Ideal Power(IPWR) - 2023 Q4 - Annual Results

Executive Summary & Business Update Ideal Power's CEO highlighted significant progress in 2023 on the B-TRAN™ commercial roadmap, with strong momentum in test programs and expectations for design wins, particularly in solid-state circuit breaker and EV applications, with initial SymCool™ module shipments underway CEO Statement & Strategic Outlook Ideal Power's CEO highlighted significant progress in 2023 on the B-TRAN™ commercial roadmap, with strong momentum in test programs and expectations for design wins, particularly in solid-state circuit breaker and EV applications, with initial SymCool™ module shipments underway - CEO Dan Brdar reported significant progress in 2023 on the B-TRAN™ commercial roadmap, continuing into 2024[2] - Strong momentum continues with participants in the test and evaluation program, particularly for solid-state circuit breaker and hybrid and electric vehicle applications[2] - The company expects to convert large OEMs into design wins and/or additional custom development agreements in 2024[2] - Phase II of the development agreement with Stellantis was recently completed, and commercial shipment of SymCool™ power modules to fulfill customer orders has commenced[2] - Industrial markets, especially the solid-state circuit breaker market served by SymCool™ power modules, are expected to be the earliest source of product sales ramp[2] Operational Highlights & Strategic Initiatives Ideal Power achieved key operational milestones in Q4 2023, including commercial module shipments and Stellantis program completion, while setting ambitious 2024 goals and expanding its B-TRAN™ patent portfolio Q4 and Recent Operational Highlights Ideal Power achieved several key operational milestones in Q4 2023, including the commercial shipment of SymCool™ power modules, successful completion of Phase II of a development program with Stellantis, and the release of technical marketing materials - Commenced commercial shipment of SymCool™ power modules to fulfill customer orders, targeting applications including solid-state switchgear, circuit protection, renewable energy inverters, industrial inverters, hybrid and electric vehicles (EVs), and EV charging[3] - Successfully completed Phase II of a product development program with Stellantis ahead of schedule, including a wafer run and deliveries of tested B-TRAN™ devices, drivers, and a Stellantis-approved comprehensive reliability test plan for automotive qualification[3] - Stellantis recognized Ideal Power and its program as a finalist in the 2023 Stellantis Venture Awards due to the excellent performance of commercial B-TRAN™ devices[3] - Released B-TRAN™ and SymCool™ videos and application notes for prospective customers, resulting in new opportunities for the sales funnel[5] - Nearing completion of a qualification run with a second high-volume wafer fabrication partner in Europe, which will support future revenue growth and add dual sourcing for wafer fabrication[5] 2024 Milestones The company has set ambitious milestones for 2024, focusing on advancing its Stellantis partnership, expanding production capabilities, securing design wins, and initiating automotive qualification testing - Successfully completed Phase II of the development program with Stellantis[11] - Aims to secure Phase III of the development program with Stellantis[11] - Plans to complete qualification of the second high-volume production fab[11] - Seeks to convert large OEMs in the test and evaluation program to design wins or custom development agreements[11] - Plans to add distributors for SymCool™ products and initiate initial sales of SymCool™ IQ intelligent power module[11] - Will begin third-party automotive qualification testing[11] Intellectual Property Ideal Power continues to expand its B-TRAN™ patent portfolio, holding 82 issued patents globally, with additional patents pending to broaden geographic coverage - Currently holds 82 issued B-TRAN™ patents, with 36 issued outside of the United States[5] - Has 39 pending B-TRAN™ patents[5] - Current geographic coverage includes North America, China, Japan, South Korea, India, and Europe, with pending coverage in Taiwan[5] Financial Performance Ideal Power reported significant commercial revenue growth in Q4 and FY2023 from a zero base in the prior year, alongside increased operating expenses driven by R&D, leading to a higher net loss and increased cash usage Summary of Q4 and Full Year 2023 Financial Results Ideal Power reported significant commercial revenue growth in Q4 and FY2023 from a zero base in the prior year, alongside increased operating expenses driven by R&D, leading to a higher net loss and increased cash usage Key Financial Highlights (Q4 and Full Year 2023 vs. 2022) | Metric | Q4 2023 | Q4 2022 | YoY Change (Q4) | FY 2023 | FY 2022 | YoY Change (FY) | | :-------------------------- | :---------- | :---------- | :-------------- | :---------- | :---------- | :-------------- | | Commercial Revenue | $61,483 | $0 | N/A | $161,483 | $0 | N/A | | Grant Revenue | $0 | $16,608 | -100% | $37,388 | $203,269 | -81.6% | | Operating Expenses | $2.5M | $2.0M | +25% | $10.4M | $7.3M | +42.5% | | Net Loss | $(2.4M) | $(1.9M) | +26.3% | $(10.0M) | $(7.2M) | +38.9% | | Cash Used (Operating, Investing, Financing) | $2.3M | $2.1M | +9.5% | $7.9M | $6.8M | +16.2% | | Cash & Cash Equivalents (Dec 31) | $8.5M | $16.3M | -47.9% | | | | - Operating expenses in both Q4 and full year 2023 were primarily driven by higher research and development spending and, for the full year, stock-based compensation expense[5] - The company reported no long-term debt outstanding at December 31, 2023[5] Balance Sheets As of December 31, 2023, Ideal Power's total assets decreased significantly, primarily driven by a reduction in cash and cash equivalents, while total liabilities increased due to higher accounts payable and other long-term liabilities Balance Sheet Summary (December 31, 2023 vs. 2022) | Metric | Dec 31, 2023 | Dec 31, 2022 | Change | | :-------------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $8,474,835 | $16,345,623 | $(7,870,788) | | Total current assets | $9,109,175 | $16,902,924 | $(7,793,749) | | Total assets | $12,248,070 | $19,399,367 | $(7,151,297) | | Total current liabilities | $930,893 | $449,318 | $481,575 | | Total liabilities | $2,188,370 | $1,490,763 | $697,607 | | Total stockholders' equity | $10,059,700 | $17,908,604 | $(7,848,904) | - Inventory increased from $0 in 2022 to $81,450 in 2023, reflecting initial commercial activities[19] - Intangible assets, net, increased from $2,036,431 to $2,580,066, indicating continued investment in intellectual property[19] Statements of Operations The company saw a significant increase in commercial revenue in 2023, but this was offset by a decrease in grant revenue and a substantial rise in operating expenses, particularly R&D, leading to a larger net loss for both the quarter and the full year Statements of Operations (Q4 and Full Year 2023 vs. 2022) | Metric | Q4 2023 | Q4 2022 | YoY Change (Q4) | FY 2023 | FY 2022 | YoY Change (FY) | | :-------------------------- | :---------- | :---------- | :-------------- | :---------- | :---------- | :-------------- | | Commercial Revenue | $61,483 | $0 | N/A | $161,483 | $0 | N/A | | Grant Revenue | $0 | $16,608 | -100% | $37,388 | $203,269 | -81.6% | | Total Revenue | $61,483 | $16,608 | +270.2% | $198,871 | $203,269 | -2.2% | | Gross Profit | $15,058 | $0 | N/A | $38,258 | $0 | N/A | | Research and Development | $1,405,957 | $1,029,695 | +36.5% | $5,743,211 | $3,366,776 | +70.6% | | General and Administrative | $850,432 | $767,309 | +10.8% | $3,533,383 | $3,123,852 | +13.1% | | Sales and Marketing | $243,563 | $192,307 | +26.7% | $1,113,752 | $852,331 | +30.7% | | Total Operating Expenses | $2,499,952 | $1,989,311 | +25.7% | $10,390,346 | $7,342,959 | +41.5% | | Loss from Operations | $(2,484,894)| $(1,989,311)| +24.9% | $(10,352,088)| $(7,342,959)| +41.0% | | Net Loss | $(2,405,748)| $(1,890,945)| +27.2% | $(9,954,020)| $(7,189,350)| +38.5% | | Net Loss per Share (basic & diluted) | $(0.39) | $(0.31) | +25.8% | $(1.61) | $(1.17) | +37.6% | - The company achieved a gross profit of $15,058 in Q4 2023 and $38,258 for the full year 2023, compared to $0 in the prior year, reflecting the commencement of commercial revenue[21] Statements of Cash Flows Ideal Power experienced an increased net cash outflow from operating activities in 2023, primarily due to a higher net loss and increased stock-based compensation, alongside higher cash usage in investing activities for property, equipment, and intangible assets Cash Flow Summary (Full Year 2023 vs. 2022) | Metric | FY 2023 | FY 2022 | Change | | :---------------------------------- | :---------- | :---------- | :----- | | Net Loss | $(9,954,020)| $(7,189,350)| $(2,764,670) | | Stock-based compensation | $2,321,380 | $975,801 | $1,345,579 | | Net cash used in operating activities | $(7,131,578)| $(6,383,914)| $(747,664) | | Net cash used in investing activities | $(522,946) | $(312,740) | $(210,206) | | Net cash used in financing activities | $(216,264) | $(127,872) | $(88,392) | | Net decrease in cash and cash equivalents | $(7,870,788)| $(6,824,526)| $(1,046,262) | | Cash and cash equivalents at end of period | $8,474,835 | $16,345,623 | $(7,870,788) | - The increase in net cash used in operating activities was partly offset by higher non-cash adjustments like depreciation and amortization, and a significant increase in stock-based compensation[23] - Investing activities saw increased spending on the purchase of property and equipment ($240,825 in 2023 vs. $182,651 in 2022) and acquisition of intangible assets ($282,121 in 2023 vs. $130,089 in 2022)[23] Company Information & Legal Disclosures Ideal Power is focused on developing and commercializing its patented B-TRAN™ semiconductor technology, a unique double-sided bidirectional AC switch designed to improve efficiency and reduce losses in various energy control applications About Ideal Power and B-TRAN™ Technology Ideal Power is focused on developing and commercializing its patented B-TRAN™ semiconductor technology, a unique double-sided bidirectional AC switch designed to improve efficiency and reduce losses in various energy control applications - Ideal Power is pioneering the development and commercialization of its broadly patented B-TRAN™ bidirectional semiconductor power switch[15] - B-TRAN™ creates highly efficient and eco-friendly energy control solutions for electric vehicle, electric vehicle charging, renewable energy, energy storage, UPS/data center, solid-state circuit breaker, and other industrial and military applications[15] - B-TRAN™ is a unique double-sided bidirectional AC switch that delivers substantial performance improvements over today's conventional power semiconductors[15] - B-TRAN™ can reduce conduction and switching losses, complexity of thermal management, and operating cost in AC power switching and control circuitry[15] Investor Communications Ideal Power provided details for its Q4 and FY2023 earnings conference call and webcast, along with information on upcoming investor conference presentations and a recent CEO interview Conference Call Details | Detail | Information | | :---------------------- | :-------------------------- | | Date | Thursday, February 29, 2024 | | Time | 10:00 AM ET | | Toll-free dial-in | 888-506-0062 | | International dial-in | 973-528-0011 | | Participant Access Code | 233198 | - An audio replay of the conference call was available one hour after the live call until Midnight on March 14, 2024[8][9] - Ideal Power President and CEO Dan Brdar was recently interviewed by Diane King Hall with Schwab Network[10] - Ideal Power plans to present at the Emerging Growth Virtual Conference on March 7, 2024, and at the Roth Capital 36th Annual Conference on March 18, 2024[12][13] Safe Harbor Statement & Contacts The report includes a safe harbor statement regarding forward-looking statements, outlining inherent risks and uncertainties, and provides contact information for investor relations - All non-historical statements are 'forward-looking statements' subject to risks, uncertainties, and other factors, including the success of B-TRAN™ technology, patent protection, development timing, market acceptance, and supply chain disruptions[16] - Investors should not place reliance on forward-looking statements as a prediction of actual results, and the company disclaims any intention to update or revise them, except as required by applicable law[16] - The Investor Relations contact is Jeff Christensen of Darrow Associates Investor Relations[17]