0001437749-23-031954.txt : 20231114 0001437749-23-031954.hdr.sgml : 20231114 20231114160131 ACCESSION NUMBER: 0001437749-23-031954 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 43 CONFORMED PERIOD OF REPORT: 20230930 FILED AS OF DATE: 20231114 DATE AS OF CHANGE: 20231114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Ideal Power Inc. CENTRAL INDEX KEY: 0001507957 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 141999058 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-36216 FILM NUMBER: 231405652 BUSINESS ADDRESS: STREET 1: 5508 HIGHWAY 290 WEST STREET 2: SUITE 120 CITY: AUSTIN STATE: TX ZIP: 78735 BUSINESS PHONE: 512-264-1542 MAIL ADDRESS: STREET 1: 5508 HIGHWAY 290 WEST STREET 2: SUITE 120 CITY: AUSTIN STATE: TX ZIP: 78735 FORMER COMPANY: FORMER CONFORMED NAME: Ideal Power Converters, Inc. DATE OF NAME CHANGE: 20101215 10-Q 1 ipwr20230630_10q.htm FORM 10-Q ipwr20230630_10q.htm
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Table of Contents



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to _______________

 

Commission File Number 001-36216

 

IDEAL POWER INC.

(Exact name of registrant as specified in its charter)

 

Delaware

14-1999058

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

5508 Highway 290 West, Suite 120

Austin, Texas 78735

(Address of principal executive offices)

(Zip Code)

 

(512) 264-1542

(Registrant’s telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

IPWR

 

The Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large accelerated filer  ☐

Accelerated filer ☐

   

Non-accelerated filer  ☒

Smaller reporting company  

   
 

Emerging growth company  

 

If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes No ☒

 

As of November 10, 2023, the issuer had 5,945,347 shares of common stock, par value $0.001, outstanding.

 



 

 

 

 

TABLE OF CONTENTS

 

PART I

FINANCIAL INFORMATION

3

     

Item 1.

Unaudited Condensed Financial Statements

3

     
 

Balance Sheets at September 30, 2023 and December 31, 2022

3

 

Statements of Operations for the three and nine months ended September 30, 2023 and 2022

4

 

Statements of Cash Flows for the nine months ended September 30, 2023 and 2022

5

 

Statements of Stockholders’ Equity for the three-month periods during the nine months ended September 30, 2023 and 2022

6

 

Notes to Financial Statements

7

     

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

13

     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

17

     

Item 4.

Controls and Procedures

17

     

PART II

OTHER INFORMATION

18

     

Item 1.

Legal Proceedings

18

     

Item 1A.

Risk Factors

18

     

Item 2.

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

18

     

Item 3.

Defaults Upon Senior Securities

18

     

Item 4.

Mine Safety Disclosures

18

     

Item 5.

Other Information

18

     

Item 6.

Exhibits

19

     

SIGNATURES

20

 

 

 

PART I-FINANCIAL INFORMATION

 

ITEM 1. CONDENSED FINANCIAL STATEMENTS

 

 

IDEAL POWER INC.

Balance Sheets

(unaudited)

 

   

September 30,

   

December 31,

 
   

2023

   

2022

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 10,760,854     $ 16,345,623  

Accounts receivable, net

    100,000       65,936  

Prepayments and other current assets

    382,091       491,365  

Total current assets

    11,242,945       16,902,924  
                 
Property and equipment, net     343,365       200,103  

Intangible assets, net

    2,556,861       2,036,431  

Right of use asset

    202,474       248,720  

Other assets

    13,311       11,189  

Total assets

  $ 14,358,956     $ 19,399,367  
                 

LIABILITIES AND STOCKHOLDERS EQUITY

               

Current liabilities:

               

Accounts payable

  $ 63,955     $ 130,503  

Accrued expenses

    690,655       254,218  

Current portion of lease liability

    69,128       64,597  

Total current liabilities

    823,738       449,318  
                 

Long-term lease liability

    150,588       202,987  

Other long-term liabilities

    1,165,089       838,458  

Total liabilities

    2,139,415       1,490,763  
                 

Commitments and contingencies (Note 5)

           
                 

Stockholders’ equity:

               

Common stock, $0.001 par value; 50,000,000 shares authorized; 5,946,668 shares issued and 5,945,347 shares outstanding at September 30, 2023 and 5,926,001 shares issued and 5,924,680 shares outstanding at December 31, 2022

    5,947       5,926  

Additional paid-in capital

    106,870,506       105,011,318  

Treasury stock, at cost, 1,321 shares at September 30, 2023 and December 31, 2022

    (13,210 )     (13,210 )

Accumulated deficit

    (94,643,702 )     (87,095,430 )

Total stockholders’ equity

    12,219,541       17,908,604  

Total liabilities and stockholders’ equity

  $ 14,358,956     $ 19,399,367  

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

IDEAL POWER INC.

Statements of Operations

(unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2023

   

2022

   

2023

   

2022

 

Development revenue

  $ 1,557     $     $ 100,000     $  

Grant revenue

          10,675       37,388       186,661  

Total revenue

    1,557       10,675       137,388       186,661  
                                 

Cost of development revenue

    2,787             76,800        

Cost of grant revenue

          10,675       37,388       186,661  

Total cost of revenue

    2,787       10,675       114,188       186,661  
                                 

Gross profit (loss)

    (1,230 )           23,200        
                                 

Operating expenses:

                               

Research and development

    1,690,538       780,151       4,337,254       2,337,081  

General and administrative

    854,025       768,957       2,682,951       2,356,543  

Sales and marketing

    293,963       207,443       870,189       660,024  

Total operating expenses

    2,838,526       1,756,551       7,890,394       5,353,648  
                                 

Loss from operations

    (2,839,756 )     (1,756,551 )     (7,867,194 )     (5,353,648 )
                                 

Interest income, net

    99,275       52,781       318,922       55,243  
                                 

Net loss

  $ (2,740,481 )   $ (1,703,770 )   $ (7,548,272 )   $ (5,298,405 )
                                 

Net loss per share – basic and diluted

  $ (0.44 )   $ (0.28 )   $ (1.22 )   $ (0.86 )
                                 

Weighted average number of shares outstanding – basic and diluted

    6,192,286       6,157,625       6,185,447       6,156,876  

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

IDEAL POWER INC.

Statements of Cash Flows

(unaudited)

 

   

Nine Months Ended

 
   

September 30,

 
   

2023

   

2022

 

Cash flows from operating activities:

               

Net loss

  $ (7,548,272 )   $ (5,298,405 )

Adjustments to reconcile net loss to net cash used in operating activities:

               

Depreciation and amortization

    193,900       134,557  

Stock-based compensation

    1,859,209       696,127  

Stock issued for services

          100,100  

Decrease (increase) in operating assets:

               

Accounts receivable

    (34,604 )     183,934  

Prepaid expenses and other assets

    153,398       (360,847 )

Increase (decrease) in operating liabilities:

               

Accounts payable

    (66,548 )     (110,657 )

Accrued expenses and other liabilities

    263,643       142,458  

Net cash used in operating activities

    (5,178,734 )     (4,512,733 )
                 

Cash flows from investing activities:

               

Purchase of property and equipment

    (198,338 )     (118,239 )

Acquisition of intangible assets

    (207,697 )     (88,640 )

Net cash used in investing activities

    (406,035 )     (206,879 )
                 

Net decrease in cash and cash equivalents

    (5,584,769 )     (4,719,612 )

Cash and cash equivalents at beginning of period

    16,345,623       23,170,149  

Cash and cash equivalents at end of period

  $ 10,760,854     $ 18,450,537  

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

IDEAL POWER INC.

Statements of Stockholders Equity

For the Three-Month Periods during the Nine Months Ended September 30, 2023 and 2022

(unaudited)

 

                   

Additional

                           

Total

 
   

Common Stock

   

Paid-In

   

Treasury Stock

   

Accumulated

   

Stockholders

 
   

Shares

   

Amount

   

Capital

   

Shares

   

Amount

   

Deficit

   

Equity

 

Balances at December 31, 2021

    5,893,767     $ 5,894     $ 104,063,321       1,321     $ (13,210 )   $ (79,906,080 )   $ 24,149,925  

Exercise of options

    1,351       1       (1 )                        

Stock issued for services

    10,000       10       100,090                         100,100  

Stock-based compensation

                231,765                         231,765  

Net loss for the three months ended March 31, 2022

                                  (1,904,641 )     (1,904,641 )

Balances at March 31, 2022

    5,905,118       5,905       104,395,175       1,321       (13,210 )     (81,810,721 )     22,577,149  

Stock-based compensation

                230,473                         230,473  

Net loss for the three months ended June 30, 2022

                                  (1,689,994 )     (1,689,994 )

Balances at June 30, 2022

    5,905,118       5,905       104,625,648       1,321       (13,210 )     (83,500,715 )     21,117,628  

Stock-based compensation

                233,889                         233,889  

Net loss for the three months ended September 30, 2022

                                  (1,703,770 )     (1,703,770 )

Balances at September 30, 2022

    5,905,118     $ 5,905     $ 104,859,537       1,321     $ (13,210 )   $ (85,204,485 )   $ 19,647,747  
                                                         

Balances at December 31, 2022

    5,926,001     $ 5,926     $ 105,011,318       1,321     $ (13,210 )   $ (87,095,430 )   $ 17,908,604  

Vesting of restricted stock units

    6,889       7       (7 )                        

Stock-based compensation

                609,926                         609,926  

Net loss for the three months ended March 31, 2023

                                  (2,527,985 )     (2,527,985 )

Balances at March 31, 2023

    5,932,890       5,933       105,621,237       1,321       (13,210 )     (89,623,415 )     15,990,545  

Vesting of restricted stock units

    6,889       7       (7 )                        

Stock-based compensation

                623,281                         623,281  

Net loss for the three months ended June 30, 2023

                                  (2,279,806 )     (2,279,806 )

Balances at June 30, 2023

    5,939,779       5,940       106,244,511       1,321       (13,210 )     (91,903,221 )     14,334,020  

Vesting of restricted stock units

    6,889       7       (7 )                        

Stock-based compensation

                626,002                         626,002  

Net loss for the three months ended September 30, 2023

                                  (2,740,481 )     (2,740,481 )

Balances at September 30, 2023

    5,946,668     $ 5,947     $ 106,870,506       1,321     $ (13,210 )   $ (94,643,702 )   $ 12,219,541  

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 Ideal Power Inc.

Notes to Financial Statements

(unaudited)

 

 

Note 1 – Organization and Description of Business

 

Ideal Power Inc. (the “Company”) was incorporated in Texas on May 17, 2007 under the name Ideal Power Converters, Inc. The Company changed its name to Ideal Power Inc. on July 8, 2013 and re-incorporated in Delaware on July 15, 2013. With headquarters in Austin, Texas, the Company is focused on the further development and commercialization of its Bidirectional bipolar junction TRANsistor (B-TRAN™) solid-state switch technology.

 

Since its inception, the Company has financed its research and development efforts and operations primarily through the sale of common stock. The Company’s continued operations are dependent upon, among other things, its ability to obtain adequate sources of funding through future revenues, follow-on stock offerings, issuances of warrants, debt financing, co-development agreements, government grants, sale or licensing of developed intellectual property or other alternatives.

 

 

Note 2 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 30, 2023.

 

In the opinion of management, these financial statements reflect all normal recurring, and other adjustments, necessary for a fair presentation. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.

 

Net Loss Per Share

 

In accordance with Accounting Standards Codification 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic net loss per share. As such, for the three and nine months ended September 30, 2023 and 2022, the Company included pre-funded warrants to purchase 253,828 shares of common stock in its computation of net loss per share. The pre-funded warrants were issued in November 2019 with an exercise price of $0.001. See Note 7.

 

In periods with a net loss, no common share equivalents are included in the computation of diluted net loss per share because their effect would be anti-dilutive. At September 30, 2023 and 2022, potentially dilutive shares outstanding amounted to 1,629,117 and 1,412,368 shares, respectively, and exclude prefunded warrants to purchase shares of common stock.

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standard, if adopted, would have a material impact on the Company’s financial statements.

 

 

 

Note 3 – Intangible Assets

 

Intangible assets, net consisted of the following:

 

   

September 30,

   

December 31,

 
   

2023

   

2022

 
   

(unaudited)

         

Patents

  $ 1,456,513     $ 1,263,930  

Trademarks

    15,114        

Other intangible assets

    1,843,036       1,391,479  
      3,314,663       2,655,409  

Accumulated amortization - patents

    (256,340 )     (211,078 )

Accumulated amortization - other intangible assets

    (501,462 )     (407,900 )
    $ 2,556,861     $ 2,036,431  

 

At September 30, 2023 and December 31, 2022, the Company had capitalized $472,108 and $341,610, respectively, for costs related to patents and trademarks that have not been awarded. Cost related to patents that have not yet been awarded are not amortized until patent issuance. As further discussed in Note 5, the Company entered into a license agreement in April 2023 and capitalized $451,557 in other intangible assets related to this agreement.

 

Amortization expense amounted to $50,420 and $138,824 for the three and nine months ended September 30, 2023, respectively, and $37,442 and $111,352 for the three and nine months ended September 30, 2022, respectively. Amortization expense for the succeeding five years and thereafter is $50,420 (remaining three months of 2023), $201,679 (2024-2027) and $1,227,617 (thereafter).

 

 

Note 4 – Lease

 

In March 2021, the Company entered into a lease agreement for 4,070 square feet of office and laboratory space located in Austin, Texas. 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 annual base rent in the second year of the lease was $77,330 and increases by $2,035 in each succeeding year of the lease. In addition, the Company is required to pay its proportionate share of operating costs for the building under this triple net lease. The lease contains a 5-year fair market renewal option. It does not contain a termination option. The Company recognized a right of use asset of $339,882 and a corresponding lease liability for this lease upon lease commencement.

 

For purposes of calculating the right of use asset and lease liability included in the Company’s financial statements, the Company estimated its incremental borrowing rate at 6% per annum.

 

Future minimum payments under the lease are as follows:

 

For the Year Ended December 31,

       

2023 (remaining)

  $ 19,841  

2024

    80,552  

2025

    82,587  

2026

    56,132  

Total lease payments

    239,112  

Less: imputed interest

    (19,396 )

Total lease liability

    219,716  

Less: current portion of lease liability

    (69,128 )

Long-term lease liability

  $ 150,588  

 

At September 30, 2023, the remaining lease term was 35 months.

 

 

For the nine months ended September 30, 2023 and 2022, operating cash outflows for lease payments totaled $58,676 and $57,150, respectively. For both the three months ended September 30, 2023 and 2022, operating lease cost, recognized on a straight-line basis, totaled $19,018, and for both the nine months ended September 30, 2023 and 2022, operating lease cost, recognized on a straight-line basis, totaled $57,053.

 

 

Note 5 – Commitments and Contingencies

 

License Agreement

 

In 2015, the Company entered into a licensing agreement which expires in February 2033. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor power switches which enhances its intellectual property portfolio. The Company will pay $100,000 annually under this agreement.

 

In April 2023, the Company amended a 2021 license agreement which expires in February 2034. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor drive circuitry which enhances its intellectual property portfolio. The Company will pay $50,000 annually under this agreement. At inception, the Company recorded an intangible asset and other long-term liability of $451,557, for the estimated present value of future payments under the licensing agreement.

 

At September 30, 2023 and December 31, 2022, the other long-term liability for the estimated present value of future payments under the licensing agreements was $1,165,089 and $838,458, respectively. The Company is accruing interest for future payments related to these agreements.

 

Legal Proceedings

 

The Company may be subject to litigation from time to time in the ordinary course of business. The Company is not currently party to any legal proceedings.

 

Indemnification Obligations

 

The employment agreements of Company executives include an indemnification provision whereby the Company shall indemnify and defend, at the Company’s expense, its executives so long as an executive’s actions were taken in good faith and in furtherance of the Company’s business and within the scope of executive’s duties and authority.

 

 

Note 6 — Equity Incentive Plan

 

In May 2013, the Company adopted the 2013 Equity Incentive Plan (as amended and restated, the “Plan”) and reserved shares of common stock for issuance under the Plan, which was last amended in June 2023. The Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”). At September 30, 2023, 524,680 shares of common stock were available for issuance under the Plan.

 

A summary of the Company’s stock option activity and related information is as follows:

 

                   

Weighted

 
           

Weighted

   

Average

 
           

Average

   

Remaining

 
   

Stock

   

Exercise

   

Life

 
   

Options

   

Price

   

(in years)

 

Outstanding at December 31, 2022

    513,948     $ 7.59       6.6  

Granted

    12,000     $ 11.96          

Outstanding at September 30, 2023

    525,948     $ 7.69       5.9  

Exercisable at September 30, 2023

    463,950     $ 7.09       5.6  

 

 

A summary of the Company’s restricted stock unit (RSU) and performance stock unit (PSU) activity is as follows:

 

   

RSUs

   

PSUs

 

Outstanding at December 31, 2022

    183,666       114,000  

Granted

    39,750        

Vested

    (20,667 )      

Outstanding at September 30, 2023

    202,749       114,000  

 

During the nine months ended September 30, 2023, the Company granted 27,550 RSUs to Board members, 12,200 RSUs to employees and 12,000 stock options to employees under the Plan. The estimated fair value of these equity grants, calculated using the Black-Scholes option valuation model for the stock options, was $529,389, $263,558 of which was recognized during the nine months ended September 30, 2023.

 

At September 30, 2023, there was $1,944,010of unrecognized compensation cost related to non-vested equity awards granted under the Plan. That cost is expected to be recognized over a weighted average period of 0.9 years.

 

 

Note 7 — Warrants

 

At September 30, 2023 and December 31, 2022, the Company had 786,420 warrants outstanding with a weighted average exercise price of $5.19 per share and 253,828 pre-funded warrants outstanding with an exercise price of $0.001 per share. The weighted average remaining life, excluding the 253,828 pre-funded warrants with no expiration date, of the outstanding warrants is 1.4 years.

 

At September 30, 2023, all warrants were exercisable, although the warrants held by certain of the Company’s warrant holders may be exercised only to the extent that the total number of shares of common stock then beneficially owned by such warrant holder does not exceed 4.99% (or, at the investor’s election, 9.99%) of the outstanding shares of the Company’s common stock.

 

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORT

 

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements include, but are not limited to, statements regarding our future financial performance, business condition and results of operations; our future business plans and pursuit of additional government funding and development agreements; our expectations regarding improvements to our technology, including incorporation of customer feedback into future products; our expectations regarding the timing of commercial fabrication of B-TRAN™ products and commencement of product sales; our expectations regarding the performance of our B-TRAN™ and the consistency between expected and actual performance; our expectations regarding testing and certification of our products; and our expectations regarding future expenses. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this report. In particular, these include statements relating to future actions, prospective products, applications, customers, technologies, future performance or results of anticipated products, expenses, and financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

 

 

our history of losses;

 

 

our ability to generate revenue;

 

 

our limited operating history;

 

 

the size and growth of markets for our technology;

 

 

regulatory developments that may affect our business;

 

 

our ability to successfully develop new products and the expected performance of those products;

 

 

the performance of third-party consultants and service providers whom we have and will continue to rely on to assist us in development and commercialization of our B-TRAN™ and related packaging and drive circuitry;

 

 

the rate and degree of market acceptance for our B-TRAN™ and current and future B-TRAN™ products;

 

 

the time required for third parties to redesign, test and certify their products incorporating our B-TRAN™;

 

 

our ability to successfully commercialize our B-TRAN™ technology;

 

 

our ability to secure strategic partnerships with semiconductor fabricators and others related to our B-TRAN™ technology;

 

 

our ability to obtain, maintain, defend and enforce intellectual property rights protecting our technology;

 

 

the success of our efforts to manage cash spending, particularly prior to the commercialization of our B-TRAN™ technology at scale;

 

 

general economic conditions and events, including inflation, and the impact they may have on us and our potential partners and licensees;

 

 

our dependence on the global supply chain and impacts of supply chain disruptions;

 

 

 

our ability to obtain adequate financing in the future, if and when we need it;

 

 

the impact of global health pandemics on our business, financial condition and results of operations;

 

 

our success at managing the risks involved in the foregoing items; and

 

 

other factors discussed in this report.

 

The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report, except as required by applicable law. You should not place undue reliance on these forward-looking statements.

 

Unless otherwise stated or the context otherwise requires, the terms “Ideal Power,” “we,” “us,” “our” and the “Company” refer to Ideal Power Inc.

 

 

 

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited 2022 financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. In addition to historical information, the discussion and analysis here and throughout this Form 10-Q contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited, to those set forth under Risk Factors in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

 

Overview

 

Ideal Power Inc. is located in Austin, Texas. 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 and $100,000 in development revenue for bidirectional power switch development. Revenue was $1,557 and $137,388 in the three and nine months ended September 30, 2023, respectively, and $10,675 and $186,661 in the three and nine months ended September 30, 2022, respectively. Revenue for the three months ended September 30, 2023 related to a development agreement. Revenue for the nine months ended September 30, 2023 related to a development agreement and a government grant. Revenue for the three and nine months ended September 30, 2022 related to government grants. We expect to pursue additional development agreements and government grants, if and when available, to further develop, improve and/or commercialize our technology. We are in the process of commercializing our B-TRAN™ technology.

 

Product Launch

 

In January 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. We expect initial SymCool™ sales to commence as early as late 2023, depending on the ultimate date that this initial product is fabricated and available for commercial sale.

 

In September 2023, we launched our second commercial product, the SymCool™ IQ Intelligent Power Module. The SymCool™ IQ 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, EV charging and UPS systems for data centers. We expect initial sales of this product to commence next year.

 

Development Agreement

 

During the fourth quarter of 2022, we announced, and began Phase 1 of, a product development agreement with a top 10 global automaker for a custom B-TRAN™ power module for use in the automaker’s electric vehicle (EV) drivetrain inverters in its next generation EV platform. In Phase 1 of the program, we provided packaged B-TRAN™ devices, test kits and technical data to the top 10 global automaker for their evaluation. During the third quarter of 2023, we secured, and began Phase 2 of, this program. In Phase 2 of the program, we are collaborating with a packaging company selected by the automaker that will fabricate the custom B-TRAN™ modules. In Phase 3, the final development phase under the program, the custom B-TRAN™ power module is expected to be tested and certified in accordance with automotive codes and standards. The delivery of production-ready B-TRAN™-based modules is targeted for 2025. We recorded all of the revenue under Phase 1 of this agreement in the nine months ended September 30, 2023. We expect to record revenue for Phase 2 of this program in the next one to two quarters.

 

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. 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 June 2023.

 

 

Results of Operations

 

Comparison of the three months ended September 30, 2023 to the three months ended September 30, 2022

 

Revenue. Revenue for the three months ended September 30, 2023 and 2022 was $1,557 and $10,675, respectively. Revenue for the three months ended September 30, 2023 consisted of development revenue (see Development Agreement above). Revenue for the three months ended September 30, 2022 consisted of grant revenue.

 

The grant revenue for the three months ended September 30, 2022 related to a $1.2 million subcontract with Diversified Technologies, Inc. (“DTI”) to supply B-TRAN™ devices as part of a contract awarded to DTI by the United States Naval Sea Systems Command (“NAVSEA”) for the development and demonstration of a B-TRAN™ enabled high efficiency direct current solid-state circuit breaker (“SSCB”). We completed our work under the subcontract in the second quarter of 2023.

 

We launched our first commercial product in January 2023 and expect initial sales of this product to commence as early as late 2023, depending on the ultimate date that this initial product is fabricated and available for commercial sale. We launched our second commercial product in September 2023 and expect initial sales of this product to commence next year. We also expect to pursue additional development agreements, including Phase 3 of the development agreement discussed above, as well as government funding opportunities that may result in additional development and/or grant revenue in the future.

 

Cost of Revenue. Cost of revenue for the three months ended September 30, 2023 and 2022 was $2,787 and $10,675, respectively. The cost of revenue for the three months ended September 30, 2023 relates to Phase 1 of the development agreement. The cost of revenue for the three months ended September 30, 2022 relates to the subcontract with DTI. For the subcontract with DTI, cost of grant revenue is equal to the associated grant revenue resulting in no gross profit.

 

Gross Profit (Loss). Gross profit (loss) for the three months ended September 30, 2023 was a gross loss of $1,230. Gross profit (loss) for the three months ended September 30, 2022 was $0. The gross loss in the three months ended September 30, 2023 relates to the development agreement. We recorded no gross profit for the DTI subcontract in the three months ended September 30, 2022 and expect no gross profit from government grants that we are pursuing or may pursue in the future.

 

Research and Development Expenses. Research and development expenses increased by $910,387, or 117%, to $1,690,538 in the three months ended September 30, 2023 from $780,151 in the three months ended September 30, 2022. The increase was due to higher semiconductor fabrication costs of $552,721, stock-based compensation expense of $284,871, engineering services, primarily device packaging costs, of $71,379, personnel costs of $60,671, partly offset by lower search and placement fees of $53,823 and other B-TRAN™ development spending of $5,432.

 

In the three months ended September 30, 2023, higher semiconductor fabrication costs included wafer runs at a high-volume production foundry and the start of qualification of a second high-volume production foundry. In the three months ended September 30, 2023, stock-based compensation expense included $207,776 related to performance stock units granted in December 2022 with a derived service period of 0.89 years.

 

Research and development expenses will be subject to quarterly variability due primarily to the number, size and timing of semiconductor fabrication runs and their associated cost as well as the timing and cost of other major development activities.

 

General and Administrative Expenses. General and administrative expenses increased by $85,068, or 11%, to $854,025 in the three months ended September 30, 2023 from $768,957 in the three months ended September 30, 2022. The increase was due to higher stock-based compensation expense of $93,470, investor relations spending of $43,158 and personnel costs of $31,736, partly offset by lower consulting costs of $69,550 (relating to our compensation benchmarking study in the three months ended September 30, 2022) and other net costs of $13,746. In the three months ended September 30, 2023, stock-based compensation expense included $66,056 related to performance stock units granted in December 2022 with a derived service period of 0.89 years.

 

We expect relatively flat general and administrative expenses, exclusive of stock-based compensation, in the fourth quarter of 2023 as compared to the third quarter of 2023.

 

 

Sales and Marketing Expenses. Sales and marketing expenses increased by $86,520, or 42%, to $293,963 in the three months ended September 30, 2023 from $207,443 in the three months ended September 30, 2022. The increase was due to higher personnel costs of $57,131, legal fees for commercial contracts of $13,970, stock-based compensation expense of $13,772 and other net spending of $1,647. We expect relatively flat sales and marketing expenses in the fourth quarter of 2023 as compared to the third quarter of 2023.

 

Loss from Operations. Our loss from operations for the three months ended September 30, 2023 was $2,839,756, or 62% higher, than the $1,756,551 loss from operations for the three months ended September 30, 2022 for the reasons discussed above.

 

Interest Income, Net. Net interest income was $99,275 for the three months ended September 30, 2023 compared to $52,781 for the three months ended September 30, 2022 due to the impact of higher interest rates on our money market account.

 

Net Loss. Our net loss for the three months ended September 30, 2023 was $2,740,481, or 61% higher, as compared to a net loss of $1,703,770 for the three months ended September 30, 2022, for the reasons discussed above.

 

Comparison of the nine months ended September 30, 2023 to the nine months ended September 30, 2022

 

Revenue. Revenue for the nine months ended September 30, 2023 and 2022 was $137,388 and $186,661, respectively. Revenue for the nine months ended September 30, 2023 included development revenue of $100,000 and grant revenue of $37,388. Revenue for the nine months ended September 30, 2022 consisted of grant revenue.

 

The grant revenue for the nine months ended September 30, 2023 and 2022 related primarily to the $1.2 million subcontract with DTI discussed above. We completed our work under this subcontract in the second quarter of 2023. For the nine months ended September 30, 2022, grant revenue also included revenue related to a second subcontract with DTI. In late 2021, we entered into and began work under a $50,000 subcontract with DTI under a Phase I Small Business Innovation Research grant from the U.S. Department of Energy to develop a B-TRAN™-driven low loss alternating current SSCB. We completed our work under this subcontract in the first quarter of 2022.

 

Cost of Revenue. Cost of revenue for the nine months ended September 30, 2023 and 2022 was $114,188 and $186,661, respectively. The cost of revenue relates to the development agreement and the NAVSEA subcontract with DTI for the nine months ended September 30, 2023 and the subcontracts with DTI for the nine months ended September 30, 2022. For the subcontracts with DTI, cost of grant revenue is equal to the associated grant revenue resulting in no gross profit.

 

Gross Profit. Gross profit for the nine months ended September 30, 2023 and 2022 was $23,200 and $0, respectively. The gross profit in the nine months ended September 30, 2023 related to the development agreement. We recorded no gross profit for the DTI subcontracts in the nine months ended September 30, 2023 and 2022 and expect no gross profit from government grants that we are pursuing or may pursue in the future.

 

Research and Development Expenses. Research and development expenses increased by $2,000,173, or 86%, to $4,337,254 in the nine months ended September 30, 2023 from $2,337,081 in the nine months ended September 30, 2022. The increase was due to higher stock-based compensation expense of $851,265, semiconductor fabrication costs of $674,098, personnel costs of $286,767, engineering services, primarily device packaging, of $258,812 and other B-TRAN™ spending of $4,390, slightly offset by lower contract labor costs of $75,159.

 

In the nine months ended September 30, 2023, higher semiconductor fabrication costs included wafer runs at a high-volume production foundry and the start of qualification of a second high-volume production foundry. In the nine months ended September 30, 2022, semiconductor fabrication costs included only fabrication costs incurred at development foundries. In the nine months ended September 30, 2023, stock-based compensation expense included $623,329 related to performance stock units granted in December 2022 with a derived service period of 0.89 years.

 

General and Administrative Expenses. General and administrative expenses increased by $326,408, or 14%, to $2,682,951 in the nine months ended September 30, 2023 from $2,356,543 in the nine months ended September 30, 2022. The increase was due to higher stock-based compensation expense of $271,083 and personnel costs of $138,027, partly offset by lower consulting costs of $69,550 (relating to our compensation benchmarking study in the nine months ended September 30, 2022) and other net costs of $13,152. In the nine months ended September 30, 2023, stock-based compensation expense included $198,168 related to performance stock units granted in December 2022 with a derived service period of 0.89 years.

 

 

Sales and Marketing Expenses. Sales and marketing expenses increased by $210,165, or 32%, to $870,189 in the nine months ended September 30, 2023 from $660,024 in the nine months ended September 30, 2022. The increase was due to higher personnel costs of $129,303, search and placement fees of $43,750 and stock-based compensation of $40,733, slightly offset by lower other net spending of $3,621.

 

Loss from Operations. Our loss from operations for the nine months ended September 30, 2023 was $7,867,194, or 47% higher, than the $5,353,648 loss from operations for the nine months ended September 30, 2022 for the reasons discussed above.

 

Interest Income, Net. Net interest income was $318,922 for the nine months ended September 30, 2023 compared to $55,243 for the nine months ended September 30, 2022 due to the impact of higher interest rates on our money market account.

 

Net Loss. Our net loss for the nine months ended September 30, 2023 was $7,548,272, or 42% higher, as compared to a net loss of $5,298,405 for the nine months ended September 30, 2022, for the reasons discussed above.

 

Liquidity and Capital Resources

 

In the nine months ended September 30, 2023, we have generated development and grant revenue only. We expect initial product sales as early as late 2023, depending on the ultimate date that our initial product is fabricated and available for commercial sale. We have incurred losses since inception. We have funded our operations to date through the sale of common stock.

 

At September 30, 2023, we had cash and cash equivalents of $10.8 million. Our net working capital at September 30, 2023 was $10.4 million. We had no outstanding debt at September 30, 2023.

 

We believe that our cash and cash equivalents on hand will be sufficient to meet our ongoing liquidity needs for at least the next twelve months from the date of filing this Quarterly Report on Form 10-Q; however, we will require additional funds in the future to fully implement our plan of operation and there can be no assurance that, if needed, we will be able to secure additional debt or equity financing on terms acceptable to us or at all. 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.

 

Operating activities in the nine months ended September 30, 2023 resulted in cash outflows of $5,178,734, which were due to the net loss for the period of $7,548,272, partly offset by stock-based compensation of $1,859,209, depreciation and amortization of $193,900 and favorable balance sheet timing of $316,429.

 

Operating activities in the nine months ended September 30, 2022 resulted in cash outflows of $4,512,733, which were due to the net loss for the period of $5,298,405 and unfavorable changes in net working capital of $145,112, partly offset by stock-based compensation of $696,127, stock issued for services of $100,100 and depreciation and amortization of $134,557.

 

We expect an increase in cash outflows from operating activities in the fourth quarter of 2023 as we continue to commercialize our B-TRAN™ technology.

 

Investing activities in the nine months ended September 30, 2023 and 2022 resulted in cash outflows of $406,035 and $206,879, respectively, for the acquisition of intangible assets and fixed assets.

 

Critical Accounting Estimates

 

There have been no significant changes during the nine months ended September 30, 2023 to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

 

 

Trends, Events and Uncertainties

 

There are no material changes from trends, events or uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a smaller reporting company, we are not required to provide this information.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that this information is accumulated and communicated to management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act), under the supervision and with the participation of its Chief Executive Officer (principal executive officer) and its Chief Financial Officer (principal financial and accounting officer) of the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2023 and has concluded that, as of September 30, 2023, the Company’s disclosure controls and procedures are effective.

 

Changes in Internal Control over Financial Reporting

 

There have been no material changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

Limitations on the Effectiveness of Controls

 

Control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems’ objectives are being met. Further, the design of any system of controls must reflect the fact that there are resource constraints, and the benefits of all controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of error or mistake. Control systems can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

 

PART II-OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We may be subject to litigation from time to time in the ordinary course of business. We are not currently party to any legal proceedings.

 

ITEM 1A. RISK FACTORS

 

There are no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 

 

ITEM 6. EXHIBITS

 

Exhibit
Number

 

Document

     

31.1*

 

Certification of Principal Executive Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     

31.2*

 

Certification of Principal Financial Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     

32.1**

 

Certification pursuant to 18 U.S.C. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

     

101.INS*

 

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

     

101.SCH*

 

Inline XBRL Taxonomy Extension Schema Document

     

101.CAL*

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document

     

101.DEF*

 

Inline XBRL Taxonomy Extension Definition Linkbase Document

     

10.LAB*

 

Inline XBRL Taxonomy Extension Label Linkbase Document

     

101.PRE*

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document

     

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)

 


* Filed herewith
** Furnished herewith

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated November 14, 2023

IDEAL POWER INC.  

   
 

By:

/s/ R. Daniel Brdar

   

R. Daniel Brdar 

   

Chief Executive Officer  

     
 

By:

/s/ Timothy W. Burns  

   

Timothy W. Burns  

   

Chief Financial Officer  

 

20
EX-31.1 2 ex_595869.htm EXHIBIT 31.1 ex_595869.htm

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

 

I, R. Daniel Brdar, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Ideal Power Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: November 14, 2023

 
   

/s/ R. Daniel Brdar

 

R. Daniel Brdar

 

Chief Executive Officer (Principal Executive Officer)

 

 

 
EX-31.2 3 ex_595870.htm EXHIBIT 31.2 ex_595870.htm

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

 

I, Timothy W. Burns, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Ideal Power Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: November 14, 2023

 
   

/s/ Timothy W. Burns

 

Timothy W. Burns

 

Chief Financial Officer (Principal Financial and

 

Accounting Officer)

 

 

 
EX-32.1 4 ex_595871.htm EXHIBIT 32.1 ex_595871.htm

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the periodic report of Ideal Power Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2023 as filed with the Securities and Exchange Commission (the “Report”), we, R. Daniel Brdar, Chief Executive Officer (Principal Executive Officer) and Timothy W. Burns, Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

 

(1)         The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

 

(2)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

 

 

Date: November 14, 2023

 
   

/s/ R. Daniel Brdar

 

R. Daniel Brdar

 

Chief Executive Officer (Principal Executive Officer)

 
   

/s/ Timothy W. Burns

 

Timothy W. Burns

 

Chief Financial Officer (Principal Financial and

 

Accounting Officer)

 

 

 
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Document And Entity Information - shares
9 Months Ended
Sep. 30, 2023
Nov. 10, 2023
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2023  
Document Transition Report false  
Entity File Number 001-36216  
Entity Registrant Name IDEAL POWER INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 14-1999058  
Entity Address, Address Line One 5508 Highway 290 West, Suite 120  
Entity Address, City or Town Austin  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 78735  
City Area Code 512  
Local Phone Number 264-1542  
Title of 12(b) Security Common Stock, par value $0.001 per share  
Trading Symbol IPWR  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding (in shares)   5,945,347
Entity Central Index Key 0001507957  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q3  
Amendment Flag false  
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Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 10,760,854 $ 16,345,623
Accounts receivable, net 100,000 65,936
Prepayments and other current assets 382,091 491,365
Total current assets 11,242,945 16,902,924
Property and equipment, net 343,365 200,103
Intangible assets, net 2,556,861 2,036,431
Right of use asset 202,474 248,720
Other assets 13,311 11,189
Total assets 14,358,956 19,399,367
Current liabilities:    
Accounts payable 63,955 130,503
Accrued expenses 690,655 254,218
Current portion of lease liability 69,128 64,597
Total current liabilities 823,738 449,318
Long-term lease liability 150,588 202,987
Other long-term liabilities 1,165,089 838,458
Total liabilities 2,139,415 1,490,763
Commitments and Contingencies  
Stockholders’ equity:    
Common stock, $0.001 par value; 50,000,000 shares authorized; 5,946,668 shares issued and 5,945,347 shares outstanding at September 30, 2023 and 5,926,001 shares issued and 5,924,680 shares outstanding at December 31, 2022 5,947 5,926
Additional paid-in capital 106,870,506 105,011,318
Treasury stock, at cost, 1,321 shares at September 30, 2023 and December 31, 2022 13,210 13,210
Accumulated deficit (94,643,702) (87,095,430)
Total stockholders’ equity 12,219,541 17,908,604
Total liabilities and stockholders’ equity $ 14,358,956 $ 19,399,367
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.23.3
Balance Sheets (Unaudited) (Parentheticals) - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Common Stock, Par or Stated Value Per Share (in dollars per share) $ 0.001 $ 0.001
Common Stock, Shares Authorized (in shares) 50,000,000 50,000,000
Common Stock, Shares, Issued (in shares) 5,946,668 5,926,001
Common Stock, Shares, Outstanding (in shares) 5,945,347 5,924,680
Treasury Stock, Common, Shares (in shares) 1,321 1,321
XML 13 R4.htm IDEA: XBRL DOCUMENT v3.23.3
Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Total revenue $ 1,557 $ 10,675 $ 137,388 $ 186,661
Total cost of revenue 2,787 10,675 114,188 186,661
Gross profit (1,230) 0 23,200 0
Operating expenses:        
Research and development 1,690,538 780,151 4,337,254 2,337,081
General and administrative 854,025 768,957 2,682,951 2,356,543
Sales and marketing 293,963 207,443 870,189 660,024
Total operating expenses 2,838,526 1,756,551 7,890,394 5,353,648
Loss from operations (2,839,756) (1,756,551) (7,867,194) (5,353,648)
Interest income, net 99,275 52,781 318,922 55,243
Net loss $ (2,740,481) $ (1,703,770) $ (7,548,272) $ (5,298,405)
Net loss per share – basic and diluted (in dollars per share) $ (0.44) $ (0.28) $ (1.22) $ (0.86)
Weighted average number of shares outstanding – basic and diluted (in shares) 6,192,286 6,157,625 6,185,447 6,156,876
Development Revenue [Member]        
Total revenue $ 1,557 $ 0 $ 100,000 $ 0
Total cost of revenue 2,787 0 76,800 0
Grant [Member]        
Total revenue 0 10,675 37,388 186,661
Total cost of revenue $ 0 $ 10,675 $ 37,388 $ 186,661
XML 14 R5.htm IDEA: XBRL DOCUMENT v3.23.3
Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash flows from operating activities:    
Net loss $ (7,548,272) $ (5,298,405)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 193,900 134,557
Stock-based compensation 1,859,209 696,127
Stock issued for services 0 100,100
Decrease (increase) in operating assets:    
Accounts receivable 34,604 (183,934)
Prepaid expenses and other assets (153,398) 360,847
Increase (decrease) in operating liabilities:    
Accounts payable (66,548) (110,657)
Accrued expenses and other liabilities 263,643 142,458
Net cash used in operating activities (5,178,734) (4,512,733)
Cash flows from investing activities:    
Purchase of property and equipment 198,338 118,239
Acquisition of intangible assets 207,697 88,640
Net cash used in investing activities (406,035) (206,879)
Net decrease in cash and cash equivalents (5,584,769) (4,719,612)
Cash and cash equivalents at beginning of period 16,345,623 23,170,149
Cash and cash equivalents at end of period $ 10,760,854 $ 18,450,537
XML 15 R6.htm IDEA: XBRL DOCUMENT v3.23.3
Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock, Common [Member]
Retained Earnings [Member]
Total
Balances (in shares) at Dec. 31, 2021 5,893,767   1,321    
Balances at Dec. 31, 2021 $ 5,894 $ 104,063,321 $ (13,210) $ (79,906,080) $ 24,149,925
Exercise of options (in shares) 1,351   0    
Exercise of options $ 1 (1) $ 0 0 0
Stock issued for services (in shares) 10,000   0    
Stock issued for services $ 10 100,090 $ 0 0 100,100
Stock-based compensation 0 231,765 0 0 231,765
Net loss $ 0 0 $ 0 (1,904,641) (1,904,641)
Balances (in shares) at Mar. 31, 2022 5,905,118   1,321    
Balances at Mar. 31, 2022 $ 5,905 104,395,175 $ (13,210) (81,810,721) 22,577,149
Balances (in shares) at Dec. 31, 2021 5,893,767   1,321    
Balances at Dec. 31, 2021 $ 5,894 104,063,321 $ (13,210) (79,906,080) 24,149,925
Net loss         (5,298,405)
Balances (in shares) at Sep. 30, 2022 5,905,118   1,321    
Balances at Sep. 30, 2022 $ 5,905 104,859,537 $ (13,210) (85,204,485) 19,647,747
Balances (in shares) at Mar. 31, 2022 5,905,118   1,321    
Balances at Mar. 31, 2022 $ 5,905 104,395,175 $ (13,210) (81,810,721) 22,577,149
Stock-based compensation 0 230,473 0 0 230,473
Net loss $ 0 0 $ 0 (1,689,994) (1,689,994)
Balances (in shares) at Jun. 30, 2022 5,905,118   1,321    
Balances at Jun. 30, 2022 $ 5,905 104,625,648 $ (13,210) (83,500,715) 21,117,628
Stock-based compensation 0 233,889 0 0 233,889
Net loss $ 0 0 $ 0 (1,703,770) (1,703,770)
Balances (in shares) at Sep. 30, 2022 5,905,118   1,321    
Balances at Sep. 30, 2022 $ 5,905 104,859,537 $ (13,210) (85,204,485) 19,647,747
Balances (in shares) at Dec. 31, 2022 5,926,001   1,321    
Balances at Dec. 31, 2022 $ 5,926 105,011,318 $ (13,210) (87,095,430) 17,908,604
Stock-based compensation 0 609,926 0 0 609,926
Net loss $ 0 0 $ 0 (2,527,985) (2,527,985)
Vesting of restricted stock units (in shares) 6,889   0    
Vesting of restricted stock units $ 7 (7) $ 0 0 0
Balances (in shares) at Mar. 31, 2023 5,932,890   1,321    
Balances at Mar. 31, 2023 $ 5,933 105,621,237 $ (13,210) (89,623,415) 15,990,545
Balances (in shares) at Dec. 31, 2022 5,926,001   1,321    
Balances at Dec. 31, 2022 $ 5,926 105,011,318 $ (13,210) (87,095,430) 17,908,604
Net loss         (7,548,272)
Balances (in shares) at Sep. 30, 2023 5,946,668   1,321    
Balances at Sep. 30, 2023 $ 5,947 106,870,506 $ (13,210) (94,643,702) 12,219,541
Balances (in shares) at Mar. 31, 2023 5,932,890   1,321    
Balances at Mar. 31, 2023 $ 5,933 105,621,237 $ (13,210) (89,623,415) 15,990,545
Stock-based compensation 0 623,281 0 0 623,281
Net loss $ 0 0 $ 0 (2,279,806) (2,279,806)
Vesting of restricted stock units (in shares) 6,889   0    
Vesting of restricted stock units $ 7 (7) $ 0 0 0
Balances (in shares) at Jun. 30, 2023 5,939,779   1,321    
Balances at Jun. 30, 2023 $ 5,940 106,244,511 $ (13,210) (91,903,221) 14,334,020
Stock-based compensation 0 626,002 0 0 626,002
Net loss $ 0 0 $ 0 (2,740,481) (2,740,481)
Vesting of restricted stock units (in shares) 6,889   0    
Vesting of restricted stock units $ 7 (7) $ 0 0 0
Balances (in shares) at Sep. 30, 2023 5,946,668   1,321    
Balances at Sep. 30, 2023 $ 5,947 $ 106,870,506 $ (13,210) $ (94,643,702) $ 12,219,541
XML 16 R7.htm IDEA: XBRL DOCUMENT v3.23.3
Note 1 - Organization and Description of Business
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Business Description and Basis of Presentation [Text Block]

Note 1 – Organization and Description of Business

 

Ideal Power Inc. (the “Company”) was incorporated in Texas on May 17, 2007 under the name Ideal Power Converters, Inc. The Company changed its name to Ideal Power Inc. on July 8, 2013 and re-incorporated in Delaware on July 15, 2013. With headquarters in Austin, Texas, the Company is focused on the further development and commercialization of its Bidirectional bipolar junction TRANsistor (B-TRAN™) solid-state switch technology.

 

Since its inception, the Company has financed its research and development efforts and operations primarily through the sale of common stock. The Company’s continued operations are dependent upon, among other things, its ability to obtain adequate sources of funding through future revenues, follow-on stock offerings, issuances of warrants, debt financing, co-development agreements, government grants, sale or licensing of developed intellectual property or other alternatives.

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.23.3
Note 2 - Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

Note 2 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 30, 2023.

 

In the opinion of management, these financial statements reflect all normal recurring, and other adjustments, necessary for a fair presentation. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.

 

Net Loss Per Share

 

In accordance with Accounting Standards Codification 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic net loss per share. As such, for the three and nine months ended September 30, 2023 and 2022, the Company included pre-funded warrants to purchase 253,828 shares of common stock in its computation of net loss per share. The pre-funded warrants were issued in November 2019 with an exercise price of $0.001. See Note 7.

 

In periods with a net loss, no common share equivalents are included in the computation of diluted net loss per share because their effect would be anti-dilutive. At September 30, 2023 and 2022, potentially dilutive shares outstanding amounted to 1,629,117 and 1,412,368 shares, respectively, and exclude prefunded warrants to purchase shares of common stock.

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standard, if adopted, would have a material impact on the Company’s financial statements.

 

 

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.23.3
Note 3 - Intangible Assets
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]

Note 3 – Intangible Assets

 

Intangible assets, net consisted of the following:

 

   

September 30,

   

December 31,

 
   

2023

   

2022

 
   

(unaudited)

         

Patents

  $ 1,456,513     $ 1,263,930  

Trademarks

    15,114        

Other intangible assets

    1,843,036       1,391,479  
      3,314,663       2,655,409  

Accumulated amortization - patents

    (256,340 )     (211,078 )

Accumulated amortization - other intangible assets

    (501,462 )     (407,900 )
    $ 2,556,861     $ 2,036,431  

 

At September 30, 2023 and December 31, 2022, the Company had capitalized $472,108 and $341,610, respectively, for costs related to patents and trademarks that have not been awarded. Cost related to patents that have not yet been awarded are not amortized until patent issuance. As further discussed in Note 5, the Company entered into a license agreement in April 2023 and capitalized $451,557 in other intangible assets related to this agreement.

 

Amortization expense amounted to $50,420 and $138,824 for the three and nine months ended September 30, 2023, respectively, and $37,442 and $111,352 for the three and nine months ended September 30, 2022, respectively. Amortization expense for the succeeding five years and thereafter is $50,420 (remaining three months of 2023), $201,679 (2024-2027) and $1,227,617 (thereafter).

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.23.3
Note 4 - Lease
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

Note 4 – Lease

 

In March 2021, the Company entered into a lease agreement for 4,070 square feet of office and laboratory space located in Austin, Texas. 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 annual base rent in the second year of the lease was $77,330 and increases by $2,035 in each succeeding year of the lease. In addition, the Company is required to pay its proportionate share of operating costs for the building under this triple net lease. The lease contains a 5-year fair market renewal option. It does not contain a termination option. The Company recognized a right of use asset of $339,882 and a corresponding lease liability for this lease upon lease commencement.

 

For purposes of calculating the right of use asset and lease liability included in the Company’s financial statements, the Company estimated its incremental borrowing rate at 6% per annum.

 

Future minimum payments under the lease are as follows:

 

For the Year Ended December 31,

       

2023 (remaining)

  $ 19,841  

2024

    80,552  

2025

    82,587  

2026

    56,132  

Total lease payments

    239,112  

Less: imputed interest

    (19,396 )

Total lease liability

    219,716  

Less: current portion of lease liability

    (69,128 )

Long-term lease liability

  $ 150,588  

 

At September 30, 2023, the remaining lease term was 35 months.

 

 

For the nine months ended September 30, 2023 and 2022, operating cash outflows for lease payments totaled $58,676 and $57,150, respectively. For both the three months ended September 30, 2023 and 2022, operating lease cost, recognized on a straight-line basis, totaled $19,018, and for both the nine months ended September 30, 2023 and 2022, operating lease cost, recognized on a straight-line basis, totaled $57,053.

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.23.3
Note 5 - Commitments and Contingencies
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

Note 5 – Commitments and Contingencies

 

License Agreement

 

In 2015, the Company entered into a licensing agreement which expires in February 2033. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor power switches which enhances its intellectual property portfolio. The Company will pay $100,000 annually under this agreement.

 

In April 2023, the Company amended a 2021 license agreement which expires in February 2034. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor drive circuitry which enhances its intellectual property portfolio. The Company will pay $50,000 annually under this agreement. At inception, the Company recorded an intangible asset and other long-term liability of $451,557, for the estimated present value of future payments under the licensing agreement.

 

At September 30, 2023 and December 31, 2022, the other long-term liability for the estimated present value of future payments under the licensing agreements was $1,165,089 and $838,458, respectively. The Company is accruing interest for future payments related to these agreements.

 

Legal Proceedings

 

The Company may be subject to litigation from time to time in the ordinary course of business. The Company is not currently party to any legal proceedings.

 

Indemnification Obligations

 

The employment agreements of Company executives include an indemnification provision whereby the Company shall indemnify and defend, at the Company’s expense, its executives so long as an executive’s actions were taken in good faith and in furtherance of the Company’s business and within the scope of executive’s duties and authority.

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.23.3
Note 6 - Equity Incentive Plan
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

Note 6 — Equity Incentive Plan

 

In May 2013, the Company adopted the 2013 Equity Incentive Plan (as amended and restated, the “Plan”) and reserved shares of common stock for issuance under the Plan, which was last amended in June 2023. The Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”). At September 30, 2023, 524,680 shares of common stock were available for issuance under the Plan.

 

A summary of the Company’s stock option activity and related information is as follows:

 

                   

Weighted

 
           

Weighted

   

Average

 
           

Average

   

Remaining

 
   

Stock

   

Exercise

   

Life

 
   

Options

   

Price

   

(in years)

 

Outstanding at December 31, 2022

    513,948     $ 7.59       6.6  

Granted

    12,000     $ 11.96          

Outstanding at September 30, 2023

    525,948     $ 7.69       5.9  

Exercisable at September 30, 2023

    463,950     $ 7.09       5.6  

 

 

A summary of the Company’s restricted stock unit (RSU) and performance stock unit (PSU) activity is as follows:

 

   

RSUs

   

PSUs

 

Outstanding at December 31, 2022

    183,666       114,000  

Granted

    39,750        

Vested

    (20,667 )      

Outstanding at September 30, 2023

    202,749       114,000  

 

During the nine months ended September 30, 2023, the Company granted 27,550 RSUs to Board members, 12,200 RSUs to employees and 12,000 stock options to employees under the Plan. The estimated fair value of these equity grants, calculated using the Black-Scholes option valuation model for the stock options, was $529,389, $263,558 of which was recognized during the nine months ended September 30, 2023.

 

At September 30, 2023, there was $1,944,010of unrecognized compensation cost related to non-vested equity awards granted under the Plan. That cost is expected to be recognized over a weighted average period of 0.9 years.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.23.3
Note 7 - Warrants
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Warrants Disclosure [Text Block]

Note 7 — Warrants

 

At September 30, 2023 and December 31, 2022, the Company had 786,420 warrants outstanding with a weighted average exercise price of $5.19 per share and 253,828 pre-funded warrants outstanding with an exercise price of $0.001 per share. The weighted average remaining life, excluding the 253,828 pre-funded warrants with no expiration date, of the outstanding warrants is 1.4 years.

 

At September 30, 2023, all warrants were exercisable, although the warrants held by certain of the Company’s warrant holders may be exercised only to the extent that the total number of shares of common stock then beneficially owned by such warrant holder does not exceed 4.99% (or, at the investor’s election, 9.99%) of the outstanding shares of the Company’s common stock.

 

 

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.23.3
Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 30, 2023.

 

In the opinion of management, these financial statements reflect all normal recurring, and other adjustments, necessary for a fair presentation. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.

Earnings Per Share, Policy [Policy Text Block]

Net Loss Per Share

 

In accordance with Accounting Standards Codification 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic net loss per share. As such, for the three and nine months ended September 30, 2023 and 2022, the Company included pre-funded warrants to purchase 253,828 shares of common stock in its computation of net loss per share. The pre-funded warrants were issued in November 2019 with an exercise price of $0.001. See Note 7.

 

In periods with a net loss, no common share equivalents are included in the computation of diluted net loss per share because their effect would be anti-dilutive. At September 30, 2023 and 2022, potentially dilutive shares outstanding amounted to 1,629,117 and 1,412,368 shares, respectively, and exclude prefunded warrants to purchase shares of common stock.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standard, if adopted, would have a material impact on the Company’s financial statements.

XML 24 R15.htm IDEA: XBRL DOCUMENT v3.23.3
Note 3 - Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
   

September 30,

   

December 31,

 
   

2023

   

2022

 
   

(unaudited)

         

Patents

  $ 1,456,513     $ 1,263,930  

Trademarks

    15,114        

Other intangible assets

    1,843,036       1,391,479  
      3,314,663       2,655,409  

Accumulated amortization - patents

    (256,340 )     (211,078 )

Accumulated amortization - other intangible assets

    (501,462 )     (407,900 )
    $ 2,556,861     $ 2,036,431  
XML 25 R16.htm IDEA: XBRL DOCUMENT v3.23.3
Note 4 - Lease (Tables)
9 Months Ended
Sep. 30, 2023
Notes Tables  
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

For the Year Ended December 31,

       

2023 (remaining)

  $ 19,841  

2024

    80,552  

2025

    82,587  

2026

    56,132  

Total lease payments

    239,112  

Less: imputed interest

    (19,396 )

Total lease liability

    219,716  

Less: current portion of lease liability

    (69,128 )

Long-term lease liability

  $ 150,588  
XML 26 R17.htm IDEA: XBRL DOCUMENT v3.23.3
Note 6 - Equity Incentive Plan (Tables)
9 Months Ended
Sep. 30, 2023
Notes Tables  
Share-Based Payment Arrangement, Option, Activity [Table Text Block]
                   

Weighted

 
           

Weighted

   

Average

 
           

Average

   

Remaining

 
   

Stock

   

Exercise

   

Life

 
   

Options

   

Price

   

(in years)

 

Outstanding at December 31, 2022

    513,948     $ 7.59       6.6  

Granted

    12,000     $ 11.96          

Outstanding at September 30, 2023

    525,948     $ 7.69       5.9  

Exercisable at September 30, 2023

    463,950     $ 7.09       5.6  
Share-Based Payment Arrangement, Outstanding Award, Activity, Excluding Option [Table Text Block]
   

RSUs

   

PSUs

 

Outstanding at December 31, 2022

    183,666       114,000  

Granted

    39,750        

Vested

    (20,667 )      

Outstanding at September 30, 2023

    202,749       114,000  
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.23.3
Note 2 - Summary of Significant Accounting Policies (Details Textual) - $ / shares
9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Nov. 30, 2019
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 5.19   $ 5.19  
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 1,629,117 1,412,368    
Prefunded Warrants [Member]        
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) 253,828 253,828    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 0.001   $ 0.001 $ 0.001
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.23.3
Note 3 - Intangible Assets (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Apr. 30, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets, Gross $ 3,314,663   $ 3,314,663     $ 2,655,409
Amortization of Intangible Assets 50,420 $ 37,442 138,824 $ 111,352    
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year 50,420   50,420      
Finite-Lived Intangible Asset, Expected Amortization, Year Two 201,679   201,679      
Finite-Lived Intangible Asset, Expected Amortization, Year Three 201,679   201,679      
Finite-Lived Intangible Asset, Expected Amortization, Year Four 201,679   201,679      
Finite-Lived Intangible Asset, Expected Amortization, Year One 201,679   201,679      
Finite Lived Intangible Asset Expected Amortization After Year Four 1,227,617   1,227,617      
Patents and Trademarks Yet to be Awarded [Member]            
Finite-Lived Intangible Assets, Gross 472,108   472,108     $ 341,610
Licensing Agreements [Member]            
Finite-Lived Intangible Assets, Gross $ 451,557   $ 451,557   $ 451,557  
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Note 3 - Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets, Gross $ 3,314,663 $ 2,655,409
Finite-Lived Intangible Assets, Net 2,556,861 2,036,431
Patents [Member]    
Finite-Lived Intangible Assets, Gross 1,456,513 1,263,930
Accumulated amortization (256,340) (211,078)
Trademarks [Member]    
Finite-Lived Intangible Assets, Gross 15,114 0
Other Intangible Assets [Member]    
Finite-Lived Intangible Assets, Gross 1,843,036 1,391,479
Accumulated amortization $ (501,462) $ (407,900)
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Note 4 - Lease (Details Textual)
3 Months Ended 9 Months Ended
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Mar. 31, 2021
USD ($)
ft²
Operating Lease, Right-of-Use Asset $ 202,474   $ 202,474   $ 248,720  
Lessee, Operating Lease, Discount Rate           6.00%
Lessee, Operating Lease, Remaining Lease Term 35 months   35 months      
Operating Lease, Payments     $ 58,676 $ 57,150    
Operating Lease, Cost $ 19,018 $ 19,018 $ 57,053 $ 57,053    
Office and Laboratory Space [Member]            
Area of Real Estate Property | ft²           4,070
Lessee, Operating Lease, Term of Contract           63 months
Operating Leases, Future Minimum Payments, Due In One Year           $ 56,471
Lessee Operating Lease, Abated Rent           18,824
Lessee, Operating Lease, Liability, to be Paid, Year Two           77,330
Operating Leases, Increases In Base Rent, Amount           2,035
Operating Lease, Right-of-Use Asset           $ 339,882
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Note 4 - Lease - Future Minimum Payments (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
2023 (remaining) $ 19,841  
Lessee, Operating Lease, Liability, to be Paid, Year One 80,552  
Lessee, Operating Lease, Liability, to be Paid, Year Two 82,587  
Lessee, Operating Lease, Liability, to be Paid, Year Three 56,132  
Total lease payments 239,112  
Less: imputed interest (19,396)  
Total lease liability 219,716  
Less: current portion of lease liability (69,128) $ (64,597)
Long-term lease liability $ 150,588 $ 202,987
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Note 5 - Commitments and Contingencies (Details Textual) - USD ($)
Sep. 30, 2023
Apr. 30, 2023
Dec. 31, 2022
Dec. 31, 2015
Finite-Lived Intangible Assets, Gross $ 3,314,663   $ 2,655,409  
Licensing Agreements [Member]        
Commitments, Annual Payment   $ 50,000   $ 100,000
Finite-Lived Intangible Assets, Gross 451,557 $ 451,557    
Contractual Obligation $ 1,165,089   $ 838,458  
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Note 6 - Equity Incentive Plan (Details Textual)
9 Months Ended
Sep. 30, 2023
USD ($)
shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross 12,000
Restricted Stock Units (RSUs) [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted 39,750
The 2013 Equity Incentive Plan [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant 524,680
Share Based Compensation Arrangement By Share Based Payment Award, Grants In Period, Fair Value | $ $ 529,389
Share-Based Payment Arrangement, Expense | $ 263,558
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ $ 1,944,010
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition 10 months 24 days
The 2013 Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Employee [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross 12,000
The 2013 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Employee [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted 12,200
The 2013 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Board Member [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted 27,550
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Note 6 - Equity Incentive Plan - Stock Option Activity (Details) - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Outstanding, options (in shares) 513,948  
Outstanding, weighted average exercise price (in dollars per share) $ 7.59  
Outstanding, weighted average remaining life (Year) 5 years 10 months 24 days 6 years 7 months 6 days
Granted, options (in shares) 12,000  
Granted, weighted average exercise price (in dollars per share) $ 11.96  
Outstanding, options (in shares) 525,948 513,948
Outstanding, weighted average exercise price (in dollars per share) $ 7.69 $ 7.59
Exercisable, options (in shares) 463,950  
Exercisable, weighted average exercise price (in dollars per share) $ 7.09  
Exercisable, weighted average remaining life (Year) 5 years 7 months 6 days  
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Note 6 - Equity Incentive Plan - Other Award Activity (Details)
9 Months Ended
Sep. 30, 2023
shares
Restricted Stock Units (RSUs) [Member]  
Outstanding at December 31, 2022 (in shares) 183,666
Granted (in shares) 39,750
Vested (in shares) (20,667)
Outstanding at September 30, 2023 (in shares) 202,749
Performance Stock Units (PSUs) [Member]  
Outstanding at December 31, 2022 (in shares) 114,000
Granted (in shares) 0
Vested (in shares) 0
Outstanding at September 30, 2023 (in shares) 114,000
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Note 7 - Warrants (Details Textual) - $ / shares
9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Nov. 30, 2019
Class of Warrant or Right, Outstanding 786,420 786,420  
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 5.19 $ 5.19  
Warrants and Rights Outstanding, Term 1 year 4 months 24 days    
Maximum Beneficial Ownership Percentage of Warrants 4.99%    
Maximum Beneficial Ownership Percentage of Warrants Upon Investor's Election 9.99%    
Prefunded Warrants [Member]      
Class of Warrant or Right, Outstanding 253,828 253,828  
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 0.001 $ 0.001 $ 0.001
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DE 14-1999058 5508 Highway 290 West, Suite 120 Austin TX 78735 512 264-1542 Common Stock, par value $0.001 per share IPWR NASDAQ Yes Yes Non-accelerated Filer true false false 5945347 10760854 16345623 100000 65936 382091 491365 11242945 16902924 343365 200103 2556861 2036431 202474 248720 13311 11189 14358956 19399367 63955 130503 690655 254218 69128 64597 823738 449318 150588 202987 1165089 838458 2139415 1490763 0.001 0.001 50000000 50000000 5946668 5945347 5926001 5924680 5947 5926 106870506 105011318 1321 1321 13210 13210 -94643702 -87095430 12219541 17908604 14358956 19399367 1557 0 100000 0 0 10675 37388 186661 1557 10675 137388 186661 2787 0 76800 0 0 10675 37388 186661 2787 10675 114188 186661 -1230 0 23200 0 1690538 780151 4337254 2337081 854025 768957 2682951 2356543 293963 207443 870189 660024 2838526 1756551 7890394 5353648 -2839756 -1756551 -7867194 -5353648 99275 52781 318922 55243 -2740481 -1703770 -7548272 -5298405 -0.44 -0.28 -1.22 -0.86 6192286 6157625 6185447 6156876 -7548272 -5298405 193900 134557 1859209 696127 0 100100 34604 -183934 -153398 360847 -66548 -110657 263643 142458 -5178734 -4512733 198338 118239 207697 88640 -406035 -206879 -5584769 -4719612 16345623 23170149 10760854 18450537 5893767 5894 104063321 1321 -13210 -79906080 24149925 1351 1 -1 0 0 0 0 10000 10 100090 0 0 0 100100 0 231765 0 0 231765 0 0 0 -1904641 -1904641 5905118 5905 104395175 1321 -13210 -81810721 22577149 0 230473 0 0 230473 0 0 0 -1689994 -1689994 5905118 5905 104625648 1321 -13210 -83500715 21117628 0 233889 0 0 233889 0 0 0 -1703770 -1703770 5905118 5905 104859537 1321 -13210 -85204485 19647747 5926001 5926 105011318 1321 -13210 -87095430 17908604 6889 7 -7 0 0 0 0 0 609926 0 0 609926 0 0 0 -2527985 -2527985 5932890 5933 105621237 1321 -13210 -89623415 15990545 6889 7 -7 0 0 0 0 0 623281 0 0 623281 0 0 0 -2279806 -2279806 5939779 5940 106244511 1321 -13210 -91903221 14334020 6889 7 -7 0 0 0 0 0 626002 0 0 626002 0 0 0 -2740481 -2740481 5946668 5947 106870506 1321 -13210 -94643702 12219541 <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Note</b> <b>1</b> –<b> Organization and Description of Business</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">Ideal Power Inc. (the “Company”) was incorporated in Texas on May 17, 2007 under the name Ideal Power Converters, Inc. The Company changed its name to Ideal Power Inc. on July 8, 2013 and re-incorporated in Delaware on July 15, 2013. With headquarters in Austin, Texas, the Company is focused on the further development and commercialization of its Bidirectional bipolar junction TRANsistor (B-TRAN™) solid-state switch technology.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">Since its inception, the Company has financed its research and development efforts and operations primarily through the sale of common stock. The Company’s continued operations are dependent upon, among other things, its ability to obtain adequate sources of funding through future revenues, follow-on stock offerings, issuances of warrants, debt financing, co-development agreements, government grants, sale or licensing of developed intellectual property or other alternatives.</p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Note</b> <b>2</b> –<b> Summary of Significant Accounting Policies</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Basis of Presentation</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">The accompanying unaudited financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 30, 2023.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In the opinion of management, these financial statements reflect all normal recurring, and other adjustments, necessary for a fair presentation. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Net Loss Per Share</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In accordance with Accounting Standards Codification 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic net loss per share. As such, for the three and nine months ended September 30, 2023 and 2022, the Company included pre-funded warrants to purchase 253,828 shares of common stock in its computation of net loss per share. The pre-funded warrants were issued in November 2019 with an exercise price of $0.001. See Note 7.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In periods with a net loss, no common share equivalents are included in the computation of diluted net loss per share because their effect would be anti-dilutive. At September 30, 2023 and 2022, potentially dilutive shares outstanding amounted to 1,629,117 and 1,412,368 shares, respectively, and exclude prefunded warrants to purchase shares of common stock.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Recent Accounting Pronouncements</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">Management does not believe that any recently issued, but not yet effective, accounting standard, if adopted, would have a material impact on the Company’s financial statements.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Basis of Presentation</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">The accompanying unaudited financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The balance sheet at December 31, 2022 has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 30, 2023.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In the opinion of management, these financial statements reflect all normal recurring, and other adjustments, necessary for a fair presentation. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.</p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Net Loss Per Share</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In accordance with Accounting Standards Codification 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic net loss per share. As such, for the three and nine months ended September 30, 2023 and 2022, the Company included pre-funded warrants to purchase 253,828 shares of common stock in its computation of net loss per share. The pre-funded warrants were issued in November 2019 with an exercise price of $0.001. See Note 7.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In periods with a net loss, no common share equivalents are included in the computation of diluted net loss per share because their effect would be anti-dilutive. At September 30, 2023 and 2022, potentially dilutive shares outstanding amounted to 1,629,117 and 1,412,368 shares, respectively, and exclude prefunded warrants to purchase shares of common stock.</p> 253828 253828 0.001 1629117 1412368 <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Recent Accounting Pronouncements</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">Management does not believe that any recently issued, but not yet effective, accounting standard, if adopted, would have a material impact on the Company’s financial statements.</p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Note</b> <b>3</b> –<b> Intangible Assets</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">Intangible assets, net consisted of the following:</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>September</b> <b>30,</b> </b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>December</b> <b>31,</b> </b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>2023</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>2022</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>(unaudited)</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 70%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Patents</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">1,456,513</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">1,263,930</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Trademarks</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">15,114</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">—</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Other intangible assets</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">1,843,036</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">1,391,479</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">3,314,663</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">2,655,409</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Accumulated amortization - patents</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">(256,340</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">)</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">(211,078</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Accumulated amortization - other intangible assets</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(501,462</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(407,900</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,556,861</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,036,431</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> </tbody></table> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">At September 30, 2023 and December 31, 2022, the Company had capitalized $472,108 and $341,610, respectively, for costs related to patents and trademarks that have not been awarded. Cost related to patents that have not yet been awarded are not amortized until patent issuance. As further discussed in Note 5, the Company entered into a license agreement in April 2023 and capitalized $451,557 in other intangible assets related to this agreement.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">Amortization expense amounted to $50,420 and $138,824 for the three and nine months ended September 30, 2023, respectively, and $37,442 and $111,352 for the three and nine months ended September 30, 2022, respectively. Amortization expense for the succeeding five years and thereafter is $50,420 (remaining three months of 2023), $201,679 (2024-2027) and $1,227,617 (thereafter).</p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>September</b> <b>30,</b> </b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>December</b> <b>31,</b> </b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>2023</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>2022</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>(unaudited)</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 70%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Patents</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">1,456,513</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">1,263,930</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Trademarks</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">15,114</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">—</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Other intangible assets</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">1,843,036</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">1,391,479</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">3,314,663</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">2,655,409</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Accumulated amortization - patents</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">(256,340</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">)</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">(211,078</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Accumulated amortization - other intangible assets</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(501,462</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(407,900</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,556,861</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,036,431</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> </tbody></table> 1456513 1263930 15114 0 1843036 1391479 3314663 2655409 256340 211078 501462 407900 2556861 2036431 472108 341610 451557 50420 138824 37442 111352 50420 201679 201679 201679 201679 1227617 <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Note</b> <b>4</b> –<b> Lease</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In March 2021, the Company entered into a lease agreement for 4,070 square feet of office and laboratory space located in Austin, Texas. 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 annual base rent in the second year of the lease was $77,330 and increases by $2,035 in each succeeding year of the lease. In addition, the Company is required to pay its proportionate share of operating costs for the building under this triple net lease. The lease contains a 5-year fair market renewal option. It does not contain a termination option. The Company recognized a right of use asset of $339,882 and a corresponding lease liability for this lease upon lease commencement.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">For purposes of calculating the right of use asset and lease liability included in the Company’s financial statements, the Company estimated its incremental borrowing rate at 6% per annum.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">Future minimum payments under the lease are as follows:</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;"><b>For the Year Ended December 31,</b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; width: 1%;"> </td> <td style="font-family: Times New Roman; font-size: 10pt; width: 1%;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt; width: 14%;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt; width: 1%;"><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2023 (remaining)</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">19,841</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2024</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">80,552</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2025</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">82,587</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2026</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">56,132</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Total lease payments</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">239,112</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Less: imputed interest</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(19,396</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Total lease liability</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">219,716</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Less: current portion of lease liability</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(69,128</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Long-term lease liability</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">150,588</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> </tbody></table> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">At September 30, 2023, the remaining lease term was 35 months.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">For the nine months ended September 30, 2023 and 2022, operating cash outflows for lease payments totaled $58,676 and $57,150, respectively. For both the three months ended September 30, 2023 and 2022, operating lease cost, recognized on a straight-line basis, totaled $19,018, and for both the nine months ended September 30, 2023 and 2022, operating lease cost, recognized on a straight-line basis, totaled $57,053.</p> 4070 P63M 56471 18824 77330 2035 339882 0.06 <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;"><b>For the Year Ended December 31,</b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; width: 1%;"> </td> <td style="font-family: Times New Roman; font-size: 10pt; width: 1%;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt; width: 14%;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt; width: 1%;"><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2023 (remaining)</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">19,841</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2024</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">80,552</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2025</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">82,587</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">2026</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">56,132</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Total lease payments</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">239,112</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Less: imputed interest</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(19,396</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Total lease liability</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">219,716</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Less: current portion of lease liability</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(69,128</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 83%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Long-term lease liability</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 14%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">150,588</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> </tbody></table> 19841 80552 82587 56132 239112 19396 219716 69128 150588 P35M 58676 57150 19018 19018 57053 57053 <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Note</b> <b>5</b> –<b> Commitments and Contingencies</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">License Agreement</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In 2015, the Company entered into a licensing agreement which expires in February 2033. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor power switches which enhances its intellectual property portfolio. The Company will pay $100,000 annually under this agreement.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In April 2023, the Company amended a 2021 license agreement which expires in February 2034. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor drive circuitry which enhances its intellectual property portfolio. The Company will pay $50,000 annually under this agreement. At inception, the Company recorded an intangible asset and other long-term liability of $451,557, for the estimated present value of future payments under the licensing agreement.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">At September 30, 2023 and December 31, 2022, the other long-term liability for the estimated present value of future payments under the licensing agreements was $1,165,089 and $838,458, respectively. The Company is accruing interest for future payments related to these agreements.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Legal Proceedings</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">The Company may be subject to litigation from time to time in the ordinary course of business. The Company is not currently party to any legal proceedings.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><span style="text-decoration: underline; ">Indemnification Obligations</span></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">The employment agreements of Company executives include an indemnification provision whereby the Company shall indemnify and defend, at the Company’s expense, its executives so long as an executive’s actions were taken in good faith and in furtherance of the Company’s business and within the scope of executive’s duties and authority.</p> 100000 50000 451557 1165089 838458 <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Note</b> <b>6</b> —<b> Equity Incentive Plan</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">In May 2013, the Company adopted the 2013 Equity Incentive Plan (as amended and restated, the “Plan”) and reserved shares of common stock for issuance under the Plan, which was last amended in June 2023. The Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”). At September 30, 2023, 524,680 shares of common stock were available for issuance under the Plan.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">A summary of the Company’s stock option activity and related information is as follows:</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Weighted</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Weighted</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Average</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Average</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Remaining</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Stock</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Exercise</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Life</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Options</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Price</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>(in</b> <b>years)</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 55%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at December 31, 2022</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">513,948</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">7.59</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">6.6</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Granted</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">12,000</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">11.96</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="text-align: right; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at September 30, 2023</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">525,948</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">7.69</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">5.9</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Exercisable at September 30, 2023</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">463,950</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">7.09</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">5.6</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> </tbody></table> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">A summary of the Company’s restricted stock unit (RSU) and performance stock unit (PSU) activity is as follows:</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <table cellpadding="0" cellspacing="0" class="finTable" style="margin-right: auto; margin-left: 56pt; width: 85%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: center; margin: 0pt;"><b><b>RSUs</b></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: center; margin: 0pt;"><b><b>PSUs</b></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 62%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at December 31, 2022</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">183,666</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">114,000</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Granted</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">39,750</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">—</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Vested</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(20,667</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">—</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at September 30, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">202,749</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">114,000</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> </tbody></table> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">During the nine months ended September 30, 2023, the Company granted 27,550 RSUs to Board members, 12,200 RSUs to employees and 12,000 stock options to employees under the Plan. The estimated fair value of these equity grants, calculated using the Black-Scholes option valuation model for the stock options, was $529,389, $263,558 of which was recognized during the nine months ended September 30, 2023.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">At September 30, 2023, there was $1,944,010of unrecognized compensation cost related to non-vested equity awards granted under the Plan. That cost is expected to be recognized over a weighted average period of 0.9 years.</p> 524680 <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Weighted</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Weighted</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Average</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="text-align: center; font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"><b> </b></td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Average</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Remaining</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Stock</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Exercise</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Life</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr class="finHeading" style="vertical-align: bottom;"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Options</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>Price</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><b>(in</b> <b>years)</b></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt; width: 55%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at December 31, 2022</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">513,948</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">7.59</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">6.6</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Granted</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">12,000</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">11.96</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="text-align: right; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at September 30, 2023</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">525,948</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">7.69</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">5.9</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin: 0pt;">Exercisable at September 30, 2023</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">463,950</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">7.09</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">5.6</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td> </tr> </tbody></table> 513948 7.59 P6Y7M6D 12000 11.96 525948 7.69 P5Y10M24D 463950 7.09 P5Y7M6D <table cellpadding="0" cellspacing="0" class="finTable" style="margin-right: auto; margin-left: 56pt; width: 85%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tbody><tr class="finHeading" style="vertical-align: bottom; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: center; margin: 0pt;"><b><b>RSUs</b></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: center; margin: 0pt;"><b><b>PSUs</b></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 62%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at December 31, 2022</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">183,666</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">114,000</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Granted</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">39,750</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">—</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Vested</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(20,667</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">—</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255); font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">Outstanding at September 30, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">202,749</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">114,000</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0); margin-left: 0pt;"> </td> </tr> </tbody></table> 183666 114000 39750 0 20667 -0 202749 114000 27550 12200 12000 529389 263558 1944010 P0Y10M24D <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Note</b> <b>7</b> —<b> Warrants</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">At September 30, 2023 and December 31, 2022, the Company had 786,420 warrants outstanding with a weighted average exercise price of $5.19 per share and 253,828 pre-funded warrants outstanding with an exercise price of $0.001 per share. The weighted average remaining life, excluding the 253,828 pre-funded warrants with no expiration date, of the outstanding warrants is 1.4 years.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;">At September 30, 2023, all warrants were exercisable, although the warrants held by certain of the Company’s warrant holders may be exercised only to the extent that the total number of shares of common stock then beneficially owned by such warrant holder does not exceed 4.99% (or, at the investor’s election, 9.99%) of the outstanding shares of the Company’s common stock.</p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;text-indent:18pt;"> </p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> 786420 786420 5.19 5.19 253828 253828 0.001 0.001 253828 P1Y4M24D 0.0499 0.0999 EXCEL 38 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( "V ;E<'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " M@&Y7X@Y(T.T K @ $0 &1O8U!R;W!S+V-O&ULS9+/ M2L0P$(=?17)OIVG%0^CVLN))07!!\1:2V=U@\X=DI-VW-XV[740?P&-F?OGF M&YA>!:%\Q.?H T8RF&YF.[HD5-BP(U$0 $D=T\5JM^/ 9QP+3"G!$BXX2\)H#&Y:) MX32//5P!"XPPVO1=0+T22_5/;.D .R?G9-;4-$WUU)5]WSVPH6W:KN*\XK>[EHN&"]Z]+ZX__*["UFNS-__8 M^"(X]/#K+H8O4$L#!!0 ( "V ;E>97)PC$ 8 )PG 3 >&PO=&AE M;64O=&AE;64Q+GAM;.U:6W/:.!1^[Z_0>&?V;0O&-H&VM!-S:7;;M)F$[4X? 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