Ideal Power (NASDAQ: IPWR) builds $41.3M cash pile as losses widen
Ideal Power Inc. is an early-stage power semiconductor company focused on commercializing its B-TRAN® solid-state switch technology, with first products (discrete B-TRAN® and SymCool® Power Module) launched and initial prototype sales under evaluation by customers, including shipments under a purchase order from Stellantis.
For the six months ended June 30, 2026, the company generated $5,800 in revenue and recorded a net loss of $7,044,431, 23% higher than a year earlier, driven mainly by increased general and administrative and sales and marketing expenses and a $215,133 non-cash patent impairment. Liquidity improved substantially following February and May equity offerings, which provided $12.6 million and $27.7 million in net proceeds, respectively, lifting cash and cash equivalents to $41.3 million and total assets to $45.0 million at June 30, 2026, with no debt and working capital of $40.1 million. Management expects modestly higher operating cash outflows in the remainder of 2026 as commercialization efforts, customer engagements, and a strategic cooperation agreement around solid-state circuit breakers and EV applications progress.
Positive
- Cash strengthened to $41.3 million at June 30, 2026, from $6.1 million at year-end 2025, driven by equity offerings that raised $40.3 million in net proceeds, leaving the company debt-free with working capital of $40.1 million.
- Commercial traction advanced with a multi-year strategic cooperation agreement for circuit protection solutions, continued work under a Stellantis EV-related development program, and the company’s first design win for solid-state circuit breakers.
Negative
- The company remains in an early commercialization stage, with six-month revenue of only $5,800 and a net loss of $7.0 million, 23% higher than the prior-year period, resulting in continued operating cash outflows of $4.5 million.
Filing Explained
The 2026 financings added shares and left 3.41 million low-exercise-price warrants capable of further increasing the share count.
A Form 10-Q provides unaudited interim financial statements and updates on risks and liquidity. This filing reports that the 2026 offerings were completed, leaving
A pre-funded warrant is sold near the share price but has a nominal exercise price and converts into shares when exercised. The May offering included
The outstanding warrant balance was
The filing also reports
Exercise of the pre-funded warrants is limited by a
Key Figures
Key Terms
Bidirectional bipolar junction TRANsistor (B-TRAN®) technical
pre-funded warrants financial
design win technical
stock-based compensation financial
right of use asset financial
performance stock unit financial
FAQ
How much revenue did Ideal Power (IPWR) generate in the first half of 2026?
What was Ideal Power (IPWR)’s net loss for the six months ended June 30, 2026?
What is Ideal Power (IPWR)’s cash position and debt level as of June 30, 2026?
How much capital did Ideal Power (IPWR) raise in its 2026 equity offerings?
What progress has Ideal Power (IPWR) made with Stellantis and other customers?
How many Ideal Power (IPWR) shares are outstanding, and what is the potential dilution from pre-funded warrants?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______________ to _______________
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
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If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes
As of August 11, 2026, the issuer had
TABLE OF CONTENTS
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PART I |
FINANCIAL INFORMATION |
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Item 1. |
Unaudited Condensed Financial Statements |
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Condensed Balance Sheets at June 30, 2026 and December 31, 2025 |
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Condensed Statements of Operations for the three and six months ended June 30, 2026 and 2025 |
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Condensed Statements of Cash Flows for the six months ended June 30, 2026 and 2025 |
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Condensed Statements of Stockholders’ Equity for the three-month periods during the six months ended June 30, 2026 and 2025 |
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Notes to Unaudited Condensed Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
Controls and Procedures |
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PART II |
OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Defaults Upon Senior Securities |
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Mine Safety Disclosures |
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Other Information |
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Item 6. |
Exhibits |
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SIGNATURES |
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PART I-FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED FINANCIAL STATEMENTS
IDEAL POWER INC.
Condensed Balance Sheets
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The accompanying notes are an integral part of these condensed financial statements.
IDEAL POWER INC.
Condensed Statements of Operations
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The accompanying notes are an integral part of these condensed financial statements.
IDEAL POWER INC.
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The accompanying notes are an integral part of these condensed financial statements.
IDEAL POWER INC.
Condensed Statements of Stockholders’ Equity
For the Three-Month Periods during the Six Months Ended June 30, 2026 and 2025
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Issuance of common stock and pre-funded warrants, net |
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Vesting of stock units including payment of employee tax withholdings |
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Balances at March 31, 2026 |
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Balances at June 30, 2026 |
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Balances at December 31, 2024 |
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Balances at June 30, 2025 |
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The accompanying notes are an integral part of these condensed financial statements.
IDEAL POWER INC.
Notes to Financial Statements
(unaudited)
Note 1 – Organization and Description of Business
Ideal Power Inc. (the “Company”) was incorporated in Texas in May 2007 under the name Ideal Power Converters, Inc. The Company changed its name to Ideal Power Inc. and re-incorporated in Delaware in July 2013. With headquarters in Austin, Texas, the Company is focused on the further development and commercialization of its Bidirectional bipolar junction TRANsistor (B-TRAN®) solid-state switch technology.
Since its inception, the Company has financed its research and development efforts and operations primarily through the sale of common stock and pre-funded warrants. The Company’s continued operations are dependent upon, among other things, its ability to obtain adequate sources of funding through future revenues, follow-on stock offerings, issuances of warrants, debt financing, co-development agreements, government grants, sale or licensing of developed intellectual property or other alternatives.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The balance sheet at December 31, 2025 has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 27, 2026.
In the opinion of management, these financial statements reflect all normal recurring, and other adjustments, necessary for a fair presentation. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Segment Information
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a company-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates as one operating segment. The Company has concluded that net income (loss) is the measure of segment profitability. The CODM assesses performance for the Company, monitors budget versus actual results and determines how to allocate resources based on net income (loss) as reported in the condensed statements of operations. There are no other expense categories regularly provided to the CODM that are not already included in the condensed financial statements herein.
During the six months ended June 30, 2026 and 2025, the Company did not generate material international revenues. At June 30, 2026, the Company had $
Net Loss Per Share
In accordance with Accounting Standards Codification (“ASC”) 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic net loss per share. As such, for the three and six months ended June 30, 2026 and 2025, the Company included pre-funded warrants to purchase shares of common stock in its computation of net loss per share. The pre-funded warrants were issued in May 2026, February 2026, March 2024 and November 2019 with an exercise price of $
In periods with a net loss, no common share equivalents are included in the computation of diluted net loss per share because their effect would be anti-dilutive. At June 30, 2026 and 2025, potentially dilutive shares outstanding amounted to
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which mandates enhanced disclosure of specific costs and expenses within the notes to the financial statements. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the impact that this ASU will have on the presentation of its financial statements.
Note 3 – Intangible Assets, Net
Intangible assets, net consisted of the following:
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Patents |
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Trademarks |
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Accumulated amortization - patents |
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At June 30, 2026 and December 31, 2025, the Company capitalized $
Amortization expense amounted to $
In the three months ended June 30, 2026, the Company conducted an evaluation and rationalization of its patent portfolio and recorded a non-cash impairment charge of $
Costs related to indefinite life trademarks are not amortized but are subject to evaluation for potential impairment.
Note 4 – Lease
In April 2024, the Company entered into a first amendment and relocation agreement (the “Amended Lease”) with its landlord. The Amended Lease is for
The Company recognized a right of use asset of $
Future minimum payments under the Amended Lease are as follows:
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Total lease liability |
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Long-term lease liability |
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At June 30, 2026, the remaining lease term was
For the three months ended June 30, 2026 and 2025, operating cash flows for lease payments totaled $
Note 5 – Commitments and Contingencies
License Agreements
In 2015, the Company entered into a licensing agreement which expires in February 2033. Per the agreement, the Company has an exclusive royalty-free license, included in intangible assets, associated with semiconductor power switches which enhances its intellectual property portfolio. The Company pays $
In 2023, the Company amended a 2021 license agreement which expires in February 2034. Per the agreement, the Company has an exclusive royalty-free license, included in intangible assets, associated with semiconductor drive circuitry which enhances its intellectual property portfolio. The Company pays $
At June 30, 2026, the estimated present value of future payments under the licensing agreements was $
Legal Proceedings
The Company is subject to litigation from time to time. While the Company believes that any current or threatened legal proceedings are without merit and not material, there can be no assurance that such matters will not have a material adverse effect on its business, financial condition or results of operations in the future.
Indemnification Obligations
The employment agreements of Company executives include an indemnification provision whereby the Company shall indemnify and defend, at the Company’s expense, its executives so long as an executive’s actions were taken in good faith and in furtherance of the Company’s business and within the scope of the executive’s duties and authority.
Note 6 — Common Stock
In May 2026, the Company issued and sold
In February 2026, the Company issued and sold
Note 7 — Equity Incentive Plan
In May 2013, the Company adopted the 2013 Equity Incentive Plan (as amended and restated, the “Plan”) and reserved shares of common stock for issuance under the Plan, which was last amended in June 2026. The Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”). At June 30, 2026,
A summary of the Company’s stock option activity and related information is as follows:
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All outstanding stock options were exercisable at June 30, 2026.
A summary of the Company’s restricted stock unit (“RSU”) and performance stock unit (“PSU”) activity is as follows:
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During the six months ended June 30, 2026, the Company granted
At June 30, 2026, there was $
Note 8 — Pre-Funded Warrants
At June 30, 2026 and December 31, 2025, the Company had
During the six months ended June 30, 2026, a warrant holder exercised
At June 30, 2026, all pre-funded warrants were exercisable, although the pre-funded warrants may be exercised only to the extent that the total number of shares of common stock then beneficially owned by such warrant holder does not exceed
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORT
This report contains 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, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements include, but are not limited to, statements regarding our future financial performance, liquidity, business condition and results of operations, expectations regarding future expenses and gross margins, future business plans, and expectations regarding design wins and other business developments. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this report. In particular, these include statements relating to future actions, prospective products, applications, customers, technologies, future performance or results of anticipated products, expenses, and financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
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our history of losses; |
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our ability to generate revenue; |
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our limited operating history; |
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the size and growth of markets for our technology; |
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regulatory developments that may affect our business; |
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our ability to successfully develop new products and the expected performance of those products; |
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the performance of third-party consultants and service providers whom we have and will continue to rely on to assist us in development and commercialization of our B-TRAN® and related packaging and drive circuitry; |
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the rate and degree of market acceptance for our B-TRAN® and current and future B-TRAN® products; |
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the time required for third parties to redesign, test and certify their products incorporating our B-TRAN®; |
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our ability to successfully commercialize our B-TRAN® technology; |
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our ability to secure strategic partnerships with semiconductor fabricators and others related to our B-TRAN® technology; |
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our ability to obtain, maintain, defend and enforce intellectual property rights protecting our technology; |
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the success of our efforts to manage cash spending, particularly prior to the commercialization of our B-TRAN® technology at scale; |
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trade protectionism, tariffs, and other barriers to trade that impact the availability or cost of the raw materials and components used in our products; |
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general economic conditions and events, including inflation, and the impact they may have on us and our potential partners and licensees; |
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our dependence on the global supply chain and impacts of supply chain disruptions; |
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our ability to obtain adequate financing in the future, if and when we need it; |
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the impact of global health pandemics on our business, financial condition and results of operations; |
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our success at managing the risks involved in the foregoing items; and |
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other factors discussed in this report. |
The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report, except as required by applicable law. You should not place undue reliance on these forward-looking statements.
Unless otherwise stated or the context otherwise requires, the terms “Ideal Power,” “we,” “us,” “our” and the “Company” refer to Ideal Power Inc.
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ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited 2025 financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to historical information, the discussion and analysis here and throughout this Form 10-Q contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited, to those set forth under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.
Overview
Ideal Power Inc. is located in Austin, Texas. We are solely focused on the further development and commercialization of our Bidirectional bipolar junction TRANsistor (B-TRAN®) solid-state switch technology.
To date, operations have been funded primarily through the sale of common stock and pre-funded warrants.
We are in the process of commercializing our B-TRAN® technology and have launched our first two commercial products, the discrete B-TRAN® and the SymCool® Power Module. We generated $5,800 in revenue in the six months ended June 30, 2026 and $13,278 in revenue in the six months ended June 30, 2025.
Product Launches
Our first commercial product launch was the discrete B-TRAN®. This single B-TRAN® die packaged for electrical connection is designed to meet the very low conduction loss needs of the solid-state circuit protection and electric vehicle ("EV”) contactor markets.
Our second commercial product launch was the SymCool® Power Module. This multi-die B-TRAN® module is also designed to meet the very low conduction loss needs of the solid-state circuit protection and EV contactor markets.
Upon product launch, we design and build initial prototypes for testing and to solicit customer feedback. Based on the results of testing and customer feedback, we incorporate any necessary changes into the product design, build final prototypes and complete additional testing prior to full commercial release. To date, our customers have purchased prototypes in small quantities for evaluation and provided us feedback that has been incorporated into our product designs. We expect significantly higher volume orders from customers once we secure a design win from them and they start to build inventory in advance of launching their OEM products. For the products described above, we would expect the time from announcing a design win to the sale of the related OEM product to be roughly twelve to eighteen months, although it may vary considerably depending on the customer and application. We would expect a significantly longer design cycle for automotive applications. Design wins are expected to result in significant revenue growth for us over time as product life cycles tend to be relatively long for power electronics products as changing to another technology would require an OEM to redesign their product. See "First Design Win” below.
Development Agreement
In 2022, we announced, and began the first phase of, a product development agreement with Stellantis, a top 10 global automaker, for a custom B-TRAN® power module for use in the automaker’s EV drivetrain inverters in its next generation EV platform. In the first phase of the program, we provided packaged B-TRAN® devices, test kits and technical data to Stellantis for their evaluation. In 2023, we secured, and began the second phase of, this program. In the second phase of the program, we collaborated with Stellantis and the program partners, including both the program’s packaging company and the organization building the initial drivetrain inverter, to supply B-TRAN® devices for integration into the custom power module and inverter designs. Also, as part of the second phase of the program, we provided Stellantis a comprehensive test plan for the testing required to achieve certification to automotive standards for B-TRAN®. The test plan was subsequently approved as submitted. In 2024, we successfully completed the second phase of the program. In August 2025, we secured an order from Stellantis for custom development and packaged devices targeting multiple EV applications. We completed the first deliverable under this purchase order in 2025. Also in 2025, Stellantis informed us that they are prioritizing the EV contactor application over the drivetrain inverter application. Recently, we delivered next generation B-TRAN® custom-packaged samples and development kits for evaluation to Stellantis for EV applications under the purchase order. We are currently working to complete the remaining deliverables under the August 2025 purchase order and engaged with Stellantis on a potential EV contactor program.
Customer Engagements
We have announced several engagements and/or initial orders with large companies, including Stellantis and other global automakers, Forbes Global 500 diverse power management market leaders, global tier 1 automotive suppliers, circuit protection market leaders, inverter / energy storage market leaders and others. Companies in our sales pipeline intend to test and evaluate, or are already in the process of testing and evaluating, our technology for use in their applications. These engagements could lead to future design wins or custom development agreements. We previously announced agreements with multiple distribution partners. We may add other distribution partners in the future. Recently, we signed a letter of intent with an industry partner to co-develop a B-TRAN®-enabled intelligent solid-state circuit breaker (“SSCB”) prototype for evaluation by a U.S. hyperscaler in its development environment for the NVIDIA Rubin Ultra 800V direct current AI data center power distribution system. We may engage with others in the power semiconductor ecosystem in the future to further expand the channels to market for products incorporating our technology.
First Design Win
In late 2024, we announced our first design win for SSCBs with one of the largest circuit protection equipment manufacturers in Asia serving the data center, renewable energy, energy storage, EV and other industrial markets. In connection with this design win, we entered into a joint development agreement for a SSCB product incorporating multiple B-TRAN® devices. The agreement included the product design, prototype builds and testing of the SSCB. We completed our deliverables, including SSCB prototypes, under this agreement in the first quarter of 2025. In the third quarter of 2025, the customer successfully completed their testing of updated SSCB prototypes that included enhancements requested by the customer. The customer plans on gathering feedback on this new product from their end customers ahead of product launch. In February 2026, we entered into a multi-year strategic cooperation agreement with this customer for the design, development and worldwide sales of circuit protection solutions including SSCBs, battery disconnect units and EV contactors featuring B-TRAN®. We expect to announce additional design wins and/or custom development agreements with this customer and/or other customers in the coming quarters.
Results of Operations
Comparison of the three months ended June 30, 2026 to the three months ended June 30, 2025
Revenue. Revenue was $5,800 for the three months ended June 30, 2026, compared to $1,275 in the three months ended June 30, 2025. Revenue in the three months ended June 30, 2026 related to shipments under our purchase order from Stellantis. Revenue in the three months ended June 30, 2025 related to initial orders from customers evaluating our technology for use in their applications.
Cost of Revenue. Cost of revenue was $4,008 for the three months ended June 30, 2026, compared to $3,477 in the three months ended June 30, 2025. Cost of revenue in the three months ended June 30, 2026 related to the cost of products shipped under our purchase order from Stellantis. Cost of revenue in the three months ended June 30, 2025 related to initial low volume and high-cost shipments of prototype products.
Research and Development Expenses. Research and development expenses decreased by $469,885, or 25%, to $1,430,134 in the three months ended June 30, 2026 from $1,900,019 in the three months ended June 30, 2025. The decrease was due to lower semiconductor fabrication costs of $161,091, resulting from improvements in the efficiency of our manufacturing footprint, and lower stock-based compensation expense of $138,000, packaging and testing costs of $109,908, engineering services of $54,290 and other B-TRAN® development spending of $6,596.
General and Administrative Expenses. General and administrative expenses increased by $760,733, or 85%, to $1,657,972 in the three months ended June 30, 2026 from $897,239 in the three months ended June 30, 2025. The increase was due to higher stock-based compensation expense of $420,255, of which $266,926 related to the vesting of a performance stock unit with a performance condition that was previously deemed not probable, non-cash patent impairment charges of $215,133, higher personnel costs of $98,425 and other costs of $26,920.
Sales and Marketing Expenses. Sales and marketing expenses increased by $195,801, or 57%, to $536,834 in the three months ended June 30, 2026 from $341,033 in the three months ended June 30, 2025. The increase was due to higher personnel costs of $144,271, travel costs of $70,354, stock-based compensation expense of $31,800 and other spending of $9,543, partly offset by lower search and placement fees of $60,167.
Loss from Operations. Our loss from operations for the three months ended June 30, 2026 was $3,623,148, or 15% higher, as compared to the $3,140,493 loss from operations for the three months ended June 30, 2025, for the reasons discussed above.
Interest Income, Net. Net interest income was $210,222 for the three months ended June 30, 2026, compared to $103,728 for the three months ended June 30, 2025, due primarily to the impact of a higher cash balance after the May 2026 Offering on interest earned on our money market accounts. This was partly offset by lower interest rates on these accounts in the second quarter of 2026 compared to the second quarter of 2025.
Net Loss. Our net loss for the three months ended June 30, 2026 was $3,412,926, or 12% higher, as compared to a net loss of $3,036,765 for the three months ended June 30, 2025, for the reasons discussed above.
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025
Revenue. Revenue was $5,800 for the six months ended June 30, 2026, compared to $13,278 in the six months ended June 30, 2025. Revenue in the six months ended June 30, 2026 related to shipments under our purchase order from Stellantis. Revenue in the six months ended June 30, 2025 included prototype product sales and development revenue related to our first design win. We expect to recognize modest revenue from both product sales and development agreements in the second half of 2026.
Cost of Revenue. Cost of revenue was $4,008 for the six months ended June 30, 2026, compared to $34,339 in the six months ended June 30, 2025. Cost of revenue in the six months ended June 30, 2026 related to the cost of products shipped under our purchase order from Stellantis. Cost of revenue in the six months ended June 30, 2025 related primarily to initial low volume and high-cost shipments of prototype products. We generally expect negative gross margin from product revenue at low volumes with significant improvement in gross margins as we commence higher volume production and shipments in the future. Development revenue may result in either positive or negative gross margin depending on our scope for any specific program.
Research and Development Expenses. Research and development expenses decreased by $5,564, or less than 1%, to $3,462,447 in the six months ended June 30, 2026 from $3,468,011 in the six months ended June 30, 2025. We expect flat to lower quarterly research and development expenses in the second half of 2026 as compared to the first half of 2026 due to a decline in stock-based compensation expense as certain awards were fully expensed upon vesting in the first half of 2026. There will also be quarter-to-quarterly variability in research and development expenses due to the timing of semiconductor fabrication runs and other development activities.
General and Administrative Expenses. General and administrative expenses increased by $1,080,923, or 60%, to $2,877,983 in the six months ended June 30, 2026 from $1,797,060 in the six months ended June 30, 2025. The increase was due to higher stock-based compensation expense of $698,079, of which $266,926 related to the vesting of a performance stock unit with a performance condition that was previously deemed not probable, non-cash patent impairment charges of $215,133, higher personnel costs of $214,521 and other spending of $9,524, partly offset by lower professional fees of $56,334. We expect flat to slightly higher quarterly general and administrative expenses, exclusive of stock-based compensation, in the second half of 2026 as compared to the first half of 2026.
Sales and Marketing Expenses. Sales and marketing expenses increased by $297,339, or 44%, to $976,532 in the six months ended June 30, 2026 from $679,193 in the six months ended June 30, 2025. The increase was due to higher personnel costs of $227,262, travel costs of $83,209, stock-based compensation expense of $33,300 and other spending of $14,869, partly offset by lower search and placement fees of $61,301. We expect higher quarterly sales and marketing expenses in the second half of 2026 as compared to the first half of 2026 as we add sales personnel, expand our engagement and sales pipeline with prospective customers, and further commercialize our B-TRAN® technology and related products.
Loss from Operations. Our loss from operations for the six months ended June 30, 2026 was $7,315,170, or 23% higher, as compared to the $5,965,325 loss from operations for the six months ended June 30, 2025, for the reasons discussed above.
Interest Income, Net. Net interest income was $270,739 for the six months ended June 30, 2026 compared to $225,536 for the six months ended June 30, 2025 due primarily to the impact of a higher cash balance after the May 2026 Offering on interest earned on our money market accounts. This was partly offset by lower interest rates on these accounts in the first half of 2026 compared to the first half of 2025.
Net Loss. Our net loss for the six months ended June 30, 2026 was $7,044,431, or 23% higher, as compared to a net loss of $5,739,789 for the six months ended June 30, 2025, for the reasons discussed above.
Liquidity and Capital Resources
We have incurred losses since inception. We have funded our operations to date primarily through the sale of common stock and pre-funded warrants.
At June 30, 2026, we had cash and cash equivalents of $41.3 million. Our net working capital at June 30, 2026 was $40.1 million. We had no outstanding debt at June 30, 2026.
Operating activities in the six months ended June 30, 2026 resulted in cash outflows of $4,473,167, which were due to the net loss for the period of $7,044,431, partly offset by stock-based compensation of $1,635,526, favorable balance sheet timing of $480,283, patent impairment charges of $215,133, depreciation and amortization of $194,454, and other non-cash items of $45,868.
Operating activities in the six months ended June 30, 2025 resulted in cash outflows of $4,425,301, which were due to the net loss for the period of $5,739,789, partly offset by stock-based compensation of $714,625, depreciation and amortization of $182,107 and favorable balance sheet timing and other non-cash items of $417,756.
We expect a modest increase in cash outflows from operating activities in the remainder of 2026 as compared to the first two quarters of 2026 as we further commercialize our B-TRAN® technology.
Investing activities in the six months ended June 30, 2026 and 2025 resulted in cash outflows of $364,048 and $220,337, respectively, for the acquisition of intangible assets and fixed assets.
Financing activities in the six months ended June 30, 2026 resulted in cash inflows of $40,259,375 in net proceeds from the issuance and sale of common stock and pre-funded warrants and $267 from the exercise of pre-funded warrants, partly offset by $256,988 in tax payments related to the vesting of restricted stock units.
Financing activities in the six months ended June 30, 2025 resulted in net cash outflows of $91,659 with a cash outflow of $91,769 in tax payments related to the vesting of restricted stock units slightly offset by a cash inflow of $110 from the exercise of pre-funded warrants.
May 2026 Offering
In May 2026, we issued and sold 3,220,961 shares of our common stock at a price of $5.67 per share and 2,070,044 pre-funded warrants to purchase shares of common stock at a price of $5.669 per pre-funded warrant in a registered direct offering (the "May 2026 Offering”). The pre-funded warrants have an exercise price of $0.001 per share and no expiration date. The net proceeds to us from the May 2026 Offering were $27.7 million. We intend to use the net proceeds from the May 2026 Offering to fund further commercialization and development of our B-TRAN® technology and products and general corporate and working capital purposes.
February 2026 Offering
In February 2026, we issued and sold 3,505,855 shares of our common stock at a price of $2.75 per share and 952,881 pre-funded warrants to purchase shares of common stock at a price of $2.749 per pre-funded warrant in an underwritten public offering and also sold 631,332 pre-funded warrants to purchase shares of common stock at a price of $2.749 per pre-funded warrant in a concurrent private placement (taken together, the "February 2026 Offering”). The shares of common stock underlying the pre-funded warrants issued in the concurrent private placement were subsequently registered for resale on the Registration Statement on Form S-1 (File No. 333-294696) declared effective on April 3, 2026. The pre-funded warrants have an exercise price of $0.001 per share and no expiration date. The net proceeds to us from the February 2026 Offering were $12.6 million. We intend to use the net proceeds from the February 2026 Offering to fund further commercialization and development of our B-TRAN® technology and products and general corporate and working capital purposes.
Critical Accounting Estimates
There have been no significant changes during the six months ended June 30, 2026 to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Trends, Events and Uncertainties
There are no material changes from trends, events or uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide this information.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that this information is accumulated and communicated to management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act), under the supervision and with the participation of its Chief Executive Officer (principal executive officer) and its Chief Financial Officer (principal financial officer) of the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2026 and has concluded that, as of June 30, 2026, the Company’s disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There have been no material changes in our internal controls over financial reporting that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Limitations on the Effectiveness of Controls
Control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems’ objectives are being met. Further, the design of any system of controls must reflect the fact that there are resource constraints, and the benefits of all controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of error or mistake. Control systems can also be circumvented by the individual acts of some persons by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to litigation from time to time. While we believe that any current or threatened legal proceedings are without merit and not material, there can be no assurance that such matters will not have a material adverse effect on our business, financial condition or results of operations in the future.
ITEM 1A. RISK FACTORS
There are no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the three months ended June 30, 2026,
ITEM 6. EXHIBITS
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Exhibit |
Document |
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10.1 |
Amended and Restated Ideal Power Inc. 2013 Equity Incentive Plan (incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 4, 2026) |
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31.1* |
Certification of Principal Executive Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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31.2* |
Certification of Principal Financial Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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32.1** |
Certification pursuant to 18 U.S.C. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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101.INS* |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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101.SCH* |
Inline XBRL Taxonomy Extension Schema Document |
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101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
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10.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101). |
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* |
Filed herewith |
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** |
Furnished herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Dated: August 13, 2026 |
IDEAL POWER INC. |
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By: |
/s/ David Somo |
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David Somo |
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Chief Executive Officer |
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By: |
/s/ Timothy W. Burns |
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Timothy W. Burns |
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Chief Financial Officer |
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