Most investors find IPOs fascinating because the stock price usually moves uphill after it, especially where the company launching it is in a growth industry. However, beyond the initial glitz the company has to offer a scalable business model and stable capital growth to tie in investors in the long run. Ideal Power Inc. (NASDAQ:IPWR) shares (for instance) have raised a 10.98% since the IPO launch on November 22nd last year.

The Context

Ideal Power Inc (NASDAQ:IPWR) budgeted most (45%) of the minimum subscription ($10million) for mew product R&D while only 10% each towards capital expenditures and intangible assets (IP protection). The IPO brought in $17.2 billion (15 million net of underwriting and other expenses) which shows a great investor interest.

Value Proposition of Product Portfolio

The company produces lightweight solar power inverters, electric power converters and bi-directional batteries that are primarily used in electrical vehicle chargers, household consumers and smart grids. Energy chargers and Electrical vehicle fast chargers are the focus of the company going forward. Upcoming milestone products include hybrid micro-grid converters and bio directional power switches.

Intellectual Property Fleet

Aside from its flagship patented Power Packet Switching Architecture (PPSA) technology it has a fleet of 19 US issued patents while another 12 patents have been applied for in foreign jurisdictions including Asia.

Future Growth Potential and Challenges Ahead

With its differentiated product portfolio and technology, the company offers a strong value proposition and a great intellectual property investment to leverage on. Its financial (especially the capital skeleton) is lightweight and also highly scalable. The success of the company now depends on how smoothly and tactfully it plays on commercialization, as its operating cash pile would last it only 2 years or so from now.

Any pricing improvements and new contracts is where the real money lies for the company now. Delayed commercialization would catalyze a default over payments under the security interest granted under possible foreclosure at the hands of the Texas State’s Office of governor, economic development, and tourism.

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