Q4 2019 Earnings Call
Good day and welcome to the ideal for closure and full year 2019 business update on results conference calls.
This conference is being recorded.
I would like to turn the conference over to Chris Tyson.
Director of M. <unk> North America. Please go ahead Sir.
Thank you and good afternoon I'd like to thank you all for taking time to join us for ideal powers fourth quarter and full year 2019 business update on results conference call.
Oh, it's part of your Doctor Long Bell, Chief Executive Officer, Dampened, our eat drink Chief commercial officer, as well as Tim Burns, the company's Chief Financial Officer.
Sure we detailing these results possible wise this afternoon I for one P.M. eastern today and is available on the company's website ideal power Dot com.
Before we begin the formal presentation I'd like to remind everyone that statements made on the call what cash, including those regarding future financial results and industry prospects are forward looking at maybe subject to wake up or risk and uncertainties I could cause actual results could differ materially from those described in call. Please refer to the companies actually she filings.
List of associated risk and we would also be for each of the company's website for more supporting industry information.
Pardon I'd like to turn the call over to ideal powers, Chief Executive Officer, Dr. long Bell slot for George.
Thank you Chris.
And welcome everyone to our fourth quarter on full year 2019 business update a results conference call.
2019 was a transformative year for ideal powers, we've shifted our focus to the development and commercialization of our proprietary be true power switch technology. The divestiture I hope our legacy power conversion systems upsides.
Reply that does so singular focus and to reduce cash burn, which when paired with a resource 3.5 million dollar private placement fortified our balance sheet for 2001.
Before damper dark discussions or B Tran program activities and some detail I'd like to provide an overview of ideal power and our be trend technology. So those of you or neutral our story.
He trend that's a name apart proprietary patented power switch technology B Tran has the potential to revolutionize the power switch market a market that is expected to grow to at some point 4 billion by two calls from 22.
To provide contacts electric power switches are everywhere.
When we think of electric power switching consider homes for example, where there are pulled clubs air conditioning systems, those washing machines dryers another appliances.
For automobile same store their existing U.S., so thinking bench all cars, improving air conditioning stuff. Some power breaks see the adjustments systems and any other electrified didnt put them pumps and then the modern core draconian electric cars with their electric drive motors.
Yeah, so each systems and charging systems.
In industrial applications at Safia Sun enormous amounts of electric power utilized for virtually every factory operation, including climate control electric motor sliding robots kind of more virtually all systems and industrial becoming smarter and more energy efficient have paid.
Recall electrified to the extent that these require large amounts of electric power control is flying electric power switches the problem with today's conventional solid state power switches purchase analyze it insulated gave bipolar transistors ride you'd be TV set there.
Your any person and not by directional there any persistency weights electric power. So they cost Martin walk right also and significantly lower efficiency generates waste heat that the power levels that IGBT South Korea.
Expensive to manage the waste heat thrown all expense that sophisticated them bulky thermometer and hard work required.
Many applications for control removal of waste heat generated by GE, V. keys, and other components dictate so sites complexity.
So yeah, so again fraction of the cost of such control systems.
Character rustic.
Hold back adoption of Mario Christian Smart controls and many industrial feel call a consumer applications.
Our proprietary and broadly pads and could be.
You try and technology fulfills the same role it's conventional IGBT power switches, but most importantly, b tran switches will reduce conduction of switching losses, providing a more efficient and compact solution to crescent and future control systems.
Perhaps most notably B Tran power switches can be manufactured using we just think silicon fabrication because all of these time equipment.
Little or no special manufacturing equipment is required and this makes device manufacturer on par qualification lots complex and time consuming.
Well its success, so far to adult men and commercialization program beat trend. That's a technology can be adopted on a scale. Many may not immediately you realise one case study I'd like to talk about us B Tran and data center applications U.S. data centers currently consume 73 billion.
Kilowatt hours per year at with a graders and 13% power loss.
For a large commercial data center implementing our B Tran technology would improve I'm interrupt coupled power supply efficiency, a common source of power switch losses from 90%, 95%. This alone would save a large commercial data center 2.2 million.
A year and electricity cost some incredible bendeka indicative plus the value that our technology brings.
During a turning to the person our commercialization plan is to buy there's going to treat phases phase one which is now complete to beat around from a hypothetical concept to a patented powers to a chart detector.
Lets straight performance.
So close to four parts expectations from theoretical model.
It's too which is in process is to fabricate parts and engage with and deliver samples to potential customers to initiate the process for them to evaluate performance and integrate b tran devices into their products.
Phase three is to establish commercial partnerships and targeted market sectors for initial commercial sales would be try and power switches.
In summary.
We're in the midst of phase two of our commercialization plan, which entails the fabrication of parts and the delivery of samples to potential partners for valuation. It takes three later this year momentum should quickly build that's our technology was validated by our partners and aren't.
Michelle commercial agreements become a reality.
For going further I'd like to comment on our preparations for mitigating the impact of corporate 19 or operation Some plan.
We are working to institute the following dual sourcing of way person packaging and geographically diverse regions. We've done this all with manufacturing in China.
China, but also in the United States, United States, we've not seen the impact of.
Hello, Good 19 to any great extent, yet, but there is projected to be proud to occur while in China. It is much more mature and hopefully a beijing.
We have modest stockpiles of custom materials. Fortunately, we do not have much in the way of custom materials that are required we have some materials that were sample and from China and arrive before.
<unk>, a new year's shutdowns. So we have supplies of some parts, we will be ordering more cards, but they will not materially in fact, what we're doing over the next month or two.
Enhanced video conferencing us another capability that Oh, we're instituting to avoid travel as much as possible.
Active monitoring of the have better venture vendor mitigation plans. That's also something we're very actively doing we're understanding the process and both in China and in California, but there are other doesn't vendors in other parts of the United States, Texas.
For example in other parts of the United States, where mater gate, and we're monitoring their plans and taking what corrective action or making more suggestions, we can or taxing proactively filled those things that of concern us Fortunately.
Non.
In production right now and as a result that we do not have logistics and supply problems that our extensive we're more self contained but this page of our company's development.
And of course, we have travel restrictions self imposed at the moment, but our policies are on to do as little travel as possible and only in the case necessity.
Many of the travel plans, we had and have been canceled by a combination of ourselves and the other companies and other entities involved some of those involved bulk trade shows and other events that have been council and we're evaluating other measures.
Leaves on coal I would like now to handover the call to Dambra Dart B Tran Chief commercial officer for an overview of our pre commercialization activities Dan.
Thank you want.
In 2019, we made significant progress and the development of arbitrage technology and our commercialization roadmap.
Critically we completed testing that B Tran double sided dies.
Hi basis and test results of initial B Tran devices are consistent with the needs of our engineering prototype sampling program. The final step in phase two of our commercialization plan.
In early 2020, you received all expected wafers from the cost B Tran, Ron with our Chinese semiconductor fabricator establish caters located as part of China that has not been disrupted by quite a virus, allowing us to continue to receive b Tran wafers for domestic packaging and testing consistent with our development plan.
To the rise of Corona virus impacts in the global supply chain, we took steps to establish both domestic and international suppliers for wafers and semiconductor fabrication as part of our overall risk mitigation strategy.
This provides an important layer of redundancy, allowing us to continue to drive forward progress unabated.
Taking a previously mentioned into account as well as the fact that most of our testing and engineering activities are perfect domestically. We currently do not anticipate to run a virus to have a material effect on our business in the near term.
Package double sided B Tran ties are currently undergoing testing and characterization in our lab to generate switching data and evaluate our preliminary package design and build quality.
The testing results they are consistent with our simulations testing about package dies and requirements of our engineering prototype sampling program.
The results of our testing a characterization will be provided to target potential commercial partners and we'll guide the development of our next generation parts, we anticipate releasing fabrication of these next generation parts to our semiconductor fabrication partners later this month.
Also we recently completed our first B Tran run with our new domestic semiconductor fabricator and we're pleased with the quality of their work.
Domestic source of production is essential for government funded programs and for eventual supply to the us military.
We anticipate our initial samples will be discrete package devices for testing and have identified engage with high potential first users.
Targeting an application would be train can be in enabling technology and partner with a third party to pursue technology demonstration projects beginning in the second or third quarter.
In addition, we currently have other partners waiting to test our technology, we're eager to get them prototypes for evaluation and feedback.
And I were working with four technology demonstration project can become a more strategic relationship that enables us to leverage their success and government funded programs and their track record, providing advanced technology and products to the military. It also provides a shorter password and dance be trend based commercial product to the market due to the naval characteristics of our technology.
We'll provide more information on this opportunity as it progresses.
With respect to our beach Red hat portfolio, we don't have 51 issue be trade patterns with 15 of those patents issued outside North America.
Our geographic coverage now include China, Japan and Europe.
Our B Tran Cat portfolio also includes 34 pending patent filings that will enhance our coverage in the U.S., China, Japan, and Europe and the potential to expand our coverage to include Korea in India.
With that I'd like to end the call over to Chief Financial Officer, Tim Burns for review of our fourth quarter and full year 2019 financial results.
Thank you Dan I will run through the fourth quarter and full year 2019 financial results.
Company had no revenues from continuing operations in the fourth quarter in full year 2019.
Fourth quarter 2019, operating expenses were zero point $8 million compared to $1 million in the fourth quarter into 2018.
Full year 2019 operating expenses were $3.1 billion.
Appeared to $4.3 million in the full year 2018.
The decrease in operating expenses was due to lower general and administrative expenses, partly attributable to our cost reduction activities.
Fourth quarter 2019, net loss was zero point $8 million compared to $1.9 million in the fourth quarter 2018.
Full year 2019, net loss was $3.9 million compared to $7.9 million in the full year 2018.
The decrease in net loss is primarily due to significantly lower loss from discontinued operations as we shut down and then divesting our PPSA business in 2019, allowing us to focus our efforts on B Tran development and commercialization.
Fourth quarter 2019 cash used in operating activities with zero point $8 million compared to $2.2 million in the fourth quarter 2018.
Full year 2019 cash used in operating activities was $3.2 million compared to 6.5 million doors in the full year 2018.
Looking at continuing operations only fourth quarter 2019 cash used in operating activities zero point $7 million.
Great to $1.6 million in the fourth quarter 2018 in full year 2019 cash used in operating activities.
$2.6 million compared to $3.8 million in the full year 2018.
In November the company entered into definitive agreements with certain institutional and accredited investors, including Dr., one, though our chief Executive officer in Chairman of the board for private placement of our common stock in pre funded warrants in warrants to purchase common stock for aggregate gross proceeds of 3.5 million.
Or is it net proceeds of $3.1 million.
Cash cash equivalents totaled $3.1 million as of December 30, Onest 2019, there's no long term debt outstanding.
With the divestiture of our power conversion systems Division in PPSA technology in September to CMT Energy solutions. We're now seeing really focused on further development and commercialization of our victory in technology and well position.
An asset light operating model.
Our current burn rate of approximately zero point $7 million in cash per quarter.
Subject to both the timing of variability in the expenditures.
Findings to the between development and commercialization plan.
This cash burn rate is approximately 60% less than our average quarterly cash burn in 2018.
I'll now turn the call back over launch for closing remarks want.
Thank you town.
We have built in a solid foundation upon which to execute in 2000, twining and our positioning ourselves to develop targeted strategic partnerships with targeted partners. Our technology has transformed that there have been both its bidirectionality and its ability to reduce switching and conduction loss.
Bombs holding back many current and potential applications that would benefit from solid state all electric power control.
When we made further progress on phase two of our commercialization plan, which entails fabrication and parts and delivery of samples to our targeted potential customers for evaluation, we couldn't be more optimistic about the future of ideal powers than anytime.
Prior time in our history.
As Tim mentioned earlier, we had the lowest cash burn rate in our history as a public company.
Based on the locals engagement or potential customers and partners I believe 2020 will be on flexion point for B Tran and I look forward. It's insane. This message as we increase our communications efforts with investors and analysts.
At this time I would like to turn a meeting over and open but open it up to a call for questions operator.
Thank you.
Ladies and gentlemen, if he'd like to ask a question today. Please press star one on your thoughts on telephone. Please make sure. Your mute function is turned off to lose signatories jerk Whitman.
Again that is star one on your chest. Some phone at this time, if you'd like to ask a question.
We will make take our first question from Bruce.
Please go ahead your line is open.
Yeah. Thank you John on like a.
Question for you Dr. Bal than maybe a follow on December you did a presentation then you talked about.
For strategic partner or how are the market you have all I know what is the U.P. aftermarket.
Give me a pressure from the call today in the press release that maybe that is change could you talk about that probably misinterpreting, what I've read and what you said.
Yes.
First of all circumstances, you fall, where several potential opportunities come because before EM and may in some cases preempt some of our original plans. Our plans are with your P.S. market, but we are all.
So a salary rating other opportunities that have come up between then.
In December and now and so how we are working to balance those and.
To do what we feel makes the most have given the state of art technology.
Okay. Good then as a follow up as I understand so if you sign those strategic partnership with someone.
Well I deal make all of the beach brands or do you turn over the.
Passenger give access to the patents and.
Yes, or wherever you go will go and manufacture them and then I guess as a follow up till that lets say these five strategic partnership, but then you moved to the automotive.
Half the do all this died packaging and and testing again or there's someone just take the path and then they run one from the like they pay you a licensing fee how does that kind of work.
There was a train and then evolution as suite C.
Just on coal thing so first of all we will have.
We are Pablos shop first the bought less state that and keep that as clear as I.
Discuss what our plans for so other will fab tap houses that we have contractual relationships well pad.
The dies the dice will be package that both of those steps will be done by outside sources, we have in place today sources that.
Or certainly our planning purposes, and our expectations will be suitable for doing those operations, we worked and sell the parts to users initially we will sell cards.
Two strategic partners. So we will not have them in catalogs and throughout the the nature of what we will have it is very focused strategic partnerships. Just some absorption or is that we will look to is the optimal way to apply them most parts.
May involve a second source for example, so far redundant Sam for protection there parts supply that second source would then be as you indicated a licensee.
That might be in the form of a strict license in some cases and my key on the farm probably eight joint venture and other cases, our intention is to the have continued supply and the ability to sell to customers.
B Tran devices now you talked also about the automotive market. The automotive market is a very specialized plates I've been involved in it for many many years.
With related to electronic Arts and also some electro mechanical parts.
And and that market place.
Those strategic supplier rain events will be very sophisticated and oh will be fairly long term.
Just to make another comment we don't see belts occurring for several years, because initially we will while revenue and partnerships.
That are more executable and a much shorter timeframe. Nevertheless that the automotive it's a very large caring for us and high it is something we we will pursue and we think that the parts will be extremely effective filed for automotive.
We have a electric vehicles in particular, so I've mentioned in the past. So that is something we will pursue but that will be through most likely licensing arrangements because the size of.
That vendor pace that the automotive companies use, but we won't be addressing that in the future.
All right. Thank you very much appreciate you taking my call.
A wake up further news.
Yeah.
Thank you.
And there are no further questions over the phone at this time.
We recognize that today is a day of a lot of turmoil and markets.
We heard from Germany about their projections for the number of cold that 19 cases or it is this a difficult time and that is one that we hope to manage through and we hope that all less thing can manage through as well. Thank you very much.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation you may now disconnect.
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