Ideal Power Inc. (NASDAQ:IPWR), a developer of innovative power
conversion technologies, reported results for its first quarter
ended March 31, 2017.
Key First Quarter 2017 and Subsequent
Highlights:
- Completed a $15 million private placement with institutional
and accredited investors. All members of senior management
and the Board of Directors participated in the private
placement.
- Introduced and received UL 1741 certification for SunDial™ and
Stabiliti™ series 30kW power conversion systems.
- Shipped next generation 30kW power conversion systems to
multiple, new potential volume customers for use in their initial
projects incorporating our technology.
- Strengthened patent estate: currently have 65 issued patents,
including 25 issued patents for B-TRAN™ and approximately 90 patent
applications pending.
"In the first quarter of 2017, we transitioned to our third
generation of 30kW products, the SunDial and Stabiliti,” said Dan
Brdar, Chief Executive Officer. “Because of the strong interest we
have already seen in these products, we foresee revenue ramping in
the second half of 2017 from existing and new customers for
microgrid and solar plus storage installations.
“We are in advanced discussions with several of these customers,
with purchase orders already in hand or in hand pending the
arrangement of financing,” Brdar added. “We are also continuing to
make progress on a master supply agreement with NEXTracker, which
we also expect will drive revenue in the second half of 2017. In
addition, we believe we are well positioned to benefit from both
the 2016 awards and the first phase of 2017 funding under
California’s Self Generation Incentive Program (SGIP).
“The new solicitation from the California Public Utility
Commission (CPUC) of $90 million in incentives commenced on May 1,
2017, and was oversubscribed within two days. For the
calendar years 2017 to 2019, the total SGIP incentive budget has
been set at $567 million.
“We have also made significant progress behind the scenes with
our business development initiatives in the U.S. and abroad. More
specifically, we received certification for our two new 30kW power
conversion systems, expanded our product capabilities with the
launch of these products, began the certification process for our
30kW product for the Australian market, and shipped our new
Stabiliti product to multiple new customers for their initial
projects incorporating our advanced power conversion systems.
Brdar concluded: “As we look forward to the balance of 2017, we
remain confident about solidifying second-half revenue
opportunities based on our progress with NEXTracker and other
strategic partners, the 2016 and first phase of 2017 SGIP
incentives in California, and the continued commercial rollout of
our new Stabiliti and SunDial series products that address the
solar plus storage, standalone storage and microgrid markets.”
First Quarter 2017 Financial Results
- Q1 2017 product revenue totalled $0.3 million versus $0.5
million in Q1 2016 with the decrease in revenue primarily
attributable to the timing of, and variability in, the early market
for energy storage.
- Q1 2017 gross margins were negative 158% compared to 0.4% gross
margins in Q1 2016, primarily attributable to the non-cash write
down of inventory of $349 thousand associated with our 125kW
battery converter and end-of-life, first generation IBC-30 battery
converter. Margins in the quarter were also negatively
impacted by the launch of the SunDial and Stabiliti in the quarter
due to initial low volume and thus higher cost pilot builds for
these products.
- Q1 2017 net loss was $3.1 million compared to $2.8 million in
Q1 2016.
- Q1 2017 cash used in operating and investing activities was
$2.5 million compared to $2.8 million in Q1 2016.
- Cash and cash equivalents totalled $15.4 million as of March
31, 2017 with no long-term debt outstanding.
"The first quarter of 2017 featured the $15 million financing
that demonstrates continued shareholder confidence in and support
for Ideal Power’s disruptive technologies for power conversion
systems in the commercial and industrial storage market,” said Tim
Burns, Chief Financial Officer. “With this additional funding, we
believe our current cash position will support operations while the
energy storage market develops. During the first quarter, the
expected gross margin contraction from introducing new products was
amplified as we recorded a non-cash write down of inventory for our
legacy products. We expect gross margins to normalize later this
year, particularly as we anticipate revenue ramping in the second
half of 2017.”
Conference Call Details
Ideal Power CEO Dan Brdar and CFO Tim Burns will host the
conference call, followed by a question and answer period.
To access the call, please use the following information:
Date: |
|
Thursday, May 11,
2017 |
Time: |
|
4:30 p.m. ET, 1:30 p.m.
PT |
Toll-free dial-in
number: |
|
1-888-438-5453 |
International dial-in
number: |
|
1-719-457-2716 |
Conference ID: |
|
8052831 |
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact MZ Group at 1-949-491-8235.
The conference call will be broadcast live and available for
replay at http://public.viavid.com/index.php?id=124075 and via the
investor relations section of the Company’s website at
www.IdealPower.com.
A replay of the conference call will be available after 7:30
p.m. Eastern time through June 11, 2017.
Toll-free replay
number: |
|
1-844-512-2921 |
International replay
number: |
|
1-412-317-6671 |
Replay ID: |
|
8052831 |
About Ideal Power Inc.Ideal Power Inc.
(NASDAQ:IPWR) is a technology company dedicated to advancing the
efficiency of electric power conversion. The company 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 PV, variable frequency drives, battery
energy storage, mobile power and microgrids, and electric vehicle
charging. The company is also developing and has patented a
bi-directional, bipolar junction transistor (“B-TRAN™”) which has
the potential to dramatically increase bi-directional power
switching efficiency and power density. Ideal Power employs a
capital-efficient business model which enables the company to
address several product development projects and markets
simultaneously. For more information, visit www.IdealPower.com.
Safe Harbor StatementAll statements in this
release 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. Forward-looking
statements in this press release include our statements that we
expect revenue to ramp in the second half of 2017 as we have seen
strong interest in our Stabiliti and SunDial products from existing
and new customers for microgrid and solar + storage installations,
that we are well positioned to benefit from both the 2016 awards
and the first phase of 2017 funding under California’s Self
Generation Incentive Program (SGIP), that we remain confident about
solidifying second-half revenue opportunities based upon our
progress with NEXTracker, the prior year and new SGIP incentives in
California, and the continued commercial rollout of our new
Stabiliti and SunDial series products, that, with the
additional funding from our March 2017 private placement, we
believe our current cash position will support operations while the
energy storage market develops and that we expect gross margins to
normalize later this year, particularly as revenue ramps in the
second half of 2017. 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, whether the patents for our
technology provide adequate protection and whether we can be
successful in maintaining, enforcing and defending our patents, the
timing and impact of regulatory developments affecting the markets
for our products, our inability to predict with precision or
certainty the pace of development and commercialization of our
advanced technologies, the uncertainty of whether the demand for
energy storage products will grow at a pace consistent with our
expectations, whether our backlog will translate into revenue in
future periods, whether demand for our products, which we believe
are disruptive, will develop, and whether we can compete
successfully with other manufacturers and suppliers of power
conversion products, both now and in the future, as new products
are developed and marketed. Furthermore, we operate in a highly
competitive and rapidly changing environment where new and
unanticipated risks may arise. The availability and amount of
government incentive programs affect our customers spending
patterns, and adverse changes or developments in such programs –
such as the SGIP in California – have materially and adversely
affected our orders, net sales, gross profit and net income, and
may do so again in the future. Accordingly, investors should
not place any reliance on forward-looking statements as a
prediction of actual results. Additional information relating to
the uncertainty affecting our business are contained in our filings
with the Securities and Exchange Commission. These documents are
available on the SEC Filings section of the Investors section of
our website at http://ir.idealpower.com/. These forward-looking
statements represent our expectations as of the date of this press
release. We disclaim any intention to, and undertake no obligation
to, update or revise forward-looking statements.
|
IDEAL POWER INC. |
|
Balance Sheets |
|
|
March 31, 2017 |
|
December 31, 2016 |
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
15,350,915 |
|
|
$ |
4,204,916 |
|
Accounts
receivable, net |
|
565,467 |
|
|
378,658 |
|
Inventories, net |
|
851,863 |
|
|
1,245,147 |
|
Prepayments and other current assets |
|
304,813 |
|
|
312,593 |
|
Total
current assets |
|
17,073,058 |
|
|
6,141,314 |
|
|
|
|
|
|
Property and equipment,
net |
|
835,137 |
|
|
936,486 |
|
Intangible assets,
net |
|
1,959,498 |
|
|
1,905,556 |
|
Other assets |
|
17,920 |
|
|
17,920 |
|
Total
Assets |
|
$ |
19,885,613 |
|
|
$ |
9,001,276 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
363,333 |
|
|
$ |
346,767 |
|
Accrued
expenses |
|
1,030,961 |
|
|
1,149,129 |
|
Total
current liabilities |
|
1,394,294 |
|
|
1,495,896 |
|
|
|
|
|
|
Other long-term
liabilities |
|
266,938 |
|
|
265,418 |
|
Total
liabilities |
|
1,661,232 |
|
|
1,761,314 |
|
|
|
|
|
|
Commitments |
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
Preferred
stock, $0.001 par value; 10,000,000 shares authorized; 1,518,430
shares issued and outstanding at March 31, 2017 |
|
1,518 |
|
|
— |
|
Common
stock, $0.001 par value; 50,000,000 shares authorized; 13,998,465
shares issued and 13,996,782 shares outstanding at March 31, 2017
and 9,560,896 shares issued and 9,559,213 shares outstanding at
December 31, 2016, respectively |
|
13,998 |
|
|
9,561 |
|
Additional paid-in capital |
|
66,357,329 |
|
|
52,310,481 |
|
Treasury
stock, at cost, 1,683 shares at March 31, 2017 and December 31,
2016, respectively |
|
(5,915 |
) |
|
(5,915 |
) |
Accumulated deficit |
|
(48,142,549 |
) |
|
(45,074,165 |
) |
Total
stockholders’ equity |
|
18,224,381 |
|
|
7,239,962 |
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
19,885,613 |
|
|
$ |
9,001,276 |
|
|
|
|
|
|
|
|
|
|
IDEAL POWER INC. |
|
Statements of Operations |
|
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Product revenue |
|
$ |
275,670 |
|
|
$ |
496,644 |
|
Cost of product
revenue |
|
710,930 |
|
|
494,754 |
|
Gross
profit (loss) |
|
(435,260 |
) |
|
1,890 |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
Research
and development |
|
1,190,169 |
|
|
1,479,985 |
|
General
and administrative |
|
905,963 |
|
|
920,331 |
|
Sales and
marketing |
|
541,533 |
|
|
412,530 |
|
Total
operating expenses |
|
2,637,665 |
|
|
2,812,846 |
|
|
|
|
|
|
Loss from
operations |
|
(3,072,925 |
) |
|
(2,810,956 |
) |
|
|
|
|
|
Interest income,
net |
|
4,541 |
|
|
8,609 |
|
|
|
|
|
|
Net loss |
|
$ |
(3,068,384 |
) |
|
$ |
(2,802,347 |
) |
|
|
|
|
|
Net loss per share –
basic and fully diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.29 |
) |
|
|
|
|
|
Weighted average number
of shares outstanding – basic and fully diluted |
|
10,879,690 |
|
|
9,545,982 |
|
|
|
|
|
|
|
|
IDEAL POWER INC. |
|
Statements of Cash Flows |
|
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
|
Net
loss |
|
$ |
(3,068,384 |
) |
|
$ |
(2,802,347 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Allowance
for doubtful accounts |
|
60,703 |
|
|
— |
|
Write-down of inventory |
|
348,793 |
|
|
4,242 |
|
Depreciation and amortization |
|
113,068 |
|
|
86,999 |
|
Write-off
of capitalized patents |
|
559 |
|
|
24,753 |
|
Write-off
of fixed assets |
|
10,534 |
|
|
992 |
|
Stock-based compensation |
|
384,329 |
|
|
383,516 |
|
Decrease
(increase) in operating assets: |
|
|
|
|
Accounts
receivable |
|
(247,512 |
) |
|
425,103 |
|
Inventories |
|
44,491 |
|
|
(76,801 |
) |
Prepayments and other current assets |
|
7,780 |
|
|
5,586 |
|
Increase
(decrease) in operating liabilities: |
|
|
|
|
Accounts
payable |
|
16,566 |
|
|
(574,774 |
) |
Accrued
expenses |
|
(116,648 |
) |
|
(53,140 |
) |
Net cash
used in operating activities |
|
(2,445,721 |
) |
|
(2,575,871 |
) |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Purchase
of property and equipment |
|
(4,378 |
) |
|
(100,382 |
) |
Acquisition of intangible assets |
|
(72,376 |
) |
|
(103,111 |
) |
Net cash
used in investing activities |
|
(76,754 |
) |
|
(203,493 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Net
proceeds from issuance of stock |
|
13,657,331 |
|
|
— |
|
Exercise
of options and warrants |
|
11,143 |
|
|
35,536 |
|
Net cash
provided by financing activities |
|
13,668,474 |
|
|
35,536 |
|
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents |
|
11,145,999 |
|
|
(2,743,828 |
) |
Cash and cash
equivalents at beginning of period |
|
4,204,916 |
|
|
15,022,286 |
|
Cash and cash
equivalents at end of period |
|
$ |
15,350,915 |
|
|
$ |
12,278,458 |
|
|
|
|
|
|
|
|
|
|
Ideal Power Media Contact:
Antenna
Sharon Golubchik
201-465-8008
idealpower@antennagroup.com
Ideal Power Investor Relations Contact:
MZ North America
Chris Tyson
949-491-8235
IPWR@mzgroup.us
www.mzgroup.us
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