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What changed in Ideal Power Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ideal Power Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+173 added−156 removedSource: 10-K (2025-03-28) vs 10-K (2023-12-31)

Top changes in Ideal Power Inc.'s 2024 10-K

173 paragraphs added · 156 removed · 132 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThis in turn requires a significantly smaller surface area for heat dissipation which will enable increased power density, or power per pound, and potentially result in smaller original equipment manufacturer, or OEM, products. In addition, B-TRAN™’s symmetric bidirectional operation reduces the number of components by 75% as compared to a conventional bidirectional switch utilizing IGBTs and diodes.
Biggest changeThis higher efficiency will substantially reduce the heat generated by the operation of products utilizing this technology. As a result, products incorporating B-TRAN® have lower thermal management requirements. This in turn requires a significantly smaller surface area for heat dissipation which enables increased power density, or power per pound, and potentially smaller original equipment manufacturer, or OEM, products.
In recent years, there has been a greater demand for energy-savings and power consumption reductions and growing demand for renewable energy and electric vehicles and, as a result, the need for power semiconductors that minimize power loss has been increasing. Power semiconductors are solid-state devices that act as a switch without any mechanical movement.
In recent years, there has been greater demand for energy-savings and power consumption reductions and growing demand for renewable energy and electric vehicles and, as a result, the need for power semiconductors that minimize power loss has been increasing. Power semiconductors are solid-state devices that act as a switch without any mechanical movement.
Target markets for current and future B-TRAN™-based products include, but are not limited to, electric and hybrid electric vehicles, electric vehicle charging, renewable energy and energy storage system power converters, uninterruptible power supplies (“UPS”) for data centers, industrial motor drives, solid-state circuit breakers, distribution and transmission switches and controls and other industrial and military markets.
Target markets for current and future B-TRAN®-based products include, but are not limited to, solid-state circuit breakers, electric and hybrid electric vehicles, electric vehicle charging, renewable energy and energy storage system power converters, uninterruptible power supplies (“UPS”) for data centers, industrial motor drives, distribution and transmission switches and controls and other industrial and military markets.
However, government support for semiconductors and certain of our potential target markets including electric and hybrid electric vehicles, electric vehicle charging infrastructure, renewable energy, grid storage and improved grid resiliency may impact the size and growth rate of semiconductors and these potential target markets.
However, government support for semiconductors and certain of our target markets including electric and hybrid electric vehicles, electric vehicle charging infrastructure, renewable energy, grid storage and improved grid resiliency may impact the size and growth rate of semiconductors and these potential target markets.
At the outset, our efforts under the ARPA-E grant were focused on the development of, including the manufacturing process development for, a bidirectional insulated gate bipolar transistor (“BD-IGBT”). Although work on BD-IGBTs had previously been done by others in research labs, it was a technology that had not yet been commercialized.
At the outset, our efforts under the ARPA-E grant were focused on the development of, including the manufacturing process development for, a bidirectional insulated gate bipolar transistor (“BD-IGBT”). Although work on BD-IGBTs had previously been done by others in research labs, it was a technology that had not been commercialized.
The global power semiconductor market may be categorized by component, material, end-use and geography. Based on component, the market includes power metal-oxide semiconductor field-effect transistors (“MOSFETs”), thyristors, rectifiers, bipolar junction transistors, insulated gate bipolar transistors (“IGBTs”) and power diodes. With respect to material, the power semiconductor market is split several ways into silicon, germanium, silicon carbide and gallium nitride.
The global power semiconductor market may be categorized by component, material, end-use and geography. Based on component, the market includes power metal-oxide semiconductor field-effect transistors (“MOSFETs”), thyristors, rectifiers, bipolar junction transistors, insulated gate bipolar transistors (“IGBTs”) and power diodes. With respect to material, the power semiconductor market is split several ways into silicon, silicon carbide and gallium nitride.
We believe that B-TRAN™ provides a competitive advantage in several IGBT markets due to its higher expected efficiency and inherent bidirectionality, the growth in bidirectional applications such as electric vehicles and energy storage, and as it seems the IGBT has almost reached its technological limit.
We believe that B-TRAN® provides a competitive advantage in several IGBT markets due to its higher efficiency and inherent bidirectionality, the growth in bidirectional applications such as electric vehicles and energy storage, and as it seems the IGBT has almost reached its technological limit.
While we initially focused on the development of a BD-IGBT under the ARPA-E grant, we shifted our focus under the grant to the development of a new, highly efficient power switch called a bidirectional bipolar junction transistor, or B-TRAN™, that will allow product manufacturers to substitute one B-TRAN™ for two pairs of IGBTs and diodes used in bidirectional circuits in their products and, more importantly, be a potential replacement for conventional power switches, such as IGBTs, in the broader power semiconductor market.
While we initially focused on the development of a BD-IGBT under the ARPA-E grant, we shifted our focus under the grant to the development of a new, highly efficient power switch called a bidirectional bipolar junction transistor, or B-TRAN®, that would allow product manufacturers to substitute one B-TRAN® for two pairs of IGBTs and diodes used in bidirectional circuits in their products and, more importantly, be a potential replacement for conventional power switches, such as IGBTs, in the broader power semiconductor market.
Power semiconductors play an indispensable role in accurately driving motors from low to high speeds, controlling the voltage and flow of electricity in electric and hybrid electric vehicles, supplying power grids with power generated from solar cells or wind turbines with less power loss, and providing a stable source of electricity to various home appliances and electrical equipment.
They play an indispensable role in accurately driving motors from low to high speeds, controlling the voltage and flow of electricity in electric and hybrid electric vehicles, supplying power grids with power generated from solar cells or wind turbines with less power loss, and providing a stable source of electricity to various home appliances and electrical equipment.
We are solely focused on the further development and commercialization of our Bidirectional bipolar junction TRANsistor (“B-TRAN™”) solid-state switch technology. To date, operations have been funded primarily through the sale of common stock and we have generated $3.7 million in grant revenue for bidirectional power switch development.
We are solely focused on the further development and commercialization of our Bidirectional bipolar junction TRANsistor (“B-TRAN®”) solid-state switch technology. To date, operations have been funded primarily through the sale of common stock and pre-funded warrants and we have generated $3.7 million in grant revenue for bidirectional power switch development.
Further, the advent of drive-by-wire or x-by-wire technologies have led to a rise in number of electric components in vehicles over mechanical vehicle parts. This rise helps reduce vehicle weight which is directly related to improved fuel efficiency and reduced vehicular emissions.
Further, the advent of drive-by-wire or x-by-wire technologies has led to a rise in number of electric components in vehicles over mechanical vehicle parts. This rise helps reduce vehicle weight which is directly related to improved fuel efficiency and reduced vehicular emissions.
In Phase 2 of the program, we collaborated with Stellantis and the program partners, including both the program’s packaging company and the organization building the initial drivetrain inverter, to supply B-TRAN™ devices for integration into the custom power module and inverter designs.
In the second phase of the program, we collaborated with Stellantis and the program partners, including both the program’s packaging company and the organization building the initial drivetrain inverter, to supply B-TRAN® devices for integration into the custom power module and inverter designs.
Power semiconductors possess a structure that is different from regular semiconductors, enabling them to handle high voltages and large currents without damage. Failures may occur due to a rise in temperatures resulting from heat generated from handling large amounts of power.
Power semiconductors possess a structure that is different from regular semiconductors, enabling them to handle high voltages and large currents without damage. Failures may occur due to a rise in temperature resulting from heat generated from handling large amounts of power.
See “—Competition.” Our Technology To further improve the performance of bidirectional technologies and products, we identified the need for a true bidirectional power switch and applied for and, in 2012, received a grant from the U.S. Department of Energy’s Advanced Research Projects Agency-Energy (“ARPA-E”) to develop a bidirectional solid-state power switch.
See “—Competition.” 5 Table of Contents Our Technology To further improve the performance of bidirectional technologies and products, we identified the need for a true bidirectional power switch and applied for and, in 2012, received a grant from the U.S. Department of Energy’s Advanced Research Projects Agency-Energy (“ARPA-E”) to develop a bidirectional solid-state power switch.
Industry Background A semiconductor material is a substance that is characterized for “conducting” electricity easily, while at the same time, working as an insulator to prevent the flow of electricity. By using semiconductors, it becomes possible to perform rectification for the uni-directional flow of electricity, amplification for increasing electrical signals, and switching to open and close the flow of electricity.
Industry Background A semiconductor material is a substance that is characterized for “conducting” electricity easily, while at the same time, working as an insulator to prevent the flow of electricity. By using semiconductors, it becomes possible to perform rectification for the unidirectional flow of electricity, amplification for increasing electrical signals, and switching to open and close the flow of electricity.
The term solid-state is often used to show a difference from the earlier technologies of vacuum and gas-discharge tube devices and also to exclude the conventional electro-mechanical devices such as relays, switches, hard drives and other devices with moving parts. Solid-state devices are typically smaller, lighter and faster acting than electro-mechanical devices.
The term solid-state is often used to show a difference from the earlier technologies of vacuum and gas-discharge tube devices and also to exclude conventional electromechanical devices such as relays, switches, hard drives and other devices with moving parts. Solid-state devices are typically smaller, lighter and faster acting than electromechanical devices.
The end-use market is classified into automotive, industrial, renewable energy, telecommunication, consumer electronics, aerospace and defense, healthcare and others. Among these, automotive electronics accounts for significant consumption of power semiconductors. The number of semiconductors in vehicles has surged in recent years with the rising adoption of electric vehicles and hybrid electric vehicles.
The end-use market is classified into automotive, industrial, renewable energy, telecommunication, consumer electronics, aerospace and defense, data centers and others. Among these, automotive electronics accounts for significant consumption of power semiconductors. The number of semiconductors in vehicles has surged in recent years with the rising adoption of electric vehicles and hybrid electric vehicles.
Also, as part of Phase 2, we provided Stellantis a comprehensive test plan for the testing required to achieve certification to automotive standards for B-TRAN™. The test plan was subsequently approved as submitted. In early 2024, we successfully completed Phase 2 of the program.
Also, as part of the second phase of the program, we provided Stellantis a comprehensive test plan for the testing required to achieve certification to automotive standards for B-TRAN®. The test plan was subsequently approved as submitted. In 2024, we successfully completed the second phase of the program.
Development Agreement During the fourth quarter of 2022, we announced, and began Phase 1 of, a product development agreement with Stellantis, a top 10 global automaker, for a custom B-TRAN™ power module for use in the automaker’s EV drivetrain inverters in its next generation EV platform.
Development Agreement In 2022, we announced, and began the first phase of, a product development agreement with Stellantis, a top 10 global automaker, for a custom B-TRAN® power module for use in the automaker’s EV drivetrain inverters in its next generation EV platform.
Information contained on our website (or any other website referred to in this Annual Report on Form 10-K) is not incorporated by reference into this Annual Report on Form 10-K. 8 Table of Contents
Information contained on our website (or any other website referred to in this Annual Report on Form 10-K) is not incorporated by reference into this Annual Report on Form 10-K.
These markets typically utilize IGBTs for power switching in their applications. According to Mordor Intelligence, the power electronics market was $29.2 billion in 2022 and is forecasted to grow to $37.7 billion by 2028.
These markets typically utilize IGBTs for power switching in their applications. According to Mordor Intelligence, the power electronics market is forecasted to grow to $37.7 billion by 2028.
As of December 31, 2023, we had 45 U.S. and 35 foreign issued patents as well as 38 additional pending U.S. and international patent applications on our B-TRAN™ technology. Our first B-TRAN™ patent issued in 2015 and our patents generally have a 20-year life from the date of initial filing prior to expiration.
As of December 31, 2024, we had 49 U.S. and 43 foreign issued patents as well as 55 additional pending U.S. and international patent applications on our B-TRAN® technology. Our first B-TRAN® patent issued in 2015 and our patents generally have a 20-year life from the date of initial filing prior to expiration.
In Phase 1 of the program, we provided packaged B-TRAN™ devices, test kits and technical data to Stellantis for their evaluation. During the third quarter of 2023, we secured, and began Phase 2 of, this program.
In the first phase of the program, we provided packaged B-TRAN® devices, test kits and technical data to Stellantis for their evaluation. In 2023, we secured, and began the second phase of, this program.
Power semiconductors are mostly used in power conversion such as in changing voltages and frequencies, as well as changing direct current (“DC”) to alternating current (“AC”) and AC to DC.
These semiconductor devices are primarily used in power conversion such as in changing voltages and frequencies, as well as changing direct current (“DC”) to alternating current (“AC”) and AC to DC.
This phase is expected to include the extensive testing of the custom B-TRAN™ module to meet automotive certification standards enabling B-TRAN™ to be the core of the powertrain inverter for the automaker’s next-generation EVs. The objective of this phase is the completion and certification of a production-ready B-TRAN™-based module and is targeted for 2025.
This phase is expected to include the extensive testing of the custom B-TRAN® module to meet automotive certification standards enabling B-TRAN® to be the core of the powertrain inverter for the automaker’s next-generation EVs.
We are initially targeting large and growing segments of the IGBT market, such as solid-state circuit breakers, electric and hybrid electric vehicles, electric vehicle charging, renewable energy and energy storage.
We are initially targeting markets where B-TRAN® is an enabling technology, such as solid-state circuit breakers and contactors, and large and growing segments of the IGBT market, such as electric and hybrid electric vehicles, electric vehicle charging, renewable energy and energy storage.
Phase 3 builds on the completion of all Phase 1 and 2 deliverables and therefore transitions to Stellantis’ production team. We are currently finalizing the scope of work for the next phase of the program with Stellantis.
The next phase of the program builds on the completion of deliverables from the prior two program phases and transitions to Stellantis’ production team. We are currently finalizing the scope of work for the next phase of the program with Stellantis.
There has been a trend in both the United States and abroad to support the adoption of electric vehicles and renewable energy due to increased concern regarding the effects of climate change. For example, the Biden administration has announced several initiatives related to EVs.
In recent years, there has been a trend in both the United States and abroad to support the adoption of electric vehicles and renewable energy due to increased concern regarding the effects of climate change.
Government support for semiconductors and our potential target markets could have a material and positive impact on our business if our B-TRAN™ technology is successfully commercialized, particularly in these markets. Employees As of February 28, 2024, we had 11 full-time employees.
Government support for semiconductors and our potential target markets could have a material and positive impact on our business if our B-TRAN® technology is successfully commercialized, particularly in these markets.
Many, if not all of our competitors, have greater financial resources, more comprehensive product offerings, broader market presence, longer standing relationships with business partners, longer operating histories, greater manufacturing capabilities, stronger brand recognition, and greater marketing resources than we have.
We continue to monitor the competitive landscape for offerings or potential offerings based on new technologies with inherent bidirectionality. Many, if not all of our competitors, have greater financial resources, more comprehensive product offerings, broader market presence, longer standing relationships with business partners, longer operating histories, greater manufacturing capabilities, stronger brand recognition, and greater marketing resources than we have.
Intellectual Property We rely on a combination of patents, trade secrets, laws that protect intellectual property, confidentiality procedures and contractual restrictions with our employees and others to establish and protect our intellectual property rights.
See “Development Agreement”, “Product Launches” and “First Design Win” above. 6 Table of Contents Intellectual Property We rely on a combination of patents, trade secrets, laws that protect intellectual property, confidentiality procedures and contractual restrictions with our employees and others to establish and protect our intellectual property rights.
We are accruing interest for future payments related to these agreements. 7 Table of Contents Competition We compete against well-established incumbent power semiconductor device suppliers, including companies that already operate at a large scale in the single-sided (unidirectional) power switch market with IGBTs and MOSFETs, including silicon carbide MOSFETs.
Competition We compete against well-established incumbent power semiconductor device suppliers, including companies that already operate at a large scale in the single-sided (unidirectional) power switch market with IGBTs and MOSFETs, including silicon carbide MOSFETs. Many of these suppliers are now selling modules that utilize multiple conventional power switches to form a bidirectional circuit.
We will record the remaining Phase 2 revenue in the first quarter of 2024. 4 Table of Contents March 2024 Offering In March 2024, we issued and sold 1,366,668 shares of our common stock at a price of $7.50 per share and 633,332 pre-funded warrants to purchase shares of our common stock at a price of $7.499 per pre-funded warrant in an underwritten public offering (the “March 2024 Offering”).
We expect to announce additional design wins and/or custom development agreements in 2025. 4 Table of Contents Public Offering In March and April 2024, we issued and sold 1,666,668 shares of our common stock at a price of $7.50 per share and 633,332 pre-funded warrants to purchase shares of our common stock at a price of $7.499 per pre-funded warrant in an underwritten public offering (the “Public Offering”).
Test results measured B-TRAN™ electrical losses at less than 50% that of conventional power switches such as silicon IGBTs. 6 Table of Contents As part of the B-TRAN™ development and commercialization process and in partnership with our semiconductor fabrication partners, we continue with additional B-TRAN™ wafer runs, incorporating the results of prior runs and subsequent testing into the B-TRAN™ wafer fabrication.
As part of the B-TRAN® development and commercialization process and in partnership with our semiconductor fabrication partners, we continue with additional B-TRAN® wafer runs, incorporating the results of prior runs and subsequent testing into the B-TRAN® wafer fabrication.
Test and Evaluation Agreements Since the middle of 2021, we announced several test and evaluation agreements with prospective customers, including a second top 10 global automaker, a top 10 global provider of power conversion solutions to the solar industry, two global diverse power management market leaders, a tier 1 automotive supplier and a global power conversion supplier.
Customer Engagements We have announced several engagements and/or initial orders with large companies, including a second top 10 global automaker, a third global automaker, a top 10 global provider of power conversion solutions to the solar industry, two global diverse power management market leaders, three tier 1 automotive suppliers, a global power conversion supplier and others.
We have also qualified a high-volume production foundry that successfully fabricated B-TRAN™ wafers, validating the ability to make B-TRAN™ semiconductor power switches using conventional silicon semiconductor fabrication equipment and processes.
We have qualified two high-volume production foundries that both successfully fabricated B-TRAN® wafers, validating the ability to make B-TRAN® semiconductor power switches using conventional silicon semiconductor fabrication equipment and processes. Test results measured B-TRAN® electrical losses at less than 50% that of conventional power switches such as silicon IGBTs.
This multi-die B-TRAN™ module is designed to meet the very low conduction loss needs of the solid-state circuit breaker (“SSCB”) market. We commenced shipment of SymCool™ Power Modules to fulfill customer orders in early 2024. In late 2023, we launched our second commercial product, the SymCool™ IQ Intelligent Power Module (“IPM”).
We generated $86,032 and $161,483, respectively, in commercial revenue in the years ended December 31, 2024 and 2023. Product Launches In early 2023, we launched our first commercial product, the SymCool® Power Module. This multi-die B-TRAN® module is designed to meet the very low conduction loss needs of the solid-state circuit breaker (“SSCB”) market.
See “Test and Evaluation Agreements” above. In late 2022, we entered into our first product development agreement and, in 2023, we launched our first two commercial products. See “Development Agreement” and “Product Launches” above.
In late 2022, we entered into our first product development agreement and, in 2023, we launched our first two commercial products. In late 2024, we secured our first design win for SSCBs.
With the double-sided transistor behavior and low conduction losses validated and upgrades and improvements in the manufacturing process implemented, we began shipping multiple packaged B-TRAN™ devices, a device driver, and a power test board housed in a safety enclosure to the large companies in our test and evaluation program in mid-2023.
With the double-sided transistor behavior and low conduction losses validated and upgrades and improvements in the manufacturing process implemented, we began shipping packaged B-TRAN® devices to large companies in mid-2023. In early 2024, we commenced shipments of our SymCool® power module to fulfill customer orders. The primary raw material used in the fabrication of B-TRAN® devices is silicon wafers.
The heavy consumption of power semiconductors across several end-use markets such as industrial, automotive, consumer electronics and renewable energy is a key growth driver of the power semiconductor market. 5 Table of Contents The telecommunications market is also a significant end-user of power semiconductors. This segment displays demand for radio frequency power amplifiers and IGBTs among others.
The heavy consumption of power semiconductors across several end-use markets such as industrial, automotive and renewable energy is a key growth driver of the power semiconductor market. Geographically, Asia Pacific accounts for the leading consumption of power semiconductors among other key regions. The region is also one of the leading exporters of power semiconductors in the world.
The estimated net proceeds to us from the March 2024 Offering are $13.6 million or $15.7 million if the underwriter exercises its option to purchase additional shares in full. We intend to use the net proceeds from the March 2024 Offering to fund further commercialization and development of our B-TRAN™ technology and general corporate and working capital purposes.
The pre-funded warrants have an exercise price of $0.001 per share. The net proceeds to us from the Public Offering were $15.7 million. We intend to use the net proceeds from the Public Offering to fund further commercialization and development of our B-TRAN® technology and general corporate and working capital purposes.
The SymCool™ IQ IPM builds on the bidirectional B-TRAN™ multi-die packaging design of our SymCool™ Power Module and adds an integrated intelligent driver optimized for bidirectional operation. This product targets several markets including renewable energy, energy storage, electric vehicle (“EV”) charging and other industrial applications. We expect initial sales of this product in late 2024.
We commenced shipment of SymCool® Power Modules to fulfill customer orders in 2024. In late 2023, we launched our second commercial product, the SymCool® IQ Intelligent Power Module (“IPM”). The SymCool® IQ IPM builds on the multi-die packaging design of our SymCool® Power Module and adds an integrated intelligent driver optimized for bidirectional operation.
We pay $50,000 annually under this agreement. At inception, we recorded an intangible asset and other long-term liability of $451,557 for the estimated present value of future payments under this licensing agreement. At December 31, 2023, the corresponding long-term liability for the estimated present value of future payments under these licensing agreements was $1,125,173.
We pay $50,000 annually under this agreement. At December 31, 2024, the estimated present value of future payments under these licensing agreements was $1,157,375 with $150,000 due and payable in 2025. We are accruing interest for future payments related to these agreements.
We are in the process of commercializing our B-TRAN™ technology and launched our first two commercial products, the SymCool™ Power Module and SymCool™ IQ Intelligent Power Module, in 2023. We generated $161,483 in commercial revenue in the year ended December 31, 2023. Product Launches In early 2023, we launched our first commercial product, the SymCool™ Power Module.
We may pursue additional research and development grants, if and when available, to further develop and/or improve our technology. We are in the process of commercializing our B-TRAN® technology and have launched our first two commercial products, the SymCool® Power Module and SymCool® IQ Intelligent Power Module.
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Grant revenue was $37,388 and $203,269, respectively, in the years ended December 31, 2023 and 2022, respectively. We may pursue additional research and development grants, if and when available, to further develop and/or improve our technology.
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This product targets several markets including renewable energy, energy storage, electric vehicle (“EV”) charging and other industrial applications. We announced our first order for this product in late 2024.
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We recorded all of the revenue under Phase 1 and $61,483 of the revenue under Phase 2 in the year ended December 31, 2023.
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These companies intend to test and evaluate, or already in the process of resting and evaluating, our technology for use in their applications. These engagements could lead to future design wins or custom development agreements. We also announced agreements with three distribution partners. We may add other distribution partners in the future.
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The pre-funded warrants have an exercise price of $0.001 per share. The underwriter has a 30-day option to purchase up to an additional 300,000 shares of our common stock at the offering price, less the underwriting discounts and commissions.
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First Design Win In late 2024, we announced our first design win for SSCBs with one of the largest circuit protection equipment manufacturers in Asia serving the industrial and utility markets. In connection with this design win, we entered into a joint development agreement for a SSCB product incorporating multiple B-TRAN® devices.
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These companies, along with other current and future participants in our test and evaluation program, intend to test and evaluate the B-TRAN™ for use in their applications. We expect to incorporate the feedback from these customers into our future commercial products. We began B-TRAN™ customer shipments to program participants in mid-2023.
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The agreement includes the product design, prototype builds and testing of the SSCB, which is targeted for completion in the second quarter of 2025, to be followed by commercial sales later in the year.
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With the launch of 5G, the demand for power semiconductors has increased. Geographically, Asia Pacific accounts for the leading consumption of power semiconductors among other key regions. The region is also one of the leading exporters of power semiconductors in the world.
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In addition, B-TRAN®’s symmetric bidirectional operation reduces the number of components by 75% as compared to a conventional bidirectional switch utilizing IGBTs and diodes.
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This higher efficiency will substantially reduce the heat generated by the operation of products utilizing this technology. As a result, products incorporating B-TRANs™ will have lower thermal management requirements.
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Under the Trump administration, government support for semiconductors and certain of our potential target markets may or may not continue or may continue at lower levels than seen with the prior administration.
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The results from our testing of discrete B-TRAN™ devices and SymCool™ power modules is consistent with third-party simulations that predicted significant performance and efficiency improvements over conventional power switches such as silicon-controlled rectifiers (“SCRs”), IGBTs and MOSFETs.
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A lack of government support, on the other hand, may have a material and negative impact on our business if this lack of support results in slower adoption of products in our target markets, like electric vehicles, until such time that the cost and performance improve for these products enough that government support is unnecessary for mass adoption.
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Feedback from potential customers in the test and evaluation program will be incorporated into future B-TRAN™ products. In early 2024, we commenced shipments of our SymCool™ power module to fulfill customer orders. The primary raw material used in the fabrication of B-TRAN™ devices is silicon wafers.
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Regardless of the administration in the U.S., the market for semiconductors and our target markets is global and we believe there continues to be strong macro-trends regarding the adoption of electric vehicles and associated charging systems, renewable energy, energy storage and electrification, including grid modernization. 7 Table of Contents Employees As of February 28, 2025, we had 16 full-time employees.
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Many of these suppliers are now selling modules that utilize multiple conventional power switches to form a bidirectional circuit. We continue to monitor the competitive landscape for offerings or potential offerings based on new technologies with inherent bidirectionality.
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The Bipartisan Infrastructure Law will invest $7.5 billion to build a national network of 500,000 EV chargers so that charging EVs is predictable, reliable and accessible; more than $7 billion to ensure domestic manufacturers have the critical minerals and other components necessary to make batteries; and over $10 billion for clean transit and school buses.
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In addition, the Inflation Reduction Act provides incentives for buyers of new and used EVs, credits to help manufacturers retool existing facilities and build new manufacturing in the United States, and grants to deploy zero emission heavy-duty vehicles.
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The CHIPS and Science Act will make critical investments in building domestic capacity for the semiconductors necessary for electric vehicles and will establish a technology, innovation, and partnerships directorate at the National Science Foundation to focus on fields like semiconductors and advanced computing, advanced communications technology, advanced energy technologies, quantum information technologies, and biotechnology.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf this analyst ceases coverage of our company or fails to publish reports on us regularly and/or one or more other analysts do not initiate coverage on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
Biggest changeIf no research analysts initiate coverage on us in 2025, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. In addition, if one or more analysts initiate coverage on us but issues an adverse opinion regarding our stock, our stock price would likely decline.
Driver development is subject to similar risks as the B-TRAN™ prototype and product development including being subject to unanticipated and significant delays, expenses and technical or other problems. 9 Table of Contents More generally, the commercialization of products using our technology and designs may also be adversely affected by many factors not within our control, including: ● the willingness of market participants to try new products incorporating our technology and the perceptions of these market participants of the safety, reliability, functionality and cost effectiveness of these products; ● the emergence of newer, possibly more effective technologies; ● the cost and availability of the raw materials and components needed to manufacture and use products incorporating our technology; and ● the adoption of new regulatory or industry standards that may adversely affect the use or cost of products incorporating our technology.
Driver development is subject to similar risks as B-TRAN® prototype and product development including being subject to unanticipated and significant delays, expenses and technical or other problems. 8 Table of Contents More generally, the commercialization of products using our technology and designs may also be adversely affected by many factors not within our control, including: ● the willingness of market participants to try new products incorporating our technology and the perceptions of these market participants of the safety, reliability, functionality and cost effectiveness of these products; ● the emergence of newer, possibly more effective technologies; ● the cost and availability of the raw materials and components needed to manufacture and use products incorporating our technology; and ● the adoption of new regulatory or industry standards that may adversely affect the use or cost of products incorporating our technology.
If the license agreements we may enter into in the future do not prove to be advantageous to us, our business and results of operations will be adversely affected. Future revenue may rely on the marketing and sales efforts of third parties whom we do not control.
If the license agreements we may enter in the future do not prove to be advantageous to us, our business and results of operations will be adversely affected. Future revenue may rely on the marketing and sales efforts of third parties whom we do not control.
Once a manufacturer chooses a component for use in a particular system, it is likely to retain that component for the life of that system. In addition, the sales cycle into certain of our target markets, such as the automotive market, are typically very long.
Once a manufacturer chooses a component for use in a particular system, it is likely to retain that component for the life of that system. In addition, the sales cycle into certain of our target markets, such as the automotive market, is typically very long.
If we or our potential future licensees are not successful in achieving design wins, or if we or our potential future licensees do achieve design wins but the customers’ systems that utilize our designs are not successful, our business, financial condition, and results of operations could be materially and adversely impacted. 10 Table of Contents Even if we, or our potential future licensees, achieve design wins, the timing of generation of sales and/or licensing revenue will be dependent on the customer’s product design cycle.
If we or our potential future licensees are not successful in achieving design wins, or if we or our potential future licensees do achieve design wins but the customers’ systems that utilize our designs are not successful, our business, financial condition, and results of operations could be materially and adversely impacted. 9 Table of Contents Even if we, or our potential future licensees, achieve design wins, the timing of generation of sales and/or licensing revenue will be dependent on the customer’s product design cycle.
We have net operating loss carryforwards due to prior period losses generated before January 1, 2024 which if not utilized will begin to expire in 2031 for net operating loss carryforwards prior to 2018 and which do not expire for net operating loss carryforwards for 2018 and thereafter.
We have net operating loss carryforwards due to prior period losses generated before January 1, 2025 which if not utilized will begin to expire in 2031 for net operating loss carryforwards prior to 2018 and which do not expire for net operating loss carryforwards for 2018 and thereafter.
We have been funding operations primarily through the sale of common stock. We currently generate limited commercial revenue, and, in order to fund our operations until we are profitable, we may need to raise additional funds and such funds may not be available on commercially acceptable terms, if at all.
We have been funding operations primarily through the sale of common stock and pre-funded warrants. We currently generate limited commercial revenue, and, in order to fund our operations until we are profitable, we may need to raise additional funds and such funds may not be available on commercially acceptable terms, if at all.
Further, the award of grants is a subjective process and government agencies often do not provide detailed feedback on why a grant was not received. A factor that could negatively impact our ability to obtain government grants is that our technology is in the early stages of commercialization.
Further, the award of grants is a subjective process and government agencies often do not provide detailed feedback on why a grant was not received. 12 Table of Contents A factor that could negatively impact our ability to obtain government grants is that our technology is in the early stages of commercialization.
If we do not obtain additional grants or our efforts to obtain additional grants take longer than expected to be successful, we will need to rely on other means to fund our development. 13 Table of Contents We are highly dependent on the services of key members of our management and technical teams.
If we do not obtain additional grants or our efforts to obtain additional grants take longer than expected to be successful, we will need to rely on other means to fund our development. We are highly dependent on the services of key members of our management and technical teams.
If an ownership change has occurred or does occur in the future, our ability to utilize our net operating losses to offset income if we attain profitability may be limited. 14 Table of Contents Risks Related to Owning Our Common Stock The public market for our common stock may be volatile.
If an ownership change has occurred or does occur in the future, our ability to utilize our net operating losses to offset income if we attain profitability may be limited. Risks Related to Owning Our Common Stock The public market for our common stock may be volatile.
If we are unable to raise additional funds if and when needed, we may be required to delay, limit, reduce or terminate our development and commercialization efforts. 16 Table of Contents Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable.
If we are unable to raise additional funds if and when needed, we may be required to delay, limit, reduce or terminate our development and commercialization efforts. Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable.
At December 31, 2023, we had no shares of preferred stock outstanding. 15 Table of Contents We have not paid dividends in the past and have no immediate plans to pay dividends.
At December 31, 2024, we had no shares of preferred stock outstanding. 14 Table of Contents We have not paid dividends in the past and have no immediate plans to pay dividends.
A material part of our success depends on our ability to manage third-party resources. Our failure to properly select, manage and retain qualified third-party resources could materially and adversely affect our results of operations and relations with our partners and future customers. Our development efforts are highly dependent on third-party resources for semiconductor expertise and manufacturing.
Our failure to properly select, manage and retain qualified third-party resources could materially and adversely affect our results of operations and relations with our partners and future customers. Our development efforts are highly dependent on third-party resources for semiconductor expertise and manufacturing.
At February 28, 2024, we had 1,640,274 potentially dilutive shares outstanding, exclusive of pre-funded warrants to purchase shares of common stock that are considered outstanding common shares and included in our computation of basic earnings per share, and we may grant additional options, restricted stock units, performance stock units, other stock-based awards and/or warrants in the future.
At December 31, 2024, we had 1,297,369 potentially dilutive shares outstanding, exclusive of pre-funded warrants to purchase shares of common stock that are considered outstanding common shares and included in our computation of basic earnings per share, and we may grant additional options, restricted stock units, performance stock units, other stock-based awards and/or warrants in the future.
See also “— Our semiconductor fabrication partners may be unable to successfully and cost-effectively develop and implement new process steps necessary for bidirectional semiconductor device fabrication at scale. ” 12 Table of Contents Supply chain disruptions could interrupt product manufacturing and global logistics and increase product costs.
See also “— Our semiconductor fabrication partners may be unable to successfully and cost-effectively develop and implement new process steps necessary for bidirectional semiconductor device fabrication at scale. ” Supply chain disruptions and barriers to trade, such as tariffs, could interrupt product manufacturing and global logistics and increase product costs.
These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.
This restriction lasts for a period of three years following the share acquisition. These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.
We may license our technology in the future; however the terms of any such agreements may not prove to be advantageous to us. If the license agreements we may enter into do not prove to be advantageous to us, our business and results of operations will be adversely affected.
If the license agreements we may enter into do not prove to be advantageous to us, our business and results of operations will be adversely affected.
We currently rely upon the facilities of our semiconductor fabricator and packaging partners in the United States and abroad to support our development and production as well as vendors throughout the United States and abroad to supply silicon wafers and other materials and processing and engineering capabilities and expertise.
We currently rely upon the facilities of our semiconductor fabricator and packaging partners in the United States and abroad to support our development and production as well as vendors throughout the United States and abroad to supply silicon wafers and other materials and processing and engineering capabilities and expertise. In recent years, there have been global industry-wide logistics challenges.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period) is subject to limitation on its ability to utilize its pre-change net operating loss and credit carry-forwards, or net operating losses, to offset future taxable income.
If we are unable to generate sufficient taxable income to utilize our net operating loss carryforwards, pre-2018 carryforwards could expire unused and be unavailable to offset future income tax liabilities. 13 Table of Contents In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period) is subject to limitation on its ability to utilize its pre-change net operating loss and credit carry-forwards, or net operating losses, to offset future taxable income.
The trading market for our common stock may be influenced by the research and reports that industry or securities analysts publish about us or our business. In 2023, one securities analyst published reports on us.
The trading market for our common stock may be influenced by the research and reports that industry or securities analysts publish about us or our business. As of December 31, 2024, no securities analyst published reports on us.
Since inception, we have sustained approximately $97.0 million in net losses and we had net losses for the years ended December 31, 2023 and 2022 of approximately $10.0 million and $7.2 million, respectively.
Since inception, we have sustained approximately $107.5 million in net losses and we had net losses for the years ended December 31, 2024 and 2023 of approximately $10.4 million and $10.0 million, respectively.
The provisions in our certificate and bylaws: ● authorize our Board to issue preferred stock without stockholder approval and to designate the rights, preferences and privileges of each class; if issued, such preferred stock would increase the number of outstanding shares of our capital stock and could include terms that may deter an acquisition of us; ● limit who may call stockholder meetings; ● do not permit stockholders to act by written consent; ● do not provide for cumulative voting rights; and ● provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.
The provisions in our certificate and bylaws: ● authorize our Board to issue preferred stock without stockholder approval and to designate the rights, preferences and privileges of each class; if issued, such preferred stock would increase the number of outstanding shares of our capital stock and could include terms that may deter an acquisition of us; ● limit who may call stockholder meetings; ● do not permit stockholders to act by written consent; ● do not provide for cumulative voting rights; and ● provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum. 15 Table of Contents In addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied.
Using third-party manufacturers, both domestically and abroad, may increase the risk of misappropriation of our trade secrets, confidential information and other unpatented proprietary information.
As a result, our trade secrets, confidential information, and other unpatented proprietary rights and information may become known to others, including our competitors. Using third-party manufacturers, both domestically and abroad, may increase the risk of misappropriation of our trade secrets, confidential information and other unpatented proprietary information.
Protection of our technology is important to us so that we may offer our future customers proprietary products unavailable from our competitors, and so that we may prevent our competitors from using technology that we have developed or exclusively licensed. If we are unable to effectively protect our intellectual property, our business and competitive position may be adversely affected.
Protection of our technology is important to us so that we may offer our future customers proprietary products unavailable from our competitors, and so that we may prevent our competitors from using technology that we have developed or exclusively licensed.
At February 28, 2024, we had 6,005,031 shares of common stock outstanding and 253,828 pre-funded warrants with an exercise price of $0.001 that are included in our computation of basic earnings per share.
At December 31, 2024, we had 8,335,491 shares of common stock outstanding and 763,827 pre-funded warrants with an exercise price of $0.001 that are included in our computation of basic earnings per share.
Such protection is also maintained in part using proprietary information and inventions agreements and non-disclosure agreements. The agreements we use in an effort to protect our intellectual property, confidential information, and other unpatented proprietary information may be ineffective or insufficient to prevent unauthorized use or disclosure of such trade secrets and information.
The agreements we use in an effort to protect our intellectual property, confidential information, and other unpatented proprietary information may be ineffective or insufficient to prevent unauthorized use or disclosure of such trade secrets and information. A party to one of these agreements may breach the agreement and we may not have adequate remedies for such breach.
We may face significant expenses and liability in connection with the protection of our intellectual property and, if we are unable to successfully protect our rights or resolve intellectual property conflicts with others, our business or financial condition could be adversely affected. 11 Table of Contents Our success depends in large part on our proprietary technology for which we seek protection under patent, copyright, trademark and trade secret laws in the United States and abroad.
We may face significant expenses and liability in connection with the protection of our intellectual property and, if we are unable to successfully protect our rights or resolve intellectual property conflicts with others, our business or financial condition could be adversely affected.
Further, failure to adequately fabricate and timely ship our products to customers could lead to delays in their testing and evaluation and/or adoption of our technology, lost potential revenue, failure to meet customer demand and strained relationships with customers.
Further, failure to adequately fabricate and timely ship our products to customers could lead to delays in their testing and evaluation and/or adoption of our technology, lost potential revenue, failure to meet customer demand and strained relationships with customers. 11 Table of Contents Changes in U.S. trade policies, the imposition of tariffs by the U.S. and retaliatory responses from other countries may significantly increase our costs of production and materially and adversely affect our business.
We currently have a test and evaluation program whereby program participants test our B-TRAN™ technology for use in their applications. We can provide no assurance that participation by a potential customer in our test and evaluation program will result in a design win.
We can provide no assurance that customer engagements whereby potential customers evaluate and test our products will result in a design win.
Future facility closures and/or disruptions may occur if additional pandemic breakouts or geopolitical events occur in areas where we rely on third parties. We and certain of our suppliers also rely on international shipping to transport wafers, circuit boards and other electronic components to us and our other suppliers.
We and certain of our suppliers also rely on international shipping to transport wafers, circuit boards and other electronic components to us and our other suppliers. Delays in shipping may cause us or our suppliers to have to use more expensive air freight or other more costly methods.
In recent years, there have been global industry-wide logistics challenges, including those caused by COVID-19 outbreaks. While these logistics challenges have caused some disruption in our business, these disruptions were manageable and their impact on us was not significant.
While these logistics challenges have caused some disruption in our business, these disruptions were manageable and their impact on us was not significant. Future facility closures and/or disruptions may occur if additional pandemic breakouts or geopolitical events occur in areas where we rely on third parties.
Removed
A party to one of these agreements may breach the agreement and we may not have adequate remedies for such breach. As a result, our trade secrets, confidential information, and other unpatented proprietary rights and information may become known to others, including our competitors.
Added
Although we secured our first design win in late 2024, we also can provide no assurance that we will secure additional design wins in a timely manner or at all or that any such design wins will result in significant revenue growth for us.
Removed
During the COVID-19 outbreak, international shipping to the U.S. was disrupted and delayed due to congestion in west coast ports and other causes. Future delays in shipping may cause us or our suppliers to have to use more expensive air freight or other more costly methods.
Added
Our success depends in large part on our proprietary technology for which we seek protection under patent, copyright, trademark and trade secret laws in the United States and abroad. Such protection is also maintained in part using proprietary information and inventions agreements and non-disclosure agreements.
Removed
If we are unable to generate sufficient taxable income to utilize our net operating loss carryforwards, pre-2018 carryforwards could expire unused and be unavailable to offset future income tax liabilities.
Added
If we are unable to effectively protect our intellectual property, our business and competitive position may be adversely affected. 10 Table of Contents We may license our technology in the future; however the terms of any such agreements may not prove to be advantageous to us.
Removed
In addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. This restriction lasts for a period of three years following the share acquisition.
Added
In 2024, we added three distribution partners. We can provide no assurance that these distributors will be successful in selling our products or that we will be able to secure additional distribution partners in the future. A material part of our success depends on our ability to manage third-party resources.
Removed
In addition, if one or more analysts issues an adverse opinion regarding our stock, our stock price would likely decline.
Added
Also, if tariffs are imposed on raw materials and components utilized in our products, the costs of our products could increase and, as a result, our products could become less competitive.
Added
In that situation, we may need to identify other sources for these raw materials and components resulting in a temporary disruption to our business or reduce margins if we are unable to identify and engage alternative lower cost suppliers.
Added
We import raw materials and components required to manufacture our products primarily from suppliers outside of the U.S., including Asia.
Added
While we are working to mitigate risk through alternate sourcing in disparate geographies, any imposition by the U.S. of new or increased tariffs applicable to these imported materials or components or other restrictive trade policies or import regulations could increase our manufacturing costs, limit our ability to procure raw materials or components, make our products less competitive, cause adverse financial impacts due to volatility in foreign exchange rates, increase inflationary pressures on raw materials and energy, and negatively impact our financial condition.
Added
New or increased tariffs could also negatively affect U.S. national or regional economies, which could affect demand for our products in the U.S. Further, in response to evolving U.S. trade policies and new and increased tariffs, foreign governments, including China, may respond by imposing or increasing tariffs, duties and/or trade restrictions on U.S. goods, and may consider other measures.
Added
Such trading conflicts and related escalating governmental actions that result in additional tariffs, duties and/or trade restrictions could increase our production costs further, cause disruptions or shortages in our supply chains, impede or slow the movement of our products across borders, negatively impact the U.S., regional or local economies, and, individually or in the aggregate, materially and adversely affect our business, ability to successfully commercialize our products, and future sales and operating results.
Added
Our ability to successfully commercialize our products and future operating results depend on the continued growth of our target markets and related technologies. We are in the process of developing and commercializing products for use in our target markets, which include, among others, electric and hybrid electric vehicles, electric vehicle charging infrastructure, renewable energy, grid storage and improved grid resiliency.
Added
Governmental support for these markets and technologies may impact the size and growth rate of these markets and, as a result, our business. In recent years, the federal government and many states adopted regulations and established incentives to accelerate a transition to electric vehicles and promote the development and use of renewable energy in the United States.
Added
However, after the new U.S. administration took office in January 2025, the federal government has signaled that there could be less support for these markets and technologies at the federal level going forward and that priorities may be shifting to other areas.
Added
For example, in January 2025, the new U.S. administration took action to revoke the prior administration’s order that EVs make up half of all new cars sold in the U.S. by 2030, repealed certain tax credit programs for EV purchases and paused funding under the Inflation Reduction Act for a network of EV charging stations.
Added
While it is too early to determine how the new U.S. administration and its actions with respect to our target markets will impact the growth and scaling of those markets and related technologies, reduced government support could cause growth in these markets to slow or contract, which could have a material adverse effect on our prospects, business, future operating results and financial condition.
Added
In addition, our ability to successfully develop and commercialize our products may be negatively impacted by any change in consumer interests or preferences that results in reduced demand for our products.
Added
For example, if electric or hybrid vehicle sales growth slows or contracts or certain car manufacturers determine to cease or reduce production of electric or hybrid models, we may have fewer opportunities to commercialize our products within these markets and the opportunities that continue to exist may become more competitive.
Added
If shifts in consumer interests or preferences or other factors result in slowed growth or contraction of any of our target markets, our efforts to commercialize our products in these markets may be unsuccessful or fall short of our current expectations and our business, prospects, future results of operations and financial condition may be materially and adversely affected.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe utilize a multi-layer approach to identifying and managing cybersecurity risks including anti-virus and content filtering, weekly patch management, network firewall monitoring, utilization of a virtual private network, off-site server and email back-ups, endpoint threat detection and threat hunting, multi-factor authentication and security hardening.
Biggest changeWe employ a robust, multi-layer approach to identify and mitigate cybersecurity risks, such as anti-virus and content filtering to protect against malware and inappropriate content, weekly patch management, network firewall monitoring to detect and prevent unauthorized access, off-site email back-ups to safeguard data integrity and availability, endpoint threat detection and threat hunting to identify and respond to potential threats, and multi-factor authentication and security hardening to reinforce system defenses.
In the year ended December 31, 2023, we performed an annual cybersecurity assessment, conducted by our third-party service provider, to evaluate the robustness of our cybersecurity. To date, to our knowledge no external entity has successfully breached our system.
In December 2023, we conducted a thorough cybersecurity assessment with our third-party service provider. Based on their recommendations, we implemented several cybersecurity enhancements in 2024. To date and to our knowledge, no external entity has successfully breached our systems.
ITEM 1C: CYBERSECURITY Our Board oversees our cybersecurity program. Our cybersecurity program is managed by our Chief Financial Officer in collaboration with a third-party service provider. During the year ended December 31, 2023, we experienced no material cybersecurity incidents.
ITEM 1C: CYBERSECURITY Our Board oversees our comprehensive cybersecurity program. Our cybersecurity program is managed by our Chief Financial Officer in collaboration with a specialized third-party service provider. Our Chief Financial Officer has over ten years’ experience managing information technology (“IT”), including cybersecurity, and is the designated Chief Information Officer under our Information Resources Policy.
If a breach were to be discovered, our Chief Financial Officer would inform our Chief Executive Officer, who would then communicates the information to our Board.
If a breach were to be discovered, our Chief Financial Officer would promptly inform our Chief Executive Officer, who would then communicate the details to our Board. In addition to our cybersecurity program, we have implemented operational improvements intended to streamline business processes, reduce certain risks, and fuel growth.
Added
As of the date of this Annual Report on Form 10-K, we know of no cybersecurity incident that has or is likely to materially affect us, our business strategy, our results of operations, or our financial condition.
Added
Led by a Senior Engineer, our third-party service provider proactively assesses security, risk, and productivity to ensure optimal coverage and investment in the rapidly changing IT industry.
Added
Our IT partner’s responsible IT architecture program aims to: ● Create a network of defense against hacks ● Protect against outages, disasters, and data loss ● Continuously patch, monitor, and remediate vulnerabilities ● Meet and align with cyber risk insurance requirements ● Implement proper authentication and access protocols ● Secure all endpoints ● Install content filtering and quarantine tools ● Calibrate backups to match usage and data needs This program also helps to identify system gaps and provides solutions to align us with best practices and security measures against any cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2: PROPERTIES Our principal office is located at 5508 Highway 290 West, Suite 120, Austin, Texas 78735. We lease 4,070 square feet of office and laboratory space. The lease commenced on June 1, 2021 and, as of December 31, 2023, the remaining term of the lease is 32 months.
Biggest changeITEM 2: PROPERTIES Our principal office is located at 5508 Highway 290 West, Suite 120, Austin, Texas 78735. We lease 5,775 square feet of office and laboratory space. The lease, as amended, commenced on July 1, 2024 and, as of December 31, 2024, the remaining term of the lease is 56 months.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5: MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the Nasdaq Capital Market under the symbol “IPWR.” As of March 28, 2024, we had 22 shareholders of record.
Biggest changeITEM 5: MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the Nasdaq Capital Market under the symbol “IPWR.” As of March 26, 2025, we had 22 shareholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

51 edited+12 added−7 removed18 unchanged
Biggest changeOperating activities in the year ended December 31, 2022 resulted in cash outflows of $6,383,914, which were due to the net loss for the period of $7,189,350 and unfavorable balance sheet timing of $516,931, partly offset by non-cash items including stock-based compensation of $975,801, depreciation and amortization of $187,077, stock issued for services of $100,100, amortization of right of use asset of $58,452 and the write-off of long-lived assets of $937.
Biggest changeAlthough we believe we have adequate sources of liquidity over the long term, the success of our operations, the global economic outlook, and the pace of sustainable growth in our markets could each impact our business and liquidity. 20 Table of Contents Operating activities in the year ended December 31, 2024 resulted in cash outflows of $8,742,580, which were due to the net loss for the period of $10,417,813, unfavorable balance sheet timing of $399,667 and a non-cash gain on lease termination of $15,319, partly offset by other non-cash items including stock-based compensation of $1,596,254, depreciation and amortization of $341,045, the write-off of long-lived assets of $77,444 and amortization of right of use asset of $75,476.
Income Taxes. We account for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years.
We account for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years.
Operating activities in the year ended December 31, 2023 resulted in cash outflows of $7,131,578, which were due to the net loss for the period of $9,954,020, partly offset by other non-cash items including stock-based compensation of $2,321,380, depreciation and amortization of $271,746 and amortization of right of use asset of $62,150 and favorable balance sheet timing of $167,116.
Operating activities in the year ended December 31, 2023 resulted in cash outflows of $7,131,578, which were due to the net loss for the period of $9,954,020, partly offset by other non-cash items including stock-based compensation of $2,321,380, depreciation and amortization of $271,746, amortization of right of use asset of $62,150 and favorable balance sheet timing of $167,116.
In Phase 2 of the program, we collaborated with Stellantis and the program partners, including both the program’s packaging company and the organization building the initial drivetrain inverter, to supply B-TRAN™ devices for integration into the custom power module and inverter designs.
In the second phase of the program, we collaborated with Stellantis and the program partners, including both the program’s packaging company and the organization building the initial drivetrain inverter, to supply B-TRAN® devices for integration into the custom power module and inverter designs.
We commenced shipment of SymCool™ Power Modules to fulfill customer orders in early 2024. In late 2023, we launched our second commercial product, the SymCool™ IQ Intelligent Power Module. The SymCool™ IQ IPM builds on the bidirectional B-TRAN™ multi-die packaging design of our SymCool™ Power Module and adds an integrated intelligent driver optimized for bidirectional operation.
We commenced shipment of SymCool® Power Modules to fulfill customer orders in early 2024. 17 Table of Contents In late 2023, we launched our second commercial product, the SymCool® IQ Intelligent Power Module. The SymCool® IQ IPM builds on the bidirectional B-TRAN® multi-die packaging design of our SymCool® Power Module and adds an integrated intelligent driver optimized for bidirectional operation.
March 2024 Offering In March 2024, we issued and sold 1,366,668 shares of our common stock at a price of $7.50 per share and 633,332 pre-funded warrants to purchase shares of our common stock at a price of $7.499 per pre-funded warrant in an underwritten public offering. The pre-funded warrants have an exercise price of $0.001 per share.
Public Offering In March and April 2024, we issued and sold 1,666,668 shares of our common stock at a price of $7.50 per share and 633,332 pre-funded warrants to purchase shares of our common stock at a price of $7.499 per pre-funded warrant in an underwritten public offering. The pre-funded warrants have an exercise price of $0.001 per share.
March 2024 Offering In March 2024, we issued and sold 1,366,668 shares of our common stock at a price of $7.50 per share and 633,332 pre-funded warrants to purchase shares of our common stock at a price of $7.499 per pre-funded warrant in an underwritten public offering. The pre-funded warrants have an exercise price of $0.001 per share.
Public Offering In March and April 2024, we issued and sold 1,666,668 shares of our common stock at a price of $7.50 per share and 633,332 pre-funded warrants to purchase shares of our common stock at a price of $7.499 per pre-funded warrant in an underwritten public offering. The pre-funded warrants have an exercise price of $0.001 per share.
Also, as part of Phase 2, we provided Stellantis a comprehensive test plan for the testing required to achieve certification to automotive standards for B-TRAN™. The test plan was subsequently approved as submitted. In early 2024, we successfully completed Phase 2 of the program.
Also, as part of the second phase of the program, we provided Stellantis a comprehensive test plan for the testing required to achieve certification to automotive standards for B-TRAN®. The test plan was subsequently approved as submitted. In 2024, we successfully completed the second phase of the program.
Development Agreement During the fourth quarter of 2022, we announced, and began Phase 1 of, a product development agreement with Stellantis, a top 10 global automaker, for a custom B-TRAN™ power module for use in the automaker’s EV drivetrain inverters in its next generation EV platform.
Development Agreement In late 2022, we announced, and began the first phase of, a product development agreement with Stellantis, a top 10 global automaker, for a custom B-TRAN® power module for use in the automaker’s EV drivetrain inverters in its next generation EV platform.
We expect an increase in cash outflows from operating activities in 2024 as we further commercialize our B-TRAN™ technology. Investing activities in the years ended December 31, 2023 and 2022 resulted in cash outflows of $522,946 and $312,740, respectively.
We expect an increase in cash outflows from operating activities in 2025 as we further commercialize our B-TRAN™ technology. Investing activities in the years ended December 31, 2024 and 2023 resulted in cash outflows of $506,428 and $522,946, respectively.
In Phase 1 of the program, we provided packaged B-TRAN™ devices, test kits and technical data to Stellantis for their evaluation. During the third quarter of 2023, we secured, and began Phase 2 of, this program.
In the first phase of the program, we provided packaged B-TRAN® devices, test kits and technical data to Stellantis for their evaluation. In 2023, we secured, and began the second phase of, this program.
Our loss from operations for the year ended December 31, 2023 was $10,352,088 or 41% higher than the $7,342,959 loss from operations for the year ended December 31, 2022, driven by the factors discussed above. Interest Income, Net.
Our loss from operations for the year ended December 31, 2024 was $11,071,175 or 7% higher than the $10,352,088 loss from operations for the year ended December 31, 2023, driven by the factors discussed above. Interest Income, Net.
This phase is expected to include the extensive testing of the custom B-TRAN™ module to meet automotive certification standards enabling B-TRAN™ to be the core of the powertrain inverter for the automaker’s next-generation EVs. The objective of this phase is the completion and certification of a production-ready B-TRAN™-based module and is targeted for 2025.
This phase is expected to include the extensive testing of the custom B-TRAN® module to meet automotive certification standards enabling B-TRAN® to be the core of the powertrain inverter for the automaker’s next-generation EVs.
We generated $161,483 in commercial revenue in the year ended December 31, 2023. 18 Table of Contents Product Launches In early 2023, we launched our first commercial product, the SymCool™ Power Module. This multi-die B-TRAN™ module is designed to meet the very low conduction loss needs of the solid-state circuit breaker market.
Product Launches In early 2023, we launched our first commercial product, the SymCool® Power Module. This multi-die B-TRAN® module is designed to meet the very low conduction loss needs of the solid-state circuit breaker market.
Those estimates may be based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and/or information available from other outside sources, as appropriate. Please see Footnote 2 to our financial statements for a summary of our significant accounting policies.
Those estimates may be based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and/or information available from other outside sources, as appropriate.
For the year ended December 31, 2023, cash outflows for the acquisition of intangible assets were $282,121 and capital expenditures were $240,825. For the year ended December 31, 2022, cash outflows for the acquisition of intangible assets were $130,089 and capital expenditures were $182,651. Our capital expenditures in both years were primarily for lab testing equipment.
For the year ended December 31, 2024, cash outflows for the acquisition of intangible assets were $309,162 and capital expenditures were $197,266. For the year ended December 31, 2023, cash outflows for the acquisition of intangible assets were $282,121 and capital expenditures were $240,825. Our capital expenditures in both years were primarily for lab testing equipment.
The fair value for performance stock units, which contain market conditions, is estimated on the date of grant using a Monte Carlo analysis utilizing the same expected volatility assumption as utilized in the Black-Scholes model for stock options. Intangible Assets .
The fair value for performance stock units, which contain market conditions, is estimated on the date of grant using a Monte Carlo analysis utilizing the same expected volatility assumption as utilized in the Black-Scholes model for stock options. We did not grant any stock option or performance stock unit awards in the year ended December 31, 2024. Intangible Assets .
In 2024, we expect modest commercial revenue from product sales and product development agreements. While we do not have any active government programs, we are pursuing government funding opportunities that may result in additional grant revenue in the future. We have incurred losses since our inception. We have funded our operations to date primarily through the sale of common stock.
In 2025, we expect growth in commercial revenue from product sales and product development agreements. While we do not have any active government programs, we are pursuing government funding opportunities that may result in additional grant revenue in the future. We have incurred losses since our inception.
We are solely focused on the further development and commercialization of our B-TRAN™ solid-state switch technology. To date, operations have been funded primarily through the sale of common stock and we have generated $3.7 million in grant revenue for bidirectional power switch development. Grant revenue was $37,388 and $203,269, respectively, in the years ended December 31, 2023 and 2022, respectively.
We are solely focused on the further development and commercialization of our B-TRAN® solid-state switch technology. To date, operations have been funded primarily through the sale of common stock and pre-funded warrants. From inception, we have generated $3.7 million in grant revenue for bidirectional power switch development.
Tax benefits from an uncertain tax position are recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. 20 Table of Contents We have concluded that it is more likely than not that we will not have sufficient foreseeable taxable income within the carryforward period as applicable and permitted by current law to allow for the utilization of certain of the deductible amounts generating the deferred tax assets; therefore, a full valuation allowance has been established to reduce the net deferred tax assets to zero at December 31, 2023 and 2022.
We have concluded that it is more likely than not that we will not have sufficient foreseeable taxable income within the carryforward period as applicable and permitted by current law to allow for the utilization of certain of the deductible amounts generating the deferred tax assets; therefore, a full valuation allowance has been established to reduce the net deferred tax assets to zero at December 31, 2024 and 2023.
Financing activities in the years ended December 31, 2023 and 2022 resulted in cash outflows of $216,264 and $127,872, respectively, for the payment of withholding taxes on the vesting of restricted stock units.
Financing activities in the year ended December 31, 2023 resulted in a cash outflow of $216,264 for the payment of withholding taxes on the vesting of restricted stock units.
This product targets several markets including renewable energy, energy storage, EV charging and other industrial applications. We expect initial sales of this product in late 2024.
This product targets several markets including renewable energy, energy storage, EV charging and other industrial applications. We announced our first order for this product in late 2024.
The assumptions used in the Black-Scholes model are as follows: Grant Price — The grant price is determined based on the closing share price on the date of grant.
The fair value of each stock option award is estimated on the date of grant using the commonly used Black-Scholes option valuation model. The assumptions used in the Black-Scholes model are as follows: Grant Price — The grant price is determined based on the closing share price on the date of grant.
Test and Evaluation Agreements Since the middle of 2021, we announced several test and evaluation agreements with prospective customers, including a second top 10 global automaker, a top 10 global provider of power conversion solutions to the solar industry, two global diverse power management market leaders, a tier 1 automotive supplier and a global power conversion supplier.
Customer Engagements We announced several engagements and/or initial orders with large companies, including a second top 10 global automaker, a third global automaker, a top 10 global provider of power conversion solutions to the solar industry, two global diverse power management market leaders, three tier 1 automotive suppliers, a global power conversion supplier and others.
Our net loss increased by $2,764,670 or 38%, to $9,954,020 for the year ended December 31, 2023 from a net loss of $7,189,350 for the year ended December 31, 2022 for the reasons discussed above. Liquidity and Capital Resources In 2023, we generated commercial revenue of $161,483 and grant revenue of $37,388.
Our net loss increased by $463,793 or 5%, to $10,417,813 for the year ended December 31, 2024 from a net loss of $9,954,020 for the year ended December 31, 2023 for the reasons discussed above. Liquidity and Capital Resources In 2024, we generated commercial revenue of $86,032.
The increase was due to higher stock-based compensation expense of $959,561, wafer fabrication runs of $902,810, engineering services, primarily packaging costs, of $324,455 and personnel costs of $275,420, partly offset by lower other B-TRAN™ spending of $85,811. We expect higher research and development expenses in 2024 as we further develop our B-TRAN™ technology and related drive circuitry.
The increase was due to higher personnel costs of $623,688, engineering services, primarily packaging costs, of $123,760, search and placement fees and expenses of $110,754 and other B-TRAN® spending of $105,497, partly offset by lower stock-based compensation expense of $499,692. We expect higher research and development expenses in 2025 as we further develop our B-TRAN® technology and related drive circuitry.
In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. We determined that there was no impairment in the value of long-lived assets during the year ended December 31, 2023 and immaterial impairments in the value of long-lived assets during the year ended December 31, 2022.
In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed.
Phase 3 builds on the completion of all Phase 1 and 2 deliverables and therefore transitions to Stellantis’ production team. We are currently finalizing the scope of work for the next phase of the program with Stellantis.
The next phase of the program is expected to build on the prior phases and transition to Stellantis’ production team. We are currently finalizing the scope of work for the next phase of the program with Stellantis.
Interest income, net increased by $244,459 to $398,068 for the year ended December 31, 2023 from $153,609 for the year ended December 31, 2022 due to the impact of higher interest rates on our money market account in 2023. Net Loss.
Interest income, net increased by $255,294 to $653,362 for the year ended December 31, 2024 from $398,068 for the year ended December 31, 2023 due primarily to a higher average balance on our money market account in 2024 as a result of our public offering. Net Loss.
Research and development expenses increased by $2,376,435, or 71%, to $5,743,211 in the year ended December 31, 2023 from $3,366,776 in the year ended December 31, 2022.
Research and development expenses increased by $464,007, or 8%, to $6,207,218 in the year ended December 31, 2024 from $5,743,211 in the year ended December 31, 2023.
We intend to use the net proceeds from the March 2024 Offering to fund further commercialization and development of our B-TRAN™ technology and general corporate and working capital purposes. 19 Table of Contents Critical Accounting Estimates The following discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America.
Critical Accounting Estimates The following discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America.
The annual base rent in the second year of the lease is $77,330 and increases by $2,035 in each succeeding year of the lease. In addition, we are required to pay our proportionate share of operating costs for the building under this triple net lease. The lease contains a 5-year fair market renewal option.
The annual base rent for the first year of the Amended Lease is $118,388 and the annual base rent increases approximately 2.75% each year during the lease term. We are required to pay our proportionate share of operating costs for the building under this triple net lease.
We do not have any active government programs although we are pursuing additional government funding opportunities that may result in additional grant revenue in the future. Cost of Commercial Revenue. Cost of commercial revenue was $123,225 for the year ended December 31, 2023.
Although our primary focus is the commercialization of our B-TRAN® technology and initial products, we are pursuing additional government funding opportunities that may result in additional grant revenue in the future. Cost of Commercial Revenue. Cost of commercial revenue was $93,409 and $123,225 for the years ended December 31, 2024 and 2023, respectively. Cost of Grant Revenue.
Sales and marketing expenses increased by $261,421, or 31%, to $1,113,752 in the year ended December 31, 2023 from $852,331 in the year ended December 31, 2022. The increase was due primarily to higher personnel costs of $191,480 and stock-based compensation expense of $76,486, slightly offset by lower other costs of $6,545.
Sales and marketing expenses increased by $134,292, or 12%, to $1,248,044 in the year ended December 31, 2024 from $1,113,752 in the year ended December 31, 2023. The increase was due primarily to higher personnel costs of $220,998 and other costs of $23,287, partly offset by lower stock-based compensation expense of $63,557 and professional fees of $46,436.
The commencement of the lease occurred on June 1, 2021 and the initial term of the lease was 63 months. The actual base rent in the first year of the lease was $56,471 and was net of $18,824 in abated rent over the first three months of the lease term.
The actual base rent in the first year of the lease was $56,471 and was net of $18,824 in abated rent over the first three months of the lease term. The annual base rent in the second year of the lease was $77,330 and increased by $2,035 in each succeeding year of the lease.
We expect no gross profit from other grants that we are pursuing, or may pursue, in 2024. Gross Profit. Gross profit was $38,258 in the year ended December 31, 2023 compared to $0 in the year ended December 31, 2022.
We expect no gross profit from other grants that we are pursuing, or may pursue, in 2025. Gross Profit (Loss). Our gross loss was $7,377 for the year ended December 31, 2024 due to the higher costs associated with initial low volume production.
While we may recognize a gross profit in 2024 from development agreements, we do not expect to recognize a positive gross profit from product sales in 2024 due to the higher costs associated with initial low volume production. Research and Development Expenses.
Gross profit was $38,258 in the year ended December 31, 2023 as commercial revenue from our development agreement with Stellantis exceeded the associated program costs. We do not expect to recognize a gross profit from commercial revenue in 2025 due to the higher costs associated with initial low volume production. Research and Development Expenses.
In the year ended December 31, 2022, we did not recognize any commercial revenue as we were still focused on the development of our B-TRAN™ technology. We expect to recognize modest commercial revenue from both product sales and development agreements in 2024. Grant Revenue.
In the year ended December 31, 2023, our commercial revenue consisted of development revenue including the sale of packaged B-TRAN® devices. We expect to recognize modest commercial revenue from both product sales and development agreements in 2025 with product sales increasing in the second half of the year. 19 Table of Contents Grant Revenue.
As of December 31, 2023 and 2022, we had cash and cash equivalents of $8,474,835 and $16,345,623, respectively. Our net working capital and long-term debt at December 31, 2023 were $8,178,282 and $0, respectively. We believe that our cash and cash equivalents on hand will be sufficient to meet our ongoing liquidity needs for at least the next 12 months.
We believe that our cash and cash equivalents on hand will be sufficient to meet our ongoing liquidity needs for at least the next 12 months.
Grant revenue decreased by $165,881 to $37,388 in the year ended December 31, 2023 from $203,269 in the year ended December 31, 2022 due to the completion of our $1.2 million subcontract with Diversified Technologies, Inc.
We did not recognize any grant revenue in the year ended December 31, 2024. Grant revenue was $37,388 in the year ended December 31, 2023 as we completed our $1.2 million subcontract with Diversified Technologies, Inc.
We expect higher sales and marketing expenses in 2024 as we expand our engagement with prospective customers and support the roll-out of our SymCool™ and SymCool™ IQ products. 21 Table of Contents Loss from Operations.
We expect higher sales and marketing expenses in 2025 as we expand our engagement with prospective customers, continue to build our sales pipeline and further commercialize our B-TRAN® technology and related products. Loss from Operations.
We pay $50,000 annually under this agreement. At inception, we recorded an intangible asset and other long-term liability of $451,557 for the estimated present value of future payments under this licensing agreement. At December 31, 2023, the corresponding long-term liability for the estimated present value of future payments under these licensing agreements was $1,125,173.
We pay $50,000 annually under this agreement. At December 31, 2024, the estimated present value of future payments under these licensing agreements was $1,157,375 with $150,000 due and payable in 2025. We are accruing interest for future payments related to these agreements.
We may pursue additional research and development grants, if and when available, to further develop and/or improve our technology. We are in the process of commercializing our B-TRAN™ technology and launched our first two commercial products, the SymCool™ Power Module and SymCool™ IQ Intelligent Power Module, in 2023.
We are in the process of commercializing our B-TRAN® technology and have launched our first two commercial products, the SymCool® Power Module and SymCool® IQ Intelligent Power Module. We generated $86,032 and $161,483, respectively, in commercial revenue in the years ended December 31, 2024 and 2023.
Cost of grant revenue decreased by $165,881 to $37,288 for the year ended December 31, 2023 from $203,269 for the year ended December 31, 2022 due to the completion of our subcontract with DTI. The cost of grant revenue is equal to the associated grant revenue resulting in no gross profit.
We did not recognize any cost of grant revenue in the year ended December 31, 2024. Cost of grant revenue was $37,388 for the year ended December 31, 2023. The cost of grant revenue in 2023 was equal to the associated grant revenue resulting in no gross profit.
It does not contain a termination option. We recognized a right of use asset of $339,882 and a corresponding lease liability for this lease upon lease commencement.
We recognized a right of use asset of $524,025 and a corresponding lease liability for the Amended Lease on the commencement date.
General and Administrative Expenses. General and administrative expenses increased by $409,531, or 13%, to $3,533,383 in the year ended December 31, 2023 from $3,123,852 in the year ended December 31, 2022.
General and Administrative Expenses. General and administrative expenses increased by $75,153, or 2%, to $3,608,536 in the year ended December 31, 2024 from $3,533,383 in the year ended December 31, 2023. We expect slightly higher general and administrative expenses, exclusive of stock-based compensation, in 2025. Sales and Marketing Expenses.
We intend to use the net proceeds from the March 2024 Offering to fund further commercialization and development of our B-TRAN™ technology and general corporate and working capital purposes. 22 Table of Contents Contractual Obligations and Commitments Lease In March 2021, we entered into a lease agreement for 4,070 square feet of office and laboratory space located in Austin, Texas.
The net proceeds to us from the public offering were $15.7 million. We intend to use the net proceeds from the public offering to fund further commercialization and development of our B-TRAN® technology and general corporate and working capital purposes.
Stock-Based Compensation . We apply FASB ASC 718, “Stock Compensation,” when recording stock-based compensation. Grants to non-employees are also accounted for under ASC 718. The fair value of each stock option award is estimated on the date of grant using the commonly used Black-Scholes option valuation model.
Please see Footnote 2 to our financial statements for a summary of our significant accounting policies. 18 Table of Contents Stock-Based Compensation . We apply FASB ASC 718, “Stock Compensation,” when recording stock-based compensation. Grants to non-employees are also accounted for under ASC 718.
Results of Operations Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 Commercial Revenue. We began to commercialize our B-TRAN™ technology in 2023. For the year ended December 31, 2023, we recognized commercial revenue of $161,483. Our commercial revenue consisted of development revenue (see Development Agreement above) including the sale of packaged B-TRAN™ devices.
Results of Operations Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 Commercial Revenue. Commercial revenue was $86,032 in the year ended December 31, 2024 compared to $161,483 in the year ended December 31, 2023. In the year ended December 31, 2024, our commercial revenue related to development agreements and product sales.
Future minimum payments under the lease are as follows: For the Year Ended December 31, 2024 $ 80,552 2025 82,587 2026 56,132 Total lease payments 219,271 Less: imputed interest (16,284 ) Total lease liability $ 202,987 Licensing Agreements In 2015, we entered into a licensing agreement which expires in February 2033.
For purposes of calculating the right of use asset and lease liability, we estimated our incremental borrowing rate at 8.5% per annum. 21 Table of Contents Future minimum payments under the Amended Lease are as follows: For the Year Ended December 31, 2025 $ 120,004 2026 123,297 2027 126,703 2028 130,197 2029 88,579 Total lease payments 588,780 Less: imputed interest (102,764 ) Total lease liability 486,016 Less: current portion of lease liability (82,681 ) Long-term lease liability $ 403,335 Licensing Agreements In 2015, we entered into a licensing agreement which expires in February 2033.
These companies, along with other current and future participants in our test and evaluation program, intend to test and evaluate the B-TRAN™ for use in their applications. We expect to incorporate the feedback from these customers into our future commercial products. We began B-TRAN™ customer shipments to program participants in mid-2023.
These companies intend to test and evaluate the B-TRAN® for use in their applications and these engagements could lead to future design wins or custom development agreements. We also announced agreements with three distribution partners. We may add other distribution partners in the future.
Removed
We recorded all of the revenue under Phase 1 and $61,483 of the revenue under Phase 2 in year ended December 31, 2023. We will record the remaining Phase 2 revenue in the first quarter of 2024.
Added
Grant revenue was $0 and $37,388, respectively, in the years ended December 31, 2024 and 2023. We may pursue additional research and development grants, if and when available, to further develop and/or improve our technology.
Removed
The underwriter has a 30-day option to purchase up to an additional 300,000 shares of our common stock at the offering price, less the underwriting discounts and commissions. The estimated net proceeds to us from the March 2024 Offering are $13.6 million or $15.7 million if the underwriter exercises its option to purchase additional shares in full.
Added
First Design Win In late 2024, we announced our first design win for solid-state circuit breakers (SSCBs) with one of the largest circuit protection equipment manufactures in Asia serving the industrial and utility markets. In connection with this design win, we entered into a joint development agreement for a SSCB product incorporating multiple B-TRAN® devices.
Removed
In the year ended December 31, 2022, we did not recognize any cost of commercial revenue as we were still focused on the development of our B-TRAN™ technology. Cost of Grant Revenue.
Added
The agreement includes the product design, prototype builds and testing of the SSCB which is targeted for completion in the second quarter of 2025 to be followed by commercial sales later in the years. We expect to announce additional design wins and/or custom development agreements in 2025.
Removed
The increase was due primarily to higher stock-based compensation expense of $309,530, personnel costs of $147,063 and other costs of $3,594, partly offset by lower Board fees and expenses of $50,656. We expect relatively flat to slightly higher general and administrative expenses, exclusive of stock-based compensation, in 2024. Sales and Marketing Expenses.
Added
We determined that there was a $77,444 impairment in the value of long-lived assets during the year ended December 31, 2024, and no impairment in the value of long-lived assets during the year ended December 31, 2023. Income Taxes.
Removed
Although we believe we have adequate sources of liquidity over the long term, the success of our operations, the global economic outlook, and the pace of sustainable growth in our markets could each impact our business and liquidity.
Added
Tax benefits from an uncertain tax position are recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
Removed
The underwriter has a 30-day option to purchase up to an additional 300,000 shares of our common stock at the offering price, less the underwriting discounts and commissions. The estimated net proceeds to us from the March 2024 Offering are $13.6 million or $15.7 million if the underwriter exercises its option to purchase additional shares in full.
Added
We have funded our operations to date primarily through the sale of common stock and common stock equivalents. As of December 31, 2024 and 2023, we had cash and cash equivalents of $15,842,850 and $8,474,835, respectively. Our net working capital and long-term debt at December 31, 2024 were $15,735,796 and $0, respectively.
Removed
We are accruing interest for future payments related to these agreements.
Added
Financing activities in the year ended December 31, 2024 resulted in a net cash inflow of $16,617,023 due to net proceeds from our public offering of $15,724,818 and proceeds from warrant and stock option exercises of $1,120,513, slightly offset by $228,308 for the payment of withholding taxes on the vesting of restricted stock units.
Added
The net proceeds to us from the public offering were $15.7 million. We intend to use the net proceeds from the public offering to fund further commercialization and development of our B-TRAN™ technology and general corporate and working capital purposes.
Added
Contractual Obligations and Commitments Lease In March 2021, we entered into a lease agreement (the “Original Lease”) for 4,070 square feet of office and laboratory space located in Austin, Texas (the “Original Suite”). The commencement of the lease occurred on June 1, 2021 and the initial term of the lease was 63 months.
Added
In addition, we were required to pay our proportionate share of operating costs for the building under this triple net lease. In April 2024, we entered into a first amendment and relocation agreement (the “Amended Lease”) with our landlord. Under the Amended Lease, we relocated to another, larger suite in the same office building.
Added
The Amended Lease is for 5,775 square feet of office and laboratory space (the “New Suite”) and, upon occupancy, replaced the 4,070 square feet of office and laboratory space previously leased by us. The term of the Amended Lease expires sixty-two (62) months from July 1, 2024, the commencement date.
Added
In accordance with ASC 842, we accounted for the modification of the lease contract as a separate lease contract. The lease for the Original Suite terminated on June 30, 2024 and we recorded a gain on the termination of the lease for the Original Suite of $15,319 in general and administrative expenses.

Other IPWR 10-K year-over-year comparisons