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00015079572025-11-11

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, 2025

☐	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 11, 2025, the issuer had 8,511,403 shares of common stock, par value $0.001, outstanding.

Table of Contents

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	3

Item 1.	Unaudited Condensed Financial Statements	3

	Balance Sheets at September 30, 2025 and December 31, 2024	3
	Statements of Operations for the three and nine months ended September 30, 2025 and 2024	4
	Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	5
	Statements of Stockholders’ Equity for the three-month periods during the nine months ended September 30, 2025 and 2024	6
	Notes to Unaudited 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	16

Item 4.	Controls and Procedures	16

PART II	OTHER INFORMATION	17

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	18

SIGNATURES		19

Table of Contents

PART I-FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED FINANCIAL STATEMENTS

IDEAL POWER INC.

Balance Sheets

(unaudited)

	September 30,			December 31,
	2025			2024
ASSETS
Current assets:
Cash and cash equivalents	$	8,394,113		$	15,842,850
Accounts receivable, net		31,500			692
Inventory		65,087			96,406
Prepayments and other current assets		184,228			356,658
Total current assets		8,674,928			16,296,606

Property and equipment, net		408,675			415,232
Intangible assets, net		2,678,387			2,611,998
Right of use asset		419,589			483,497
Other assets		44,459			19,351
Total assets	$	12,226,038		$	19,826,684

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	229,199		$	104,117
Accrued expenses		568,675			374,012
Current portion of lease liability		90,646			82,681
Total current liabilities		888,520			560,810

Long-term lease liability		334,430			403,335
Other long-term liabilities		929,247			1,007,375
Total liabilities		2,152,197			1,971,520

Commitments and contingencies (Note 5)

Stockholders’ equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 8,512,724 shares issued and 8,511,403 shares outstanding at September 30, 2025 and 8,336,812 shares issued and 8,335,491 shares outstanding at December 31, 2024		8,513			8,337
Additional paid-in capital		126,226,240			125,327,300
Treasury stock, at cost, 1,321 shares at September 30, 2025 and December 31, 2024		(13,210	)		(13,210	)
Accumulated deficit		(116,147,702	)		(107,467,263	)
Total stockholders’ equity		10,073,841			17,855,164
Total liabilities and stockholders’ equity	$	12,226,038		$	19,826,684

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

Table of Contents

IDEAL POWER INC.

Statements of Operations

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenue	$	24,450		$	554		$	37,728		$	80,624
Cost of revenue		26,069			1,511			60,408			87,483
Gross loss		(1,619	)		(957	)		(22,680	)		(6,859	)

Operating expenses:
Research and development		1,793,162			1,684,063			5,261,173			4,613,703
General and administrative		958,938			893,969			2,755,998			2,695,041
Sales and marketing		266,598			320,642			945,791			996,992
Total operating expenses		3,018,698			2,898,674			8,962,962			8,305,736

Loss from operations		(3,020,317	)		(2,899,631	)		(8,985,642	)		(8,312,595	)

Interest income, net		79,667			209,283			305,203			490,556

Net loss	$	(2,940,650	)	$	(2,690,348	)	$	(8,680,439	)	$	(7,822,039	)

Net loss per share – basic and diluted	$	(0.32	)	$	(0.31	)	$	(0.95	)	$	(0.99	)

Weighted average number of shares outstanding – basic and diluted		9,153,407			8,767,251			9,124,115			7,870,542

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

Table of Contents

IDEAL POWER INC.

Statements of Cash Flows

(unaudited)

	Nine Months Ended
	September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(8,680,439	)	$	(7,822,039	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		276,332			250,936
Amortization of right of use asset		63,908			55,011
Write-off of capitalized patent		34,363			62,073
Write-off of fixed assets		6,211			15,371
Gain on lease termination		—			(15,319	)
Stock-based compensation		997,840			1,163,808
Decrease (increase) in operating assets:
Accounts receivable		(30,808	)		68,674
Inventory		31,319			21,320
Prepaid expenses and other assets		147,322			171,870
Increase (decrease) in operating liabilities:
Accounts payable		125,082			(329,045	)
Accrued expenses and other liabilities		116,535			219,483
Lease liability		(60,940	)		(54,850	)
Net cash used in operating activities		(6,973,275	)		(6,192,707	)

Cash flows from investing activities:
Purchase of property and equipment		(111,334	)		(193,461	)
Acquisition of intangible assets		(265,404	)		(251,639	)
Net cash used in investing activities		(376,738	)		(445,100	)

Cash flows from financing activities:
Net proceeds from issuance of common stock and pre-funded warrants		—			15,724,818
Exercise of options and warrants		110			1,105,655
Payment of taxes related to restricted stock unit vestings		(98,834	)		(11,579	)
Net cash provided by (used in) financing activities		(98,724	)		16,818,894

Net increase (decrease) in cash and cash equivalents		(7,448,737	)		10,181,087
Cash and cash equivalents at beginning of period		15,842,850			8,474,835
Cash and cash equivalents at end of period	$	8,394,113		$	18,655,922

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

Table of Contents

IDEAL POWER INC.

Statements of Stockholders’ Equity

For the Three-Month Periods during the Nine Months Ended September 30, 2025 and 2024

(unaudited)

					Additional											Total
	Common Stock				Paid-In			Treasury Stock					Accumulated			Stockholders’
	Shares		Amount		Capital			Shares		Amount			Deficit			Equity
Balances at December 31, 2024		8,336,812	$	8,337	$	125,327,300			1,321	$	(13,210	)	$	(107,467,263	)	$	17,855,164
Vesting of restricted stock units		12,479		12		(9,358	)		—		—			—			(9,346	)
Stock-based compensation		—		—		384,595			—		—			—			384,595
Net loss for the three months ended March 31, 2025		—		—		—			—		—			(2,703,024	)		(2,703,024	)
Balances at March 31, 2025		8,349,291		8,349		125,702,537			1,321		(13,210	)		(110,170,287	)		15,527,389
Vesting of restricted stock units		40,044		40		(82,463	)		—		—			—			(82,423	)
Exercise of pre-funded warrants		110,000		110		—			—		—			—			110
Stock-based compensation		—		—		330,030			—		—			—			330,030
Net loss for the three months ended June 30, 2025		—		—		—			—		—			(3,036,765	)		(3,036,765	)
Balances at June 30, 2025		8,499,335	$	8,499	$	125,950,104			1,321	$	(13,210	)	$	(113,207,052	)	$	12,738,341
Vesting of restricted stock units		13,389		14		(7,079	)		—		—			—			(7,065	)
Stock-based compensation		—		—		283,215			—		—			—			283,215
Net loss for the three months ended September 30, 2025		—		—		—			—		—			(2,940,650	)		(2,940,650	)
Balances at September 30, 2025		8,512,724	$	8,513	$	126,226,240			1,321	$	(13,210	)	$	(116,147,702	)	$	10,073,841

Balances at December 31, 2023		5,998,018	$	5,998	$	107,116,362			1,321	$	(13,210	)	$	(97,049,450	)	$	10,059,700
Issuance of common stock and pre-funded warrants		1,366,668		1,367		13,651,296			—		—			—			13,652,663
Exercise of options		8,334		8		86,749			—		—			—			86,757
Vesting of restricted stock units		9,679		10		(10	)		—		—			—			—
Stock-based compensation		—		—		381,019			—		—			—			381,019
Net loss for the three months ended March 31, 2024		—		—		—			—		—			(2,469,626	)		(2,469,626	)
Balances at March 31, 2024		7,382,699		7,383		121,235,416			1,321		(13,210	)		(99,519,076	)		21,710,513
Issuance of common stock and pre-funded warrants		300,000		300		2,071,855			—		—			—			2,072,155
Vesting of restricted stock units		12,539		12		(11,591	)		—		—			—			(11,579	)
Stock-based compensation		—		—		364,581			—		—			—			364,581
Net loss for the three months ended June 30, 2024		—		—		—			—		—			(2,662,065	)		(2,662,065	)
Balances at June 30, 2024		7,695,238		7,695		123,660,261			1,321		(13,210	)		(102,181,141	)		21,473,605
Exercise of warrants		439,180		439		1,018,459			—		—			—			1,018,898
Vesting of restricted stock units		9,679		10		(10	)		—		—			—			—
Stock-based compensation		—		—		418,208			—		—			—			418,208
Net loss for the three months ended September 30, 2024		—		—		—			—		—			(2,690,348	)		(2,690,348	)
Balances at September 30, 2024		8,144,097	$	8,144	$	125,096,918			1,321	$	(13,210	)	$	(104,871,489	)	$	20,220,363

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

Table of Contents

IDEAL POWER INC.

Notes to Financial Statements

(unaudited)

Note 1 – Organization and Description of Business

Ideal Power Inc. (the “Company”) was incorporated in Texas in May 2007 under the name Ideal Power Converters, Inc. The Company changed its name to Ideal Power Inc. and re-incorporated in Delaware in July 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 and pre-funded warrants. 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 condensed 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, 2024 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 28, 2025.

In the opinion of management, these financial statements reflect all normal recurring 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, 2024. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.

Liquidity and Going Concern

These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the ordinary course of business. The Company’s operations have resulted in a net loss of $8.7 million for the nine months ended September 30, 2025 and an accumulated deficit of $116.1 million at September 30, 2025. The Company’s existing sources of liquidity at September 30, 2025 include cash and cash equivalents of $8.4 million. The Company has historically funded operations primarily through the sale of common stock and prefunded warrants. The Company is dependent on additional capital in order to sustain its ongoing operations as it currently generates minimal revenue with negative cash flows from operations since inception. The current cash balance and negative cash flow raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance of this Quarterly Report on Form 10-Q.

These consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate because management believes that the Company will be able to raise additional capital to fund operations. Although the Company believes it has access to adequate sources of capital to fund its operations, it can provide no assurance that it will be able to secure additional equity or debt financing on terms acceptable to the Company or at all.

Segment Information

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a company-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates as one operating segment. The Company has concluded that net income (loss) is the measure of segment profitability. The CODM assesses performance for the Company, monitors budget versus actual results and determines how to allocate resources based on net income (loss) as reported in the statements of operations. There are no other expense categories regularly provided to the CODM that are not already included in the financial statements herein.

During the nine months ended September 30, 2025 and 2024, the Company did not generate material international revenues and as of September 30, 2025 and December 31, 2024, the Company did not have material assets located outside of the United States.

Table of Contents

Net Loss Per Share

In accordance with Accounting Standards Codification (“ASC”) 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, 2025 and 2024, the Company included pre-funded warrants to purchase shares of common stock in its computation of net loss per share. The pre-funded warrants were issued in March 2024 and 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, 2025 and 2024, potentially dilutive shares outstanding amounted to 824,760 and 1,322,819 shares, respectively, and exclude pre-funded 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,
	2025			2024
	(unaudited)
Patents	$	1,997,653		$	1,770,374
Trademarks		26,529			22,767
Other intangible assets		1,843,036			1,843,036
		3,867,218			3,636,177
Accumulated amortization - patents		(409,868	)		(349,279	)
Accumulated amortization - other intangible assets		(778,963	)		(674,900	)
	$	2,678,387		$	2,611,998

At September 30, 2025 and December 31, 2024, the Company capitalized $699,373 and $541,081, respectively, for costs related to patents that have not been awarded. Cost related to patents that have not yet been awarded are not amortized until patent issuance.

At September 30, 2025 and December 31, 2024, the Company capitalized $26,529 and $22,767, respectively, for costs related to trademarks. Costs related to indefinite life trademarks are not amortized but are subject to evaluation for potential impairment.

Amortization expense amounted to $55,253 and $164,652 for the three and nine months ended September 30, 2025, respectively, and $54,205 and $160,807 for the three and nine months ended September 30, 2024, respectively. Amortization expense for the succeeding five years and thereafter is $55,530 (remaining three months of 2025), $222,120 (2026-2029) and $1,008,475 (thereafter).

Note 4 – Lease

In March 2021, the Company entered into a lease agreement (the “Original Lease”) for 4,070 square feet of office and laboratory space located in Austin, Texas (“the Original Suite”). The commencement of the lease occurred on June 1, 2021 and the initial term of the lease was 63 months. The actual base rent in the first year of the lease was $56,471 and was net of $18,824 in abated rent over the first three months of the lease term. The annual base rent in the second year of the lease was $77,330 and increased by $2,035 in each succeeding year of the lease. In addition, the Company was required to pay its proportionate share of operating costs for the building under this triple net lease.

In April 2024, the Company entered into a first amendment and relocation agreement (the “Amended Lease”) with its landlord. Under the Amended Lease, the Company relocated to another, larger suite in the same office building. The Amended Lease is for 5,775 square feet of office and laboratory space (the “New Suite”) and, upon occupancy, replaced the 4,070 square feet of office and laboratory space previously leased by the Company. The term of the Amended Lease expires sixty-two (62) months from July 1, 2024, the commencement date. The annual base rent for the first year of the Amended Lease was $118,388 and the annual base rent increases approximately 2.75% each year during the lease term. The Company is required to pay its proportionate share of operating costs for the building under this triple net lease.

In accordance with ASC 842, the Company accounted for the modification of the lease contract as a separate lease contract. The lease for the Original Suite terminated on June 30, 2024 and the Company recorded a gain on the termination of the lease for the Original Suite of $15,319 in general and administrative expenses. The Company recognized a right of use asset and a corresponding liability for the Amended Lease on the commencement date. For purposes of calculating the right of use asset and lease liability, the Company estimated its incremental borrowing rate at 8.5% per annum.

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Future minimum payments under the Amended Lease are as follows:

For the Year Ended December 31,
2025 (remaining)	$	30,405
2026		123,297
2027		126,703
2028		130,197
2029		88,579
Total lease payments		499,181
Less: imputed interest		(74,105	)
Total lease liability		425,076
Less: current portion of lease liability		(90,646	)
Long-term lease liability	$	334,430

At September 30, 2025, the remaining lease term was 47 months.

For the three months ended September 30, 2025 and 2024, operating cash flows for lease payments totaled $30,405 and $29,597, respectively, and for the nine months ended September 30, 2025 and 2024, operating cash outflows for lease payments totaled $89,599 and $69,449, respectively. For the three months ended September 30, 2025 and 2024, operating lease cost, recognized on a straight-line basis, totaled $30,856 and $30,856, respectively, and for the nine months ended September 30, 2025 and 2024, operating lease cost, recognized on a straight-line basis, totaled $92,568 and $69,610, respectively.

Note 5 – Commitments and Contingencies

License Agreements

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, included in intangible assets, associated with semiconductor power switches which enhances its intellectual property portfolio. The Company pays $100,000 annually under this agreement.

In 2023, the Company amended a 2021 license agreement which expires in February 2034. Per the agreement, the Company has an exclusive royalty-free license, included in intangible assets, associated with semiconductor drive circuitry which enhances its intellectual property portfolio. The Company pays $50,000 annually under this agreement.

At September 30, 2025, the estimated present value of future payments under the licensing agreements was $1,079,247 with $150,000 due and payable in the next twelve months. 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 the 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. At September 30, 2025, 320,724 shares of common stock were available for issuance under the Plan.

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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, 2024		509,414		$	7.56		4.6
Forfeited/Expired		(138,600	)	$	7.78
Outstanding at September 30, 2025		370,814		$	7.48		4.5
Exercisable at September 30, 2025		366,814		$	7.42		4.5

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, 2024		331,715			114,000
Granted		131,421			80,000
Vested		(87,759	)		—
Forfeited		(98,931	)		(16,500	)
Outstanding at September 30, 2025		276,446			177,500

During the nine months ended September 30, 2025, the Company granted 38,660 RSUs to Board members, 80,000 PSUs and 40,000 RSUs to executives and 52,761 RSUs to employees under the Plan. The estimated fair value of these equity grants was $1,042,282, of which $380,023 was recognized in stock-based compensation expense totaling $997,840 for the nine months ended September 30, 2025.

At September 30, 2025, there was $1,574,069 of 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, 2025, the Company had no warrants outstanding. At December 31, 2024, the Company had 342,240 warrants outstanding with a weighted average exercise price of $8.90 per share. At September 30, 2025 and December 31, 2024, the Company had 653,827 and 763,827 pre-funded warrants outstanding, respectively, with an exercise price of $0.001 per share. During the nine months ended September 30, 2025, a warrant holder exercised 110,000 prefunded warrants for exercise proceeds of $110.

At September 30, 2025, 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.

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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, liquidity, business condition and results of operations, expectations regarding future expenses and gross margins, future business plans, and expectations regarding design wins and other business developments. 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;

	●	Our ability to continue as a going concern;

	●	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;

	●	trade protectionism, tariffs, and other barriers to trade that impact the availability or cost of the raw materials and components used in our products;

	●	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;

	●	changes in management and the board of directors, and our reliance on key personnel;

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	●	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.

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ITEM 2.

MANAGEMENT’S 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 2024 financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. 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, 2024.

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 pre-funded warrants.

We are in the process of commercializing our B-TRAN® technology and have launched our first three commercial products: the B-TRAN® Discrete, SymCool® Power Module and SymCool® IQ Intelligent Power Module. We generated $37,728 in revenue in the nine months ended September 30, 2025.

CEO Transition

Effective November 2, 2025, R. Daniel Brdar, the President and Chief Executive Officer and member of the Board of Directors of Ideal Power Inc., retired from all positions with us. Effective November 3, 2025, the Board appointed David Somo as the President and Chief Executive Officer and as a member of the Board of the Company.

Product Launches

In early 2023, we launched our SymCool® Power Module. This multi-die B-TRAN® module is designed to meet the very low conduction loss needs of the solid-state switchgear and electric vehicle (“EV”) contactor markets. We commenced shipment of SymCool® Power Modules to fulfill customer orders in 2024.

In late 2023, we launched the SymCool® IQ Intelligent Power Module (“IPM”). The SymCool® IQ IPM builds on the multi-die packaging design of our SymCool® Power Module and adds an integrated intelligent driver optimized for bidirectional operation. This product targets several markets including renewable energy, energy storage, EV charging and other industrial applications. We announced our first order for this product in late 2024.

Upon product launch, we design and build initial prototypes for testing and to solicit customer feedback. Based on the results of testing and customer feedback, we incorporate any necessary changes into the product design, build final prototypes and complete additional testing prior to full commercial release. To date, our customers have purchased prototypes in small quantities for evaluation and provided us feedback that has been incorporated into our final product designs. We expect significantly higher volume orders from customers once we secure a design win from them, and they start to build inventory in advance of launching their OEM products. For the product launches described above, we would expect the time from announcing a design win to the sale of the related OEM product to be roughly one year, although it may vary considerably depending on the customer. We would expect a significantly longer design cycle for automotive applications. Design wins are expected to result in significant revenue growth for us over time as product life cycles tend to be relatively long for power electronics products as changing to another technology would require an OEM to redesign their product. See “First Design Win” below.

Development Agreement

In 2022, we announced, and began the first phase of, a product development agreement with Stellantis, a top 10 global automaker, for a custom B-TRAN® power module for use in the automaker’s EV drivetrain inverters in its next generation EV platform. In the first phase of the program, we provided packaged B-TRAN® devices, test kits and technical data to Stellantis for their evaluation. In 2023, we secured, and began the second phase of, this program. In the second phase of the program, we collaborated with Stellantis and the program partners, including both the program’s packaging company and the organization building the initial drivetrain inverter, to supply B-TRAN® devices for integration into the custom power module and inverter designs. Also, as part of the second phase of the program, we provided Stellantis a comprehensive test plan for the testing required to achieve certification to automotive standards for B-TRAN®. The test plan was subsequently approved as submitted. In 2024, we successfully completed the second phase of the program. The next phase of the program builds on the completion of deliverables from the prior two program phases and transitions to Stellantis’ production team. We are currently finalizing the timing and scope of work for the next phase of the program with Stellantis. In August 2025, we secured an order from Stellantis for custom development and packaged devices targeting multiple EV applications.

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Customer Engagements

We have announced several engagements and/or initial orders with large companies, including a second top 10 global automaker, a third global automaker, a top 10 global provider of power conversion solutions to the solar industry, three global diverse power management market leaders, five tier 1 automotive suppliers, a global power conversion supplier and others. These companies intend to test and evaluate, or are already in the process of testing and evaluating, our technology for use in their applications. These engagements could lead to future design wins or custom development agreements. We also announced agreements with four distribution partners. We may add other distribution partners in the future.

First Design Win

In late 2024, we announced our first design win for solid-state circuit breakers (“SSCBs”) with one of the largest circuit protection equipment manufacturers in Asia serving the industrial and utility markets. In connection with this design win, we entered into a joint development agreement for a SSCB product incorporating multiple B-TRAN® devices. The agreement includes the product design, prototype builds and testing of the SSCB, which was targeted for completion in the second quarter of 2025, to be followed by commercial sales. We completed our deliverables, including SSCB prototypes, under the agreement in the first quarter of 2025, three months ahead of schedule. Recently, the customer successfully completed their testing of updated SSCB prototypes that included enhancements requested by the customer. The customer plans on gathering feedback on this new product from their end customers ahead of product launch.

Results of Operations

Comparison of the three months ended September 30, 2025 to the three months ended September 30, 2024

Revenue. Revenue was $24,450 for the three months ended September 30, 2025, compared to $554 in the three months ended September 30, 2024. Revenue in the three months ended September 30, 2025 related primarily to our completion of the first deliverable under the purchase order from Stellantis. See “Development Agreement” above.

Cost of Revenue. Cost of revenue was $26,069 for the three months ended September 30, 2025, compared to $1,511 in the three months ended September 30, 2024. Cost of revenue in the three months ended September 30, 2025 related primarily to the first deliverable under the purchase order from Stellantis.

Research and Development Expenses. Research and development expenses increased by $109,099, or 6%, to $1,793,162 in the three months ended September 30, 2025 from $1,684,063 in the three months ended September 30, 2024. The increase was due to higher semiconductor fabrication costs of $279,898, search and placement fees of $106,798 and other B-TRAN® development spending of $29,491, partly offset by lower personnel costs of $147,091 and stock-based compensation expense of $159,997.

General and Administrative Expenses. General and administrative expenses increased by $64,969, or 7%, to $958,938 in the three months ended September 30, 2025 from $893,969 in the three months ended September 30, 2024. The increase was due to higher search and placement fees of $121,900, patent impairments of $34,363 and other spending of $8,884, partly offset by lower investor relations spending of $100,178.

Sales and Marketing Expenses. Sales and marketing expenses decreased by $54,044, or 17%, to $266,598 in the three months ended September 30, 2025 from $320,642 in the three months ended September 30, 2024. The decrease was due to lower personnel costs of $101,131, partly offset by higher search and placement fees of $46,596 and other spending of $491.

Loss from Operations. Our loss from operations for the three months ended September 30, 2025 was $3,020,317, or 4% higher, as compared to the $2,899,631 loss from operations for the three months ended September 30, 2024, for the reasons discussed above.

Interest Income, Net. Net interest income was $79,667 for the three months ended September 30, 2025, compared to $209,283 for the three months ended September 30, 2024, due primarily to the impact of a declining cash balance on interest earned on our money market account.

Net Loss. Our net loss for the three months ended September 30, 2025 was $2,940,650, or 9% higher, as compared to a net loss of $2,690,348 for the three months ended September 30, 2024, for the reasons discussed above.

Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024

Revenue. Revenue was $37,728 for the nine months ended September 30, 2025, compared to $80,624 in the nine months ended September 30, 2024. For the nine months ended September 30, 2025, our revenue related to our completion of the first deliverable under the purchase order from Stellantis, development revenue in connection with our first design win and product revenue. For the nine months ended September 30, 2024, our revenue was primarily related to the completion of the second phase of our development agreement with Stellantis.

Cost of Revenue. Cost of revenue was $60,408 for the nine months ended September 30, 2025, compared to $87,483 in the nine months ended September 30, 2024. Cost of revenue in the nine months ended September 30, 2025 related to costs incurred to complete the first deliverable under the purchase order from Stellantis, development costs in connection with our first design win and costs from initial low volume shipments of our products. Cost of revenue in the nine months ended September 30, 2024 related primarily to our development agreement with Stellantis. We expect negative gross margin from product revenue at low volumes with significant improvement in gross margins as we commence higher volume production and shipments in the future.

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Research and Development Expenses. Research and development expenses increased by $647,470, or 14%, to $5,261,173 in the nine months ended September 30, 2025 from $4,613,703 in the nine months ended September 30, 2024. The increase was due to higher semiconductor fabrication costs of $615,118, personnel costs of $117,555 and search and placement fees of $103,454, partly offset by lower stock-based compensation expense of $181,021 and other B-TRAN® development spending of $7,636. We expect relatively flat to modestly lower research and development expenses in the fourth quarter of 2025 as compared to the third quarter of 2025. There will be quarter-to-quarter variability to research and development expenses due to the timing of semiconductor fabrication runs, hiring and other development activities.

General and Administrative Expenses. General and administrative expenses increased by $60,957, or 2%, to $2,755,998 in the nine months ended September 30, 2025 from $2,695,041 in the nine months ended September 30, 2024. The increase was due to higher search and placement fees of $120,792, personnel costs of $82,880, stock-based compensation expense of $53,528 and other spending of $23,914, partly offset by lower investor relations spending of $220,157. We expect relatively flat to modestly higher general and administrative expenses, exclusive of stock-based compensation, in the fourth quarter of 2025 as compared to the third quarter of 2025.

Sales and Marketing Expenses. Sales and marketing expenses decreased by $51,201, or 5%, to $945,791 in the nine months ended September 30, 2025 from $996,992 in the nine months ended September 30, 2024. The decrease was due to lower personnel costs of $101,659 and stock-based compensation expense of $38,476, partly offset by higher search and placement fees of $75,654 and other spending of $13,280. We expect relatively flat sales and marketing expenses in the fourth quarter of 2025 as compared to the third quarter of 2025 as we further commercialize our B-TRAN® technology.

Loss from Operations. Our loss from operations for the nine months ended September 30, 2025 was $8,985,642, or 8% higher, as compared to the $8,312,595 loss from operations for the nine months ended September 30, 2024, for the reasons discussed above.

Interest Income, Net. Net interest income was $305,203 for the nine months ended September 30, 2025 compared to $490,556 for the nine months ended September 30, 2024 due primarily to the impact of a declining cash balance on interest earned on our money market account.

Net Loss. Our net loss for the nine months ended September 30, 2025 was $8,680,439, or 11% higher, as compared to a net loss of $7,822,039 for the nine months ended September 30, 2024, for the reasons discussed above.

Liquidity and Capital Resources

We have incurred losses since inception. We have funded our operations to date primarily through the sale of common stock and pre-funded warrants.

At September 30, 2025, we had cash and cash equivalents of $8.4 million. Our net working capital at September 30, 2025 was $7.8 million. We had no outstanding debt at September 30, 2025.

These consolidated financial statements have been prepared on a going concern basis, which assumes we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities in the ordinary course of business. Our operations have resulted in a net loss of $8.7 million for the nine months ended September 30, 2025 and an accumulated deficit of $116.1 million at September 30, 2025. Our existing sources of liquidity at September 30, 2025 include cash and cash equivalents of $8.4 million. We have historically funded operations primarily through the sale of common stock and prefunded warrants. We are dependent on additional capital in order to sustain our ongoing operations as we currently generate minimal revenue with negative cash flows from operations since inception. The current cash balance and negative cash flow raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance of this Quarterly Report on Form 10-Q. Although we believe we have access to adequate sources of capital to fund our operations, we can provide no assurance that we will be able to secure additional equity or debt financing on terms acceptable to us or at all.

Operating activities in the nine months ended September 30, 2025 resulted in cash outflows of $6,973,275, which were due to the net loss for the period of $8,680,439, partly offset by stock-based compensation of $997,840, depreciation and amortization of $276,332, favorable balance sheet timing of $328,510 and other non-cash items of $104,482.

Operating activities in the nine months ended September 30, 2024 resulted in cash outflows of $6,192,707 which were due to the net loss for the period of $7,822,039, partly offset by stock-based compensation of $1,163,808, depreciation and amortization of $250,936, other non-cash items of $117,136 and favorable balance sheet timing of $97,452.

Investing activities in the nine months ended September 30, 2025 and 2024 resulted in cash outflows of $376,738 and $445,100, respectively, for the acquisition of intangible assets and fixed assets.

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Financing activities in the nine months ended September 30, 2025 resulted in net cash outflows of $98,724 with a cash outflow of $98,834 in tax payments related to the vesting of restricted stock units slightly offset by a cash inflow of $110 from the exercise of pre-funded warrants.

Financing activities in the nine months ended September 30, 2024 resulted in cash inflows of $15,724,818 in net proceeds from the public offering of our common stock and pre-funded warrants, $1,018,898 from the exercise of warrants, and $86,757 from the exercise of stock options, slightly offset by $11,579 in tax payments related to the vesting of restricted stock units.

Critical Accounting Estimates

There have been no significant changes during the nine months ended September 30, 2025 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, 2024.

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, 2024.

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 officer) of the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2025 and has concluded that, as of September 30, 2025, 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, 2025 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.

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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, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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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

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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 13, 2025	IDEAL POWER INC.

	By:	/s/ David Somo
		David Somo
		Chief Executive Officer

	By:	/s/ Timothy W. Burns
		Timothy W. Burns
		Chief Financial Officer

Ideal Power Inc. 10-Q