IPWR 10-K & 10-Q changes, risk factors and insider trading

Since inception, we have sustained approximately $107.5$118 million in net losses and we had net losses for the years ended December 31, 20242025 and 20232024 of approximately $10.4$10.6 million and $10.0$10.4 million, respectively. We expect to incur losses and negative cash flows from operating activities at least until such time as we have commercialized our B-TRAN™® technology and developed a substantial and stable revenue base. We cannot assure you that we can develop a substantial and stable revenue base or achieve or sustain profitability in the future.

We have been funding operations primarily through the sale of common stock and pre-funded warrants. We currently generate limited commercial revenue, and, in order to fund our operations until we are profitable, we maywill need to raise additional funds and such funds may not be available on commercially acceptable terms, if at all. If we are unable to raise funds on acceptable terms if and as needed, we may not be able to execute our business plan and generate sustainable revenue. This may seriously harm our business, financial condition and results of operations. In the event we are not able to continue operations, you will likely suffer a complete loss of your investment in our securities.

Prototype and product development and testing may be subject to unanticipated and significant delays, expenses and technical or other problems. We cannot guarantee that we will successfully achieve our milestones within our planned timeframe or ever. We have developed and tested discrete B-TRAN® devices and SymCool® power modules. We cannot predict whether future prototypes of, or actual, B-TRAN® products will achieve results consistent with our expectations, third-party simulations or the expectations of our potential customers and/or licensees. A prototype or product could cost significantly more than expected or the prototype or product design fabrication process could uncover problems that are not consistent with our expectations. Prototypes of B-TRAN® devices and new product introductions are a material part of our business plan, and if they are not proven to be successful, our business and prospects would be harmed. In addition, for both testing and commercialization purposes, the B-TRAN® needs to be packaged and paired with an efficient double-sided driver. Driver development is subject to similar risks as B-TRAN® prototype and product development including being subject to unanticipated and significant delays, expenses and technical or other problems.

The marketing and sale of our future products to end user customers may be conducted by us, distributors, sales representatives, future licensees of our technology or likely a combination thereof. Consequently, the commercial success of our products may depend, to a great extent, on the efforts of others. We may not be able to identify, maintain or establish appropriate relationships in the future. We can give no assurance that any such third parties will focus adequate resources on selling our products or will be successful in selling them. In addition, these third parties may require customization of our designs or other concessions that could reduce the potential profitability of these relationships. Failure to develop favorable licensing relationships in our target markets may adversely affect our commercialization schedule and, to the extent we enter into such relationships, the failure of our licensees to focus adequate resources on selling our products or be successful in selling them or to meet their monetary obligations to us may adversely affect our financial condition and results of operations. In 2024,the last two years, we added threefour distribution partners. We can provide no assurance that these distributors will be successful in selling our products or that we will be able to secure additional distribution partners in the future.

We are in the process of developing and commercializing products for use in our target markets, which include, among others, AI data centers, solid-state circuit protection, electric and plug-in hybrid electric vehicles, electric vehicle charging infrastructure, renewable energy, grid storage and improved grid resiliency. Governmental support for these markets and technologies may impact the size and growth rate of these markets and, as a result, our business. In recent years, the federal government and many states adopted regulations and established incentives to accelerate a transition to electric vehicles and promote the development and use of renewable energy in the United States. However, after the new U.S. administration took office in January 2025, the federal governmentthere has signaled that there could bebeen less support for these markets and technologies at the federal level going forward and thatas priorities mayhave be shiftingshifted to other areas. For example, in January 2025, the new U.S. administration took action to revoke the prior administration’s order that EVs make up half of all new cars sold in the U.S. by 2030, repealed certain tax credit programs for EV purchases and paused funding under the Inflation Reduction Act for a network of EV charging stations. While it is too earlydifficult to determine howgauge the newimpact that the U.S. administration and its actions with respect to our target markets will impacthave on the global growth and scaling of thoseour target markets and related technologies, reduced government support in the United States and abroad could cause growth in these global markets to slow or contract, which couldmay have a material adverse effect on our prospects, business, future operating results and financial condition.

We maywill need additional financing to execute our business plan and fund operations, which additional financing may not be available on commercially reasonable terms or at all.

We have and, prior to profitable commercialization at scale, may continue to rely on raising funds from investors and/or other sources to support our research and development activities and execute our business plan. Macro-economic conditions in the United States and abroad, like those currently in effect,abroad may result in a tightening of the credit markets and/or less capital available for small public companies, which may make it more difficult for us to raise capital on commercially reasonable terms or at all. If we are unable to raise funds on acceptable terms if and as needed, we may be forced to curtail our operations or even cease operating altogether. Therefore, unfavorable macroeconomic conditions, particularly in the United States, including as a result of inflation, and any recession or slowed economic growth, could have an outsized negative impact on us. This may seriously harm our business, financial condition and results of operations.

We expectmay topursue fundfunding a portion of our development efforts with funds received under government grants. However, we may not be awarded any such grants in the future, any such grant awards may be insufficient to fund a meaningful portion of our development spending and/or the timing of the receipt of any such award or awards may not coincide with the planned timing of our development efforts. Grants are subject to long procurement cycles, typically 6 to 12 months, and there may not be open grant solicitations for topics relevant to our B-TRAN® technology. Grant topics are typically identified 1 to 2 years prior to the opening of the grant solicitation and the windows to submit proposals are discrete time periods. Further, the award of grants is a subjective process and government agencies often do not provide detailed feedback on why a grant was not received.

We are authorized to issue 10,000,000 shares of “blank check” preferred stock, with such rights, preferences and privileges as may be determined from time-to-time by our Board of Directors (“Board”).Board. Our Board is empowered, without stockholder approval, to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock. The issuance of shares of preferred stock, depending on the rights, preferences and privileges attributable to the preferred stock, could reduce the voting rights and powers of our common stock and the portion of our assets allocated for distribution to common stockholders in a liquidation event, and could also result in dilution in the book value per share of our common stock. The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of the Company, to the detriment of the investors in our common stock. We cannot assure you that we will not, under certain circumstances, issue shares of our preferred stock. At December 31, 2024,2025, we had no shares of preferred stock outstanding.

Shares eligible for future sale, including pre-funded warrants and options exercisable into shares of our common stock,stock and restricted stock units and performance stock units subject to future vesting, may cause dilution to our existing stockholders and may adversely affect the market for our common stock.

At December 31, 2024,2025, we had 1,297,3691,373,809 potentially dilutive shares outstanding, exclusive of pre-funded warrants to purchase shares of common stock that are considered outstanding common shares and included in our computation of basic earnings per share, and we may grant additional options, restricted stock units, performance stock units, other stock-based awards and/or warrants in the future. The holders of vested options or warrants, including pre-funded warrants,warrants may exercise their options and/or pre-funded warrants and sell a large number of shares. Any sale of a substantial number of shares of our common stock may have a material adverse effect on the market price of our common stock.

Raising additional capital, ifas necessary, may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies.

The trading market for our common stock may be influenced by the research and reports that industry or securities analysts publish about us or our business. As of December 31, 2024,2025, noone securities analyst published reports on us. If this securities analyst stops publishing reports on us and no researchother securities analysts initiate coverage on us in 2025,us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. In addition, if this securities analyst downgrades his rating of our stock or one or more analysts initiate coverage on us but issues an adverse opinion regarding our stock, our stock price would likelymay decline.

FromTo inception,date, operations have been funded primarily through the sale of common stock and pre-funded warrants and we have generated $3.7 million in grant revenue for bidirectional power switch development. Grant revenue was $0 and $37,388, respectively, in the years ended December 31, 2024 and 2023. We may pursue additional research and development grants, if and when available, to further develop and/or improve our technology.

We are in the process of commercializing our B-TRAN® technology and have launched our first two commercial products, the SymCooldiscrete B-TRAN® Power Module and the SymCool® IQ Intelligent Power Module. We generated $86,032$37,728 and $161,483,$86,032, respectively, in commercial revenue in the years ended December 31, 20242025 and 2023.2024.

In early 2023, we launched ourOur first commercial product,product launch was the SymCooldiscrete B-TRAN® Power Module.. This multi-diesingle B-TRAN® moduledie packaged for electrical connection is designed to meet the very low conduction loss needs of the solid-state circuit breakerprotection market.and Weelectric commencedvehicle shipment(“EV”) ofcontactor SymCool® Power Modules to fulfill customer orders in early 2024.markets.

In late 2022, we announced, and began the first phase of, a product development agreement with Stellantis, a top 10 global automaker, for a custom B-TRAN® power module for use in the automaker’s EV drivetrain inverters in its next generation EV platform. 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. TheIn nextAugust phase2025, we secured an order from Stellantis for custom development and packaged devices targeting multiple EV applications. We completed the first of thefive programdeliverables isunder expectedthis topurchase buildorder onin 2025. Also in 2025, Stellantis informed us that they are prioritizing the priorEV phasescontactor andapplication transitionover tothe Stellantis’drivetrain productioninverter team.application. We are currently finalizingworking to complete the scoperemaining ofdeliverables work forunder the nextAugust phase2025 ofpurchase theorder programand engaged with Stellantis.Stellantis Thison phasea ispotential expectedEV tocontactor include the extensive testing of the custom B-TRAN® module to meet automotive certification standards enabling B-TRAN® to be the core of the powertrain inverter for the automaker’s next-generation EVs.program.

We have announced several engagements and/or initial orders with large companies, including aStellantis secondand top 10other global automaker,automakers, aForbes thirdGlobal global automaker, a top 10 global provider of power conversion solutions to the solar industry, two global500 diverse power management market leaders, threeglobal tier 1 automotive suppliers, acircuit globalprotection powermarket conversionleaders, supplierinverter / energy storage market leaders and others. These companies intend to test and evaluateevaluate, or are already in the B-TRAN®process of testing and evaluating, our technology for use in their applicationsapplications. and theseThese engagements could lead to future design wins or custom development agreements. We also announced agreements with threemultiple distribution partners. We may add other distribution partners in the future. Recently, we signed a letter of intent with a power module maker in Asia to manufacture and offer B-TRAN®-based power modules for sale to their customers. We may engage with other power module manufacturers or others in the power semiconductor ecosystem in the future to further expand the channels to market for products incorporating our technology.

In late 2024, we announced our first design win for solid-state circuit breakers (“SSCBs”) with one of the largest circuit protection equipment manufacturesmanufacturers in Asia serving the industrialdata center, renewable energy, energy storage, EV and utilityother industrial 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 includesincluded the product design, prototype builds and testing of the SSCB. We completed our deliverables, including SSCB whichprototypes, isunder targetedthis for completionagreement in the secondfirst quarter of 20252025. toIn bethe followedthird quarter of 2025, the customer successfully completed their testing of updated SSCB prototypes that included enhancements requested by commercialthe customer. The customer plans on gathering feedback on this new product from their end customers ahead of product launch. In February 2026, we entered into a multi-year strategic cooperation agreement with this customer for the design, development and worldwide sales laterof incircuit theprotection years.solutions including SSCBs, battery disconnect units and EV contactors featuring B-TRAN®. We expect to announce additional design wins and/or custom development agreements with this customer and/or other customers in 2025.2026.

In MarchFebruary and April 2024,2026, we issued and sold 1,666,6683,505,855 shares of our common stock at a price of $7.50$2.75 per share and 633,332952,881 pre-funded warrants to purchase shares of our common stock at a price of $7.499$2.749 per pre-funded warrant in an underwritten public offering.offering and 631,332 pre-funded warrants to purchase shares of common stock at a price of $2.749 per pre-funded warrant in a concurrent private placement (taken together, the “February 2026 Offering”). The pre-funded warrants have an exercise price of $0.001 per share. The estimated net proceeds to us from the publicFebruary offering2026 wereOffering $15.7are $12.6 million. We intend to use the net proceeds from the publicFebruary offering2026 Offering to fund further commercialization and development of our B-TRAN® technology and products and general corporate and working capital purposes.

Impairment of Long-Lived Assets. The long-lived assets, consisting of property and equipment and intangible assets, held and used by us 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. We determined that there was a $41,122 impairment in the value of long-lived assets during the year ended December 31, 2025 and a $77,444 impairment in the value of long-lived assets during the year ended December 31, 2024, and no impairment in the value of long-lived assets during the year ended December 31, 2023.2024.

Commercial Revenue. Commercial revenueRevenue was $37,728 in the year ended December 31, 2025 compared to $86,032 in the year ended December 31, 2024 compared to $161,483 in the year ended December 31, 2023.2024. In theboth year ended December 31, 2024,years, our commercial revenue related to development agreements and low-volume product sales. In the year ended December 31, 2023, our commercial revenue consisted of development revenue including the sale of packaged B-TRAN® devices. We expect to recognize modest commercial revenue from both product sales and development agreements in 2025 with product sales increasing in the second half of the year.2026.

Cost of Commercial Revenue. Cost of commercial revenue was $93,409$60,408 and $123,225$93,409 for the years ended December 31, 20242025 and 2023,2024, respectively.

Gross Profit (Loss).Loss. Our gross loss was $22,680 for the year ended December 31, 2025 compared to $7,377 for the year ended December 31, 2024 due to the higher costs associated with initial low volume production.production Gross profit was $38,258and, in the2025, yearcosts ended December 31, 2023 as commercialexceeding revenue fromunder ourthe development agreement with Stellantisour exceededfirst thedesign associatedwin program costs.customer. We do not expect to recognize a gross profit from commercial revenueloss in 20252026 due to the higher costs associated with initial low volume production.

General and Administrative Expenses. General and administrative expenses increased by $75,153,$158,254, or 2%,4%, to $3,766,790 in the year ended December 31, 2025 from $3,608,536 in the year ended December 31, 20242024. fromThe $3,533,383increase inwas thedue yearto endedhigher Decembersearch 31,and 2023.placement fees of $220,519, stock-based compensation expense of $137,535, legal fees of $94,161 and other spending of $35,366, partly offset by lower investor relations spending of $329,327. We expect slightlymoderately higher general and administrative expenses, exclusive of stock-based compensation, in 2025.2026.

Sales and Marketing Expenses. Sales and marketing expenses increaseddecreased by $134,292,$151,536, or 12%, to $1,096,508 in the year ended December 31, 2025 from $1,248,044 in the year ended December 31, 2024 from $1,113,752 in the year ended December 31, 2023.2024. The increasedecrease was due primarily to higherlower stock-based compensation expense, on the forfeiture of previously granted but unvested equity awards, of $147,703 and personnel costs of $220,998$103,918, partly offset by higher search and placement fees of $72,454 and other costs of $23,287, partly offset by lower stock-based compensation expense of $63,557 and professional fees of $46,436.$27,631. We expect higher sales and marketing expenses in 20252026 as we add sales personnel, expand our engagement and sales pipeline with prospective customers, continue to build our sales pipeline and further commercialize our B-TRAN® technology and related products.

Loss from Operations. Our loss from operations for the year ended December 31, 20242025 was $11,071,175$10,933,189 or 7%1% higherlower than theour $10,352,088$11,071,175 loss from operations for the year ended December 31, 2023,2024, driven by the factors discussed above.

Interest Income, Net. Interest income, net increaseddecreased by $255,294$298,593 to $354,769 for the year ended December 31, 2025 from $653,362 for the year ended December 31, 2024 from $398,068 for the year ended December 31, 2023 due primarily to a higherdeclining averagecash balance onin, and lower interest rates on, our money market account in 20242025 ascompared ato result of our public offering.2024.

In 2024,2025, we generated commercial revenue of $86,032.$37,728. In 2025,2026, we expect growth in commercial revenue from product salesdevelopment agreements and product developmentsales agreements. Whilealthough we do not haveexpect anyto activerecognize governmenta programs,gross we are pursuing government funding opportunities that may result in additional grant revenue in the future.profit. We have incurred losses since our inception. We have funded our operations to date primarily through the sale of common stock and common stock equivalents.

We believe that our cash and cash equivalents on hand will be sufficient to meet our ongoing liquidity needs for at least the next 12 months. See “February 2026 Offering” below. Additional future financing may be necessary to fund our operations and there can be no assurance that, if needed, we will be able to secure additional debt or equity financing on terms acceptable to us or at all. Although we believe we have adequate sources of liquidity over the long term, the success of our operations, the global economic outlook, and the pace of sustainable growth in our markets could each impact our business and liquidity.

We expect an increase in cash outflows from operating activities in 20252026 as we further commercialize our B-TRAN™® technology.

Financing activities in the year ended December 31, 2025 resulted in a net cash outflow of $128,828 due to the payment of withholding taxes on the vesting of restricted stock units of $128,938, slightly offset by $110 in proceeds from the exercise of pre-funded warrants. Financing activities in the year ended December 31, 2024 resulted in a net cash inflow of $16,617,023 due to net proceeds from our public2024 offeringPublic Offering of $15,724,818 and proceeds from warrant and stock option exercises of $1,120,513, slightly offset by $228,308 for the payment of withholding taxes on the vesting of restricted stock units. Financing activities in the year ended December 31, 2023 resulted in a cash outflow of $216,264 for the payment of withholding taxes on the vesting of restricted stock units.

In MarchFebruary and April 2024,2026, we issued and sold 1,666,6683,505,855 shares of our common stock at a price of $7.50$2.75 per share and 633,332952,881 pre-funded warrants to purchase shares of our common stock at a price of $7.499$2.749 per pre-funded warrant in an underwritten public offering.offering and 631,332 pre-funded warrants to purchase shares of common stock at a price of $2.749 per pre-funded warrant in a concurrent private placement (taken together, the “February 2026 Offering”). The pre-funded warrants have an exercise price of $0.001 per share. The estimated net proceeds to us from the publicFebruary offering2026 wereOffering $15.7are $12.6 million. We intend to use the net proceeds from the publicFebruary offering2026 Offering to fund further commercialization and development of our B-TRAN™® technology and products and general corporate and working capital purposes.

In March 2021, we entered into a lease agreement (the “Original Lease”) for 4,070 square feet of office and laboratory space located in Austin, Texas (the “Original Suite”). The commencement of the lease occurred on June 1, 2021 and the initial term of the lease was 63 months. 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, we were required to pay our proportionate share of operating costs for the building under this triple net lease.

We are in the process of commercializing our B-TRAN® technology and have launched our first two commercial products, the discrete B-TRAN® and the SymCool® Power Module. We generated no revenue in the three months ended March 31, 2026 and $12,003$5,800 in revenue in the threesix months ended MarchJune 31,30, 2026 and $13,278 in revenue in the six months ended June 30, 2025.

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 products described above, we would expect the time from announcing a design win to the sale of the related OEM product to be roughly twelve to eighteen months, although it may vary considerably depending on the customer and application. 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.

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. In August 2025, we secured an order from Stellantis for custom development and packaged devices targeting multiple EV applications. We completed the first of five deliverablesdeliverable under this purchase order in 2025. Also in 2025, Stellantis informed us that they are prioritizing the EV contactor application over the drivetrain inverter application. Recently, we delivered next generation B-TRAN® custom-packaged samples and development kits for evaluation to Stellantis for EV applications under the purchase order. We are currently working to complete the remaining deliverables under the August 2025 purchase order and engaged with Stellantis on a potential EV contactor program.

We have announced several engagements and/or initial orders with large companies, including Stellantis and other global automakers, Forbes Global 500 diverse power management market leaders, global tier 1 automotive suppliers, circuit protection market leaders, inverter / energy storage market leaders and others. TheseCompanies companiesin our sales pipeline 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 alsopreviously announced agreements with multiple distribution partners. We may add other distribution partners in the future. Recently, we signed a letter of intent with an industry partner to co-develop a B-TRAN®-enabled intelligent solid-state circuit breaker (“SSCB”) prototype for evaluation by a U.S. hyperscaler in its development environment for the NVIDIA Rubin Ultra 800V direct current AI data center power moduledistribution maker in Asia to manufacture and offer B-TRAN®-based power modules for sale to their customers.system. We may engage with other power module manufacturers or others in the power semiconductor ecosystem in the future to further expand the channels to market for products incorporating our technology.

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 data center, renewable energy, energy storage, EV and other industrial 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 included the product design, prototype builds and testing of the SSCB. We completed our deliverables, including SSCB prototypes, under this agreement in the first quarter of 2025. In the third quarter of 2025, 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. In February 2026, we entered into a multi-year strategic cooperation agreement with this customer for the design, development and worldwide sales of circuit protection solutions including SSCBs, battery disconnect units and EV contactors featuring B-TRAN®. We expect to announce additional design wins and/or custom development agreements with this customer and/or other customers in 2026.the coming quarters.

Comparison of the three months ended MarchJune 31,30, 2026 to the three months ended MarchJune 31,30, 2025

Revenue. Revenue was $0$5,800 for the three months ended MarchJune 31,30, 2026, compared to $12,003$1,275 forin the three months ended MarchJune 31,30, 2025. ForRevenue in the three months ended MarchJune 31,30, 2025, our revenue included product sales and development revenue2026 related to shipments under our firstpurchase design win. We expect to recognize modest revenueorder from bothStellantis. product sales and development agreementsRevenue in the remainderthree ofmonths 2026.ended June 30, 2025 related to initial orders from customers evaluating our technology for use in their applications.

Cost of Revenue. Cost of revenue was $0 and $30,862$4,008 for the three months ended MarchJune 31,30, 20262026, andcompared 2025,to respectively.$3,477 Forin the three months ended MarchJune 31,30, 2025,2025. ourCost of revenue in the three months ended June 30, 2026 related to the cost of revenueproducts includedshipped costunder our purchase order from Stellantis. Cost of productrevenue salesin andthe developmentthree expensesmonths ended June 30, 2025 related to ourinitial firstlow designvolume win.and high-cost shipments of prototype products.

General and Administrative Expenses. General and administrative expenses increased by $320,190,$760,733, or 36%,85%, to $1,220,011$1,657,972 in the three months ended MarchJune 31,30, 2026 from $899,821$897,239 in the three months ended MarchJune 31,30, 2025. The increase was due to higher stock-based compensation expense of $277,824,$420,255, of which $266,926 related to inducement awards granted to our new CEO in the fourth quartervesting of 2025,a andperformance stock unit with a performance condition that was previously deemed not probable, non-cash patent impairment charges of $215,133, higher personnel costs of $116,095, partly offset by lower investor relations spending of $70,631$98,425 and other spendingcosts of $3,098. We expect slightly higher quarterly general and administrative expenses, exclusive of stock-based compensation, in the remainder of 2026 as compared to the first quarter of 2026.$26,920.

Sales and Marketing Expenses. Sales and marketing expenses increased by $101,538,$195,801, or 30%,57%, to $439,698$536,834 in the three months ended MarchJune 31,30, 2026 from $338,160$341,033 in the three months ended MarchJune 31,30, 2025. The increase was due to higher personnel costs of $82,991,$144,271, travel costs of $12,855$70,354, stock-based compensation expense of $31,800 and other spending of $5,692.$9,543, Wepartly expectoffset higherby quarterlylower salessearch and marketingplacement expenses in the remainderfees of 2026 as compared to the first quarter of 2026 as we add sales personnel, expand our engagement and sales pipeline with prospective customers, and further commercialize our B-TRAN® technology and related products.$60,167.

Loss from Operations. Our loss from operations for the three months ended MarchJune 31,30, 2026 was $3,692,022,$3,623,148, or 31%15% higher, as compared to the $2,824,832$3,140,493 loss from operations for the three months ended MarchJune 31,30, 2025, for the reasons discussed above.

Interest Income, Net. Net interest income was $60,517$210,222 for the three months ended MarchJune 31,30, 2026, compared to $121,808$103,728 for the three months ended MarchJune 31,30, 2025, due primarily as a result ofto the impact of decreased interest from a lower average dailyhigher cash balance andafter lowerthe May 2026 Offering on interest rateearned on our money market account.accounts. This was partly offset by lower interest rates on these accounts in the second quarter of 2026 compared to the second quarter of 2025.

Net Loss. Our net loss for the three months ended MarchJune 31,30, 2026 was $3,631,505,$3,412,926, or 34%12% higher, as compared to a net loss of $2,703,024$3,036,765 for the three months ended MarchJune 31,30, 2025, for the reasons discussed above.

At MarchJune 31,30, 2026, we had cash and cash equivalents of $16.4$41.3 million. Our net working capital at MarchJune 31,30, 2026 was $15.3$40.1 million. We had no outstanding debt at MarchJune 31,30, 2026.

Operating activities in the threesix months ended MarchJune 31,30, 2026 resulted in cash outflows of $2,034,860,$4,473,167, which were due to the net loss for the period of $3,631,505,$7,044,431, partly offset by stock-based compensation of $991,440,$1,635,526, favorable balance sheet timing of $488,259$480,283, patent impairment charges of $215,133, depreciation and amortization of $194,454, and other non-cash items of $116,946.$45,868.

Operating activities in the threesix months ended MarchJune 31,30, 2025 resulted in cash outflows of $2,066,774$4,425,301, which were due to the net loss for the period of $2,703,024,$5,739,789, partly offset by stock-based compensation of $384,595,$714,625, depreciation and amortization of $182,107 and favorable balance sheet timing of $139,102 and other non-cash items of $112,553.$417,756.

We expect a modest increase in cash outflows from operating activities in the remainder of 2026 as compared to the first quartertwo quarters of 2026 as we further commercialize our B-TRAN® technology.

Investing activities in the threesix months ended MarchJune 31,30, 2026 and 2025 resulted in cash outflows of $253,966$364,048 and $69,878,$220,337, respectively, for the acquisition of intangible assets and fixed assets.

Financing activities in the threesix months ended MarchJune 31,30, 2026 resulted in cash inflows of $12,570,526,$40,259,375 asin net proceeds from the Februaryissuance 2026and Offering (see below)sale of $12,574,677common werestock onlyand slightlypre-funded warrants and $267 from the exercise of pre-funded warrants, partly offset by the$256,988 paymentin oftax withholdingpayments taxesrelated uponto the vesting of restricted stock units of $4,151.units.

Financing activities in the threesix months ended MarchJune 31,30, 2025 resulted in net cash outflows of $9,346$91,659 fromwith thea paymentcash outflow of withholding$91,769 taxesin upontax payments related to the vesting of restricted stock units.units slightly offset by a cash inflow of $110 from the exercise of pre-funded warrants.

OnIn May 14, 2026, we entered into a definitive agreement with certain institutional investors for the purchaseissued and sale ofsold 3,220,961 shares of our common stock at a price of $5.67 per share and 2,070,044 pre-funded warrants to purchase shares of common stock at a price of $5.669 per pre-funded warrant in a registered direct offering (the "May 2026 Offering”). The pre-funded warrants have an exercise price of $0.001 per share and no expiration date. The estimated net proceeds to us from the May 2026 Offering arewere $27.7 million. The closing of the May 2026 Offering is expected to occur on or about May 18, 2026, subject to the satisfaction of customary closing conditions. We intend to use the net proceeds from the May 2026 Offering to fund further commercialization and development of our B-TRAN® technology and products and general corporate and working capital purposes.

In February 2026, we issued and sold 3,505,855 shares of our common stock at a price of $2.75 per share and 952,881 pre-funded warrants to purchase shares of common stock at a price of $2.749 per pre-funded warrant in an underwritten public offering,offering and also sold 631,332 pre-funded warrants to purchase shares of common stock at a price of $2.749 per pre-funded warrant in a concurrent private placement (taken together, the "February 2026 Offering”). The shares of common stock underlying the pre-funded warrants issued in the concurrent private placement were subsequently registered for resale on the Registration Statement on Form S-1 (File No. 333-294696) declared effective on April 3, 2026. The pre-funded warrants have an exercise price of $0.001 per share and no expiration date. The estimated net proceeds to us from the February 2026 Offering arewere $12.6 million. We intend to use the net proceeds from the February 2026 Offering to fund further commercialization and development of our B-TRAN® technology and products and general corporate and working capital purposes.

There have been no significant changes during the threesix months ended MarchJune 31,30, 2026 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, 2025.