Q3 2024 Ideal Power Inc Earnings Call

Operator: Good morning, ladies and gentlemen, and welcome to the Ideal Power third quarter 2024 results call. At this time, all participants are in a listen-only mode. And at the end of management's remarks, there will be a question and answer session. Investors can submit their questions anytime within the meeting webcast. by typing them into the Q&A button on the left of your viewing screen. Analysts who publish research may ask questions on the phone line. For analysts to ask questions on the phone line, please press star 1 on your telephone keypad. For participants who are using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Good morning, ladies and gentlemen, and welcome to the ideal powers third quarter 2024 results call.

At this time all participants are in a listen only mode.

And at the end of managements remarks, there will be a question and answer session.

Investors can submit their questions anytime within the webcast.

By typing them into the Q&A button on the left of your viewing screen.

Analysts to publish research may ask questions on the phone line.

Speaker Change: For analysts to ask questions on the phone line. Please press star one on your telephone keypad.

Speaker Change: Participants who are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: As a reminder, this event is being recorded.

Speaker Change: As a reminder, this event is being recorded.

Jeff Christensen: I would now like to turn the conference over to Mr. Jeff Christensen, Investor Relations.

I would now like to turn the conference over to Mr. Jeff Christiansen Investor Relations. Sir. Please go ahead.

Operator: Sir, please go ahead.

Jeff Christensen: Thank you, Allie, and good morning, everyone. Thank you for joining Ideal Power's third quarter 2024 conference call. With me on the call are Dan Berdar, President and Chief Executive Officer, and Tim Burns, Chief Financial Officer.

Jeff Christiansen: Thank you Ali and good morning, everyone. Thank.

Jeff Christiansen: Thank you for joining ideal powers third quarter 2024 conference call.

Jeff Christiansen: With me on the call are Dan <unk>, President and Chief Executive Officer, and Jim Burns Chief Financial Officer.

Jeff Christensen: Ideal Power's third quarter 2024 financial results press release is available on the company's website at idealpower.com. Before we begin, I'd like to remind everyone that statements made on the call and webcasts, including those regarding future financial results and company prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's SEC filings for a list of associated risks. And we would also refer to the company's website for more supporting company information.

Jeff Christiansen: Ideal powers third quarter 2024 financial results press release is available on the company's website at Idaho power Dot com.

Before we begin I'd like to remind everyone that statements made on the call and webcast, including those regarding future financial results and company prospects are forward looking and maybe subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call.

Jeff Christiansen: Please refer to the company's SEC filings for a list of associated risks.

Jeff Christiansen: We would also refer you to the company's website for more supporting company information.

Jeff Christensen: Now I would like to turn the call over to Ideal Power's President and CEO Dan Burdard.

Speaker Change: I would like to turn the call over to ideal powers, President and CEO Jan Bernard Dan.

Dan Berdar: Dan. Thank you, Jeff. I appreciate everybody joining us today. I'm excited to update you on our progress since the start of the third quarter, including several significant developments. I'll cover the key highlights briefly, then discuss them a little more depth and provide context for their importance.

Speaker Change: Thank you Jeff I appreciate it.

Everybody joining us today I'm excited to update you on our progress since the start of the third quarter, including several significant developments I'll cover. The key highlights briefly then discuss them a little more depth to provide context for their importance and Tim Burns, who will discuss our financial results will be pleased to answer your questions. After our prepared remarks.

Dan Berdar: And Tim Burns will discuss our financial results. We'll be pleased to answer your questions after our prepared remarks. First, a global Tier 1 automotive supplier recently ordered numerous discrete D-TRAN devices, a Simcoe power module, solid-state circuit breaker, evaluation board, and a driver. This customer is interested in using D-TRAN for solid-state EV contactor applications. Second, we continue to meet regularly with Stellantis technical and production teams. Phase 3 is expected to begin shortly after Stellantis selects a Tier 1 supplier to design and build the drivetrain inverter for its new EV platform. In a parallel initiative, Stellantis and Ideal Power continue to work with a large semiconductor company with expertise in driver control circuitry for the B-Train inverter driver.

Speaker Change: First a global tier one automotive supplier recently ordered numerous discrete b Tran devices simple power module. So I would say circuit breaker evaluation board and driver. This customer is interested in using B Tran for solid state EV contactor applications.

Speaker Change: Second we continue to meet regularly with still Lantus technical and production teams phase III is expected to begin shortly after still linked to select a tier one supplier to design and build the drivetrain inverter for its new EV platform at.

Speaker Change: In apparel initiative, so lantus and Idaho power continue to work with a large semiconductor company with expertise in driver control circuitry for the B Tran inverter driver.

Dan Berdar: Third, we're collaborating with our third global automaker, along with our previously announced engagements with Stellantis and a second top 10 global automaker. This auto OEM is evaluating B-TRAN enabled contactors in its electric vehicle We recently delivered a solid state circuit breaker evaluation board to this customer. Fourth, Richardson Electronics, a global distributor of our products, is engaged with a global leader in the design and manufacturer of power conversion equipment, electric motors, and motor drives for the potential use of BTRAN in a matrix converter application. Fifth, this quarter, we added Riosho as our second distributor. Riosho has already placed orders with Ideal Power from a large global customer interested in the company's products for solid state circuit protection applications.

Speaker Change: Third we're collaborating with our third global automaker, along with our previously announced engagements with Atlantis and a second top 10 global automaker. This auto OEM is evaluating b Tran enabled contractors and its electric vehicles. We recently delivered a solid state circuit breaker evaluation boards to this customer.

Speaker Change: Fourth Richardson electronics, a global distributor of our products is engaged with a global leader in the design and manufacturer of power conversion equipment Electric motors and motor drives for the <unk>.

Actual use of B, Tran and a matrix converter applications.

Speaker Change: This quarter, we added Rio show is our second distributor.

Speaker Change: Joe has already placed orders with ideal power from a large global customer interested in the companys products for solid state circuit protection applications.

Dan Berdar: In addition, Ryosho recently introduced vTran to global automakers based in Japan. Sixth, this quarter, we also added C-CORM as our third distributor. In response to customer requests, C-CORM is quoting our products to large companies for solid-state circuit breaker applications. C-CORM is strong in Asia, particularly China. Seventh, we commence third party automotive qualification testing of B-Train devices. This testing requires over 1,000 packaged BTRAN devices from multiple wafer runs. Initial test results are positive with no failures to date. Based on the results of testing, we increased the current rating of our SimCool power module by 25% to 200 amps.

Speaker Change: In addition, <unk> recently introduced B Tran to global automakers based in Japan.

Speaker Change: Fixed this quarter, we also added <unk> as our third distributor in response to customer requests CCAR misquoting, our products the large companies for solid state circuit breaker applications.

Speaker Change: <unk> is strong in Asia, particularly China.

Speaker Change: Seven we commenced third party automotive qualification testing of B Tran devices.

Speaker Change: This testing requires over 1000 package b trans devices for multiple wafer runs initial test results are positive with no failures to date.

Speaker Change: Eight based on the results of testing we increased the current rating of our simple power module by 25% to 200 amps and.

Dan Berdar: In conjunction with a power module size reduction of approximately 50%, this significantly increases the power density for the SimCool power module while reducing costs.

Speaker Change: In conjunction with a power module size reduction of approximately 50%. This significantly increases the power density for the simple power module, while reducing cost.

Dan Berdar: Looking first at the automotive market, since we're not constrained under our arrangement with Stellantis, we continue to lever our success with them to attract and engage other auto OEMs and Tier 1 automotive suppliers to evaluate B-Tran for their next generation electric and hybrid electric vehicle platform. This quarter, we added our third global automaker and a global tier one automotive supplier to our list of customer engagement. The third global automaker is evaluating vTRAN-enabled contactors for its electric vehicles. We recently delivered a solid-state circuit breaker evaluation board to this customer while the new global Tier 1 automotive supplier ordered numerous discrete vTRAN devices, a Simcoe power module, a solid-state circuit breaker evaluation board, and a driver.

Speaker Change: Looking first at the automotive market since we're not constrained under a range of Lantus, we continued to lever our success with them to attract and engage other auto Oems and tier one automotive suppliers to evaluate b Tran for their next generation electric and hybrid electric vehicle platforms. This quarter, we added our third global automaker and a global tier.

Speaker Change: One automotive supplier through our list of customer engagements with <unk>.

Speaker Change: Global automaker is evaluating Vitrain enabled contactor for its electric vehicles. We recently delivered a solid state circuit breaker evaluation board for this customer while the new global tier one automotive supplier or their numerous discrete b Tran devices simple power module solid state circuit breaker evaluation board and a driver.

Dan Berdar: Like the third global automaker, this tier one supplier is also interested in using vTran for solid state EV contactor applications, a new application where vTran is an enabling technology. The EV contactor application is generating a lot of interest from global automakers and their tier one suppliers. Solid-state contactors provide several benefits over electromechanical contactors. They act much faster, thereby eliminating arcing and improving safety, and are more reliable as they do not include physical contacts subject to wear. In addition, they provide programmable settings for trip and current limits, as well as built-in safety diagnostics. Solid state contactors are also expected to cost less than electromechanical contactors in EV applications.

Speaker Change: Like the third global automaker. This tier one supplier is also interested in using retrans for solid state EBIT contactor applications, a new application, where <unk> is an enabling technology.

The EBIT contact your application is generating a lot of interest from global automakers and their tier one suppliers. So I would say cost factors provides several benefits over electro mechanical contractors.

Speaker Change: Much faster, thereby eliminating arcing and improving safety and a more reliable as they do not include physical contact subject where in addition, they provide programmable settings for tripping current limits as well as built in safety diagnostics. So I'll say contact US are also expected to cost less the electro mechanical contractors and EV applications.

Dan Berdar: While conventional power semiconductors have conduction losses that are too high to make solid-state EV contactors practical, BTRAN is enabling as it provides ultra-low conduction losses with the added benefit of inherent bidirectionality. E-tram-based EV contactors provide an efficient, fast-acting solution for high-voltage applications in EVs, where they can play a critical role in isolating the battery, inverter, and onboard charger to ensure safety when the vehicle is off or being serviced. The need for very low losses and the ability of a contactor act very quickly is becoming increasingly important as automotive OEMs increase the operating voltage of their systems to enable shorter charging times for the battery.

Speaker Change: While conventional power semiconductors have conduction losses that are too high to make solid state <unk> practical <unk> is enabling us it provides ultra low conduction losses with the added benefit of inherent bi directionality.

Speaker Change: <unk> provide an efficient fast acting solution for high voltage applications in Evs, where they can play a critical role in isolating the battery converter and onboard charger to ensure safety when the vehicles off were being serviced the need for very low losses and the ability of a contactor acted very quickly is becoming increasingly.

Speaker Change: Important as automotive Oems increased the operating voltage other systems to enable shorter charging times for the batteries.

Dan Berdar: Moving on to different EV applications for B-Tran, our program with Stellantis is for a custom B-Tran power module for use in their EV drivetrain platform across their brands. Atlantis is furthest along of the three global electric vehicle automakers we're working with. The development program with Stellantis is structured in three phases. As many of you know, we successfully completed phase two of our program with them earlier this year and are eagerly waiting to begin the next phase. While Stellantis Upper Management has been focused on resolving their well-documented inventory and labor challenges this year, we're now seeing a return to focusing on future models and platforms. The selection of a Tier 1 for the program's drivetrain inverter is now under internal review, and we're confident we'll secure the next phase of the program in the coming months.

Speaker Change: Moving onto different EV applications for B Tran our program was to Lantus is for a customer B Tran power module for use in their EV drivetrain platform across their black their brands.

The Atlantis is furthest along of the three global electric vehicle automakers, we're working with the.

Speaker Change: The development program was to Lantus is structured in three phases as many of you know we successfully completed phase II of our program with them earlier this year and are eagerly waiting to begin the next phase.

Speaker Change: Whilst the Lantus Upper management has been focused on resolving their well documented inventory and labor challenges. This year. We're now seeing a return to focusing on future models and platforms. The selection of a tier one for the programs drivetrain inverter is now under internal review and we're confident we will secure the next phase of the program in the coming months.

Dan Berdar: Since completing phase two, we continue to meet with their technical and production teams weekly to keep the program progressing. Meanwhile, the length is developed and send out a drive train and burger solicitation to roughly a half dozen tier one suppliers. The Tier 1 suppliers were asked to provide their proposals to supply V-Tran based drivetrain inverters. So Lantus introduced our team to the Tier 1 suppliers we were not already working with so we could bring them up to speed on the technology, our products, the unique configuration we developed for the application, and the corresponding test data that demonstrated we provide better performance compared to other silicon and silicon carbide solutions.

Speaker Change: Since completing phase two we continue to meet with their technical and production teams weekly to keep the program progressing. Meanwhile, the lantus develop and send out a drivetrain and Burger solicitation to roughly a half dozen tier one suppliers.

Speaker Change: Here, what suppliers were asked to provide their proposals to supplier B Tran based drivetrain and burgers.

Speaker Change: <unk> introduced our team to the tier one suppliers, we were not already working with so we could bring them up to speed on the technology or products. The unique configuration that we developed for the application and the corresponding test data demonstrated we provide better performance compared to other silicon and silicon carbide solutions.

Dan Berdar: The Tier 1 Inverter Proposals have been submitted to Stellantis. They are reviewing the proposals and will now select one or two tier one suppliers to design and build the drivetrain inverter for their new EV platform. After the Tier 1 inverter supplier is selected by Stellantis, we expect to start the next phase working with the Tier 1 suppliers and Stellantis teams with the objective of developing a production-ready BTRAN power module for use in their EV drivetrain. Completion of the BTRAN module is targeted for 2025. Stellantis is also interested in BTRAN for battery circuit protection applications as well.

Speaker Change: The tier one inverter proposals have been submitted this to lantus.

Speaker Change: They are reviewing the proposal and will down select to one or two tier one suppliers to design and build the drivetrain inverter for their new EV platform.

Speaker Change: After the tier one inverter supplier is selected by the Lantus, we expect to start the next phase working with the tier one suppliers and still anthos teams with the objective of developing a production ready <unk> power module for using their EV drivetrain.

Speaker Change: Completion of the <unk> module is targeted for 2025.

Speaker Change: <unk> is also interested in <unk> for battery circuit protection applications, as well and a parallel initiatives. The lantus is working with us and a large semiconductor company with expertise in driver control circuitry for B Tran inverter driver. In addition, the Lantus recently introduce us to another large semiconductor company.

Dan Berdar: In a parallel initiative, Stellantis is working with us and a large semiconductor company with expertise in driver control circuitry for a BTRAN inverter driver. In addition, Stellantis recently introduced us to another large semiconductor company to explore potential collaboration on a novel concept utilizing BTRAN for the inverter module. While waiting on the next phase to be formalized, we recently commenced third-party automotive qualification testing of our B-Tran die. We prioritize shipment of packaged B-Tran devices for multiple wafer runs for this third-party testing, as it will allow us to share third-party test data with industrial customers during the automotive qualification and design-in process, and prior to these industrial customers ramping their potential new product offerings incorporating B-Tran.

Speaker Change: For potential collaboration on a novel concept utilizing <unk> for the inverter module.

Speaker Change: While waiting on the next phase to be formalized. We recently commenced third party automotive qualification testing of our B Tran di we prioritize shipment of package B Tran devices for multiple wafer runs for this third party testing as it will allow us to share of third party test data with industrial customers during the automotive qualification and designing in Prague.

Speaker Change: <unk> and prior to these industrial customers ramping their potential new product offerings, incorporating b Tran industrial.

Dan Berdar: Industrial qualification includes a subset of the testing required for automotive qualification with less stringent requirements for certain tests. Formal third party automotive qualification is only required prior to customers, including our B-Tran Semiconductor Technology and automotive products, systems and subsystems offered for sale. Automotive qualification testing includes a broad array of testing required by automotive codes and standards, utilizing specified parameters, in some cases, much more stringent than industrial standards and a wide range of test conditions. The testing to achieve automotive qualification requires over a thousand packaged B-Train devices from multiple wafer runs. The process itself includes tens of thousands of power cycles at various current levels, thermal cycling at extreme temperature and humidity levels, blocking voltage, and shock and vibration testing and visual inspection.

Speaker Change: Allocation includes a subset of the testing required for automotive qualification with less stringent requirements for certain tests.

Speaker Change: Formal third party automotive qualification is only required prior to customers, including our B Tran semiconductor technology and automotive products systems and subsystems offered for sale.

Speaker Change: Automotive qualification testing includes a broad array of testing required by automotive codes and standards utilizing specified parameters in some cases much more stringent than industrial standards and a wide range of test conditions.

Speaker Change: The testing to achieve automotive qualification requires over 1000 package B Tran devices from multiple wafer runs.

Speaker Change: The process itself includes tens of thousands of power cycles at various current levels thermal cycling at extreme temperature and humidity levels blocking voltage and shock and vibration testing and visual inspection.

Dan Berdar: These tests are designed to expose a semiconductor to conditions that are intended to accelerate failure mechanisms and demonstrate the long term reliability of the device. Since testing began last month, it has gone well, with no failures to date. We expect auto qualification to be successfully completed in the first half of 2025. As I mentioned, industrial orders in the near term are not dependent on the successful completion of automotive qualification. However, third-party automotive qualification will provide further assurance to industrial customers of the long-term reliability of BTRAN in conditions beyond what is required for industrial applications. It's also expected to potentially accelerate sales to industrial customers, but are often conservative in adopting new technology.

Speaker Change: These tests are designed to expose the semiconductor to conditions that are intended to accelerate failure mechanisms and demonstrate the long term reliability of the devices.

Speaker Change: So this testing began last month it has gone well with no failures to date.

Speaker Change: We expect auto qualification to be successfully completed in the first half of 2025.

Speaker Change: As I mentioned industrial orders in the near term are not dependent on the successful completion of automotive qualification.

Speaker Change: However, third party automotive qualification will provide further assurance to industrial customers of the long term reliability of <unk> and conditions beyond what is required for industrial applications is also expected to potentially accelerate sales to industrial customers that are often conservative in adopting new technologies.

Dan Berdar: Now, let's take a look at the industrial markets, as these are expected to be at the early source of our product sales and revenue ramp initially for solid state circuit breakers and other circuit protection applications served by our simple power module. E-Tran is an enabling technology for solid-state circuit protection applications as it reduces conduction losses and operating costs in power switching and control circuitry. Solid-state devices can act literally orders of magnitude faster than the electromechanical circuit breakers widely used today. V-Tran enabled circuit protection devices provide the additional benefits of ultra-low conduction losses, critical and continuously conducting applications, and inherent bidirectionality.

Speaker Change: Now, let's take a look at the industrial markets. As these are expected to be at the early source of our product sales and revenue ramp initially for solid state circuit Breakers and other circuit protection applications served by our <unk> power module <unk>.

Speaker Change: <unk> is an enabling technology for solid state circuit protection applications as it reduces conduction losses, and operating costs and power switching and control circuitry.

Speaker Change: I would state devices connect literally orders of magnitude faster than the electromechanical circuit breakers widely used today and <unk> enabled circuit protection devices provide the additional benefits of ultra low conduction losses critical and continuously conducting applications and inherent bi directionality.

Dan Berdar: We've got a roster of large companies that we've been working with for several months. We've got several more in the queue in early space discussion. For customers that have already conducted an initial evaluation of our products, we're now in the process of responding to their request for proposals for custom packages and or development agreements if their applications require any unique packaging or customization. For customers that will use our standard products, we expect increasing order sizes as they transition from initial evaluation and prototyping to building inventory for OEM product launch. To facilitate this process, we created a Solid State Circuit Breaker reference design for these customers that includes an evaluation board along with BTRAN devices.

Speaker Change: We've got a roster of large companies that we've been working with for several months and we've got several more in the queue in early stage discussions for.

Speaker Change: For customers that have already conducted initial valuation of our products. We're now in the process of responding to their request for proposals for custom packages <unk> development agreement. If there are applications require any unique packaging or customization.

Speaker Change: For customers that will use our standard products, we expect increasing order sizes as they transition from initial evaluation and prototyping to building inventory for OEM product watches.

Speaker Change: To date. This process, we created a solid state circuit breaker reference design for these customers that includes an evaluation board along with B Tran devices. This reference design is expected to accelerate customers evaluation of B Tran for use in their solid state circuit breaker products are.

Dan Berdar: This reference design is expected to accelerate customers' evaluation of BTRAN for use in their Solid State Circuit Breaker products. Our revenue will be modest with small orders in the near term, as customers evaluate B-Trans and build initial product prototypes incorporating our product. Once these customers are deep into their design cycle, we expect order size to significantly increase, resulting in a ramp in revenue. While the timing of customer adoption is not within our direct control, we're targeting to ramp revenue in the second half of next year, based on the multitude of global customers evaluating our technology, several of whom have already placed initial orders.

Speaker Change: Our revenue will be modest with small orders in the near term as customers evaluate b Tran and build initial product prototypes incorporating our products.

Speaker Change: Once these customers are deep into their design cycle, we expect order size to significantly increase resulting at a ramp in revenue.

Speaker Change: While the timing of customer adoption is not within our direct control we're targeting to ramp revenue in the second half of next year based on the multitude of global customers evaluating our technology several of whom have already placed initial orders.

Dan Berdar: We added our second and third distributors, Riosho and Secorm, in the third quarter, a significant development in our commercialization roadmap for B-Tram. Ryosho and C-CORM are similar to our previously announced distributor, Richardson Electronics, as they have expertise in demand creation, not just catalog order taking, strong technical sales teams, global reach, and a proven track record of securing sales for new technology. Ryosho is the U.S. subsidiary of Ryodan, a publicly listed company on the Tokyo Stock Exchange with almost $2 billion in annual sales in over 20 international locations. The show is focused on the sale of semiconductors and other electronic components with particular strength throughout Asia.

Speaker Change: We added our second and third distributors Rio show in <unk> in the third quarter, a significant development in our commercialization roadmap for B Tran.

Speaker Change: We actually own the <unk> are similar to our previously announced distributor Richardson electronics.

Speaker Change: <unk> expertise in demand creation, not just catalog order, taking strong technical sales teams global reach and a proven track record of securing sales for new technologies.

Ratio is the U S subsidiary of REO, then a publicly listed company on the Tokyo stock exchange with almost $2 billion in annual sales and over 20 international locations.

Speaker Change: <unk> is focused on the sale of semiconductors and other electronic components with particular strength throughout Asia.

Dan Berdar: Right out of the gate, they placed orders with us from a large global customer interested in our technology for solid state circuit protection applications and recently introduced D-TRAN to global automakers based in Japan. ZCorum Advanced Technology is quoting our products to large companies for solid state circuit breaker applications. Our products fit very well with their customer base. They have customers throughout Asia with China as their primary focus. China is the largest market in the world for power semiconductors today. C-CORM is focused on industrial applications requiring circuit protection in DC infrastructure and electric vehicle charging, and is a leader in sales to the utility infrastructure market.

Speaker Change: Right out of the gate, they placed orders with us from a large global customer interested in our technology for solid state Circuit protection applications, and recently introduced <unk> to global automakers based in Japan.

Speaker Change: <unk> advanced technology is quoting our products to large companies for solid state circuit breaker applications are.

Speaker Change: Products fit very well with their customer base their customers throughout Asia with China is their primary focus China is the largest market in the world for power semiconductors today.

Speaker Change: <unk> is focused on industrial applications, requiring circuit protection, and DC infrastructure and electric vehicle charging and as a leader in sales to the utility infrastructure market.

Dan Berdar: Addition of these two distributors is another example of our asset light business model that leverages the large investment already made in silicon processing, distribution, demand creation, and support infrastructure.

Speaker Change: Additionally, these two distributors is another example of our asset light business model that Leverages. The large investment already made in silicon processing distribution demand creation and support infrastructure.

Dan Berdar: Utilizing data from a recent study by Mordor Intelligence and their global power electronics market report, we expect to be trans serviceable addressable market or SAM to more than double over the next five years to almost $8 billion, growing at a compound annual growth rate of 16%. Within the overall market is the $1 billion SAM for solid-state switchgear we're attacking with our SimCool Power Module, and the $1.4 billion SAM for renewable energy, energy storage, microgrids, and EV charging targeted by our SimCool IQ product. Our SAM also includes $1.6 million for industrial applications, such as motor drives and UPS systems for data centers, and $3.6 billion for automotive.

Utilizing data from a recent study by Mordor intelligence in their global power Electronics market report, we expect the <unk> serviceable addressable market where Sam.

More than double over the next five years to almost $8 billion growing at a compound annual growth rate of 16%.

Speaker Change: Within the overall market is the $1 billion Sam for solid state switch gear, we're attacking with our simple power module and the $1 $4 billion, Sam for renewable energy energy storage micro grids, and EV charging targeted by our <unk> Iq product.

Our Sam also includes $1 6 million for industrial applications, such as motor drives and <unk> systems for data centers and $3 6 billion for automotive.

Dan Berdar: As it relates to the release, the recent election, there is some investor concern regarding the impact of the new administration on certain of our target markets, such as electric vehicles and renewable energy. This can be seen recently as companies in these exact these sectors experienced sharp declines in their stock price immediately following the election. While we understand the concern, the adoption of electric vehicles and renewable energy is a global market and will continue despite any near-term changes in government policy in the United States. We see the global nature of these markets as our customer base is largely made up of large global companies, many of them headquartered in Europe or Asia.

Speaker Change: As it relates to the release the recent election, there is some investor concern regarding the impact of the new administration on certain of our target markets, such as electric vehicles and renewable energy.

Speaker Change: This can be seen recently as companies in these exact the sectors experienced sharp declines in your stock price immediately following the election are.

Speaker Change: We understand the concerns the adoption of electric vehicles and renewable energy is a global market and we will continue despite any near term changes in government policy in the United States, We see the global nature of these markets as our customer base is largely made up of large global companies many of them headquartered in Europe or Asia.

Dan Berdar: There is a broad and global support for the clean energy transition at all levels of government globally. Private investment in clean energy continues to increase. Renewable energy is now the lowest cost source of electricity in many areas and industry experts continue to forecast significant growth for electric vehicles and renewables. Regardless of the administration in Washington, D.C., we're well positioned for growth due to the increased and inevitable further electrification of society that will drive growing demand for power semiconductors, particularly those with compelling value propositions like D-Tran. We see no change in the level of engagement of our customers, as they are uniformly focused on improving the performance and cost of their next generation products.

Speaker Change: There was a broad and global support for the clean energy transition at all levels of government globally private investment in clean energy continues to increase renewable energy is now the lowest cost source of electricity in many areas and industry experts continue to forecast significant growth productive vehicles in renewables.

Speaker Change: Regardless of the administration in Washington D. C. We are well positioned for growth due to the increased an inevitable further electrification of society that will drive growing demand for power semiconductors, particularly those with compelling value propositions like D train.

Speaker Change: We see no change in the level of engagement of our customers as they are uniformly focused on improving the performance and cost of their next generation products. The trend not only improves the economics of electric vehicles and renewable energy solutions, but also other applications like solid state circuit protection motor drives and UBS systems for data centers.

Dan Berdar: eTrend not only improves the economics of electric vehicles and renewable energy solutions, but also other applications like solid state circuit protection, motor drives and UPS systems for data.

Dan Berdar: Turning to our high volume wafer fabrication suppliers in Europe and Asia, we're bull sourced for wafer fabrication in different parts of the world with ample capacity to support anticipated customer demand over the next few years. Our dual sourcing for wafer fabrication in disparate geographies has no exposure to China or Taiwan to mitigate supply chain risk. Our fat partner in Asia was able to produce functional bi-directional devices from an engineering run last year that demonstrated high wafer yield without the need for special equipment or capital investment. There's always room to improve yields. And over the course of last year, we focused on further increasing yields to reach our commercial yield target.

Speaker Change: Turning to our high volume wafer fabrication suppliers in Europe, and Asia with dual sourced per wafer fabrication and different parts of the world with ample capacity to support anticipated customer demand over the next few years are dual sourcing for wafer fabrication and disparate geographies has no exposure to China, or Taiwan and mitigates.

Apply chain risks are.

Speaker Change: Our fab partner in Asia was able to produce functional bidirectional devices from an engineering run last year demonstrated high wafer yield without the need for special equipment or capital investment.

Speaker Change: There is always room to improve yields and over the course of last year, we focused on further increasing yields to reach our commercial yield target.

Dan Berdar: by leveraging our proprietary proven process flow, we successfully qualified second wafer fabrication partner located in Europe last quarter. The engineering run at this fab, similar to the engineering run in our Asian fab, provide a functional bidirectional device. Due to process improvements, device performance from the most recent runs at this fab match, or in some cases exceeds, that of the devices from our fab partner in Asia. We're working closely with this partner to increase yields, leveraging our lessons learned from our other wafer fabrication runs. We expect to achieve our commercial yield target at this fab in advance of our sales ramp expected to start in the second half of next year.

Speaker Change: By leveraging our proprietary improvement process flow, we successfully qualified second wafer fabrication partner located in Europe last quarter.

Speaker Change: The engineering around it this path similar to the engineering run in our Asian Fab provide a functional bidirectional devices.

Due to process improvements and device performance from the most recent runs at this fast match or in some cases exceeds that of devices from our fab partner in Asia. We're working closely with this partner to increase yields leveraging our lessons learned from our other wafer fabrication runs we expect to achieve our commercial yield target at this fab in advance of.

Speaker Change: Sales are expected to start in the second half of next year.

Dan Berdar: Moving on to innovation, we expect to complete the first engineering run of our next generation B-Tran die design later this year. This die will be roughly half the size of the current die, translating to more than twice as many die per wafer, while providing the same voltage and current rating capability of our current device. This next-generation B-Tran die design is part of our long-term cost reduction roadmap. We've already completed the packaging design for this next-generation die. We expect the packaging itself to be about 30% smaller than our current package design with a corresponding decrease in cost.

Moving onto innovation, we expect to complete the first engineering run of our next generation <unk> design later this year.

Speaker Change: This <unk> will be roughly half the size of the current value translating to more than twice as many die per wafer, while providing the same voltage and current rating capability of our current device.

Speaker Change: This next generation <unk> design as part of our long term cost reduction roadmap. We've already completed the packaging design for this next generation die, we expect the packaging itself to be about 30% smaller than our current package design with a corresponding decrease in cost.

Dan Berdar: Turning to parallel device characterization, we've demonstrated that the current sharing of BTRAN is better than that of conventional devices, such as IGBTs, when devices are run in parallel for high current capability. This is of critical importance for solid state circuit breaker applications, where OEM will combine multiple SIMCOOL power modules in parallel to achieve their desired breaker rating. Unlike IGBTs, BTRAN is able to balance current sharing between devices in parallel at specified levels of temperature mismatch between the devices. This feature improves reliability compared to running IGBTs in parallel for multi-die power modules, providing us with another competitive advantage compared to conventional technology.

Speaker Change: Turning to parallel device characterization, we've demonstrated that the current sharing the current sharing of B Tran is better than that of conventional devices such as <unk>. When devices are run in parallel for high current capability.

Speaker Change: This is of critical importance for solid state circuit breaker applications, where Oems will combine multiple Sim cool power modules in parallel to achieve their desired breaker rating.

<unk> B Tran is able to balance current sharing between devices in parallel at specified levels of temperature mismatch between the devices. This feature improves reliability compared to running igt's in parallel for multi die power modules, providing us with another competitive advantage compared to conventional technologies.

Dan Berdar: Another advantage to our approach for the foreseeable future is that the wafers and resulting dies are all the same for any application, whether going into a circuit breaker, electric vehicle, energy storage system, data center, or solar installation. We can ramp up production cost effectively because we don't have to forecast wafer demand and die design mix based on the application. For automakers, it will ultimately be them buying our dies. All they need from us are our wafers or dyes themselves. For example, under the Stellantis program, they're working with an innovative packaging company to develop a unique packaging design that fits the needs of their B-Train enabled drive train inverter.

Another advantage to our approach for the foreseeable future is that the wafers and resulting dives. We're all the same for any application, where they're going into a circuit breaker electric vehicle energy storage system datacenter or solar installation.

We can ramp up production cost effectively because we don't have to forecast wafer demand and die design mix based on the application.

Speaker Change: For automakers it will ultimately be them buying our guys.

Speaker Change: While they need from us our wafers or guys themselves for example, under the <unk> program. We are working with an innovative packaging company to develop a unique packaging design that fits the needs of their be trained enabled drivetrain and Burger. This allows us to continue to focus on improving our core technologies.

Dan Berdar: This allows us to continue to focus on improving our Ford technology. We're unaware of any competing inherently bidirectional high power technologies using using anything similar to our technology. high growth, high power applications such as solid state circuit breakers, power converters for energy storage, solar and wind power, electric vehicle inverters and contactors, electric vehicle charging stations, UPS systems for data centers, and other applications are all focused on bringing down cost while improving efficiency for their next generation product. Silicon carbide has been targeting many of these same applications, high cost and inherent materials challenges of silicon carbide remain a long term challenge to meet the needs of many of these customers.

Speaker Change: We are unaware of any competing inherently bi directional high power technologies using using anything similar to our technology.

Speaker Change: High growth high power applications, such as solid state circuit Breakers power converters for energy storage solar and wind power electric vehicle on burgers and contactor is electric vehicle charging stations <unk> systems for data centers and other applications are all focused on bringing down cost while improving efficiency for their next generation.

Speaker Change: <unk> products.

Speaker Change: While silicon carbide has been targeting many of these same applications are high cost inherent materials challenges of silicon carbide remain a long term challenge to meet the needs of many of these customers. This is evidenced by the recent decision by companies such as Corvo, who announced they are exiting the silicon carbide market.

Dan Berdar: This is evidenced by the recent decision by companies such as Corvo, who announced they are exiting the silicon carbide market. We believe BTRAN, particularly in bi-directional applications, offers a new low-loss, lower-cost approach.

Speaker Change: We believe B Tran, particularly in bi directional applications offers a new low loss lower cost approach.

Dan Berdar: Looking at our expanding BTRAN patent estate, we currently have 90 issued BTRAN patents, with 42 of those issued outside of the United States. Our current geographic coverage for our patents includes North America, China, Japan, South Korea, India, Europe, and now Taiwan, all representing our high-priority geographic coverage. Just last month, we had our first B-Tran patent issue in Taiwan, providing coverage in a country known for its power semiconductor manufacturing. As a result of our continued innovation, our list of pending vTran patents is now at 50 In addition, we treat the proven process flow we use to make our devices as a trade secret and work under strict confidentiality with our vapor fabrication partners.

Speaker Change: Looking at our expanding B Tran patent estate. We currently have 90 issued B Tran patents with 42 of those issues outside of the United States.

Speaker Change: Our current geographic coverage for our patents includes North America, China, Japan, South Korea, India, Europe, now, Taiwan, all representing our high priority.

Speaker Change: Geographic coverage.

Speaker Change: Last month, we had our first B Tran patent issue in Taiwan, providing coverage in a country known for its power semiconductor manufacturing.

Speaker Change: As a result of our continued innovation our list of pending <unk> patents is now at 50.

Speaker Change: In addition, we treat the proven process flow, we use to make our devices as a trade secret work under strict confidentiality with our wafer fabrication partners. So even a competitor studied our patents they would not have the know how on how to actually fabricate the device.

Dan Berdar: So even if competitors studied our patents, they would not have the know-how on how to actually fabricate the device.

Dan Berdar: Overall, this quarter, we added our third global automaker for our list of customer engagements. We secured initial orders from a global tier one automotive supplier. We added our second and third distributors with expertise in demand creation, and they're placing customer orders and providing quotes for our products to large global companies. And we're continuing to innovate and advance our B-Trans technology and products while preparing our supply chain to handle the pending sales ramp. The momentum we're building is working to advance companies to orders, followed by potential custom development agreements and or design wins and revenue growth.

Overall this quarter, we added our third global automaker for our list of customer engagements. We secured initial orders from a global tier one automotive supplier, we added our second and third distributors with expertise in demand creation, and theyre, placing customer orders and providing quotes for our products to large global companies.

Speaker Change: And we're continuing to innovate and advance our B Tran technology and products are preparing our supply chain to handle the pending sales ramp.

Speaker Change: <unk>. We are building is working to advanced companies. The orders followed by potential custom development agreements and our design wins and revenue growth I would like to hand, the call over to Tim Burns to review our financials.

Tim Burns: I would like to hand the call over to Tim Burns to review our financials.

Tim Burns: Thank you, Dan.

Tim Burns: Thank you Dan and good morning, everyone.

Tim Burns: And good morning, everyone. Our third quarter 2024 cash burn was $2.4 million, up from $1.9 million in the third quarter of 2023, and up from $2.2 million in the second quarter of 2024. Our Q3 cash burn was at the low end of our guidance of $2.4 to $2.6 million due to the timing of spending and related payments. We continue to manage expenses prudently and aggressively. We expect fourth quarter 2024 cash burn of approximately $2.6 to $2.8 million. You previously provided guidance of a cash burn for full year 2024 of $8.5 million net of an expected $1 million in proceeds from warrant exercise.

Tim Burns: Our third quarter 2020 for cash burn was $2 4 million up from $1 9 million in the third quarter of 2023 and up $2 2 million in the second quarter of 2024.

Tim Burns: Our Q3 cash burn was at the low end of our guidance of two four to $2 6 million.

Tim Burns: Due to the timing of spending and related payments.

Tim Burns: We continue to manage expenses prudently and aggressively.

Tim Burns: We expect fourth quarter 2020 for cash burn of approximately two six to $2 $8 million.

Tim Burns: We have previously provided guidance of the cash burn for full year 2024 of $8 $5 million net of an expected $1 million in proceeds from warrant exercises.

Tim Burns: We now expect it to be slightly below that estimate for the full year 2024. Specifically, we expect full year 2024 cash burn of approximately 8.2 to 8.4 million dollars net of the 1 million dollars in proceeds from award exercise. These warrants were scheduled to expire this month. However, the warrant holder exercised the warrants in the third quarter, resulting in one million dollars in proceeds to the company. Cash and cash equivalents totaled $18.7 million at September 30, 2024. We have no debt in a clean capital structure. We recorded very modest revenue for the third quarter driven by our prioritization of devices for automotive qualification testing.

We now expect it to be slightly below that estimate for the full year 2024 spin.

Tim Burns: Specifically, we expect full year 2020 for cash burn of approximately eight two to $8 $4 million.

Tim Burns: Net of the $1 million in proceeds from warrant exercises.

Tim Burns: These warrants were scheduled to expire this month.

Tim Burns: However, the warrant holders exercised the warrants in the third quarter, resulting in $1 million in proceeds to the company.

Tim Burns: Cash and cash equivalents totaled $18 7 million at September 32024, we have no debt and a clean capital structure.

We recorded very modest revenue for the third quarter, driven by our prioritization of devices for automotive qualification testing.

Tim Burns: While initial orders from the large companies evaluating our products for potential inclusion in their OEM products will be small, we expect order sizes to increase as customers start to prototype their OEM products and progress through their design cycle. Looking at the fourth quarter of 2024, we expect to see modest volume and commercial revenue from product sales. Operating expenses were $2.9 million in the third quarter 2024 compared to $2.8 million in the third quarter of 2023. We expect both research and development in sales and marketing spending to increase modestly in the coming quarters due to recent and future hiring and costs associated with our development and commercialization efforts.

Tim Burns: While initial orders from a large companies evaluating our products for potential inclusion in their OEM products will be small we expect order sizes to increase as customers start to prototypes, they're OEM products and progress through their design cycles.

Tim Burns: Looking at the fourth quarter of 2024, we expect to see modest volume and commercial revenue from product sales.

Tim Burns: Operating expenses were $2 9 million in the third quarter of 2024 compared to $2 8 million in the third quarter of 2023.

Tim Burns: We expect both research and development and sales and marketing spending to increase modestly in the coming quarters due to recent and future hiring and costs associated with our development and commercialization efforts.

Tim Burns: We also continue to expect some quarter to quarter variability in operating expense. Particularly our research and development spending. do the timing of semiconductor fabrication runs, product development, other research and development activities and hiring. The timing of equity grants and related stock-based compensation expense recognition will also cause variability in our quarterly operating results. Our net loss was flat at $2.7 million in both the third quarter of 2024 and the third quarter of 2023. At the end of September, we had 8,142,776 shares outstanding. 975,579 options and stock units outstanding. 887,160 pre funded warrants outstanding and 347,240 warrants.

Tim Burns: We also continue to expect some quarter to quarter variability in operating expenses.

Tim Burns: Particularly our research and development spending.

Tim Burns: Due to the timing of semiconductor fabrication runs product development other research and development activities in hiring.

Tim Burns: The timing of equity grants and related stock based compensation expense recognition.

Speaker Change: He will also cause variability in our quarterly operating results.

Our net loss was flat at $2 $7 million in both the third quarter of 2024 in the third quarter 2023.

At the end of September we had $8 million or 142776 shares outstanding nine.

975579 options and stock units outstanding.

Speaker Change: 887160, <unk> pre funded warrants outstanding.

Speaker Change: And 347240 warrants outstanding.

Tim Burns: The remaining warrants have an exercise price of $8.90 and are set to expire in August of next year. At September 30, 2024, our fully diluted share count was 10,352,755 shares.

Speaker Change: The remaining warrants have an exercise price of $8 90.

Speaker Change: And are set to expire in August of next year.

At September 32020 for our fully diluted share count was $10 million 352755 shares.

Operator: At this time, I'd like to open up the call for questions.

At this time I would like to open up the call for questions.

Operator: Operator. Thank you.

Operator.

Speaker Change: Thanks <unk>.

Operator: At this time, we are conducting our question and answer session. Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left of your viewing screen. Analyst to publish research. May ask questions on the phone line. For analysts to ask questions on the phone line, please press star 1 on your telephone keypad. Please note, it may be necessary to pick up your handset if on speakerphone to provide optimum sound quality. Thank you.

Speaker Change: At this time, we are conducting our question and answer session.

Speaker Change: <unk> can submit their questions within the meeting webcast by typing them into the Q&A button on the left of your viewing screen.

Speaker Change: Although this too.

Speaker Change: Published research May ask questions on the phone line for analysts to ask questions on the phone line. Please press star one on your telephone keypad.

Speaker Change: Please note it may be necessary to pick up.

Speaker Change: Your hands, if on speakerphone provide optimum sound quality.

Speaker Change: Thank you.

Brian Dobson: Our first question is coming from Brian Dobson with Clear Street.

Speaker Change: Our first question is coming from Brian Dobson with clear strength.

Brian Dobson: Your line is live. Good morning. Thanks very much for taking my question.

Your line is live.

Brian Dobson: Good morning, Thanks, very much for taking my question.

Dan Berdar: Um, you know, I guess just to bring it up to 30,000 feet, if you could for a moment opine on the outcome of the US election, in particular, if you think that some of the the recent negativity surrounding green energy has been overblown, and how you think this impacts the operating environment over the next four years? Yeah, you know, I think There certainly was an immediate reaction to it. But you know, if you look at the prior administration where Trump was our president, solar actually did very well. So I think part of this is really just concerned that some of the incentives that are out there are going to be a headwind for things particularly like solar, and the high cost of electric vehicles, you know, is already a challenge even before the election.

Brian Dobson: I guess just to bring it up to 30000 feet. If you could for a moment opine on the outcome of the U S election.

Brian Dobson: In particular do you think that some of the recent negativity surrounding green energy has been overblown.

Ex the operating environment over the next four years.

Speaker Change: Yes, I think.

There certainly was an immediate reaction to it but if you look at the prior.

Speaker Change: Administration, where Trump was our president solar actually did very well. So I think part of this is really this concern that some of the incentives that are out there.

Speaker Change: Are going to be a headwind for things, particularly like solar and the high cost of electric vehicles is already a challenging before the election, but the.

Dan Berdar: But, you know, the customers we're working with, they are not disengaging in any way. You know, they're really focusing on what they need to do to keep their products competitive, which is really focused on how do they drive down the cost and improve the performance, whether it's more kilowatt hours out of energy storage system or more range out of the battery. So I think it's really just more short term reaction. And based on what we've seen, when this administration was in office previously, it really didn't have any deleterious impact on solar in the U.S. And as I mentioned in my comments, I mean, it is a global market.

Speaker Change: The customers, we're working with various theyre not disengaging at any way they are really focusing on what they need to do to keep their products competitive which is really focused on how do they drive down the cost and improve the performance, whether it's more kilowatt hours out of energy storage system or more range out of the battery. So I think it's really just more of a short term reaction and based on what we've seen.

Speaker Change: When this administration was in office previously you really didn't have any deleterious impact on the <unk>.

Speaker Change: <unk> in the U S and then as I mentioned in my comments I mean, it is a global market so the growth.

Dan Berdar: So the growth that we're seeing in electric vehicles globally and renewable energy, that momentum continues to be pretty strong.

Speaker Change: That we're seeing on electric vehicles globally, and renewable energy that momentum continues to be pretty strong.

Brian Dobson: Yeah, thanks for that color. You mentioned that in the quarter, you added new distributors as well. And it's encouraging to hear that they've already placed orders.

Speaker Change: Yes, thanks for that color you mentioned that in the quarter, you added new distributors as well and it's encouraging to hear that they have already placed orders how do you see that relationship developing over the course of 'twenty five 'twenty six is there any kind of additional color you can give us on your long term client support those two partners.

Dan Berdar: How do you see that relationship developing over the course of 25 and 26? Is there any kind of additional color you can give us on your long term plans of working with those two partners? Yeah, so these distributors that we've signed up, so now Richardson and the two most recent to get us to the three distributors are all involved in demand creation. So they're introducing us to large customers while they are handling order fulfillment for us, which is great from the perspective that many of these customers are international. The real value is really in the introductions and we have arrangements with the distributors that they will temporarily get a small single digit fee from customers where they introduce us to, but we handle them direct.

Speaker Change: <unk>.

Speaker Change: Yes. So these distributors that we signed up so now Richardson and the two most recent to get us to the three distributors are all involved in demand creation. So they are introducing us to large customers. While they are handling order fulfillment for us which is great from the perspective that many of these customers are international the real value is is <unk>.

Speaker Change: And the introductions and we have arrangements with the distributors that they will temporarily get a small single digit fee.

Speaker Change: From customers, where they introduce us to but we handle them direct so if youre talking like an automotive company in very large industrial company those will not be actually fulfilled ultimately through distribution, although the introduction may be made through.

Dan Berdar: So, if you're talking like an automotive company, a very large industrial company, those will not be actually fulfilled ultimately through distribution. Although the introduction may be made. through these distributors.

Brian Dobson: So for us, it's really an extension of the sales Yeah, excellent.

Speaker Change: Due to these distributors so for us it's really an extension of the sales team.

Speaker Change: Yes, excellent and regarding your work with still and us.

Dan Berdar: And regarding your work with Stellantis, in entering phase three, can you offer any kind of additional color on that project and how you see it perhaps progressing from a timeline point of view next year? Yeah, we, you know, we actually saw the the Stellantis team at the senior levels really focused on the fact that I think they were relatively slow to react to what was going on in the car market with the volume of vehicles they were building and where they were pricing vehicles. So it created, I think, a distraction for them with coming to terms with the fact that they had an excessive inventory and they didn't have incentives to move vehicles.

Speaker Change: And entering phase III can you offer any kind of additional color on that project and how you see it perhaps progressing from a timeline point of view next year.

Speaker Change: Yes, we actually saw the.

Speaker Change: Atlantis team at the senior level is really focused on the fact that I think they were.

Speaker Change: It'll be slow to react to what was going on in the car market with the.

Speaker Change: The volume of vehicles, they were building and where they were pricing vehicles. So it created I think a distraction for them with coming to terms with the fact that they had an excess of inventory and we didn't have incentives to move vehicles that seem to take away. Some of the priority internally for them to get approvals for a lot of the technology programs are working.

Dan Berdar: That seemed to take away some of the priority internally for them to get approvals for a lot of the technology programs they're working on. We're seeing that swing back now that they seem to have their roadmap laid out. I think they are, you know, the technical teams have continued to work and the production teams to continue to work despite that. And we've been collaborating with them as well. So I think that they are still very much focused on getting this new version of their power module for the inverter ready for next year. So they can start to actually get into actual testing of the build.

Speaker Change: We're seeing that swing back now that they seem to have the roadmap laid out.

I think they are.

Speaker Change: The technical teams have continued to work in the production teams, who continue to work despite that and we've been collaborating with them as well. So I think that they are still very much focused on getting this new version of their power module for the inverter ready for next year. So they can start to actually get into actual testing of the builds that.

Dan Berdar: That seems to really be a driver because part of the strategy that they've got are to bring out more electric vehicles that can provide longer range and reduce the cost of those vehicles. And we fit very well into that formula, because that's really part of what our technology brings to the table.

Speaker Change: That seems to really be a driver because part of the strategy that <unk> got are to bring out more electric vehicles that can provide longer range and reduce the cost of those vehicles and we fit very well into that formula because thats really part of what our technology brings to the table.

Brian Dobson: Great, thanks very much.

Speaker Change: Great. Thanks very much.

Dan Berdar: And just for some investors that might be new to the story, could you just quickly highlight what you're most excited about for 25 and 26? Yeah, I'm really excited to the fact that, you know, the companies that we're working with, they're very large, global customers that have the ability to actually really bring out some innovative products. And we're learning a lot from them as well about, you know, they're where they're going with their products. You know, it's bringing new semiconductors technology always takes a long time. You've got to get the customers educated about your technology.

Speaker Change: Just for some investors that might be new to the story could you just quickly highlight what youre most excited about for 'twenty five 'twenty six.

Speaker Change: I am really excited of the fact that the companies that we're working with.

Speaker Change: They are very large global customers that have the ability to actually really bring out some innovative products and we're learning a lot from them as well about where they're going with their products.

Speaker Change: It's bringing new semiconductor technology always takes a long time, you've got to get the customers educated about your technology, they've got to get devices and get familiar with them they've got to start working on their designs. So it was a long process and it's really exciting for us the number of companies that we see spending time energy and resources on and on.

Dan Berdar: They've got to get devices and get familiar with them. They've got to start working on their designs. So it's a long process. And it's really exciting for us. The number of companies that we see spending time, energy and resources on an ongoing basis with us, because any one of them can drive a significant amount of volume for us as they get to the point where they start to roll out product.

Speaker Change: Boeing basis with us because any one of them can drive a significant amount of volume for us as they get to the point, where they start to rollout product.

Brian Dobson: Great, look forward to catching up with you after the call. Thank you.

Speaker Change: Great look forward to catching up with you on critical.

Speaker Change: Thank you.

Speaker Change: Thank you.

Jeff Christensen: I will now turn this call back to Jeff Christensen to read questions submitted through the webcast.

Speaker Change: I will turn this call back to Jeff Christensen to read questions submitted through the webcast. Thank you.

Jeff Christensen: Thank you. Thanks, Operator.

Thanks, Operator, gentlemen, first submitted question is does B Tran.

Jeff Christensen: Gentlemen, the first submitted question is, does BTRAN have uses in data centers? And if yes, is Ideal Power talking to anyone about that? Yeah, it does. You know, one of the things that data centers really have to focus on is circuit protection, whether it's through the UPS systems or circuit protection of the servers themselves. And those are continuously conducting devices that have to act extremely fast.

Speaker Change: <unk> and data centers and if yes is.

Speaker Change: Idaho power, taking talking to anyone about it.

Speaker Change: Yes. It does one of the things that data centers really have to focus on is.

Speaker Change: Circuit protection, whether it's through the UBS systems or in circuit protection of the servers themselves.

Speaker Change: And those are continuously converting conducting devices that have to act extremely fast. So we actually are already talking to customers that are looking at <unk> as part of protecting the data centers from disruptions in the power quality and how they can be incorporated into the new designs for things like the <unk> and Aston disconnects.

Dan Berdar: So, we actually are already talking to customers that are looking at BTRAN as part of protecting the data centers from disruptions in the power quality and how they can be incorporated into the new designs for things like the UPSs and ACID disconnects that allow the data centers to keep operating.

Speaker Change: Allow the datacenters to keep operating.

Jeff Christensen: Thank you.

Speaker Change: Thank you. Our next question is how much annual revenue does ideal power need to be profitable and cash flow positive.

Tim Burns: Our next submitted question is how much annual revenue does Ideal Power need to be profitable and cash flow positive? What would the margin be for that revenue? Yeah, so there's obviously a lot of variables to take into account there. But I would say roughly 30 to 50 million is probably the range in terms of annual revenue where we would get the cash flow break even. And that assumes that at that point, you're above 30% gross margins, with our long term target being obviously 50% gross margins, but until we get further scale, we'll probably be in the 30s at that kind of revenue range.

Speaker Change: What would the margin be for that revenue.

Speaker Change: Yes, so there's obviously a lot of variables to take into account there but.

Speaker Change: I would say roughly 30% to $50 million is probably the range in terms of annual revenue, where we would get the cash flow breakeven and that assumes that at that point youre above 30% gross margins with our long term target being obviously, 50% gross margins but.

Speaker Change: Until we get further scale will probably be in the 30% that kind of revenue range.

Tim Burns: Thank you. In October, it was announced the company received orders.

Speaker Change: Thank you.

Speaker Change: In October it was announced the company received orders how accretive are those revenues and are they will they be recognized in the fourth quarter.

Tim Burns: How accretive are those revenues and are they will they be recognized in the fourth quarter? Yeah, so in general, right now, most of the orders we're talking about are small. And it's just because the timing of where people are in their design cycle.

Speaker Change: Yes, so in general right now most of the orders we're talking about are small and it's been just because the timing of where people are in their design cycle. So while initial orders here in the near term will be small we expect to really start to see larger orders as these customers get to is actually building prototypes of their products that they intend to launch and then actually starting to build inventory for those.

Tim Burns: So while initial orders here in the near term will be small, we expect to really start to see larger orders as these customers get to actually building prototypes of their product that they intend to launch, and then actually starting to build inventory for those products. So generally, those orders will be fulfilled within Unknown Speaker Depending, I would say anywhere between, you know, if we have the inventory on hand immediate to 12 weeks. So if we announce an order in October, very likely the revenue will be recognized here in the fourth quarter.

Speaker Change: So.

Speaker Change: Generally those orders will be fulfilled within.

Speaker Change: Depending I would say anywhere between.

Speaker Change: If we have the inventory on hand immediate 212 week. So if we announce an order in October very likely revenue will be recognized here in the fourth quarter.

Operator: Thank you. We have several questions submitted. If you have a question, please, you know, please click on in the webcast portal, click on ask a question button.

Speaker Change: Thank you.

Speaker Change: We have several questions submitted if you have a question.

Speaker Change: <unk>.

Speaker Change: Please click on the webcast portal.

Tim Burns: Our next submitted question is, since there are many industries that could benefit from BTRAN, why is it taking so long to achieve even one large order? Where is there urgency? Yeah, I would say it gets back to some of what I said for the, in answering the last question. These companies have, if you're working in the industrial sector, you know, 12 month design cycle. So, if you're still in the 1st, half of that design cycle, it's going to be very low quantity orders, right? If you're working later into that design cycle, which just again will be 6 to 12 months into the design cycle, we'd expect increasing water sizes.

Speaker Change: To ask a question button. Our next submitted question is since there are many industries that could benefit from B Tran why is it taking so long to achieve even one large order, whereas their urgency.

Speaker Change: Yes, I would say it gets back to a similar I said for the in answering the last question.

Speaker Change: These companies have if you are looking at industrial sector 12 month design cycle. So if you are still in the first half of that design cycle, it's going to be very low quantity orders right. If youre working later into that design cycle is just again will be six months to 12 months into the design cycle, we would expect increasing water sizes, but.

Tim Burns: But it's really just a factor of when they began their evaluation and where they are in that design.

Speaker Change: It's really just a factor of when they began their evaluation and where they are and that design cycle.

Tim Burns: Thank you. Our next submitted question is, at what point is an Ideal Power news event material enough to disclose the name or names of your global development partner? So I would say there's not a hard and fast rule. I mean, technically. I think the stance has been made by the SEC and NASDAQ and others that the name of the company is, can be kept confidential in most cases. So, what you really need to look at is the relationship and how far you are along with that customer, whether they're ready to introduce a product. So, there's certain checkpoints kind of that we look at, where we go back to those customers and ask for permission to name them, and we'll continue to do that.

Speaker Change: Thank you.

Speaker Change: Next to me. The question is at what point is an ideal power news event material enough to disclose the name or names of your global development partners.

Speaker Change: So I would say, there's not a hard and fast rule I mean technically.

I think the stance has been made in the SEC by the SEC and NASDAQ and others that the name of the company is can be kept confidential in most cases. So what you really need to look at is the relationship and how far you are along with that customer whether they are ready to introduce a product. So.

Speaker Change: There are certain checkpoints that we look at where we go back to those customers and ask for permission to name them.

Speaker Change: And we will continue to do that but its really when.

Tim Burns: But it's really, you know, when you sign a formal agreement prior to launch of a product, those are times that there's much more likelihood, particularly when you're near product launch, because the products will be out there, right? It's not just an R&D effort. Companies don't want people to know what they're doing just solely from an R&D perspective. But when something's, you know, getting productized, that kind of changes the narrative.

Speaker Change: When you sign a formal agreement prior to the launch of a product those are times that there is much more likelihood, particularly when you're near product launch because the products will be out there right. It's not just an R&D effort companies don't want people to know what theyre doing just solely from an R&D perspective, but when substance getting product.

Speaker Change: That kind of changes the narrative.

Tim Burns: Thank you. Our next submitted question is, what do you see is the most likely application for a first design win? And what type of company?

Speaker Change: Thank you.

Speaker Change: Our next question is what do you see as the most likely application for our first design win and what type of company.

Tim Burns: And what do you think the timing of the design win will be? Yeah, I think the most likely application is going to be something related to solid state circuit breakers or circuit protection. We've got several companies now that that is their focus on how they want to use BTRAN. Well, there's a lot of companies that are focusing on things like, you know, EV contactors and so forth, that design cycle and that wind cycle, I think, on the industrial side will certainly be shorter. And there's enough players in that space that we're working with that are making good progress that that would be my expected my expectation for first sample.

Speaker Change: What do you think the timing of the design win will be.

Yes, I think the most likely application is going to be something related to solid state circuit breakers or circuit protection we've got.

Speaker Change: Several companies now that that is their focus on how they want to use <unk>.

Speaker Change: There's a lot of companies that are focusing on things like contractors and so forth that design cycle and that win cycle I think on the industrial side, we will certainly be shorter and there is enough players in that space that we're working with that are making good progress that that would be my expectation my expectation for first sample I think the companies themselves.

Tim Burns: I think the companies themselves, when I think about those that are sort of in the lead with the companies we're working with, they are going to be companies that are significant suppliers to the utility space and to the large industrial customers where they provide other types of power control equipment and other circuit protection devices where this actually brings something unique to their portfolio of products that gives them a competitive advantage versus others that we're not working with.

Speaker Change: Think about those that are sort of in the lead with the companies. We're working with they are going to be companies that are significant suppliers to the utility space and two large industrial customers, where they provide other types of power control equipment.

Speaker Change: Other circuit protection devices for this actually bring something unique to their portfolio of products.

Speaker Change: Gives them a competitive advantage versus others that were not working with.

Operator: Thank you. It looks like there are no other submitted questions.

Speaker Change: Thank you.

Speaker Change: It looks like there are no other submitted questions Dan do you have any closing remarks.

Dan Berdar: Dan, do you have any closing remarks? I just want to thank everybody for joining us today on today's call and for your questions. And we look forward to continuing commercial announcements on our vtran before our next update call.

Dan: I just want to thank everybody for joining us today on today's call and for your questions and we look forward to continuing commercial announcements on our Retrans before our next update call. Operator, you may end the call.

Operator: Operator, you may end the call. Thank you.

Speaker Change: Thank you. This concludes today's conference all parties may disconnect and have a great day.

Operator: This concludes today's conference. All parties may disconnect and have a great day.