Ideal Power Inc (NASDAQ:IPWR), a company known for its innovative B-TRAN technology, continues to make big strides with the recent completion of prototypes of a solid-state circuit breaker (SSCB) product for an OEM customer. In a recent discussion with Tim Burns, the company's CFO, he outlined the rapid development of these prototypes, which were designed in collaboration with a key OEM customer and are expected to accelerate market adoption of B-TRAN enabled SSCBs. Burns also shared insights into Ideal Pow ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, The ...

Core Insights - Ideal Power Inc. has successfully completed all deliverables related to its first design win for solid-state circuit breakers (SSCBs) three months ahead of schedule [1][2][3] Company Developments - The company entered into a joint development agreement with a major Asian circuit protection equipment manufacturer to develop SSCBs using multiple B-TRAN® devices [2][3] - The integration of B-TRAN® devices into SSCB prototypes resulted in over a 60% reduction in total losses compared to traditional SiC devices, enhancing performance and adding bidirectionality [2][3] - The SSCB prototypes have been shipped to the customer for further testing, allowing for an expedited marketing process for the new ultra-low loss breaker [2][3] Market Opportunities - The initial B-TRAN®-based SSCB product is projected to generate several hundred thousand dollars in revenue in its first year, with potential to exceed one million dollars in the second year [4] - The customer plans to market this product to renewable energy and energy storage providers, with expectations of multiple B-TRAN®-enabled SSCB products in the future [4] - The overall opportunity with this customer could lead to sales of up to one million units per year, with additional applications in data centers, lighting, air conditioning systems, and electric vehicles [4] Technology Validation - The first design win and joint development agreement validate B-TRAN® as a key technology for solid-state circuit breakers, with expectations of expanded opportunities and potential design wins with large global companies [3][4]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001‑36216 IDEAL POWER INC. (Exact name of registrant as specified in its charter) DELAWARE 14‑1999058 (State or other jurisdiction of incorporation or organization) For the transition period from t ...

Core Insights - Ideal Power Inc is progressing ahead of schedule in its joint development program for solid-state circuit breakers, attributed to effective collaboration and integration processes [1][2] Group 1: Product Development and Market Strategy - The B-TRAN based solution is designed to fit seamlessly within existing circuit breaker designs, expediting the customer's time to market for their initial product [2] - Prototypes of the circuit breaker are expected to be completed and shipped by late March or early April, with commercial sales anticipated to begin in 2025 [2][8] - The customer initially sought a higher-performing alternative to their existing circuit breaker, which was not meeting performance expectations [3] Group 2: Competitive Advantage and Technology Differentiation - Ideal Power's technology offers a more efficient and cost-effective solution compared to silicon carbide-based devices, addressing critical issues like cost and conduction losses [4] - The company's solid-state circuit breaker technology is over 100 times faster than conventional electromechanical breakers, making it suitable for applications requiring rapid response [14] - The B-TRAN technology is designed to minimize conduction losses, which is essential for continuously conducting devices like circuit breakers [13][14] Group 3: Financial Outlook and Revenue Potential - The first design win for the solid-state circuit breaker could generate over $1 million in revenue in its second year, with expectations for scaling B-TRAN adoption across other customers [11] - Ideal Power has a serviceable addressable market opportunity of $1 billion in solid-state switchgear and $1.4 billion in energy and power [13] - The company has $15.8 million in cash and no long-term debt, allowing for strategic investments to support the transition from development to revenue generation starting in 2025 [15]

Investment Focus - The company focuses on growth markets, particularly in AI and biotech, while also exploring undervalued stocks with significant potential [1] - The investment strategy includes a diverse portfolio ranging from megacap to microcap stocks, primarily in the U.S. market, with occasional interest in European and Canadian stocks [1] Investment Strategy - The investment style is inspired by Warren Buffett but is applied to riskier investments, indicating a willingness to engage in more volatile sectors [1] - The portfolio includes sectors such as semiconductor, mining, shipping, and dividends, highlighting a broad investment approach [1] Professional Background - The company is led by a deputy director general in a prominent European sector organization, bringing over twenty years of experience in Brussels, which is central to European institutions [1] - The individual has a Master's Degree in Law, suggesting a strong analytical background that may benefit investment decision-making [1]

Financial Data and Key Metrics Changes - The fourth quarter cash burn was $2.6 million, an increase from $2.1 million in Q4 2023 and $2.4 million in Q3 2024, aligning with the low end of guidance [51] - Full-year 2024 cash burn totaled $8.2 million, also at the low end of guidance [51] - Cash and cash equivalents were $15.8 million at December 31, 2024, with no debt [53] - The net loss for Q4 2024 was $2.6 million, compared to $2.4 million in Q4 2023, while the full-year net loss was $10.4 million, up from $10 million in 2023 [56] Business Line Data and Key Metrics Changes - The company secured its first design win for solid-state circuit breakers, which is expected to significantly contribute to revenue growth [10][48] - An order for SimCool IQ intelligent power modules was secured, opening an estimated $1.4 billion serviceable addressable market [12] - Orders were received from a tier-one automotive supplier for B-TRAN devices and SimCool power modules, indicating strong interest in electric vehicle applications [13] Market Data and Key Metrics Changes - The solid-state circuit breaker market is projected to grow due to the increasing demand for semiconductor-based solutions in renewable energy and electric vehicles [33][35] - The automotive market is seeing engagement from three tier-one suppliers and several global automakers, with a focus on EV contactor applications [38][40] Company Strategy and Development Direction - The company aims to ramp sales and achieve positive cash flow and profitability through key milestones, including securing additional design wins and increasing current ratings of products [22][25] - The strategy includes expanding partnerships with large global companies and enhancing customer engagement in solid-state circuit breakers and EV contactors [7][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, citing positive customer feedback and an expanding pipeline of potential design wins [7][49] - The company remains confident in its technology's ability to meet the needs of the automotive and industrial markets despite potential regulatory changes in the U.S. [40][41] Other Important Information - The company has a robust patent portfolio with 94 issued patents, enhancing its competitive position in the market [45][46] - Third-party automotive qualification testing is ongoing, with positive results to date, which will support future sales to both automotive and industrial customers [21][32] Q&A Session Summary Question: Revenue expectations from the SSCB customer - Revenue of several hundred thousand is expected in the first year of sales, starting from the product launch [61][62] Question: Number of additional SSTB customers in evaluation - Over half a dozen large companies are currently evaluating the technology for solid-state circuit breaker applications [64] Question: Potential for more design wins in 2025 - The company is targeting additional design wins in 2025 [67] Question: Details on the EV contactors program with Stellantis - The program will take longer, but funding is expected in 2025 [69] Question: Insights from the program review with Stellantis - The review highlighted the need for a low-loss solid-state EV contactor, with positive feedback from Stellantis [78][79] Question: Current headcount and expected growth - Current headcount is 16, expected to grow to around 20 by the end of the year, with plans to add more sales personnel [102] Question: Automotive qualification testing standards - Automotive standards allow for a certain number of failures during testing, and the company is currently seeing no die failures [106] Question: Opportunities in hybrid vehicles - The focus is currently on full electric vehicles, but there is potential for hybrid opportunities as relationships develop [110]

Financial Data and Key Metrics Changes - The fourth quarter 2024 cash burn was $2.6 million, up from $2.1 million in Q4 2023 and $2.4 million in Q3 2024, aligning with the low end of guidance [51] - The full-year 2024 cash burn was $8.2 million, also at the low end of guidance, net of $1 million from warrant exercises [51] - Cash and cash equivalents totaled $15.8 million at December 31, 2024, with no debt [53] - The net loss for Q4 2024 was $2.6 million, compared to $2.4 million in Q4 2023, and the full-year net loss was $10.4 million, compared to $10 million in 2023 [56] Business Line Data and Key Metrics Changes - The company secured its first design win for solid-state circuit breakers with a major Asian manufacturer, which is expected to lead to commercial sales later in 2025 [10][11] - An order for SimCool IQ intelligent power modules was secured, opening an estimated $1.4 billion serviceable addressable market for energy and power applications [12] - Orders were received from a tier-one automotive supplier for B-TRAN devices and SimCool power modules, indicating strong interest in B-TRAN technology for electric vehicle applications [13] Market Data and Key Metrics Changes - The solid-state circuit breaker market is expected to grow due to the increasing demand for semiconductor-based solutions in renewable energy, energy storage, and electric vehicle charging [34] - The company is engaged with three tier-one auto suppliers and several global automakers, indicating a strong market presence in the automotive sector [38] Company Strategy and Development Direction - The company aims to ramp sales and achieve positive cash flow and profitability through key milestones, including securing additional design wins and starting initial sales in the second half of 2025 [22][25] - The focus is on expanding the pipeline with large global companies and enhancing customer engagement for solid-state circuit breakers and EV contactors [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, citing positive customer feedback and an expanding pipeline of potential design wins that could lead to significant revenue [7][49] - The company remains confident in its technology's ability to meet the needs of the automotive and industrial markets despite potential changes in government policy affecting electric vehicles [40][41] Other Important Information - The company has 94 issued patents and 53 pending patents, indicating a strong focus on protecting its intellectual property [45][46] - The automotive qualification testing is progressing positively, with zero die failures reported to date [21][29] Q&A Session Summary Question: Revenue expectations from the first SSCB customer - The revenue of several hundred thousand is expected in the first year of sales, starting from the product launch [62] Question: Number of additional SSTB customers in evaluation - Over a half dozen large companies are currently evaluating the technology for solid-state circuit breaker applications [64] Question: Potential for more design wins in 2025 - The company is targeting additional design wins in 2025 [67] Question: Details on the EV contactors program with Stellantis - The program will take longer, but funding is expected in 2025 [69] Question: Insights from the program review with Stellantis - The meeting was productive, with Stellantis expressing interest in the company's solutions for their contactor issues [78] Question: Size and market of the first design win - The first design win is for an industrial-sized circuit breaker capable of handling several dozen amps [84] Question: Will the design win be sold to other companies? - The design win is not constrained and can be leveraged for other companies [87] Question: Expected design wins from distributors - Design wins will come from a mix of direct engagements and distributor introductions [90] Question: Stellantis' decision on tier-one suppliers - Stellantis plans to use multiple tier-one suppliers for their inverter program [93] Question: Headcount and expected growth - Current headcount is 16, expected to grow to around 20 by the end of the year, with a focus on increasing sales staff [102] Question: Automotive qualification testing standards - Automotive standards allow for a certain number of failures during testing [106] Question: Potential design wins for hybrid vehicles - Current focus is on full electric vehicles, but opportunities for hybrids may arise as relationships develop [110]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive focuses on sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Group 2 - Proactive has a strong emphasis on technology adoption, utilizing various tools to enhance workflows [4] - The company employs automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Financial Performance - Ideal Power reported commercial revenue of $5,408 in Q4 2024 and $86,032 for the full year 2024, compared to $61,483 and $161,483 in 2023 respectively, indicating a significant decline in revenue [20]. - The net loss for Q4 2024 was $2.6 million, slightly higher than the $2.4 million loss in Q4 2023, while the full year net loss increased to $10.4 million from $10.0 million in 2023 [6]. - Net loss for the year ended December 31, 2024, was $10,417,813, compared to a net loss of $9,954,020 in 2023, representing an increase in loss of approximately 4.6% [22]. Operating Expenses - Operating expenses in Q4 2024 were $2.8 million, up from $2.5 million in Q4 2023, primarily due to increased research and development spending [6]. - Cash used in operating and investing activities was $2.6 million in Q4 2024, compared to $2.1 million in Q4 2023, and $9.2 million for the full year 2024, up from $7.7 million in 2023 [6]. - Net cash used in operating activities increased to $8,742,580 in 2024 from $7,131,578 in 2023, reflecting a rise of about 22.6% [22]. - The company recorded stock-based compensation of $1,596,254 in 2024, down from $2,321,380 in 2023, a decrease of about 31.2% [22]. - Depreciation and amortization expenses rose to $341,045 in 2024 from $271,746 in 2023, an increase of about 25.5% [22]. - The acquisition of intangible assets amounted to $309,162 in 2024, compared to $282,121 in 2023, reflecting an increase of approximately 9.6% [22]. - The company experienced a decrease in accounts payable by $300,981 in 2024, contrasting with an increase of $274,595 in 2023 [22]. - The company reported a write-off of capitalized patents amounting to $62,073 in 2024, with no such write-off recorded in 2023 [22]. - The net cash used in investing activities decreased slightly to $506,428 in 2024 from $522,946 in 2023, a reduction of about 3.2% [22]. Cash Position - Cash and cash equivalents totaled $15.8 million as of December 31, 2024, an increase from $8.5 million in 2023 [18]. - Cash and cash equivalents at the end of the period increased to $15,842,850 in 2024, up from $8,474,835 in 2023, marking an increase of approximately 86.5% [22]. - Net cash provided by financing activities was $16,617,023 in 2024, compared to a net cash used of $216,264 in 2023, indicating a significant turnaround [22]. Market Opportunities and Product Development - Ideal Power has identified a $1.0 billion market opportunity for solid-state switchgear and a $1.4 billion opportunity in the energy and power market [3]. - The company secured its first design win for solid-state circuit breakers (SSCB) with a major Asian manufacturer, which is expected to drive revenue growth starting in the second half of 2025 [2]. - Ideal Power plans to initiate sales ramp in the second half of 2025 following the successful rollout of its first B-TRAN®-based product [2]. - The company is currently conducting third-party automotive qualification and reliability testing of B-TRAN® devices, with positive test results reported so far [6]. - The company has 94 issued B-TRAN® patents, with 45 issued outside the United States and 53 pending patents, covering multiple regions including North America and Asia [6].