GlobeNewswire Inc | Aug 13, 2020 04:05PM EDT

August 13, 2020

AUSTIN, Texas, Aug. 13, 2020 (GLOBE NEWSWIRE) -- Ideal Power Inc.(Nasdaq: IPWR), pioneering the development and commercialization of highly efficient and broadly patented B-TRAN bi-directional power switches, reported results for its second quarter ended June 30, 2020.

During the second quarter of 2020, we significantly advanced Phase Two of our B-TRAN commercialization plan, which entails the fabrication of parts and the delivery of samples to potential partners for evaluation," said Dan Brdar, President and Chief Executive Officer of Ideal Power. "We signed a $1.2 million contract to partner with Diversified Technologies (DTI), a developer and marketer of high voltage, high power pulse modulators, DC power supplies, and control systems for the U.S. Departments of Energy and Defense and other prestigious customers, to develop and demonstrate B-TRAN enabled high efficiency 12kV medium voltage direct current circuit breakers for the U.S. Navy as part of their ship electrification program, our first award for a government-funded technology project. We also made strong progress on our engineering sampling program, completing the fabrication qualification process as well as another B-TRAN run with Teledyne, our domestic semiconductor fabrication partner, and are preparing for dies to be packaged for internal testing and characterization. Overall, we are tracking to plan and are focused for the remainder of the year on completing a first run of packaged B-TRAN devices under our DTI partnership and on putting engineering prototype samples packaged with a driver into potential customers hands.

Key Recent Operational Highlights

-- Signed a $1.2 million contract to partner with Diversified Technologies, Inc. (DTI) /a developer and marketer of high voltage, high power pulse modulators, DC power supplies, and control systems for the U.S. Departments of Energy and Defense, leading universities, and private sector companies, on the demonstration of B-TRAN enabled high efficiency direct current circuit breakers. This contract is part of a two-year, $3.0 million contract awarded to DTI by United States Naval Sea Systems Command (NAVSEA) to support its ship electrification program. Ideal Power kicked off its part of the program in late June. -- Completed the fabrication qualification process with Teledyne, the Companys domestic semiconductor fabrication partner. The dies produced during this process will be packaged and utilized for internal testing and characterization. -- Released next-generation parts to Teledyne for fabrication under the NAVSEA program and potential early customer samples. -- In collaboration with University of Texas at Austins Microelectronic Research Center, began design of a new current source driver to be used in our engineering prototype sampling program. -- B-TRAN Patent Estate: Currently have 56 issued B-TRAN patents with 20 of those issued outside of the United States and 27 pending B-TRAN patents. Current geographic coverage includes North America, China, Japan and Europe, with potential to expand coverage into South Korea and India. -- In August, Ideal Power raised an estimated $2.5 million in net proceeds from an early warrant exercise transaction with certain of the Companys Series A warrant holders, in which Series A warrant holders were issued new Series C warrants to purchase up to an aggregate of 705,688 shares of the Companys common stock at an exercise price of $8.90 per share, through a private placement, as an incentive for such Series A warrant holders to exercise their Series A warrants early. The transaction strengthened the Companys cash position and enabled an orderly exercise of warrants for holders.

Second Quarter 2020 Financial Results

-- Research and development expenses in the second quarter of 2020 were $0.3 million, flat compared to $0.3 million in the second quarter of 2019. -- General and administrative expenses in the second quarter of 2020 were $0.5 million compared to $0.6 million in the second quarter of 2019. The decrease was due to lower legal fees and facilities costs. -- Net loss in the second quarter of 2020 was $0.8 million compared to $1.3 million in the second quarter of 2019. The decrease in net loss was due to the sale of the PPSA operations in September 2019 and lower general and administrative expenses. The second quarter of 2019 included a $0.3 million loss from discontinued operations. -- Cash used in operating activities for the first six months of 2020 was $1.5 million compared to $1.8 million in the first six months of 2019. Cash flows from operating activities in the six months of 2019 included $0.5 million of cash used in discontinued operations. -- Cash and cash equivalents totaled $1.8 million as of June 30, 2020. Subsequent to June 30, 2020, the Company raised an estimated $2.5 million in net proceeds from an early warrant exercise transaction. -- Long-term debt outstanding was $0.1 million relating to a Payroll Protection Program loan received in the second quarter of 2020 to temporarily subsidize payroll and facilities costs in a business landscape impacted by the COVID-19 pandemic.

Second Quarter 2020 Conference Call Details

Ideal Power CEO and President 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, August 13, 2020Time: 4:30 p.m. EST, 1:30 p.m. PSTToll-free dial-in number: 1- 866-248-8441International dial-in number: 1-323-347-3612Conference ID: 8018042

Please call the conference telephone number 5 to 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 LHA Investor Relations at 1-212-838-3777.

The conference call will be broadcast live and available for replay at http://public.viavid.com/player/index.php?id=140862 and via the investor relations section of the Companys website at www.IdealPower.com.

A replay of the conference call will be available after 7:30 p.m. Eastern time on August 13, 2020 through September 13, 2020.

Toll Free Replay Number: 1-844-512-2921International Replay Number: 1-412-317-6671Replay ID: 8018042

About Ideal Power Inc.

Ideal Power (NASDAQ: IPWR) is pioneering the development of its broadly patented bi-directional power switches, creating highly efficient and ecofriendly energy control solutions for industrial, alternative energy, military and automotive applications. The Company is 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 able to deliver substantial performance improvements over today's conventional power semiconductors. Ideal Power believes B-TRAN modules will reduce conduction and switching losses, complexity of thermal management and operating cost in medium voltage AC power switching and control circuitry. For more information, visit www.IdealPower.com.

Safe Harbor Statement All 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 Ideal Powers 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 impact of COVID-19 on our business, financial condition and results of operations, the success of our B-TRAN technology, including the success of of our contract with DTI, whether the patents for our technology provide adequate protection and whether we can be successful in maintaining, enforcing and defending our patents and our inability to predict with precision or certainty the pace of development and commercialization of our B-TRAN technology, our ability to secure additional financing on commercially reasonable terms, or at all, especially in light of the market volatility uncertainty as a result of the COVID-19 pandemic and uncertainties set forth in our quarterly, annual and other 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:LHA Investor RelationsCarolyn Capaccio, CFA; Keith FetterT: 212-838-3777IdealPowerIR@lhai.com

IDEAL POWER INC.Balance Sheets

June 30, December 31, 2020 2019 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,793,582 $ 3,057,682 Prepayments and other current assets 223,838 248,148 Total current assets 2,017,420 3,305,830 Property and equipment, net 46,078 47,302 Intangible assets, net 1,594,085 1,634,378 Right of use asset 171,849 260,310 Other assets ? 17,920 Total assets $ 3,829,432 $ 5,265,740 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable $ 47,333 $ 182,956 Accrued expenses 327,328 319,135 Current portion of lease liability 176,989 183,119 Total current liabilities 551,650 685,210 Long-term debt 96,407 ? Long-term lease liability ? 82,055 Other long-term liabilities 603,917 609,242 Total liabilities 1,251,974 1,376,507 Commitments and contingencies Stockholders? equity: Common stock, $0.001 par value; 50,000,000shares authorized; 2,353,306 shares issuedand 2,351,985 shares outstanding at June 30, 2,353 2,101 2020, and 2,101,272 shares issued and2,099,951 shares outstanding at December 31,2019, respectivelyAdditional paid-in capital 71,693,988 71,242,256 Treasury stock, at cost, 1,321 shares at June (13,210 ) (13,210 )30, 2020 and December 31, 2019Accumulated deficit (69,105,673 ) (67,341,914 )Total stockholders? equity 2,577,458 3,889,233 Total liabilities and stockholders? equity $ 3,829,432 $ 5,265,740

IDEAL POWER INC.Statements of Operations(unaudited)

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Grant revenue $ 6,515 $ ? $ 6,515 $ ? Cost of grant 6,515 ? 6,515 ? revenueGross profit ? ? ? ? Operating expenses:Research and 316,325 335,752 666,989 553,968 developmentGeneral and 515,878 580,663 1,095,648 1,049,053 administrativeTotaloperating 832,203 916,415 1,762,637 1,603,021 expenses Loss fromcontinuingoperations (832,203 ) (916,415 ) (1,762,637 ) (1,603,021 )beforeinterestInterest(income) 1,055 (6,809 ) 1,122 309 expense, netLoss fromcontinuing (833,258 ) (909,606 ) (1,763,759 ) (1,603,330 )operationsLoss fromdiscontinued ? (342,076 ) ? (689,251 )operationsNet loss $ (833,258 ) $ (1,251,682 ) $ (1,763,759 ) $ (2,292,581 ) Loss fromcontinuingoperations per $ (0.28 ) $ (0.62 ) $ (0.59 ) $ (1.10 )share ? basicand fullydilutedLoss fromdiscontinuedoperations per ? (0.23 ) ? (0.48 )share ? basicand fullydilutedNet loss pershare ? basic $ (0.28 ) $ (0.85 ) $ (0.59 ) $ (1.58 )and fullydiluted Weightedaverage numberof shares 2,998,350 1,474,001 2,983,372 1,453,648 outstanding ?basic andfully diluted

IDEAL POWER INC.Statements of Cash Flows(unaudited)

Six Months Ended June 30, 2020 2019 Cash flows from operating activities: Loss from continuing operations $ (1,763,759 ) $ (1,603,330 )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization 57,248 56,497 Write-off of capitalized patents 18,235 ? Stock-based compensation 226,168 140,190 Stock issued for services 50,000 ? Decrease in operating assets: Prepayments and other current assets 42,230 112,347 Increase (decrease) in operating liabilities: Accounts payable (135,623 ) 2,836 Accrued expenses 3,144 (7,588 )Net cash used in operating activities (1,502,357 ) (1,299,048 )Net cash used in operating activities ? ? (465,328 )discontinued operations Cash flows from investing activities: Purchase of property and equipment (10,678 ) (1,194 )Acquisition of intangible assets (23.288 ) (54,710 )Net cash used in investing activities (33,966 ) (55,904 ) Cash flows from financing activities: Proceeds from loans 96,407 ? Proceeds from the exercise of warrants 175,816 ? Net cash provided by financing activities 272,223 ? Net decrease in cash and cash equivalents ? (1,264,100 ) (1,354,952 )continuing operationsNet decrease in cash and cash equivalents ? ? (465,328 )discontinued operationsCash and cash equivalents at beginning of 3,057,682 3,258,077 periodCash and cash equivalents at end of period $ 1,793,582 $ 1,437,797

IDEAL POWER INC.Statement of Stockholders EquityFor the Three-Month Periods during the Six Months Ended June 30, 2020 and 2019(unaudited)

Preferred Additional Accumulated Total Common Stock Stock Paid-In Treasury Stock Deficit Stockholders? Capital Equity Shares Amount Shares Amount Shares Amount Balances atDecember 31, 1,404,479 $ 1,404 1,518,430 $ 1,518 $ 68,022,484 1,321 $ (13,210 ) $ (63,414,252 ) $ 4,597,944 2018Conversionof preferred 70,843 71 (708,430 ) (708 ) 637 ? ? ? ? stock tocommon stockStock-based ? ? ? ? (25,814 ) ? ? ? (25,814 )compensationNet loss forthe threemonths ended ? ? ? ? ? ? ? (1,040,899 ) (1,040,899 )March 31,2019Balances atMarch 31, 1,475,322 $ 1,475 810,000 $ 810 $ 67,997,307 1,321 $ (13,210 ) $ (64,455,151 ) $ 3,531,231 2019Stock-based ? ? ? ? 101,843 ? ? ? 101,843 compensationNet loss forthe threemonths ended ? ? ? ? ? ? ? (1,251,682 ) (1,251,682 )June 30,2019Balances atJune 30, 1,475,322 $ 1,475 810,000 $ 810 $ 68,099,150 1,321 $ (13,210 ) $ (65,706,833 ) $ 2,381,392 2019 Balances atDecember 31, 2,101,272 $ 2,101 ? $ ? $ 71,242,256 1,321 $ (13,210 ) $ (67,341,914 ) $ 3,889,233 2019Stock-based ? ? ? ? 116,497 ? ? ? 116,497 compensationNet loss forthe threemonths ended ? ? ? ? ? ? ? (930,501 ) (930,501 )March 31,2020Balances atMarch 31, 2,101,272 $ 2,101 ? $ ? $ 71,358,753 1,321 $ (13,210 ) $ (68,272,415 ) $ 3,075,229 2020Stock-based ? ? ? ? 109,671 ? ? ? 109,671 compensationStock issued 26,316 26 ? ? 49,974 ? ? ? 50,000 for servicesExercise of 225,718 226 ? ? 175,590 ? ? ? 175,816 warrantsNet loss forthe threemonths ended ? ? ? ? ? ? ? (833,258 ) (833,258 )June 30,2020Balances atJune 30, 2,353,306 $ 2,353 ? $ ? $ 71,693,988 1,321 $ (13,210 ) $ (69,105,673 ) $ 2,577,458 2020