Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 28, 2023 | Jun. 30, 2022 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Annual Report | true | ||
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(g) 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 | 5,924,680 | ||
Entity Central Index Key | 0001507957 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 72,209,660 | ||
Auditor Name | BPM LLP | ||
Auditor Firm ID | 207 | ||
Auditor Location | San Jose, California |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 16,345,623 | $ 23,170,149 |
Accounts receivable, net | 65,936 | 233,262 |
Prepayments and other current assets | 491,365 | 43,900 |
Total current assets | 16,902,924 | 23,447,311 |
Property and equipment, net | 200,103 | 56,158 |
Intangible assets, net | 2,036,431 | 2,055,650 |
Right of use asset | 248,720 | 307,172 |
Other assets | 11,189 | 11,189 |
Total assets | 19,399,367 | 25,877,480 |
Current liabilities: | ||
Accounts payable | 130,503 | 130,500 |
Accrued expenses | 254,218 | 353,507 |
Loss: current portion of lease liability | 64,597 | 58,864 |
Total current liabilities | 449,318 | 542,871 |
Long-term lease liability | 202,987 | 267,584 |
Other long-term liabilities | 838,458 | 917,100 |
Total liabilities | 1,490,763 | 1,727,555 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2022 and 2021 | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 5,926,001 shares issued and 5,924,680 shares outstanding at December 31, 2022 and 5,893,767 shares issued and 5,892,446 shares outstanding at December 31, 2021 | 5,926 | 5,894 |
Additional paid-in capital | 105,011,318 | 104,063,321 |
Treasury stock, at cost; 1,321 shares at December 31, 2022 and 2021, respectively | (13,210) | (13,210) |
Accumulated deficit | (87,095,430) | (79,906,080) |
Total stockholders' equity | 17,908,604 | 24,149,925 |
Total liabilities and stockholders' equity | $ 19,399,367 | $ 25,877,480 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares, issued | 5,926,001 | 5,893,767 |
Common stock, shares, outstanding | 5,924,680 | 5,892,446 |
Treasury stock, common shares | 1,321 | 1,321 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statements of Operations | ||
Grant revenue | $ 203,269 | $ 576,399 |
Cost of grant revenue | 203,269 | 576,399 |
Gross profit | 0 | 0 |
Operating expenses: | ||
Research and development | 3,366,776 | 1,927,743 |
General and administrative | 3,123,852 | 2,408,425 |
Sales and marketing | 852,331 | 512,807 |
Total operating expenses | 7,342,959 | 4,848,975 |
Loss from operations | (7,342,959) | (4,848,975) |
Other income: | ||
Interest income (expense), net | 153,609 | (12,701) |
Gain on forgiveness of long-term debt | 0 | 91,407 |
Total other income | 153,609 | 78,706 |
Net loss | $ (7,189,350) | $ (4,770,269) |
Net loss per share - basic | $ (1.17) | $ (0.80) |
Net loss per share - diluted | $ (1.17) | $ (0.80) |
Weighted average number of shares outstanding - basic | 6,157,866 | 5,937,520 |
Weighted average number of shares outstanding - diluted | 6,157,866 | 5,937,520 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Treasury Stock, Common | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2020 | $ 3,266 | $ 78,974,964 | $ (75,135,811) | $ 3,829,209 | |
Beginning balance (in shares) at Dec. 31, 2020 | 3,265,740 | ||||
Treasury Stock, beginning balance at Dec. 31, 2020 | $ (13,210) | ||||
Treasury stock, beginning balance (in shares) at Dec. 31, 2020 | 1,321 | ||||
Issuance of shares of common stock in public offering | $ 1,353 | 21,203,256 | 21,204,609 | ||
Issuance of shares of common stock in public offering (in shares) | 1,352,975 | ||||
Exercise of options and warrants | $ 1,261 | 3,324,822 | 3,326,083 | ||
Exercise of options and warrants (in shares) | 1,261,052 | ||||
Stock issued for services | $ 14 | 207,966 | 207,980 | ||
Stock issued for services (in shares) | 14,000 | ||||
Stock-based compensation | 352,313 | 352,313 | |||
Net loss | (4,770,269) | (4,770,269) | |||
Ending balance at Dec. 31, 2021 | $ 5,894 | 104,063,321 | (79,906,080) | $ 24,149,925 | |
Ending balance (in shares) at Dec. 31, 2021 | 5,893,767 | ||||
Treasury stock, ending balance (in shares) at Dec. 31, 2021 | 1,321 | 1,321 | |||
Treasury Stock, ending balance at Dec. 31, 2021 | $ (13,210) | $ 13,210 | |||
Stock issued for services | $ 10 | 100,090 | 100,100 | ||
Stock issued for services (in shares) | 10,000 | ||||
Vesting of restricted stock units | $ 21 | (127,893) | (127,872) | ||
Vesting of restricted stock units (in shares) | 20,883 | ||||
Stock-based compensation | 975,801 | 975,801 | |||
Exercise of options | $ 1 | (1) | |||
Exercise of options (in shares) | 1,351 | ||||
Net loss | (7,189,350) | (7,189,350) | |||
Ending balance at Dec. 31, 2022 | $ 5,926 | $ 105,011,318 | $ (87,095,430) | $ 17,908,604 | |
Ending balance (in shares) at Dec. 31, 2022 | 5,926,001 | ||||
Treasury stock, ending balance (in shares) at Dec. 31, 2022 | 1,321 | 1,321 | |||
Treasury Stock, ending balance at Dec. 31, 2022 | $ (13,210) | $ 13,210 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (7,189,350) | $ (4,770,269) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 187,077 | 157,564 |
Write-off of long-lived assets | 937 | 528 |
Stock-based compensation | 975,801 | 352,313 |
Stock issued for services | 100,100 | 207,980 |
Gain on forgiveness of long-term debt | 0 | (91,407) |
Decrease (increase) in operating assets: | ||
Accounts receivable | 167,326 | (62,975) |
Prepaid expenses and other assets | (389,013) | 176,223 |
Increase (decrease) in operating liabilities: | ||
Accounts payable | 3 | 28,516 |
Accrued expenses and other liabilities | (236,795) | (279,337) |
Net cash used in operating activities | (6,383,914) | (4,280,864) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (182,651) | (44,267) |
Acquisition of intangible assets | (130,089) | (192,668) |
Net cash used in investing activities | (312,740) | (236,935) |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 0 | 21,204,609 |
Exercise of options and warrants | 0 | 3,326,083 |
Payment of taxes on vesting of restricted stock units | (127,872) | 0 |
Net cash (used in) provided by financing activities | (127,872) | 24,530,692 |
Net (decrease) increase in cash and cash equivalents | (6,824,526) | 20,012,893 |
Cash and cash equivalents at beginning of year | 23,170,149 | 3,157,256 |
Cash and cash equivalents at end of year | $ 16,345,623 | $ 23,170,149 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Description of Business | |
Organization and Description of Business | 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Accounts Receivable Trade accounts receivable are stated net of an allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on review and analysis of specific customer balances that may not be collectible, customer payment history and any other customer-specific information that may impact the evaluation of the specific customer’s credit. Trade accounts receivable at December 31, 2022 relate to a $1.2 million subcontract with Diversified Technologies, Inc. (“DTI”), signed in June 2020, to supply B-TRAN™ devices as part of a two-year contract awarded to DTI by the United States Naval Sea Systems Command for the development and demonstration of a B-TRAN™ enabled high efficiency direct current solid-state circuit breaker (“SSCB”).In 2022, two 6-month extensions were approved under this contract. At December 31, 2022, unbilled grant receivables with DTI, which are included in accounts receivable, net, were $17,857 and the allowance for doubtful accounts was $0. Property and Equipment Property and equipment are stated at historical cost less accumulated depreciation and amortization. Major additions and improvements are capitalized while maintenance and repairs that do not improve or extend the useful life of the respective asset are expensed. Depreciation and amortization of property and equipment is computed using the straight-line method over their estimated useful lives. Leasehold improvements are amortized over the shorter of the life of the asset or the related leases. Estimated useful lives of the principal classes of assets are as follows: Leasehold improvements Shorter of lease term or useful life Machinery and equipment 5 years Furniture, fixtures and IT equipment 3 – 5 years Intangible Assets The Company’s intangible assets are composed of patents, which are recorded at cost, and other intangible assets, which are recorded at cost plus the estimated present value of all future payments associated with the other intangible assets. The Company capitalizes third-party legal costs and filing fees, if any, associated with obtaining patents or other intangible assets. Once the patent asset has been placed in service, the Company amortizes these costs over the shorter of the asset’s legal life, generally 20 years from the initial filing date, or its estimated economic life using the straight-line method. For the other intangible assets, the Company amortizes the asset over the 17-year term of the underlying agreements. Impairment of Long-Lived Assets The long-lived assets, consisting of property and equipment and intangible assets, held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was an impairment in the value of long-lived assets in the amount of $937 and $528 during the years ended December 31, 2022 and 2021, respectively. Fair Value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs used to establish fair value are the following: ● Level 1 — Quoted prices in active markets for identical assets or liabilities; ● Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and ● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities The Company’s financial instruments primarily consist of cash and cash equivalents, accounts payable and long-term liabilities. As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is primarily attributed to the short-term nature of these instruments. In 2015, the Company recorded a long-term liability for the estimated present value of future payments under licensing agreements. In 2021, the Company recorded an adjustment to increase the long-term liability due to an increase in the future payments due under these licensing agreements. The Company determined the discount rate to estimate the present value of the future payments based on the applicable treasury rates. The Company’s long-term liability is classified within Level 3. See Note 5 and Note 9 for more details regarding the licensing agreements. The Company did not identify any other assets and liabilities that are required to be presented in the balance sheets at fair value. Revenue Recognition The Company recognizes revenue and related cost of revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” and, as applicable, with the guidance issued by the FASB in June 2018 for the recipients of grants. Currently, the Company recognizes grant revenue and cost of grant revenue only. Government contracts, including grants, are agreements that generally provide the Company with cost reimbursement for certain types of development activities over a contractually defined period. Grant revenue is recognized in the period during which the Company incurs the related costs, provided that the Company has incurred the cost in accordance with the specifications and work plans determined between the Company and the government entity. For the years ended December 31, 2022 and 2021, the Company recognized $203,269 and respectively Research and Development Research and development costs are presented as a line item under operating expenses and are expensed as incurred. Research and development costs include costs to further develop the Company’s B-TRAN™ Income Taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. At December 31, 2022 and 2021, the Company has established a full reserve against all deferred tax assets. Tax benefits from an uncertain tax position are recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate resolution. Net Loss Per Share The Company applies FASB ASC 260, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of equity awards and warrants using the treasury stock method. In periods with a net loss, no common share equivalents are included because their effect would be anti-dilutive. In accordance with ASC 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic earnings per share.As such, the Company includes pre-funded warrants to purchase shares of common stock in its computation of earnings per share. The pre-funded warrants were issued in November 2019 with an exercise price of $0.001. See Note 12. At December 31, 2022 and 2021, potentially dilutive shares outstanding amounted to 1,598,034 and 1,379,306 shares, respectively, and exclude pre-funded warrants to purchase shares of common stock. Stock Based Compensation The Company applies FASB ASC 718, “Stock Compensation,” when recording stock-based compensation. Grants to non-employees are also accounted for under ASC 718. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The fair value of each performance stock unit award is estimated on the date of grant using a Monte Carlo simulation. The Company issues common stock upon exercise of equity awards and warrants. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash with a major financial institution located in the United States. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company maintains balances in excess of federally insured limits. The Company has not experienced losses in such accounts and believes it is not exposed to significant credit risk regarding its cash and cash equivalents. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, would have a material impact on the Company’s financial statements. |
Prepayments and Other Current A
Prepayments and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments and Other Current Assets | |
Prepayments and Other Current Assets | Note 3 — Prepayments and Other Current Assets Prepayments and other current assets consisted of the following: December 31, 2022 2021 Prepaid insurance $ 213,357 $ 22,307 Prepaid semiconductor fabrication costs 110,319 — Prepaid software 71,141 4,374 Prepaid consulting 32,000 — Prepaid engineering services 26,000 — Other 38,548 17,219 $ 491,365 $ 43,900 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Property and Equipment | Note 4 — Property and Equipment Property and equipment, net consisted of the following: December 31, 2022 2021 Machinery and equipment $ 233,431 $ 93,811 Building leasehold improvements 10,245 10,245 Furniture, fixtures, software and IT equipment 98,793 62,884 342,469 166,940 Accumulated depreciation and amortization (142,366) (110,782) $ 200,103 $ 56,158 Depreciation expense amounted to $37,769 and $25,234 for the years ended December 31, 2022 and 2021, respectively. During the year ended December 31, 2022, the Company wrote-off $937 in property and equipment. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets | |
Intangible Assets | Note 5 — Intangible Assets Intangible assets, net consisted of the following: December 31, 2022 2021 Patents $ 1,263,930 $ 1,133,841 Other intangible assets 1,391,479 1,391,479 2,655,409 2,525,320 Accumulated amortization - patents (211,078) (158,516) Accumulated amortization – other intangible assets (407,900) (311,154) $ 2,036,431 $ 2,055,650 At December 31, 2022 and 2021, the Company had capitalized $341,610 and $306,640, respectively, for costs related to patents that have not been awarded. Costs related to patents that have not been awarded are not amortized until patent issuance. During the years ended December 31, 2022 and 2021, the Company wrote-off $0 and $528, respectively, in previously capitalized patent costs. Amortization expense amounted to $149,308 and $132,330 for the years ended December 31, 2022 and 2021, respectively. Amortization expense succeeding five years |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses | |
Accrued Expenses | Note 6 — Accrued Expenses Accrued expenses consisted of the following: December 31, 2022 2021 Accrued compensation $ 70,261 $ 147,756 Accrued Board fees 62,500 30,000 Accrued professional fees 53,300 44,000 Accrued licensing fees 50,000 50,000 Accrued taxes — 75,200 Other 18,157 6,551 $ 254,218 $ 353,507 |
Loans
Loans | 12 Months Ended |
Dec. 31, 2022 | |
Loans | |
Loans | Note 7 – Loans In May 2020, the Company entered into a Loan Agreement and Promissory Note (collectively the “PPP Loan”) with BBVA USA pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The Company received total proceeds of $91,407 from the unsecured PPP Loan. The PPP Loan was scheduled to mature in May 2022 and had an interest rate of 1.00% per annum and was subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act. In accordance with the requirements of the CARES Act and the PPP, the Company used the proceeds from the PPP Loan primarily for payroll costs. The Company applied for forgiveness of the PPP Loan during the first quarter of 2021. In May 2021, the SBA approved forgiveness of the Company’s PPP Loan in the principal amount of $91,407, including accrued interest. The $91,407 gain on forgiveness of the PPP Loan is shown in other income (expenses) in the financial statements for the year ended December 31, 2021 and represents a non-cash financing activity. |
Lease
Lease | 12 Months Ended |
Dec. 31, 2022 | |
Lease | |
Lease | Note 8 — Lease The Company leased 14,782 square feet of office and laboratory space located in Austin, Texas and subleased approximately seventy-five percent (75%) of this space to a third party. This lease and sublease expired concurrently on May 31, 2021. 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 is $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 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 $ 78,517 2024 80,552 2025 82,587 2026 56,132 Total lease payments 297,788 Less: imputed interest (30,204) Total lease liability 267,584 Less: current portion of lease liability (64,597) Long-term lease liability $ 202,987 For the year ended December 31, 2022, operating cash outflows for lease payments totaled$76,482 and the operating lease cost, recognized on a straight-line basis, totaled $76,070. For the year ended December 31, 2021, operating cash outflows for lease payments totaled $108,247 and the operating lease cost, recognized on a straight-line basis, totaled $125,187. At December 31, 2022, the remaining lease term was 44 months. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 9 — Commitments and Contingencies Licensing Agreements In 2015, the Company entered into licensing agreements which expire in February 2033. Per the agreements, the Company has an exclusive royalty-free license associated with semiconductor power switches which enhances its intellectual property portfolio. The agreements include both fixed payments, all of which were paid prior to 2017, and ongoing variable payments. The variable payments are a function of the number of associated patent filings pending and patents issued under the agreements. The Company will pay $10,000 for each patent filing pending and $20,000 for each patent issued annually with one-half of the annual payment due within 20 days of December 21 st st In March 2021, two patents associated with these agreements were issued and the Company recorded, as a non-cash activity, an intangible asset and a corresponding other 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 that it believes would reasonably have a material adverse impact on its business, financial results, and cash flows. 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 as long as an executive’s actions were taken in good faith and in furtherance of Company’s business and within the scope of executive’s duties and authority. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity | |
Equity | Note 10 — Equity All shares of common stock have a par value of $0.001. Each holder of common stock is entitled to one vote per share outstanding. Public Offering In February 2021, the Company issued and sold 1,352,975 shares of its common stock, including 176,475 additional shares of common stock pursuant to the exercise of the underwriter’s option to purchase additional shares in full, in an underwritten public offering at a price of $17.00 per share (the “Public Offering”). The net proceeds to the Company from the Public Offering were $21.2 million. The Company is utilizing, and intends to continue utilizing, the net proceeds from the Public Offering to fund commercialization and development of its B-TRAN™ technology and general corporate and working capital purposes. Stock Issuances In January 2022, the Company issued 10,000 unregistered shares of common stock, valued at $100,100 at the time of issuance, to a third-party vendor as compensation for services performed. In October 2021, the Company issued 10,000 unregistered shares of common stock, valued at $139,300 at the time of issuance, to a third-party vendor as compensation for services performed. In February 2021, the Company issued 4,000 unregistered shares of common stock, valued at $68,680 at the time of issuance, to a third-party vendor as compensation for services performed. |
Equity Incentive Plan
Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2022 | |
Equity Incentive Plan | |
Equity Incentive Plan | Note 11 — 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 2021. As a result of the last amendment, the number of shares authorized for issuance under the Plan increased by 500,000 shares and the Plan will now terminate in June 2031, unless sooner terminated or extended by the Company’s Board of Directors (the “Board”).The Plan is administered by the Compensation Committee of the Board.At December 31, 2022, there were 176,430 shares of common stock available for issuance under the Plan. During the year ended December 31, 2022, the Company granted 31,062 stock options to Board members, 57,500 restricted stock units and 97,500 performance stock units to executives and 30,000 stock options, 59,500 restricted stock units and 16,500 performance stock units 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 and a Monte Carlo simulation model for the performance stock units, which contain market conditions, was $2,688,111, of which $320,722 was recognized in the respective department expenses in the statement of operations for the year ended December 31, 2022. During the year ended December 31, 2021, the Company granted 31,821 stock options to Board members, 100,000 restricted units to executives and 100,000 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 $2,078,872, of which $327,414 was recognized during the year ended December 31, 2021. As permitted by SAB 107, management utilizes the simplified approach to estimate the expected term of stock options, which represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. treasury yield in effect at the time of grant. The volatility is estimated based on the historical volatilities of comparable companies. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future. The assumptions used in the Black-Scholes model are as follows: For the year ended December 31, 2022 2021 Average risk-free interest rate 2.67 % 0.97 % Expected dividend yield — % — % Expected life 5.25 to 6.00 years 5.31 to 6.00 years Expected volatility 90 % 90 % The Company utilizes the same expected volatility in the Monte Carlo simulation for performance stock units. A summary of the Company’s stock option activity and related information is as follows: 2022 2021 Weighted Weighted Weighted Average Weighted Average Average Remaining Average Remaining Stock Exercise Life Stock Exercise Life Options Price (in years) Options Price (in years) Outstanding at January 1 492,886 $ 7.35 7.6 391,650 $ 5.70 8.1 Granted 61,062 $ 11.09 131,821 $ 11.42 Exercised (3,750) $ 5.36 (27,934) $ 3.27 Forfeited / Expired (36,250) $ 10.45 (2,651) $ 8.04 Outstanding at December 31 513,948 $ 7.59 6.6 492,886 $ 7.35 7.6 Exercisable at December 31 443,284 $ 6.78 6.2 378,470 $ 6.17 7.1 The following table sets forth additional information about stock options outstanding at December 31, 2022: Weighted Average Weighted Remaining Average Options Life Exercise Options Range of Exercise Prices Outstanding (in years) Price Exercisable $1.99 – $2.85 181,557 5.3 $ 2.52 181,557 $4.25 – $9.31 176,736 7.5 $ 7.33 176,736 $10.41 – $17.25 151,302 7.2 $ 12.82 80,638 $31.50 – $79.40 4,353 3.6 $ 48.50 4,353 513,948 443,284 Stock options granted under the Plan have ten-year terms and generally vest immediately or annually over a three-year vesting period except for option grants to independent directors that generally vest quarterly over a one-year vesting period. The estimated aggregate pretax intrinsic value (the difference between the Company’s stock price on the last day of the year ended December 31, 2022 and the exercise prices, multiplied by the number of in-the-money options) is $2.1 million for both outstanding A summary of the Company’s restricted stock unit (RSU) and performance stock unit (PSU) activity is as follows: 2022 2021 RSUs PSUs RSUs PSUs Outstanding at January 1 100,000 — — — Granted 117,000 114,000 100,000 — Vested (33,334) — — — Outstanding at December 31 183,666 114,000 100,000 $ — In the year ended December 31, 2022, 33,334 restricted stock units vested of which 12,451 restricted stock units were forfeited to cover the executives’ payroll tax withholding obligations. The payment of the taxes on the vesting of the restricted stock units is shown as a financing activity on the statement of cash flow. As of December 31, 2022, there was $3,273,829 of unrecognized compensation cost related to non-vested share-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 1.0 years. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Warrants | |
Warrants | Note 12 — Warrants A summary of the Company’s warrant activity and related information is as follows: Warrants Pre-Funded Warrants Weighted Weighted Average Average Exercise Exercise Warrants Price Warrants Price Outstanding at December 31, 2020 1,149,868 $ 6.36 320,201 $ 0.001 Exercised (363,448) $ 8.90 (66,373) $ 0.001 Outstanding at December 31, 2021 786,420 $ 5.19 253,828 $ 0.001 Outstanding at December 31, 2022 786,420 $ 5.19 253,828 $ 0.001 All warrants were exercisable at December 31, 2022 although warrants may generally be exercised only to the extent that the total number of shares of common stock then beneficially owned by these shareholders does not exceed 4.99% (or, at the investor’s election, 9.99%) of the outstanding shares of the Company’s stock. The weighted average remaining life, excluding the 253,828 pre-funded warrants with no expiration date, of the outstanding warrants is 2.2 years. The estimated aggregate pre-tax intrinsic value (the difference between the Company’s stock price on the last day of the year ended December 31, 2022 and the exercise prices, multiplied by the number of in-the-money warrants) is $7.1 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | Note 13 — Income Taxes Income taxes are disproportionate to income due to net operating loss carryforwards, which are fully reserved. As of December 31, 2022, the Company has federal net operating loss carryforwards of approximately $65 million . The federal net operating loss carryforward for years prior to 2018 expire from 2031 through 2038. Federal net operating loss carryforwards for year 2018 and thereafter do not expire. Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company’s net operating loss and credit carryforwards may be limited if a cumulative change in ownership of more than 50% occurs within any three-year period since the last ownership change. The Company may have had one or more Management has concluded that it is more likely than not that the Company will not have sufficient foreseeable taxable income within the carryforward period as applicable and permitted by current law to allow for the utilization of certain of the deductible amounts generating the deferred tax assets; therefore, a full valuation allowance has been established to reduce the net deferred tax assets to zero at December 31, 2022 and 2021. The following is a summary of the significant components of the Company’s net deferred income tax assets and liabilities as of December 31, 2022 and 2021: For the Year Ended December 31, 2022 2021 Current deferred income tax assets: Accrued compensation and other $ 11,000 $ 11,000 Less: valuation allowance (11,000) (11,000) $ — $ — Non-current deferred income tax assets and (liabilities): Net operating loss $ 13,642,000 $ 13,013,000 Research and development credit 18,000 18,000 Research and experimental costs 595,000 — Warrants issued for services 45,000 45,000 Depreciation and amortization 135,000 126,000 Exercise of options and warrants (36,000) (33,000) Stock based compensation 1,149,000 1,028,000 Intangibles and other (633,000) (606,000) Less: valuation allowance (14,915,000) (13,591,000) Net non-current deferred tax assets $ — $ — The Company has applied the provisions of FASB ASC 740, Income Tax, The Company recognizes interest and penalties related to income tax matters in interest expense and operating expenses, respectively. As of December 31, 2022 and 2021, the Company has no accrued interest and penalties related to uncertain tax positions. The Company is subject to tax in the United States (“U.S.”) and files tax returns in the U.S. federal and certain state jurisdictions. The Company is generally no longer subject to U.S. federal, state and local income tax examinations by tax authorities for all tax years since inception due to the carryover of unused net operating losses and tax credits. The Company currently is not under examination by any tax authority. The reconciliation between the statutory income tax rate and the effective tax rate is as follows: For the Year Ended December 31, 2022 2021 Statutory federal income tax rate (21) % (21) % Valuation allowance 21 21 — % — % |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are stated net of an allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on review and analysis of specific customer balances that may not be collectible, customer payment history and any other customer-specific information that may impact the evaluation of the specific customer’s credit. Trade accounts receivable at December 31, 2022 relate to a $1.2 million subcontract with Diversified Technologies, Inc. (“DTI”), signed in June 2020, to supply B-TRAN™ devices as part of a two-year contract awarded to DTI by the United States Naval Sea Systems Command for the development and demonstration of a B-TRAN™ enabled high efficiency direct current solid-state circuit breaker (“SSCB”).In 2022, two 6-month extensions were approved under this contract. At December 31, 2022, unbilled grant receivables with DTI, which are included in accounts receivable, net, were $17,857 and the allowance for doubtful accounts was $0. |
Property and Equipment | Property and Equipment Property and equipment are stated at historical cost less accumulated depreciation and amortization. Major additions and improvements are capitalized while maintenance and repairs that do not improve or extend the useful life of the respective asset are expensed. Depreciation and amortization of property and equipment is computed using the straight-line method over their estimated useful lives. Leasehold improvements are amortized over the shorter of the life of the asset or the related leases. Estimated useful lives of the principal classes of assets are as follows: Leasehold improvements Shorter of lease term or useful life Machinery and equipment 5 years Furniture, fixtures and IT equipment 3 – 5 years |
Intangible Assets | Intangible Assets The Company’s intangible assets are composed of patents, which are recorded at cost, and other intangible assets, which are recorded at cost plus the estimated present value of all future payments associated with the other intangible assets. The Company capitalizes third-party legal costs and filing fees, if any, associated with obtaining patents or other intangible assets. Once the patent asset has been placed in service, the Company amortizes these costs over the shorter of the asset’s legal life, generally 20 years from the initial filing date, or its estimated economic life using the straight-line method. For the other intangible assets, the Company amortizes the asset over the 17-year term of the underlying agreements. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The long-lived assets, consisting of property and equipment and intangible assets, held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was an impairment in the value of long-lived assets in the amount of $937 and $528 during the years ended December 31, 2022 and 2021, respectively. |
Fair Value | Fair Value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs used to establish fair value are the following: ● Level 1 — Quoted prices in active markets for identical assets or liabilities; ● Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and ● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities The Company’s financial instruments primarily consist of cash and cash equivalents, accounts payable and long-term liabilities. As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is primarily attributed to the short-term nature of these instruments. In 2015, the Company recorded a long-term liability for the estimated present value of future payments under licensing agreements. In 2021, the Company recorded an adjustment to increase the long-term liability due to an increase in the future payments due under these licensing agreements. The Company determined the discount rate to estimate the present value of the future payments based on the applicable treasury rates. The Company’s long-term liability is classified within Level 3. See Note 5 and Note 9 for more details regarding the licensing agreements. The Company did not identify any other assets and liabilities that are required to be presented in the balance sheets at fair value. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue and related cost of revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” and, as applicable, with the guidance issued by the FASB in June 2018 for the recipients of grants. Currently, the Company recognizes grant revenue and cost of grant revenue only. Government contracts, including grants, are agreements that generally provide the Company with cost reimbursement for certain types of development activities over a contractually defined period. Grant revenue is recognized in the period during which the Company incurs the related costs, provided that the Company has incurred the cost in accordance with the specifications and work plans determined between the Company and the government entity. For the years ended December 31, 2022 and 2021, the Company recognized $203,269 and respectively |
Research and Development | Research and Development Research and development costs are presented as a line item under operating expenses and are expensed as incurred. Research and development costs include costs to further develop the Company’s B-TRAN™ |
Income Taxes | Income Taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. At December 31, 2022 and 2021, the Company has established a full reserve against all deferred tax assets. Tax benefits from an uncertain tax position are recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate resolution. |
Net Loss Per Share | Net Loss Per Share The Company applies FASB ASC 260, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of equity awards and warrants using the treasury stock method. In periods with a net loss, no common share equivalents are included because their effect would be anti-dilutive. In accordance with ASC 260, shares issuable for little or no cash consideration are considered outstanding common shares and included in the computation of basic earnings per share.As such, the Company includes pre-funded warrants to purchase shares of common stock in its computation of earnings per share. The pre-funded warrants were issued in November 2019 with an exercise price of $0.001. See Note 12. At December 31, 2022 and 2021, potentially dilutive shares outstanding amounted to 1,598,034 and 1,379,306 shares, respectively, and exclude pre-funded warrants to purchase shares of common stock. |
Stock Based Compensation | Stock Based Compensation The Company applies FASB ASC 718, “Stock Compensation,” when recording stock-based compensation. Grants to non-employees are also accounted for under ASC 718. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The fair value of each performance stock unit award is estimated on the date of grant using a Monte Carlo simulation. The Company issues common stock upon exercise of equity awards and warrants. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash with a major financial institution located in the United States. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company maintains balances in excess of federally insured limits. The Company has not experienced losses in such accounts and believes it is not exposed to significant credit risk regarding its cash and cash equivalents. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, would have a material impact on the Company’s financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of property plant and equipment | Leasehold improvements Shorter of lease term or useful life Machinery and equipment 5 years Furniture, fixtures and IT equipment 3 – 5 years |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments and Other Current Assets | |
Schedule of prepayments and other current assets | December 31, 2022 2021 Prepaid insurance $ 213,357 $ 22,307 Prepaid semiconductor fabrication costs 110,319 — Prepaid software 71,141 4,374 Prepaid consulting 32,000 — Prepaid engineering services 26,000 — Other 38,548 17,219 $ 491,365 $ 43,900 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Schedule of property and equipment net | December 31, 2022 2021 Machinery and equipment $ 233,431 $ 93,811 Building leasehold improvements 10,245 10,245 Furniture, fixtures, software and IT equipment 98,793 62,884 342,469 166,940 Accumulated depreciation and amortization (142,366) (110,782) $ 200,103 $ 56,158 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets | |
Schedule of intangible assets, net | December 31, 2022 2021 Patents $ 1,263,930 $ 1,133,841 Other intangible assets 1,391,479 1,391,479 2,655,409 2,525,320 Accumulated amortization - patents (211,078) (158,516) Accumulated amortization – other intangible assets (407,900) (311,154) $ 2,036,431 $ 2,055,650 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, 2022 2021 Accrued compensation $ 70,261 $ 147,756 Accrued Board fees 62,500 30,000 Accrued professional fees 53,300 44,000 Accrued licensing fees 50,000 50,000 Accrued taxes — 75,200 Other 18,157 6,551 $ 254,218 $ 353,507 |
Lease (Tables)
Lease (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Lease | |
Schedule of future minimum payments under the lease | For the Year Ended December 31, 2023 $ 78,517 2024 80,552 2025 82,587 2026 56,132 Total lease payments 297,788 Less: imputed interest (30,204) Total lease liability 267,584 Less: current portion of lease liability (64,597) Long-term lease liability $ 202,987 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of company's stock options activity and related information | 2022 2021 Weighted Weighted Weighted Average Weighted Average Average Remaining Average Remaining Stock Exercise Life Stock Exercise Life Options Price (in years) Options Price (in years) Outstanding at January 1 492,886 $ 7.35 7.6 391,650 $ 5.70 8.1 Granted 61,062 $ 11.09 131,821 $ 11.42 Exercised (3,750) $ 5.36 (27,934) $ 3.27 Forfeited / Expired (36,250) $ 10.45 (2,651) $ 8.04 Outstanding at December 31 513,948 $ 7.59 6.6 492,886 $ 7.35 7.6 Exercisable at December 31 443,284 $ 6.78 6.2 378,470 $ 6.17 7.1 |
Schedule of additional information about stock options outstanding | The following table sets forth additional information about stock options outstanding at December 31, 2022: Weighted Average Weighted Remaining Average Options Life Exercise Options Range of Exercise Prices Outstanding (in years) Price Exercisable $1.99 – $2.85 181,557 5.3 $ 2.52 181,557 $4.25 – $9.31 176,736 7.5 $ 7.33 176,736 $10.41 – $17.25 151,302 7.2 $ 12.82 80,638 $31.50 – $79.40 4,353 3.6 $ 48.50 4,353 513,948 443,284 |
Schedule of restricted stock unit (RSU) and performance stock unit (PSU) activity | 2022 2021 RSUs PSUs RSUs PSUs Outstanding at January 1 100,000 — — — Granted 117,000 114,000 100,000 — Vested (33,334) — — — Outstanding at December 31 183,666 114,000 100,000 $ — |
Employee Stock Option | |
Schedule of assumptions used in the black-scholes model | For the year ended December 31, 2022 2021 Average risk-free interest rate 2.67 % 0.97 % Expected dividend yield — % — % Expected life 5.25 to 6.00 years 5.31 to 6.00 years Expected volatility 90 % 90 % |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Warrants | |
Summary of the company's warrant activity and related information | Warrants Pre-Funded Warrants Weighted Weighted Average Average Exercise Exercise Warrants Price Warrants Price Outstanding at December 31, 2020 1,149,868 $ 6.36 320,201 $ 0.001 Exercised (363,448) $ 8.90 (66,373) $ 0.001 Outstanding at December 31, 2021 786,420 $ 5.19 253,828 $ 0.001 Outstanding at December 31, 2022 786,420 $ 5.19 253,828 $ 0.001 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of Deferred Tax Assets and Liabilities | For the Year Ended December 31, 2022 2021 Current deferred income tax assets: Accrued compensation and other $ 11,000 $ 11,000 Less: valuation allowance (11,000) (11,000) $ — $ — Non-current deferred income tax assets and (liabilities): Net operating loss $ 13,642,000 $ 13,013,000 Research and development credit 18,000 18,000 Research and experimental costs 595,000 — Warrants issued for services 45,000 45,000 Depreciation and amortization 135,000 126,000 Exercise of options and warrants (36,000) (33,000) Stock based compensation 1,149,000 1,028,000 Intangibles and other (633,000) (606,000) Less: valuation allowance (14,915,000) (13,591,000) Net non-current deferred tax assets $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | For the Year Ended December 31, 2022 2021 Statutory federal income tax rate (21) % (21) % Valuation allowance 21 21 — % — % |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Nov. 30, 2019 | |
Summary of Significant Accounting Policies | |||||
Grant revenue | $ 203,269 | $ 576,399 | |||
Cost of grant revenue | 203,269 | 576,399 | |||
Impairment of long-lived assets | $ 937 | $ 528 | |||
Potentially dilutive shares outstanding (in shares) | 1,598,034 | 1,379,306 | |||
Patents | |||||
Summary of Significant Accounting Policies | |||||
Impairment of long-lived assets | $ 0 | $ 528 | |||
Asset amortization, legal life (in years) | 20 years | ||||
Other intangible assets | |||||
Summary of Significant Accounting Policies | |||||
Asset amortization, legal life (in years) | 17 years | ||||
Diversified Technologies Inc | |||||
Summary of Significant Accounting Policies | |||||
Unbilled grant receivables | $ 17,857 | ||||
Allowance for doubtful accounts | $ 0 | ||||
Recognized from 2020-2022 | |||||
Summary of Significant Accounting Policies | |||||
Outstanding at December 31 (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Recognized from 2020-2022 | Recognized from 2020-2022 | |||||
Summary of Significant Accounting Policies | |||||
Outstanding at December 31 (in dollars per share) | $ 0.001 | ||||
B TRAN Devices | Diversified Technologies Inc | Recognized from 2020-2022 | |||||
Summary of Significant Accounting Policies | |||||
Subcontract value | $ 1,200,000 | ||||
Supplier contract term | 2 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Building leasehold improvements | |
Summary of Significant Accounting Policies | |
Property, plant and equipment, estimated useful lives | Shorter of lease term or useful life |
Machinery and equipment | |
Summary of Significant Accounting Policies | |
Estimated useful lives (in years) | 5 years |
Furniture, fixtures and IT equipment | Maximum | |
Summary of Significant Accounting Policies | |
Estimated useful lives (in years) | 5 years |
Furniture, fixtures and IT equipment | Minimum | |
Summary of Significant Accounting Policies | |
Estimated useful lives (in years) | 3 years |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Prepayments and Other Current Assets | ||
Prepaid insurance | $ 213,357 | $ 22,307 |
Prepaid semiconductor fabrication costs | 110,319 | |
Prepaid software | 71,141 | 4,374 |
Prepaid consulting | 32,000 | |
Prepaid engineering services | 26,000 | |
Other | 38,548 | 17,219 |
Prepaid Expense and Other Assets, Current | $ 491,365 | $ 43,900 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment | ||
Gross property and equipment | $ 342,469 | $ 166,940 |
Accumulated depreciation and amortization | (142,366) | (110,782) |
Property, plant and equipment, net total | 200,103 | 56,158 |
Depreciation expense | 37,769 | 25,234 |
Amount wrote-off in property and equipment | 937 | |
Building leasehold improvements | ||
Property and Equipment | ||
Gross property and equipment | 10,245 | 10,245 |
Machinery and equipment | ||
Property and Equipment | ||
Gross property and equipment | 233,431 | 93,811 |
Furniture, fixtures, software and IT equipment | ||
Property and Equipment | ||
Gross property and equipment | $ 98,793 | $ 62,884 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets | ||
Gross intangible assets | $ 2,655,409 | $ 2,525,320 |
Intangible assets, net | 2,036,431 | 2,055,650 |
Patents | ||
Intangible Assets | ||
Gross intangible assets | 1,263,930 | 1,133,841 |
Accumulated amortization | (211,078) | (158,516) |
Other intangible assets | ||
Intangible Assets | ||
Gross intangible assets | 1,391,479 | 1,391,479 |
Accumulated amortization | $ (407,900) | $ (311,154) |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets | ||
Write-off of long-lived assets | $ 937 | $ 528 |
Amortization expense | 149,308 | 132,330 |
Amortization expense for 2023 | 152,904 | |
Amortization expense for 2024 | 152,904 | |
Amortization expense for 2025 | 152,904 | |
Amortization expense for 2026 | 152,904 | |
Amortization expense for 2027 | 152,904 | |
Amortization expense for thereafter | 930,301 | |
Patents | ||
Intangible Assets | ||
Capitalized costs for costs related to patents that have not been awarded | 341,610 | 306,640 |
Write-off of long-lived assets | $ 0 | $ 528 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses | ||
Accrued compensation | $ 70,261 | $ 147,756 |
Accrued Board fees | 62,500 | 30,000 |
Accrued professional fees | 53,300 | 44,000 |
Accrued licensing fees | 50,000 | 50,000 |
Accrued taxes | 75,200 | |
Other | 18,157 | 6,551 |
Accrued expenses | $ 254,218 | $ 353,507 |
Loans (Details)
Loans (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 31, 2021 | May 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loans | ||||
Gain on forgiveness of long-term debt | $ 0 | $ 91,407 | ||
PPP Loan | ||||
Loans | ||||
Proceeds from loan | $ 91,407 | |||
Interest rate (as a percent) | 1% | |||
U.S. Small Business Administration Economic Injury Disaster Loan | ||||
Loans | ||||
Gain on forgiveness of long-term debt | $ 91,407 |
Lease - Additional Information
Lease - Additional Information (Details) | 12 Months Ended | |||
May 31, 2021 ft² | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2021 USD ($) ft² | |
Lease | ||||
Percentage of Texas facility subleased | 75% | |||
Annual base rent in the second year of the lease | $ 80,552 | |||
Right of use asset | 248,720 | $ 307,172 | ||
Lease liability | $ 267,584 | |||
Remaining lease term | 44 months | |||
Operating lease payments | $ 76,482 | 108,247 | ||
Operating lease cost | $ 76,070 | $ 125,187 | ||
Office and laboratory space | ||||
Lease | ||||
Square feet of office and laboratory space leased (in sq ft) | ft² | 14,782 | 4,070 | ||
Initial term of the operating lease | 63 months | |||
Actual base rent in first year of the lease | $ 56,471 | |||
Abated rent | 18,824 | |||
Annual base rent in the second year of the lease | 77,330 | |||
Increase in base rent each succeeding year | $ 2,035 | |||
Operating lease renewal term | 5 years | |||
Right of use asset | $ 339,882 | |||
Lease liability | $ 339,882 | |||
Incremental borrowing rate | 6% |
Lease - Future Minimum Payments
Lease - Future Minimum Payments under the Lease (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Master Lease | ||
2023 | $ 78,517 | |
2024 | 80,552 | |
2025 | 82,587 | |
2026 | 56,132 | |
Total lease payments | 297,788 | |
Less: imputed interest | (30,204) | |
Total lease liability | 267,584 | |
Loss: current portion of lease liability | (64,597) | $ (58,864) |
Long-term lease liability | $ 202,987 | $ 267,584 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2015 | |
Commitments and Contingencies | ||||
Payment for each patent issued | $ 130,089 | $ 192,668 | ||
Licensing agreements | ||||
Commitments and Contingencies | ||||
Payable for each patent filing pending | $ 10,000 | |||
Payment for each patent issued | $ 20,000 | |||
Payment for each patent issue days | 20 days | |||
Other long-term liabilities assumed in non-cash activities | $ 426,937 | |||
Intangible assets acquired in non-cash activities | $ 426,937 | |||
Long-term liability for estimated present value of future payments under licensing agreement | 838,458 | $ 917,100 | ||
Licensing agreements | Maximum | ||||
Commitments and Contingencies | ||||
Annual payment due | $ 100,000 | |||
June 21st | Licensing agreements | ||||
Commitments and Contingencies | ||||
Payment for each patent issue days | 20 days |
Equity - Pubic Offering (Detail
Equity - Pubic Offering (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Voting per share | one | one | |
Net proceeds from offering | $ 0 | $ 21,204,609 | |
Underwriters option | |||
Equity | |||
Number of shares issued and sold | 176,475 | ||
Common Stock | |||
Equity | |||
Number of shares issued and sold | 1,352,975 | ||
Common Stock | Public Offering | |||
Equity | |||
Number of shares issued and sold | 1,352,975 | ||
Offering price | $ 17 | ||
Net proceeds from offering | $ 21,200,000 |
Equity - Stock Issuances (Detai
Equity - Stock Issuances (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2022 | Oct. 31, 2021 | Feb. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity | |||||
Stock issued for services | $ 100,100 | $ 207,980 | |||
Third-party vendor | |||||
Equity | |||||
Stock issued for services (in shares) | 10,000 | 10,000 | 4,000 | ||
Stock issued for services | $ 100,100 | $ 139,300 | $ 68,680 |
Equity Incentive Plan - Additio
Equity Incentive Plan - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock Units (RSUs) | |||
Equity Incentive Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 183,666 | 100,000 | |
Number of units granted | 117,000 | 100,000 | |
Performance Shares | |||
Equity Incentive Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 114,000 | ||
Number of units granted | 114,000 | ||
2013 Equity Incentive Plan | |||
Equity Incentive Plan | |||
Share-based compensation arrangement by share-based payment award, options, outstanding | $ 2,100,000 | ||
Share-based compensation arrangement by share-based payment award, options, vested | 2,100,000 | ||
Estimated fair value of these equity grants | 2,688,111 | $ 2,078,872 | |
Estimated fair value of these equity grants recognized | $ 320,722 | $ 327,414 | |
2013 Equity Incentive Plan | Share-based Payment Arrangement, Employee | |||
Equity Incentive Plan | |||
Number of stock options granted | 30,000 | ||
2013 Equity Incentive Plan | Share-based Payment Arrangement, Nonemployee | |||
Equity Incentive Plan | |||
Number of stock options granted | 31,062 | ||
2013 Equity Incentive Plan | Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Nonemployee | |||
Equity Incentive Plan | |||
Number of units granted | 57,500 | ||
2013 Equity Incentive Plan | Performance Stock Units (PSUs) | |||
Equity Incentive Plan | |||
Number of units granted | 97,500 | ||
Equity Incentive Plan | |||
Equity Incentive Plan | |||
Number of additional shares authorized for issuance | 500,000 | ||
Shares of common stock available for issuance under the Plan (in shares) | 176,430 | ||
Weighted average period for recognition | 1 year | ||
Number of stock options granted | 61,062 | 131,821 | |
Equity Incentive Plan | Employees | |||
Equity Incentive Plan | |||
Number of stock options granted | 100,000 | ||
Equity Incentive Plan | Board members | |||
Equity Incentive Plan | |||
Number of stock options granted | 31,821 | ||
Equity Incentive Plan | Executives | |||
Equity Incentive Plan | |||
Number of stock options granted | 100,000 | ||
Equity Incentive Plan | Restricted Stock Units (RSUs) | Employees | |||
Equity Incentive Plan | |||
Estimated fair value of options granted | $ 59,500 | ||
Equity Incentive Plan | Performance Stock Units (PSUs) | Employees | |||
Equity Incentive Plan | |||
Estimated fair value of options granted | $ 16,500 |
Equity Incentive Plan - Assumpt
Equity Incentive Plan - Assumptions Used in the Black-Scholes Model (Details) - Equity Incentive Plan | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity Incentive Plan | ||
Average risk-free interest rate | 2.67% | 0.97% |
Expected dividend yield | 0% | 0% |
Expected volatility | 90% | 90% |
Maximum | ||
Equity Incentive Plan | ||
Expected life | 6 years | 6 years |
Minimum | ||
Equity Incentive Plan | ||
Expected life | 5 years 3 months | 5 years 3 months 21 days |
Equity Incentive Plan - Summary
Equity Incentive Plan - Summary of Stock Option Activity and Related Information (Details) - Equity Incentive Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options | |||
Outstanding at January 1 | 492,886 | 391,650 | |
Number of stock options granted | 61,062 | 131,821 | |
Exercised (in shares) | (3,750) | (27,934) | |
Forfeited / Expired | (36,250) | (2,651) | |
Outstanding at December 31, 2022 | 513,948 | 492,886 | 391,650 |
Exercisable at December 31, 2022 | 443,284 | 378,470 | |
Weighted Average Exercise Price | |||
Outstanding at January 1 (in dollars per share) | $ 7.35 | $ 5.70 | |
Granted | 11.09 | 11.42 | |
Exercised (in dollars per share) | 5.36 | 3.27 | |
Forfeited/Expired (in dollars per share) | 10.45 | 8.04 | |
Outstanding at December 31, 2022 (in dollars per share) | 7.59 | 7.35 | $ 5.70 |
Exercisable at December 31, 2022 (in dollars per share) | $ 6.78 | $ 6.17 | |
Weighted Average Remaining Life (in years) | |||
Outstanding at December 31, 2022 | 6 years 7 months 6 days | 7 years 7 months 6 days | 8 years 1 month 6 days |
Exercisable at December 31, 2022 | 6 years 2 months 12 days | 7 years 1 month 6 days |
Equity Incentive Plan - Schedul
Equity Incentive Plan - Schedule of Additional Information About Stock Options Outstanding (Details) - Equity Incentive Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity Incentive Plan | |||
Options Outstanding (in shares) | 513,948 | 492,886 | 391,650 |
Weighted Average Remaining Life (in years) | 6 years 7 months 6 days | 7 years 7 months 6 days | 8 years 1 month 6 days |
Weighted Average Exercise Price (in dollars per share) | $ 7.59 | $ 7.35 | $ 5.70 |
Options Exercisable (in shares) | 443,284 | 378,470 | |
$1.99 - $2.85 | |||
Equity Incentive Plan | |||
Options Outstanding (in shares) | 181,557 | ||
Weighted Average Remaining Life (in years) | 5 years 3 months 18 days | ||
Weighted Average Exercise Price (in dollars per share) | $ 2.52 | ||
Options Exercisable (in shares) | 181,557 | ||
$4.25 - $9.31 | |||
Equity Incentive Plan | |||
Options Outstanding (in shares) | 176,736 | ||
Weighted Average Remaining Life (in years) | 7 years 6 months | ||
Weighted Average Exercise Price (in dollars per share) | $ 7.33 | ||
Options Exercisable (in shares) | 176,736 | ||
$10.41 - $17.25 | |||
Equity Incentive Plan | |||
Options Outstanding (in shares) | 151,302 | ||
Weighted Average Remaining Life (in years) | 7 years 2 months 12 days | ||
Weighted Average Exercise Price (in dollars per share) | $ 12.82 | ||
Options Exercisable (in shares) | 80,638 | ||
$31.50 - $79.40 | |||
Equity Incentive Plan | |||
Options Outstanding (in shares) | 4,353 | ||
Weighted Average Remaining Life (in years) | 3 years 7 months 6 days | ||
Weighted Average Exercise Price (in dollars per share) | $ 48.50 | ||
Options Exercisable (in shares) | 4,353 |
Equity Incentive Plan - Summa_2
Equity Incentive Plan - Summary Of The Company's Restricted Stock Unit (RSU) and Performance Stock Unit (PSU) Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted stock unit (RSU) and performance stock unit (PSU) activity | ||
Unrecognized compensation cost related to non-vested share-based compensation arrangements | $ 3,273,829 | |
RSUs | ||
Restricted stock unit (RSU) and performance stock unit (PSU) activity | ||
Outstanding at January 1 | 100,000 | |
Granted | 117,000 | 100,000 |
Vested | (33,334) | |
Outstanding at December 31 | 183,666 | 100,000 |
Number of shares forfeited to cover payroll tax withholding obligations | 12,451 | |
PSUs | ||
Restricted stock unit (RSU) and performance stock unit (PSU) activity | ||
Granted | 114,000 | |
Outstanding at December 31 | 114,000 |
Warrants (Details)
Warrants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | |
Warrant | ||
Warrants | ||
Outstanding at December 31 (in shares) | 1,149,868 | |
Exercised (in shares) | (363,448) | |
Outstanding at December 31 (in shares) | 786,420 | 786,420 |
Outstanding at December 31 (in dollars per share) | $ 6.36 | |
Exercised (in per share) | 8.90 | |
Outstanding at December 31 (in dollars per share) | $ 5.19 | $ 5.19 |
Pre Funded Warrants | ||
Warrants | ||
Outstanding at December 31 (in shares) | 320,201 | |
Exercised (in shares) | (66,373) | |
Outstanding at December 31 (in shares) | 253,828 | 253,828 |
Outstanding at December 31 (in dollars per share) | $ 0.001 | |
Exercised (in per share) | 0.001 | |
Outstanding at December 31 (in dollars per share) | $ 0.001 | $ 0.001 |
Warrants - Additional Informati
Warrants - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Warrants | |
Maximum Beneficial Ownership Percentage of Warrants | 4.99% |
Maximum Beneficial Ownership Percentage of Warrants Upon Investor's Election | 9.99% |
Pre Funded Warrants | |
Warrants | |
Number of warrants with no expiration date | shares | 253,828 |
Class of warrants, weighted average remaining life of warrants | 2 years 2 months 12 days |
Warrant | |
Warrants | |
Proceeds from the exercise of warrants | $ | $ 7.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 0 | $ 0 |
Operating loss carryforwards, limitations on use | through 2038. Federal net operating loss carryforwards for year 2018 and thereafter do not expire. Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company's net operating loss and credit carryforwards may be limited if a cumulative change in ownership of more than 50% occurs within any three-year period since the last ownership change. The Company may have had one or more | |
Domestic tax authority | ||
Income Taxes | ||
Operating loss carryforwards | $ 65,000,000 |
Income Taxes - Summary of Signi
Income Taxes - Summary of Significant Components of Net Deferred Income Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets and liabilities | ||
Accrued compensation and other | $ 11,000 | $ 11,000 |
Less: valuation allowance | (11,000) | (11,000) |
Current deferred income tax assets | 0 | 0 |
Net operating loss | 13,642,000 | 13,013,000 |
Research and development credit | 18,000 | 18,000 |
Research and experimental costs | 595,000 | |
Warrants issued for services | 45,000 | 45,000 |
Depreciation and amortization | 135,000 | 126,000 |
Exercise of options and warrants | (36,000) | (33,000) |
Stock based compensation | 1,149,000 | 1,028,000 |
Intangibles and other | (633,000) | (606,000) |
Less: valuation allowance | (14,915,000) | (13,591,000) |
Net non-current deferred tax assets | $ 0 | $ 0 |
Income Taxes - Reconciliation B
Income Taxes - Reconciliation Between the Statutory Income Tax Rate and the Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Statutory federal income tax rate | (21.00%) | (21.00%) |
Valuation allowance | 21% | 21% |
Effective income tax rate | 0% | 0% |