SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event
reported): August 4, 2015
IDEAL POWER INC.
(Exact name of registrant as specified
in Charter)
Delaware |
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001-36216 |
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14-1999058 |
(State or other jurisdiction of
incorporation or organization) |
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(Commission File No.) |
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(IRS Employee Identification No.) |
4120 Freidrich Lane, Suite 100
Austin, Texas, 78744
(Address of Principal Executive Offices)
512-264-1542
(Issuer Telephone number)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction
A.2 below).
| ¨ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)). |
| ¨ | Pre-commencement communications pursuant to Rule 13e-(c)
under the Exchange Act (17 CFR 240.13(e)-4(c)) |
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On August 4, 2015, Ideal Power Inc. (the
“Company”) issued a press release announcing its financial results for the quarter ended June 30, 2015. The press release
is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in its entirety into this Item
2.02. The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying
important factors that could cause actual results to differ materially from those anticipated.
The Company will
host a conference call with investors to discuss the results. The conference call will begin at 4:30 p.m. Eastern time on Tuesday,
August 4, 2015. The call may be accessed in the U.S. by dialing 1-888-715-1397 and entering the passcode: 5937716. A webcast of
the call may be found at http://public.viavid.com/player/index.php?id=115560. Investors can submit questions to the Company via
email at matt.hayden@mzgroup.us. The webcast replay will be available on the Company’s website, www.idealpower.com.
The information furnished under this Item
2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes
of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the
liabilities of that Section. The information in this Item 2.02, including Exhibit 99.1, shall not be deemed incorporated by reference
into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language
in such filing.
| Item 9.01 | Financial
Statements and Exhibits |
| Exhibit 99.1 | Press release issued August 4, 2015 |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: August 4, 2015 |
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IDEAL POWER INC. |
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By: |
/s/ Timothy Burns |
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Timothy Burns |
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Chief Financial Officer |
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EXHIBIT INDEX
Exhibit No. |
Description |
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|
99.1 |
Press release issued August 4, 2015 |
Exhibit 99.1
Ideal Power Inc. Announces Second Quarter 2015 Results
Management
to Host Conference Call at 4:30 pm ET
AUSTIN, TX -- (Marketwired) -- 08/04/15 -- Ideal Power Inc.
(NASDAQ: IPWR), a developer of disruptive technologies in the power conversion space, today announced results for the three and
six months ended June 30, 2015.
Key Q2 2015 and Subsequent Highlights:
| · | Announced an agreement with KACO new energy whereby KACO will resell
Ideal Power products under the KACO label in North and Central America. |
| · | Gexpro launched its branded storage system which includes Ideal
Power’s converters and placed a large volume purchase order. |
| · | Added an additional channel partner, a solar distributor, who will
be entering the storage market with a battery energy storage system incorporating Ideal Power’s power converters. |
| · | Formalized an alliance agreement with ONEnergy Inc. through collaboration
with LG Chem. |
| · | Received 5 MW in orders in June, including largest order to date.
Orders covered the full family of Ideal Power products. |
| · | Delivered our first grid-resilient 125 kW 2 port and multi-port Power Conversion Systems (PCS) to launch
customers for system integration ahead of full commercial launch.
|
| · | Order backlog of $2.2 million as of June 30, 2015. |
| · | Achieved certification for new grid-resilient 30 kW 2 port and multi-port
PCS. |
| · | Received five new patents related to bi-directional switches. |
| · | Raised $15.9 million in net proceeds through a follow-on offering,
strengthening the balance sheet with $20 million in cash at June 30, 2015. |
"During the second quarter we made excellent progress on
all aspects of our business, broadening our network of channel partners, securing additional volume orders across our full product
portfolio, receiving initial orders from new customers, and continuing to develop our technology and expand our patent portfolio.
We achieved key certifications for our grid-resilient 30 kW products and shipped our first grid-resilient 125kW 2 port and multi-port
PCS for applications where certification is not mandatory. We expect our grid-resilient 125 kW PCS, which is scheduled to be certified
later this year, to be a significant growth driver for Ideal Power going forward”, stated Dan Brdar, Chairman and CEO.
“After recently attending the Energy Storage
Association Conference and Intersolar North America Conference, it is evident that energy storage has gained a great deal of
momentum. The declining cost of batteries and the convergence of solar and storage are creating new channel partners and
business models that can utilize our unique products and technology. Many of these companies want a turn-key solution that is
competitive in price, offers the best performance and payback, and is backed by a company who can provide financing and a
performance guarantee. We believe that by having our power converters incorporated into energy storage solutions developed by
key industry players, it will enable us to establish a leading market position while creating barriers to entry,” Mr.
Brdar went on to say.
Exhibit 99.1
Second Quarter 2015 Financial Results
| · | Second quarter 2015 product revenues were $1.2 million compared to
$0.4 million in Q2 2014. |
| · | Product revenue for the first six months of 2015 was $2.4 million
compared to $0.6 million in the year ago period. |
| · | Second quarter 2015 gross margins were 12% compared to negative 2%
gross margins for Q2 2014. |
| · | Research and development expenses increased to $1.1 million as a result
of the self-funding of our bi-directional switch development efforts, previously funded by the ARPA-E grant, in addition to development
costs associated with our grid-resilient 125 kW PCS products. |
| · | Second quarter 2015 net loss was $2.3 million compared to $1.6 million
in the same year ago period. |
| · | Cash and cash equivalents totaled $20.0 million on June 30, 2015 compared
to $7.9 million on December 31, 2014 with no long-term debt outstanding. |
"We continue to invest to keep the Company well-positioned
for growth. As we attain higher unit volumes, the added scale should allow us to reduce our unit costs, spread production overhead
over a larger volume base, and expand our gross margins. This is already evident in the positive gross margins we have achieved
in the first half of the year despite the introduction of new products in the second quarter at initially low volumes. We continue
to invest heavily in research and development to expand our product offerings, including our investment in bi-directional switch
development," stated Tim Burns, Chief Financial Officer of Ideal Power.
Business Overview
Ideal Power's patented Power Packet Switching Architecture™
(PPSA) technology enables significant improvements over conventional power converters, thus improving efficiency, reliability,
size and installed cost. The Company's products are made from standard industry components, are battery agnostic and are software
driven, which provides ultimate flexibility for customers. Ideal Power's current products include grid-resilient 30kW and 125kW
2 port and multi-port PCS based on its internationally patented PPSA technology. These products allow the Company to address several
multi-billion dollar vertical markets, including commercial energy storage, integrated storage with solar or wind, and on-grid
and off-grid microgrid applications, in addition to non-renewable energy applications.
Ideal Power has formed key relationships with leaders in target
vertical markets to support their growth initiatives. New channel relationships are expected to significantly increase penetration
into target markets and may be complemented by licensing agreements, enabling high volume and international expansion.
Conference Call Details
CEO Dan Brdar and CFO Tim Burns will host a conference call
with investors which will provide additional details on what has occurred during the second quarter and year-to-date periods. To
access the call, please use the following information:
Date: Tuesday, August 4, 2015
Time: 4:30 PM ET, 1:30 PM PT
US dial-in: 1-888-715-1397
International Dial-In: 1-913-312-0961 Passcode: 5937716 (or reference Ideal Power 2015 Q2 Update Call)
Webcast: http://public.viavid.com/player/index.php?id=115560
The webcast replay will be available on the Company's Web site,
www.idealpower.com.
Exhibit 99.1
About Ideal Power Inc.
Ideal Power Inc. (NASDAQ: IPWR) has developed a novel, patented
power conversion technology called Power Packet Switching Architecture™ (PPSA). PPSA improves the size, cost, efficiency,
flexibility and reliability of electronic power converters. PPSA can scale across several large and growing markets, including
solar photovoltaic generation, electrified vehicle charging, and commercial grid storage. Ideal Power also has a capital-efficient
business model that can enable it to address these markets simultaneously. Ideal Power has won multiple grants for its PPSA technology,
including a $2.5 million grant from the Department of Energy's Advanced Research Projects Agency - Energy (ARPA-E) program, and
market-leading customers are incorporating PPSA as a key component of their systems. For more information, visit www.idealpower.com.
Safe Harbor Statement
All statements in this release and on the associated conference
call that are not based on historical fact are "forward looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include, but are not limited to: our statements concerning the timing
of certification for our grid-resilient 125 kW PCS and the expectation that it will be a significant growth driver for our business;
our belief that by having our power converters incorporated into energy storage solutions developed by key industry players, we
will be able to establish a leading market position; and our expectation that increased scale will result in gross margin expansion.
While management has based any forward looking statements included in this release on its current expectations, the information
on which such expectations were based may change. These forward looking statements rely on a number of assumptions concerning future
events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control that could
cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not
limited to, the risks that regulatory approvals may not be forthcoming in the time frames we currently expect or at all, we will
not continue to add new partners to help us broaden our market reach, our commercial relationships with our partners will not enable
future growth or the operating results we currently forecast, unanticipated costs or lower-than-anticipated revenue may adversely
impact our ability to execute our operating plan, our new channel relationships may not be as successful as we expect and we may
not successfully enter into new licensing arrangements regarding our technology, the patents for our technology may not provide
adequate protection and we may not be successful in maintaining, enforcing and defending our patents, demand for energy storage
products may not grow, demand for our products, which we believe are disruptive, may not develop and we may not be able to compete
successfully with other manufacturers and suppliers of energy conversion products, both now and in the future, as new products
are developed and marketed. Orders in backlog, while generally not cancellable nor protected from price changes, nevertheless may
be rescheduled with our consent and as such may not be indicative of future revenues in any given period. Furthermore, we operate
in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should
not place any reliance on forward looking statements as a prediction of actual results. We disclaim any intention to, and undertake
no obligation to, update or revise forward looking statements.
Ideal Power Media Contact:
Mercom Communications
Wendy Prabhu
1.512.215.4452
idealpower@mercomcapital.com
www.mercomcapital.com
Investor Relations Contact:
MZ North America
Matt Hayden
1.949.259.4986
Matt.hayden@mzgroup.us
www.mzgroup.us
IDEAL POWER INC.
BALANCE SHEETS
| |
June 30, | | |
December 31, | |
| |
2015 | | |
2014 | |
ASSETS | |
| | | |
| | |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 19,965,791 | | |
$ | 7,912,011 | |
Accounts receivable, net | |
| 757,464 | | |
| 446,521 | |
Inventories, net | |
| 665,481 | | |
| 251,338 | |
Prepayments and other current assets | |
| 286,368 | | |
| 263,605 | |
Total current assets | |
| 21,675,104 | | |
| 8,873,475 | |
Property and equipment, net | |
| 616,993 | | |
| 374,376 | |
Patents, net | |
| 1,095,090 | | |
| 1,012,964 | |
Other non-current assets | |
| 17,920 | | |
| 17,920 | |
Total assets | |
$ | 23,405,107 | | |
$ | 10,278,735 | |
| |
| | | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 1,154,813 | | |
$ | 441,636 | |
Accrued expenses | |
| 881,031 | | |
| 773,119 | |
Total current liabilities | |
| 2,035,844 | | |
| 1,214,755 | |
| |
| | | |
| | |
Stockholders’ equity: | |
| | | |
| | |
Common stock, $0.001 par value; 50,000,000 shares authorized; 9,345,263 and 7,048,235 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | |
| 9,345 | | |
| 7,048 | |
Additional paid-in capital | |
| 49,500,394 | | |
| 32,712,020 | |
Treasury stock | |
| (2,657 | ) | |
| (2,657 | ) |
Accumulated deficit | |
| (28,137,819 | ) | |
| (23,652,431 | ) |
Total stockholders’ equity | |
| 21,369,263 | | |
| 9,063,980 | |
Total liabilities and stockholders’ equity | |
$ | 23,405,107 | | |
$ | 10,278,735 | |
IDEAL POWER INC.
STATEMENTS OF
OPERATIONS
| |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
Revenues: | |
| | | |
| | | |
| | | |
| | |
Products | |
$ | 1,199,037 | | |
$ | 444,100 | | |
$ | 2,397,028 | | |
$ | 552,600 | |
Grants | |
| - | | |
| 116,426 | | |
| - | | |
| 299,021 | |
Total revenue | |
| 1,199,037 | | |
| 560,526 | | |
| 2,397,028 | | |
| 851,621 | |
| |
| | | |
| | | |
| | | |
| | |
Cost of revenues: | |
| | | |
| | | |
| | | |
| | |
Products | |
| 1,056,138 | | |
| 440,972 | | |
| 2,075,639 | | |
| 635,313 | |
Grant research and development costs | |
| - | | |
| 129,362 | | |
| - | | |
| 332,245 | |
Total cost of revenue | |
| 1,056,138 | | |
| 570,334 | | |
| 2,075,639 | | |
| 967,558 | |
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| | | |
| | | |
| | | |
| | |
Gross profit (loss) | |
| 142,899 | | |
| (9,808 | ) | |
| 321,389 | | |
| (115,937 | ) |
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| | | |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
Research and development | |
| 1,100,348 | | |
| 645,335 | | |
| 2,092,580 | | |
| 954,898 | |
General and administrative | |
| 968,364 | | |
| 718,287 | | |
| 1,879,141 | | |
| 1,463,255 | |
Sales and marketing | |
| 371,228 | | |
| 261,528 | | |
| 844,180 | | |
| 529,747 | |
Total operating expenses | |
| 2,439,940 | | |
| 1,625,150 | | |
| 4,815,901 | | |
| 2,947,900 | |
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| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (2,297,041 | ) | |
| (1,634,958 | ) | |
| (4,494,512 | ) | |
| (3,063,837 | ) |
| |
| | | |
| | | |
| | | |
| | |
Interest income | |
| 4,651 | | |
| 7,394 | | |
| 9,124 | | |
| 15,531 | |
| |
| | | |
| | | |
| | | |
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Net loss | |
$ | (2,292,390 | ) | |
$ | (1,627,564 | ) | |
$ | (4,485,388 | ) | |
$ | (3,048,306 | ) |
| |
| | | |
| | | |
| | | |
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Net loss per share – basic and fully diluted | |
$ | (0.28 | ) | |
$ | (0.23 | ) | |
$ | (0.59 | ) | |
$ | (0.44 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of shares outstanding – basic and fully diluted | |
| 8,103,475 | | |
| 7,011,465 | | |
| 7,582,362 | | |
| 7,005,319 | |
IDEAL POWER INC.
STATEMENTS OF CASH FLOWS
| |
Six Months Ended June 30, | |
| |
2015 | | |
2014 | |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (4,485,388 | ) | |
$ | (3,048,306 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Allowance for doubtful accounts | |
| 54,791 | | |
| - | |
Write-down of inventory | |
| (6,430 | ) | |
| - | |
Depreciation and amortization | |
| 80,940 | | |
| 19,711 | |
Write-off of capitalized software | |
| 45,641 | | |
| - | |
Write-off of capitalized patents | |
| 103,289 | | |
| - | |
Stock-based compensation | |
| 666,434 | | |
| 379,282 | |
Fair value of warrants issued for services | |
| 50,940 | | |
| 67,920 | |
Decrease (increase) in operating assets: | |
| | | |
| | |
Accounts receivable | |
| (365,734 | ) | |
| (152,602 | ) |
Inventories | |
| (423,740 | ) | |
| 272,724 | |
Prepaid expenses and other assets | |
| (22,763 | ) | |
| 22,734 | |
Increase (decrease) in operating liabilities: | |
| | | |
| | |
Accounts payable | |
| 713,177 | | |
| (195,648 | ) |
Accrued expenses and deferred rent | |
| 107,912 | | |
| 130,198 | |
Net cash used in operating activities | |
| (3,480,931 | ) | |
| (2,503,987 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Purchase of property and equipment | |
| (343,208 | ) | |
| (233,971 | ) |
Acquisition of patents | |
| (195,378 | ) | |
| (254,809 | ) |
Net cash used in investing activities | |
| (538,586 | ) | |
| (488,780 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Net proceeds from issuance of common stock | |
| 15,924,405 | | |
| - | |
Exercise of options and warrants | |
| 148,892 | | |
| 4,990 | |
Net cash provided by financing activities | |
| 16,073,297 | | |
| 4,990 | |
| |
| | | |
| | |
Net increase (decrease) in cash and cash equivalents | |
| 12,053,780 | | |
| (2,987,777 | ) |
Cash and cash equivalents at beginning of period | |
| 7,912,011 | | |
| 14,137,097 | |
Cash and cash equivalents at end of the period | |
$ | 19,965,791 | | |
$ | 11,149,320 | |
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