Ideal Power Reports First Quarter 2019 Financial Results
May 01 2019 - 4:01PM
Ideal Power Inc. (NASDAQ: IPWR), a semiconductor and power
conversion technology company, reported results for its first
quarter ended March 31, 2019.
Key First Quarter 2019 and Subsequent
Highlights:
Power Conversion Systems (PCS) Division
- In April, announced agreement to
sell PCS business and Power Packet Switching Architecture (PPSA™)
technology to PATHION Holdings, a provider of safe and intelligent
energy solutions, for a combination of cash, PATHION Holdings
common stock and the assumption of certain liabilities. Transaction
synergies include:- Transaction strategically positions Ideal Power
with new asset light model focused on B-TRAN™ solid state switch
commercialization;- PPSA technology to be positioned into more
integrated platform with broader market reach;- Right size facility
as PATHION will sublease approximately 80% of Austin, Texas
headquarters; and- Reduction in cash outflows for Ideal Power with
proforma cash burn rate expected to be $600 thousand to $700
thousand per quarter starting as of the transaction close
date.
B-TRAN™ Division
- Shifted to commercialization of our
patented B-TRANTM technology for the $12 billion global
semiconductor power switch market.
- Completed first prototype drivers
and proceeding with internal evaluation and preparation for
customer sampling.- Second generation dies are currently in process
at three independent sources.- Sampling efforts will move forward
based on results of our characterization efforts on our second
generation die, packaging and prototype driver.- Engineering
samples for potential customers and partners expected in Q2
2019.
- Increased internal capabilities for
device design, testing and characterization by:- Bringing in-house
device simulation capability;- Installing wafer probe tester to
characterize fabricated die in our engineering laboratory; and-
Adding the capability to design and program device drivers for
various configurations of packaged B-TRANs™.
- Completed packaging design and
vendor selection for second generation die.
- Identified several government
funding opportunities for device specific development and B-TRAN
based demonstration projects.
- B-TRAN™ Patent Estate: As of March
31st, we had 44 issued B-TRAN™ patents with 11 of those patents
issued outside the United States in China, Europe and
Australia. Our pending B-TRAN™ patent portfolio includes
approximately 30 patent filings and contains applications in Japan,
South Korea and India.
Management Commentary
“With our new strategic focus announced in early
2019, we will become an asset light operating company focused on
our B-TRAN power switch technology,” said Dr. Lon Bell, Chief
Executive Officer of Ideal Power.
“This transaction allows us to focus our efforts
on the development and commercialization of our proprietary B-TRAN
technology. Our business model leverages capabilities at existing
semiconductor fabrication facilities, collaborations with major
universities and our relationships with semiconductor experts to
complement our internal modeling, power switch development and
characterization capabilities.
“Moreover, success of PATHION in the marketplace
would directly benefit our shareholders through Ideal Power’s
equity stake in PATHION. We are excited to enter into this
opportunity for our shareholders and to pass the torch to PATHION
to take our PPSA technology into broader distribution as part of
their comprehensive energy solutions offering,” concluded Bell.
First Quarter 2019 Financial Results
- Q1 2019 loss from continuing operations was $694 thousand
compared to $975 thousand in Q1 2018. The decrease in loss from
continued operations was primarily due to cost reduction
activities, including lower headcount.
- Q1 2019 loss from discontinued operations was $347 thousand
compared to $1.1 million in Q1 2018 due to our exit from the power
conversion business in early January 2019.
- Q1 2019 net loss was $1 million compared to $2.1 million in Q1
2018
- Q1 2019 cash used in operating activities from continuing
operations was $587 thousand compared to $885 thousand in Q1
2018.
- Cash and cash equivalents totaled $2.2 million as of March 31,
2019, with no long-term debt outstanding.
“Given our new strategic focus and the presentation of our PCS
division as discontinued operations, we had no revenue from
continuing operations in the first quarter of 2019,” said Tim
Burns, Chief Financial Officer. “We reduced our PCS division
workforce and suspended further power converter system development
and sales in early January. As a result of these actions and
the pending sale of this division, we now estimate that annualized
cash expenditures will be reduced by at least $3 million,”
continued Burns.
“On the cash management side, we maintained our targeted cash
burn rate, utilizing $1 million of cash in the first quarter of
2019, due to aggressive cost cutting initiatives, compared to $2.1
million in the first quarter of 2018. We believe that strong cash
management, our pending PPSA sale and no debt will provide us with
a stable financial runway into 2020,” concluded Burns.
Conference Call Details
Ideal Power Chairman, CEO and President Dr. Lon Bell, CFO Tim
Burns and B-TRAN Chief Commercial Officer Dan Brdar will host the
conference call, followed by a question and answer period.
To access the call, please use the following information:
Date: |
Wednesday, May 1,
2019 |
Time: |
4:30 p.m. EDT, 1:30 p.m.
PDT |
Toll-free dial-in
number: |
1-800-458-4148 |
International dial-in
number: |
1-323-794-2597 |
Conference ID: |
2954951 |
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=134182 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 1, 2019.
Toll Free Replay
Number: |
1-844-512-2921 |
International Replay
Number: |
1-412-317-6671 |
Replay ID: |
2954951 |
About Ideal Power Inc.Ideal
Power (NASDAQ: IPWR) is a semiconductor and power conversion
technology company focused on its patented Bi-directional, Bi-polar
Junction Transistor (B-TRAN™) semiconductor technology. B-TRAN is a
unique double-sided bi-directional AC switch expected to deliver
substantial performance improvements over today's conventional
power semiconductors. B-TRANs offer the potential to improve
efficiency and system economics of a wide variety of power
converter applications including electrified vehicle traction
drives, energy storage applications, photovoltaic (PV) inverters
and wind converters, variable frequency (VFD) motor drives, and AC
and DC power control applications. 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. 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 successful closing of the sale of our PCS business,
the success of our B-TRAN technology, the success of our strategic
shift and change in corporate focus, whether the patents for our
technology provide adequate protection and whether we can be
successful in maintaining, enforcing and defending our patents, our
inability to predict with precision or certainty the pace of
development and commercialization of our B-TRAN technology, whether
we can continue as a going concern and uncertainties set forth in
our quarterly and annual reports filed with the Securities and
Exchange Commission. 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 Investor Relations Contact: MZ
North America Chris Tyson 949-491-8235 IPWR@mzgroup.us
www.mzgroup.us
IDEAL POWER INC. Balance
Sheets
|
|
March 31, 2019 |
|
|
December 31, 2018 |
|
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,228,664 |
|
|
$ |
3,258,077 |
|
Accounts
receivable |
|
|
4,961 |
|
|
|
– |
|
Prepayments and other current assets |
|
|
327,872 |
|
|
|
333,877 |
|
Current
assets of discontinued operations held for sale |
|
|
727,943 |
|
|
|
1,096,323 |
|
Total
current assets |
|
|
3,289,440 |
|
|
|
4,688,277 |
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net |
|
|
55,600 |
|
|
|
63,214 |
|
Intangible assets,
net |
|
|
1,411,263 |
|
|
|
1,396,409 |
|
Right of use asset |
|
|
386,624 |
|
|
|
– |
|
Other assets |
|
|
17,920 |
|
|
|
17,920 |
|
Total
assets |
|
$ |
5,160,847 |
|
|
$ |
6,165,820 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
130,456 |
|
|
$ |
94,203 |
|
Accrued
expenses |
|
|
177,828 |
|
|
|
167,755 |
|
Current
liabilities of discontinued operations held for sale |
|
|
501,436 |
|
|
|
877,755 |
|
Total
current liabilities |
|
|
809,720 |
|
|
|
1,139,713 |
|
|
|
|
|
|
|
|
|
|
Lease liability |
|
|
388,918 |
|
|
|
– |
|
Other long-term
liabilities |
|
|
430,978 |
|
|
|
428,163 |
|
Total
liabilities |
|
|
1,629,616 |
|
|
|
1,567,876 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Preferred
stock, $0.001 par value; 10,000,000 shares authorized; 810,000
shares issued and outstanding at March 31, 2019 and 1,518,430
shares issued at December 31, 2018, respectively |
|
|
810 |
|
|
|
1,518 |
|
Common
stock, $0.001 par value; 50,000,000 shares authorized; 14,736,020
shares issued and 14,722,840 shares outstanding at March 31, 2019
and 14,027,590 shares issued and 14,014,410 shares outstanding at
December 31, 2018, respectively |
|
|
14,736 |
|
|
|
14,028 |
|
Additional paid-in capital |
|
|
67,984,046 |
|
|
|
68,009,860 |
|
Treasury
stock, at cost, 13,180 shares at March 31, 2019 and December 31,
2018, respectively |
|
|
(13,210 |
) |
|
|
(13,210 |
) |
Accumulated deficit |
|
|
(64,455,151 |
) |
|
|
(63,414,252 |
) |
Total
stockholders’ equity |
|
|
3,531,231 |
|
|
|
4,597,944 |
|
Total
liabilities and stockholders’ equity |
|
$ |
5,160,847 |
|
|
$ |
6,165,820 |
|
IDEAL POWER INC.
Statements of Operations
(unaudited)
|
|
Three Months Ended March 31, |
|
|
|
2019 |
|
|
2018 |
|
Product revenue |
|
$ |
– |
|
|
$ |
– |
|
Cost of product
revenue |
|
|
– |
|
|
|
– |
|
Gross
profit |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development |
|
|
218,216 |
|
|
|
94,544 |
|
General
and administrative |
|
|
468,390 |
|
|
|
882,099 |
|
Sales and
marketing |
|
|
– |
|
|
|
– |
|
Total
operating expenses |
|
|
686,606 |
|
|
|
976,643 |
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations before interest |
|
|
(686,606 |
) |
|
|
(976,643 |
) |
Interest (income)
expense, net |
|
|
7,118 |
|
|
|
(1,315 |
) |
Loss from continuing
operations |
|
|
(693,724 |
) |
|
|
(975,328 |
) |
Loss from discontinued
operations |
|
|
(347,175 |
) |
|
|
(1,080,834 |
) |
Net loss |
|
$ |
(1,040,899 |
) |
|
$ |
(2,056,162 |
) |
|
|
|
|
|
|
|
|
|
Loss from continuing
operations per share – basic and fully diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.07 |
) |
Loss from discontinued
operations per share – basic and fully diluted |
|
|
(0.02 |
) |
|
|
(0.08 |
) |
Net loss per share –
basic and fully diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding – basic and fully diluted |
|
|
14,313,525 |
|
|
|
13,991,121 |
|
IDEAL POWER INC. Statements of Cash Flows
(unaudited)
|
|
Three Months Ended March 31, |
|
|
|
2019 |
|
|
2018 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Loss from
continuing operations |
|
$ |
(693,724 |
) |
|
$ |
(975,328 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
27,595 |
|
|
|
43,704 |
|
Write-off
of capitalized patents |
|
|
– |
|
|
|
10,873 |
|
Stock-based compensation |
|
|
26,621 |
|
|
|
143,356 |
|
Decrease
(increase) in operating assets: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(4,961 |
) |
|
|
3,350 |
|
Prepayments and other current assets |
|
|
6,005 |
|
|
|
29,295 |
|
Increase
(decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
36,253 |
|
|
|
(55,362 |
) |
Accrued
expenses |
|
|
15,182 |
|
|
|
(85,084 |
) |
Net cash
used in operating activities |
|
|
(587,029 |
) |
|
|
(885,196 |
) |
Net cash
used on operating activities – discontinued operations |
|
|
(409,867 |
) |
|
|
(942,176 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchase
of property and equipment |
|
|
(1,194 |
) |
|
|
– |
|
Acquisition of intangible assets |
|
|
(31,323 |
) |
|
|
(33,561 |
) |
Net cash
used in investing activities |
|
|
(32,517 |
) |
|
|
(33,561 |
) |
Net cash
used in investing activities – discontinued operations |
|
|
– |
|
|
|
(8,046 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
None |
|
|
– |
|
|
|
– |
|
Net cash
provided by financing activities |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalents – continuing operations |
|
|
(619,546 |
) |
|
|
(918,757 |
) |
Net decrease in cash
and cash equivalents – discontinued operations |
|
|
(409,867 |
) |
|
|
(950,222 |
) |
Cash and cash
equivalents at beginning of period |
|
|
3,258,077 |
|
|
|
10,022,247 |
|
Cash and cash
equivalents at end of period |
|
$ |
2,228,664 |
|
|
$ |
8,153,268 |
|
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