, the Time of Sale Disclosure Package
or the Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue statement
of fact which, in such Underwriter’s reasonable opinion, is material, or omits to state a fact which, in such Underwriter’s
reasonable opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading.
(e) On the Closing
Date and on each Option Closing Date, there shall have been furnished to the Underwriters the opinion and negative assurance letter
of DLA Piper LLP (US), corporate counsel for the Company, dated the Closing Date or the Option Closing Date, as applicable, and
addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
(f) On the Closing
Date and on each Option Closing Date, there shall have been furnished to the Underwriters the opinion and negative assurance letter
of Groover & Associates PLLC, intellectual property counsel for the Company, dated the Closing Date or the Option Closing
Date, as applicable, and addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
(g) On the Closing
Date and on each Option Closing Date, there shall have been furnished to the Underwriters the negative assurance letter of Lowenstein
Sandler LLP, counsel to the Underwriters, dated the Closing Date or the Option Closing Date, and addressed to the Representative,
in form and substance reasonably satisfactory to the Representative.
(h) The Underwriters
shall have received a letter of Gumbiner Savett Inc. on the date hereof and on the Closing Date and on each Option Closing Date,
addressed to the Representative, as representative of the Underwriters, confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualifications
of accountants under Rule 2-01 of Regulation S-X of the Commission, and confirming, as of the date of each such letter (or, with
respect to matters involving changes or developments since the respective dates as of which specified financial information is
given in the Time of Sale Disclosure Package, as of a date not prior to the date hereof or more than five days prior to the date
of such letter), the conclusions and findings of said firm with respect to the financial information and other matters required
by the Underwriters.
(j) On the Closing
Date and on each Option Closing Date, there shall have been furnished to the Underwriters a certificate, dated the Closing Date
and each Option Closing Date, and addressed to the Representative, signed by the chief executive officer and the chief financial
officer of the Company, in their capacity as officers of the Company, to the effect that:
(i) The
representations and warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material
Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this Agreement
are true and correct, in all material respects, as if made at and as of the Closing Date and the Option Closing Date, and the
Company has complied with all the agreements and satisfied all the conditions on its part required to be performed or satisfied
at or prior to the Closing Date or the Option Closing Date, as applicable;
(ii) No
stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof or any amendment
thereof, (B) suspending the qualification of the Securities for offering or sale, or (C) suspending or preventing the use of the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued, and no proceeding for
that purpose has been instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory body; and
(iii) There
has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect during the period from
and after the date of this Agreement and prior to the Closing Date or the Option Closing Date, as applicable.
(k) On or before
the date hereof, the Representative shall have received duly executed “lock-up” agreements, in the form set forth
on Schedule IV, among the Representative and each of the parties specified in Schedule V.
(l) The Company shall
have furnished to the Underwriters and their counsel such additional documents, certificates and evidence as the Underwriters
or their counsel may have reasonably requested.
If any condition specified
in this Section 6 shall not have been fulfilled in all material respects and as required to be fulfilled, this Agreement may be
terminated by the Representative by written notice to the Company at any time at or prior to the Closing Date or an Option Closing
Date, as applicable, and such termination shall be without liability of any party to any other party, except that Section 5(a)(viii),
Section 7 and Section 8 shall survive any such termination and remain in full force and effect.
7. Indemnification and Contribution.
(a) The Company agrees
to indemnify, defend and hold harmless each Underwriter, its affiliates, directors and officers and employees, and each person,
if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any losses, claims, damages or liabilities to which such Underwriter or such person may become subject, under
the Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent
of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including
the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant
to Rules 430A and 430B of the Rules and Regulations, or arise out of or are based upon the omission from the Registration Statement,
or alleged omission to state therein, a material fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) an untrue statement or alleged untrue statement of a material fact contained in the Time of Sale Disclosure
Package, the Prospectus, or any amendment or supplement thereto (including any documents filed under the Exchange Act and deemed
to be incorporated by reference into the Registration Statement or the Prospectus), any Issuer Free Writing Prospectus or the
Marketing Materials or in any other materials used in connection with the offering of the Securities, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading, (iii) in whole or in part any inaccuracy
in the representations and warranties of the Company contained herein, or (iv) in whole or in part, any failure of the Company
to perform its obligations hereunder or under law, and will reimburse each Underwriter for any legal or other out-of-pocket expenses
reasonably incurred by it in connection with evaluating, investigating or defending against such loss, claim, damage, liability
or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action (or any legal or other expenses reasonably incurred in connection with the evaluation, investigation
or defense thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto
or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by
such Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f).
(b) Each Underwriter,
severally and not jointly, will indemnify, defend and hold harmless the Company, its affiliates, directors, officers and employees,
and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any losses, claims, damages or liabilities to which the Company or such person may become subject,
under the Securities Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement,
the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus,
or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Time of Sale
Disclosure Package, the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus in reliance upon
and in conformity with written information furnished to the Company by such Underwriter specifically for use in the preparation
thereof, which written information is described in Section 7(f), and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with evaluating, investigating and defending against any such loss, claim, damage,
liability or action.
(c) Promptly after
receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying
party from any liability that it may have to any indemnified party except to the extent such indemnifying party has been materially
prejudiced by such failure. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party, and after notice from the indemnifying party to such indemnified party of the indemnifying party’s
election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection
for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof; provided,
however, that if (i) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying
party, (ii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party), or (iii) the indemnifying party has not in fact employed counsel reasonably satisfactory
to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement
of the action, the indemnified party shall have the right to employ a single counsel to represent it in any claim in respect of
which indemnity may be sought under subsection (a) or (b) of this Section 7, in which event the reasonable fees and expenses of
such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the indemnified party as incurred.
The indemnifying party
under this Section 7 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment
in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named
and indemnity was or would be sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes
an unconditional release of such indemnified party from all liability for claims that are the subject matter of such action, suit
or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) If the indemnification
provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering and
sale of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Final Prospectus.
The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or
the Underwriters and the parties’ relevant intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and each Underwriter agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating
or defending against any action or claim that is the subject of this subsection (d). Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of
the amount of such Underwriter’s commissions referenced in Section 4(a) actually received by such Underwriter pursuant to
this Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ respective
obligations to contribute as provided in this Section 7 are several in proportion to their respective underwriting commitments
and not joint.
(e) The obligations
of the Company under this Section 7 shall be in addition to any liability that the Company may otherwise have and the benefits
of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the several obligations of each Underwriter
under this Section 7 shall be in addition to any liability that such Underwriter may otherwise have and the benefits of such obligations
shall extend, upon the same terms and conditions, to the Company, and its officers, directors and each person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
(f) For purposes
of this Agreement, each Underwriter severally confirms, and the Company acknowledges, that there is no information concerning
such Underwriter furnished in writing to the Company by such Underwriter specifically for preparation of or inclusion in the Registration
Statement, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, other than the statements
set forth in the last paragraph on the cover page of the Prospectus, the marketing and legal names of each Underwriter, and the
statements set forth in the “Underwriting” section of the Prospectus and Time of Sale Disclosure Package, only insofar
as such statements relate to the amount of selling concession and re-allowance or to overallotment, stabilization and related
activities that may be undertaken by such Underwriter.
8.
Representations and Agreements to Survive Delivery. All representations, warranties, and agreements of the Company
contained herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements of the several Underwriters
and the Company contained in Section 5(a)(viii) and Section 7 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the several Underwriters or any controlling person thereof, or the Company or any
of its officers, directors, or controlling persons, and shall survive delivery of, and payment for, the Securities to and by the
Underwriters hereunder.
9.
Termination of this Agreement.
(a) The Representative
shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any time at or prior
to the Closing Date or any Option Closing Date (as to the Option Shares to be purchased on such Option Closing Date only), if
in the reasonable discretion of the Representative, (i) there has occurred any material adverse change in the securities markets
or any event, act or occurrence that has materially disrupted, or in the reasonable opinion of the Representative, will in the
future materially disrupt, the securities markets or there shall be such a material adverse change in general financial, political
or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make
it, in the reasonable judgment of the Representative, inadvisable or impracticable to market the Securities or enforce contracts
for the sale of the Securities, (ii) trading in the Company’s Common Stock shall have been suspended by the Commission,
the NASDAQ Capital Market or trading in securities generally on the NASDAQ Global Market, the New York Stock Exchange or the NYSE
MKT shall have been suspended, (iii) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the NASDAQ Global Market, the New York Stock Exchange, or the NYSE MKT, by such exchange
or by order of the Commission or any other governmental authority having jurisdiction, (iv) a banking moratorium shall have been
declared by federal or New York or California state authorities, (v) there shall have occurred any attack on, outbreak or escalation
of hostilities or act of terrorism involving the United States, any declaration by the United States of a national emergency or
war, any substantial change or development involving a prospective substantial change in United States or international political,
financial or economic conditions or any other calamity or crisis, (vi) the Company suffers any loss by strike, fire, flood, earthquake,
accident or other calamity, whether or not covered by insurance, or (vii) in the reasonable judgment of the Representative, there
has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations,
business affairs or business prospects of the Company and its subsidiaries considered as a whole, whether or not arising in the
ordinary course of business.. Any such termination shall be without liability of any party to any other party except that the
provisions of Section 5(a)(viii) and Section 7 hereof shall at all times be effective and shall survive such termination.
(b) If the Representative
elects to terminate this Agreement as provided in this Section, the Company and the other Underwriters shall be notified promptly
by the Representative by telephone, confirmed by letter.
10.
Substitution of Underwriters. If any Underwriter or Underwriters shall default in its or their obligations to purchase
Securities hereunder on the Closing Date or any Option Closing Date and the aggregate number of Securities which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed ten percent (10%) of the total number of Securities
to be purchased by all Underwriters on such Closing Date or Option Closing Date, the other Underwriters shall be obligated severally,
in proportion to their respective commitments hereunder, to purchase the Securities which such defaulting Underwriter or Underwriters
agreed but failed to purchase on such Closing Date or Option Closing Date. If any Underwriter or Underwriters shall so default
and the aggregate number of Securities with respect to which such default or defaults occur is more than ten percent (10%) of
the total number of Securities to be purchased by all Underwriters on such Closing Date or Option Closing Date and arrangements
satisfactory to the remaining Underwriters and the Company for the purchase of such shares by other persons are not made within
forty-eight (48) hours after such default, this Agreement shall terminate.
If the remaining Underwriters
or substituted Underwriters are required hereby or agree to take up all or part of the Securities of a defaulting Underwriter
or Underwriters on such Closing Date or Option Closing Date as provided in this Section 10, (i) the Company shall have the right
to postpone such Closing Date or Option Closing Date for a period of not more than five (5) full business days in order to permit
the Company to effect whatever changes in the Registration Statement, the Prospectus, or in any other documents or arrangements,
which may thereby be made necessary, and the Company agrees to promptly file any amendments to the Registration Statement or the
Prospectus which may thereby be made necessary, and (ii) the respective numbers of Securities to be purchased by the remaining
Underwriters or substituted Underwriters shall be taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of its liability to the Company or any other Underwriter
for damages occasioned by its default hereunder. Any termination of this Agreement pursuant to this Section 10 shall be without
liability on the part of any non-defaulting Underwriters or the Company, except that the representations, warranties, covenants,
indemnities, agreements and other statements set forth in Section 2 and 3, the obligations with respect to expenses to be paid
or reimbursed pursuant to Section 5 and the provisions of Section 5(a)(viii) and Section 7 and Sections 11 through 19, inclusive,
shall not terminate and shall remain in full force and effect.
11. Notices.
Except as otherwise provided herein, all communications hereunder shall be in writing and, (i) if to the Underwriters,
shall be mailed, delivered or telecopied to Roth Capital Partners, LLC, 888 San Clemente Drive, Newport Beach, CA 92660,
telecopy number: (949) 720-7227, Attention: Managing Director, and (ii) if to the Company, shall be mailed, delivered or
telecopied to it at Ideal Power Inc., 4120 Freidrich Lane, Austin, TX 78744, telecopy number: (512) 264-1546, Attention:
Tim Burns, Chief Financial Officer; with a copy (which shall not constitute notice) to DLA Piper LLP (US), 401 Congress
Avenue, Suite 2500, Austin, TX 78701, telecopy number: (512) 457-7001, Attention: Paul E. Hurdlow, Esq., or in each case to
such other address as the person to be notified may have requested in writing. Any party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
12.
Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in
Section 8. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal
or equitable remedy or claim under or in respect of this Agreement or any provision herein contained. The term “successors
and assigns” as herein used shall not include any purchaser, as such purchaser, of any of the Securities from any Underwriter.
13.
Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) each Underwriter has been retained
solely to act as underwriter in connection with the sale of the Securities and that no fiduciary, advisory or agency relationship
between the Company and any Underwriter has been created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether any Underwriter has advised or is advising the Company on other matters; (b) the price and other terms
of the Securities set forth in this Agreement were established by the Company following discussions and arms-length negotiations
with the Underwriters and the Company is capable of evaluating and understanding and understands and accepts the terms, risks
and conditions of the transactions contemplated by this Agreement; (c) it has been advised that each Underwriter and its affiliates
are engaged in a broad range of transactions that may involve interests that differ from those of the Company and that no Underwriter
has any obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship;
(d) it has been advised that each Underwriter is acting, in respect of the transactions contemplated by this Agreement, solely
for the benefit of such Underwriter, and not on behalf of the Company.
14.
Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be binding unless executed
in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute
a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute
a continuing waiver unless otherwise expressly provided.
15.
Partial Unenforceability. The invalidity or unenforceability of any section, paragraph, clause or provision of
this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision.
16.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New
York.
17.
Submission to Jurisdiction. The Company irrevocably (a) submits to the jurisdiction of any court of the State of
New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions
contemplated by this Agreement, the Registration Statement, the Time of Sale Disclosure Package and the Prospectus (each a “Proceeding”),
(b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest
extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to
commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such
Proceeding is brought in an inconvenient forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW,
ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
THE REGISTRATION STATEMENT, THE TIME OF SALE DISCLOSURE PACKAGE AND THE PROSPECTUS.
18.
Counterparts. This Agreement may be executed and delivered (including by facsimile transmission and electronic
mail) in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed
to be an original and all such counterparts shall together constitute one and the same instrument.
[Signature Page Follows]
Please sign and return
to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement between the Company
and the several Underwriters in accordance with its terms.
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Very truly yours, |
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IDEAL POWER INC. |
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By: |
/s/ Timothy W. Burns |
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Name: |
Timothy W. Burns |
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Title: |
Chief Financial Officer |
Confirmed as of the date first above-
mentioned by the Representative of the
several Underwriters.
ROTH
CAPITAL PARTNERS, LLC
By: |
/s/ Aaron M. Gurewitz |
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Name: |
Aaron M. Gurewitz |
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Title: |
Head of Equity Capital Markets |
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[Signature page to Underwriting Agreement]
SCHEDULE I
Name |
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Number
of Firm Shares to be Purchased |
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Number
of Option Shares to be Purchased |
Roth Capital Partners,
LLC |
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1,451,625 |
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217,744 |
National Securities
Corporation |
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290,325 |
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43,549 |
Northland Securities,
Inc. |
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193,550 |
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29,032 |
Total |
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1,935,550 |
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290,325 |
SCHEDULE II
Final Term Sheet
Issuer: |
Ideal Power Inc.
(the “Company”) |
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Symbol: |
IPWR |
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Security: |
1,935,500 shares of common stock, par value $0.001 per share (the “Common Stock”),
of the Company |
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Over-allotment option: |
290,325 shares of Common Stock |
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Public offering price: |
$7.75 per share |
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Underwriting discount |
$0.465 per share |
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Net proceeds (excluding the over-allotment): |
Approximately $13.8 million (after deducting the
underwriting discount and estimated offering expenses payable by the Company) |
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Trade date: |
May 15, 2015 |
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Settlement date: |
May 20, 2015 |
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Underwriters: |
Roth Capital Partners, LLC, National
Securities Corporation, Northland Securities, Inc. |
SCHEDULE III
Free Writing Prospectus
SCHEDULE IV
Form of Lock-Up Agreement
May __, 2015
Roth Capital Partners, LLC
888 San Clemente Drive
Newport Beach, CA 92660
As Representative of the Several Underwriters
Ladies and Gentlemen:
This
Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting
Agreement”) to be entered into among Ideal Power Inc., a Delaware corporation (the “Company”), and
Roth Capital Partners, LLC, as representative (the “Representative”) of
the underwriters named in Schedule I to the Underwriting Agreement (the “Underwriters,” or each, an
“Underwriter”), with respect to the proposed public offering of securities of the Company (the “Offering”),
including shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”). Capitalized
terms used and not otherwise defined herein shall have the meanings given them in the Underwriting Agreement.
In order to induce
you to enter into the Underwriting Agreement, the undersigned agrees that, for a period (the “Lock-Up Period”)
beginning on the date hereof and ending on, and including, the date that is 90 days after the date of the final prospectus supplement
relating to the Offering, the undersigned will not, without the prior written consent of the Representative, (i) sell, offer
to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose
of, directly or indirectly, or file (or participate in the filing of) a registration statement with the Securities and Exchange
Commission (the “Commission”) in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder (the “Exchange Act”) with respect to, any
Common Stock or any other securities of the Company that are substantially similar to Common Stock, or any securities convertible
into or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing, (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Common
Stock or any other securities of the Company that are substantially similar to Common Stock, or any securities convertible into
or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing, whether any such transaction is
to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (iii) publicly announce an intention
to effect any transaction specified in clause (i) or (ii).
The foregoing paragraph
shall not apply to (a) the registration of the offer and sale of Common Stock as contemplated by the Underwriting Agreement and
the sale of the Common Stock to the several Underwriters in the Offering, (b) transactions relating to shares of Common Stock
or other securities acquired in open market transactions after the completion of the Offering, (c) bona fide gifts or charitable
contributions, provided the recipient thereof agrees in writing with the Representative to be bound by the terms of this Lock-Up
Agreement, (d) dispositions to any trust for the direct or indirect benefit of the undersigned and/or the immediate family of
the undersigned, provided that such trust agrees in writing with the Representative to be bound by the terms of this Lock-Up Agreement,
(e) transfers of Common Stock or securities convertible into Common Stock on death by will or intestacy, (f) sales or transfers
of Common Stock solely in connection with the “cashless” exercise of Company stock options outstanding on the date
hereof for the purpose of exercising such stock options (provided that any remaining Common Stock received upon such exercise
will be subject to the restrictions provided for in this Lock-Up Agreement), (g) sales or transfers of Common Stock or securities
convertible into Common Stock pursuant to a sales plan entered into prior to the date hereof pursuant to Rule 10b5-1 under
the Exchange Act, a copy of which has been provided to the Underwriters, (h) the disposition of shares of Common Stock to the
Company in a transaction exempt from Section 16(b) of the Exchange Act solely in connection with the payment of taxes due; (i)
transfers to the Company of shares of Common Stock, restricted stock units, or any security convertible into or exercisable or
exchangeable for Common Stock in connection with (A) termination of employment or other termination of a service provider and
pursuant to agreements wherein the Company has the option to repurchase such shares, or (B) agreements wherein the Company has
a right of first refusal with respect to transfers of such shares. In addition, the restrictions sets forth herein shall not prevent
the undersigned from entering into a sales plan pursuant to Rule 10b5-1 under the Exchange Act after the date hereof, provided
that (i) a copy of such plan is provided to the Underwriters promptly upon entering into the same and (ii) no sales
or transfers may be made under such plan until the Lock-Up Period ends or this Lock-Up Agreement is terminated in accordance with
its terms. For purposes of this paragraph, “immediate family” shall mean the undersigned and the spouse, any lineal
descendent, father, mother, brother or sister of the undersigned.
In addition, the undersigned
hereby waives any rights the undersigned may have to require registration of Common Stock in connection with the filing of a registration
statement relating to the Offering. The undersigned further agrees that, for the Lock-Up Period, the undersigned will not, without
the prior written consent of the Representative, make any demand for, or exercise any right with respect to, the registration
of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other rights
to purchase Common Stock or any such securities.
The undersigned hereby
confirms that the undersigned has not, directly or indirectly, taken, and hereby covenants that the undersigned will not, directly
or indirectly, take, any action designed, or which has constituted or will constitute or might reasonably be expected to cause
or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of
shares of Common Stock.
If (i) the Company
notifies you in writing that it does not intend to proceed with the Offering, or (ii) if the closing of the Offering does not
occur prior to thirty (30) days from the date of this Lock-Up Agreement, this Lock-Up Agreement shall be terminated and the undersigned
shall be released from its obligations hereunder.
[signature page follows]
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Very truly yours, |
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(Name - Please Print) |
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(Signature) |
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(Name of Signatory, in the case of entities - Please Print) |
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(Title of Signatory, in the case of entities - Please Print) |
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Address: |
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SCHEDULE V
List of officers and directors
executing lock-up agreements
R. Daniel Brdar
William
Alexander
Timothy Burns
Mark L. Baum
Lon E. Bell
David B. Eisenhaure
Ryan
K. O’Keefe
Exhibit
5.1
![](image_003.jpg)
May 15,
2015
IDEAL POWER,
INC.
4120 Freidrich
Lane, Suite 100
Austin,
Texas 78744
Ladies and
Gentlemen:
You have
requested our opinion with respect to certain matters in connection with the sale and issuance by IDEAL POWER INC., a Delaware
corporation (the “Company”), of up to an aggregate of 2,225,825 shares (the “Shares”) of the Company’s
common stock, par value $0.001 per share (the “Common Stock”), pursuant to a Registration Statement on Form S-3 (File
No. 333-200661) (the “Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Act”), the related prospectus included therein (the “Prospectus”)
and the prospectus supplement to be filed with the Commission pursuant to Rule 424(b) promulgated under the Act (the “Prospectus
Supplement”).
In connection
with this opinion, we have examined and relied upon the Registration Statement and the related Prospectus and Prospectus Supplement,
the Company’s Certificate of Incorporation, as amended, and the Company’s Bylaws, as amended, as currently in effect,
and the originals or copies certified to our satisfaction of such other documents, records, certificates, memoranda and other instruments
as in our judgment are necessary or appropriate to enable us to render the opinion expressed below.
In rendering
this opinion, we have assumed the genuineness and authenticity of all signatures on original documents; the genuineness and authenticity
of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as copies; the accuracy,
completeness and authenticity of certificates of public officials; and the due authorization, execution and delivery of all documents
where due authorization, execution and delivery are prerequisites to the effectiveness of such documents (other than with respect
to the Company).
On the
basis of the foregoing, and in reliance thereon, we are of the opinion that the Shares have been duly and validly authorized
and, when issued and sold pursuant to the Underwriting Agreement by and between the Company and Roth Capital Partners, LLC,
as representative of the several underwriters named therein (collectively, the “Underwriters”), dated May 15, 2015, and in accordance with the Registration Statement and the related Prospectus and Prospectus Supplement, will
be validly issued, fully paid and nonassessable.
We consent
to the reference to our firm under the caption “Legal Matters” in the Prospectus Supplement and to the filing of this
opinion as an exhibit to a Current Report of the Company on Form 8-K. In giving our consent, we do not thereby admit that we are
in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the
Commission thereunder.
Very truly
yours,
/s/ DLA
PIPER LLP (US)
DLA PIPER
LLP (US)
Exhibit 99.1
Ideal Power Inc.
Announces Proposed Public Offering of Common Stock
AUSTIN, TX -- (Marketwired) — May 14, 2015 — Ideal
Power Inc. (NASDAQ: IPWR), a developer of innovative power conversion technologies, today announced that it plans to offer shares
of its common stock in an underwritten public offering. Ideal Power intends to use the proceeds of the proposed offering for working
capital and general corporate purposes.
Roth Capital Partners is acting as the sole book-running manager
for the offering. National Securities Corporation and Northland Capital Markets are acting as co-managers.
All the shares described above are being offered by Ideal Power
pursuant to a registration statement previously filed with and subsequently declared effective by the Securities and Exchange
Commission (“SEC”). A preliminary prospectus supplement relating to the offering will be filed with the SEC and will
be available on the SEC’s website at http://www.sec.gov upon filing. ‘Northland
Capital Markets’ is the trade name for certain capital markets and investment banking services of Northland Securities,
Inc., member FINRA/SIPC.
This press release shall not constitute an offer to sell or
the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in
any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction. Copies of the preliminary prospectus supplement, when filed, and accompanying
base prospectus relating to this offering may be obtained from Roth Capital Partners, LLC, 888 San Clemente, Newport Beach, CA
92660, (800) 678-9147 or email: rothecm@roth.com or by accessing the SEC’s website, www.sec.gov.
About Ideal Power Inc.
Ideal Power develops power conversion technologies designed
to improve the size, cost, efficiency, flexibility and reliability of electronic power converters.
Forward-Looking Statements
This announcement contains forward-looking
statements, including statements regarding the proposed public offering. The offering is subject to market and other conditions,
and there can be no assurance as to whether or when the offering may be completed or as to the actual size or terms of the offering.
Investors should not to place undue reliance on the forward-looking statements contained in this release. Risks and uncertainties
relating to Ideal Power and its business can be found in the “Risk Factors” section of the preliminary prospectus
supplement related to the proposed offering to be filed with the SEC. Ideal Power undertakes no duty or obligation to
update any forward-looking statements contained in this release as a result of new information, future events or changes in Ideal
Power’s expectations.
Ideal Power Media Contact:
Mercom Communications
www.mercomcapital.com
Wendy Prabhu
Email Contact
1.512.215.4452
Investor Relations Contact:
MZ North America
www.mzgroup.us
Matt Hayden
Email Contact
1.949.259.4986
Exhibit 99.2
Ideal Power Inc. Prices Underwritten
Public Offering of Common Stock
AUSTIN, TX -- (Marketwired) — May 15, 2015
— Ideal Power Inc. (NASDAQ: IPWR), a developer of innovative power conversion technologies, today announced the pricing
of a $15 million underwritten public offering of 1,935,500 shares of its common stock at a public offering price of
$7.75 per share. Ideal Power has also granted the underwriter a 30-day option to purchase up to an additional 290,325
shares of common stock to cover overallotments in connection with the offering. After the underwriting discount and estimated
offering expenses payable by it, Ideal Power expects to receive net proceeds of approximately $13.8 million, assuming no
exercise of the overallotment option. Ideal Power currently expects to use the net proceeds from the offering for working
capital and general corporate purposes. The offering is expected to close on or about May 20, 2015, subject to customary
closing conditions.
Roth Capital Partners is acting as the sole book-running manager
for the offering. National Securities Corporation and Northland Capital Markets are acting as co-managers. ‘Northland Capital
Markets’ is the trade name for certain capital markets and investment banking services of Northland Securities, Inc., member
FINRA/SIPC.
All the shares described above are being offered by Ideal Power
pursuant to a registration statement previously filed with and declared effective by the Securities and Exchange Commission. A
prospectus supplement relating to the offering will be filed with the SEC and will be available on the SEC’s website at
http://www.sec.gov.
This press release shall not constitute an offer to sell or
the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in
any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction. Copies of the preliminary prospectus supplement and accompanying base prospectus
relating to this offering may be obtained from Roth Capital Partners, LLC, 888 San Clemente, Newport Beach, CA 92660, (800) 678-9147
or email: rothecm@roth.com or by accessing the SEC’s website, www.sec.gov.
About Ideal Power Inc.
Ideal Power develops power conversion technologies designed
to improve the size, cost, efficiency, flexibility and reliability of electronic power converters.
Forward-Looking Statements
This announcement contains forward-looking statements regarding
the public offering and the intended use of proceeds from the offering. The offering is subject to market and other conditions,
and there can be no assurance as to whether or when the offering may be completed or as to the actual size or terms of the offering.
Ideal Power cautions investors not to place undue reliance on the forward-looking statements contained in this release. Risks
and uncertainties relating to Ideal Power and its business, as well as this offering, can be found in the “Risk Factors”
section of the prospectus supplement related to the proposed offering to be filed with the SEC. Ideal Power undertakes no duty
or obligation to update any forward-looking statements contained in this release as a result of new information, future events
or changes in Ideal Power’s expectations.
Investor Relations Contact:
MZ North America
www.mzgroup.us
Matt Hayden
Email Contact
1.949.259.4986
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