Good morning, ladies and gentlemen, and welcome to the Ideal Power First Quarter 2025 Results Conference Call. All participants are in a listen-only mode. At the end of management's remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this event is being recorded. I would now like to turn the conference over to Jeff Christensen. Please go ahead.

Thank you, Holly, and good morning, everyone. Thank you for joining Ideal Power's first quarter 2025 results conference call. With me on the call are Dan Brdar, President and Chief Executive Officer; and Tim Burns, Chief Financial Officer. Ideal Power's first quarter 2025 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 webcast, 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. We would also refer you to the company's website for more supporting company information. Now, I'll turn the call over to Ideal Power's President and CEO, Dan Brdar. Dan?

Thank you, Jeff. I appreciate everyone joining us today. I am looking forward to updating everyone on our progress since the start of the first quarter. I will briefly cover the key highlights from the start of the first quarter and discuss the most significant developments and little bit more depth and provide some context for their important. Then I will turn things over to Tim to discuss our financial results. We will be pleased to answer your questions after our prepared remarks. First, we complete the solid-state circuit breaker prototypes related for our first design win 3 months ahead of schedule. The customer completed their initial testing of these prototypes last month and we continue collaborating with them on their first B-TRAN enabled solid-state circuit breaker product ahead of its introduction to the marketplace in the coming months. Second, the potential new EV contactor program with Stellantis that we discussed in our year-end call, in late February was given internal approval at Stellantis and is advancing through their internal purchase order approval process. This would be our second program with Stellantis in addition to the drivetrain inverter program. Third, as we announced in our quarterly results press release earlier today, we secured an order from a third, Forbes Global 500 power management market leader interested in our technology for solid-state circuit breakers for power distribution systems. They're evaluating our technology for circuit protection for power distribution systems with a focus on DC microgrids for solar and wind. With the addition of this customer, we're now engaged with three Global 500 power management market leaders. Design wins with any of these companies could lead to several million dollars or more of annual revenue for us. Fourth, Sekorm, one of our demand creation distributors, secured an order for discrete B-TRAN devices,…

Thank you, Dan, and good morning, everyone. Our first quarter 2025 cash burn was $2.1 million up from $2 million in the first quarter of 2024 and down significantly from the $2.6 million cash burn in the fourth quarter of 2024. Our Q1 cash burn was below our guidance of $2.2 million to $2.4 million due to the timing of spending and related payments. We continue to manage expenses prudently and aggressively. We expect second quarter 2025 cash burn to increase to approximately $2.5 million to $2.7 million with the full year 2025 cash burn over $10 million with the increase primarily due to 2024 and planned 2025 hiring. This compares to a 2024 cash burn of $9.2 million excluding the benefit of warrant proceeds. Cash and cash equivalents totaled $13.7 million at March 31, 2025. We have no debt in a clean capital structure. We recorded modest revenue for the first quarter of 2025 as customers continue to evaluate our technology. 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 cycles and roll out B-TRAN-based products. Looking at the second quarter of 2025, we expect to see modest volume in commercial revenue from product sales with our revenue ramp starting in the second half of 2025. Operating expenses were $2.8 million in the first quarter of 2025 compared to $2.5 million in the first quarter of 2024. 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. We also continue to expect some quarter-to-quarter variability in operating expenses, particularly our research and development spending, due to 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. Net loss in the first quarter of 2025 was $2.7 million compared to $2.5 million in the first quarter of 2024. At the March 2025, we had 8,347,970 shares outstanding, 988,140 options and stock units outstanding, 763,827 pre-funded warrants outstanding and 342,240 warrants outstanding. The remaining warrants have an exercise price of $8.9 and are set to expire in August of this year. If exercised in full, the exercise of these warrants result in $3 million of proceeds to the company. At March 31, 2025, our fully diluted share count was 10,442,177 shares. At this time, I'd like to open up the call for questions. Operator?

Thank you. [Operator Instructions] Your first question for today is from Casey Ryan with WestPark Capital.

Good morning, gentlemen. This is exciting report and update. I just had a couple of questions. Can you talk a little bit about the Sekorm, Advanced Technology bullet point that you provided? It sounds like they've secured an order, but are you able to talk about when you ship against it, I guess, and then when the corresponding revenues would occur already occurred in Q1 or is that something that's coming over the course of FY 2025?

Yes. So that order, we just started shipping, it's partially fulfilled right now. It's a good opportunity for us obviously in the market. It's another one of these transactions that could result in a design win here later on in the year. So we're getting real good traction from our distribution partners and it's really on the demand creation side in terms of introducing us to new customers that want to evaluate our technology. While they are involved in order taking, for some, it's just really the introduction and we kind of run with it from there. So it really does create a lot of opportunities for us.

Okay. All right. Terrific. And so some of the shipments were in Q1, is that what you're saying? And then some are coming in Q2, Q3?

Right.

Okay. Okay, terrific. And then all the progress with Stellantis is very encouraging. I think you mentioned that you're moving to the PO process at Stellantis. For those of us who are unfamiliar, including myself, what does that mean in terms of time? Not that you exactly, but what are your expectations for that process to sort of take that sort of a multi-quarter thing or something that can move rapidly or maybe longer than what I'm thinking?

Yes. Stellantis, because they've come together as a result of all these acquisitions and mergers. They are a big company with a lot of bureaucracy, but what they've emphasized to us repeatedly is because they already had a program underway and are kind of having to shift directions, this is a high priority program for them. So I think we're going to see this in a relatively short-time period compared to what things normally happen in Stellantis. It will probably take several weeks to get through that process, but it's not something that we're going to be looking at a couple of quarters from now still waiting for. We think it's going to be in the Stellantis timeline relatively near term.

Okay. And then when that process is over, what is able to happen? They're actually to pull in, I guess, live samples at that point? Or is that indicating something more widespread, I guess?

It's actually a program that has been laid out that has us working with a company that's working on the controls for the contactor. There's a scope on design, there's a scope on testing, there's scope that includes shipping devices that get tested in their labs. It's we don't know yet is are they going to structure it as like a multiphase program like they did with the inverter program or is it going to be all in one phase? Because they sound like because of the priority of the program, it might just be a release for the full program, particularly since the contactors are less complicated than an EV drivetrain.

Right. Okay. Okay. And then, if you can, where do these opportunities with Stellantis end, say five years down the road? Does it end with Ideal Power sort of providing contactors and maybe EV drivetrains to sort of all Stellantis vehicles or sort of a subset of and EVs is what I'm focused on at this point. But I mean, do we still have to get designed into certain vehicles even if we're sort of approved and sort of accepted by Stellantis corporate essentially? What's kind of the end game here in terms of the opportunity? I feel like it's big, but I'm just how we sort of describe it down the road.

Just so everybody understands, we won't be providing the contactor or the drivetrain. We'll be providing the semiconductors to go into those. But the way Stellantis is approaching this, which is the way we see most of the established automakers doing it is they're looking to create a platform that they can take across multiple models and multiple brands because they don't want to have each one be different. So for example, the work we're doing with them on a drivetrain will address vehicles that will be in a variety of the brands that are similar sized vehicles across multiple markets. So they're trying to really make sure that they're being as efficient and getting as much leverage out of the design work that they can, so that there's a there literally is a platform that they work from. So for us, the win gets you into multiple vehicles and multiple brands in Stellantis.

Okay. All right. Terrific. That's really encouraging actually, really sort of a good vision for where this can go. And then you mentioned I think you mentioned opportunity with another OEM for auto. Is that accurate? And then would we get any maybe clarification on which product that was for? I think you said it was for EV contactor, but I just wanted to double check that.

Yes. So there's a second opportunity with a large global automaker that's specific to EV contactors. So we're still deeply engaged with that automaker. And then there is a third automaker that we are still engaged with, had they have not made a decision internally where they would like to apply the device. We've talked to them about both the EV contactor opportunity and the drivetrain inverter program. That's another top 10 global automaker. And then we're engaged with several Tier 1 automotive suppliers. I think some of the EV manufacturers rely on their Tier 1s to bring them those subsystems. So we would sell our technology to the Tier 1. They would put it into, for instance, a drivetrain inverter that they would then ultimately sell to the EV or automotive manufacturers themselves.

Right. Okay. Okay. Well, I think those are really helpful answers and I think the opportunities look significant. So this is a great update and thank you for taking my questions.

Our pleasure, Casey. Good talking to you.

I will now turn the call over to Jeff Christensen to read questions submitted through the webcast. Thank you.

Thanks, Holly. Gentlemen, the first question is, do you have any comments on Wolfspeed's financial challenges as they are the leader in the development and manufacturing of silicon carbide devices?

Yes, good question. It's really kind of unfortunate what's happened there. I mean Wolfspeed has spent decades developing silicon carbide and getting it commercialized. But it really highlights why we are so focused on an asset-light business model. Wolfspeed's challenges, they've got they've got $1.3 billion in cash, they've got $6.5 billion in debt, because it's an asset-heavy model. I mean, they own the fabs for the things that they're doing. I think, honestly, the debt that they've got coming due will probably be restructured. They're going to have to find a longer-term solution though because the asset-light business model is a very challenging one. It takes a lot of capital and it requires really high level of asset utilization. So I think it really, at the end of the day, highlights why we are sticking so closely to the model that we have and why, on our presentation, we say that not only are we fabless, we'll never own a fab. We're really leveraging that enormous investment that's already been made in wafer fabrication and packaging for silicon devices.

Thank you. Yes, we have several questions have been submitted by our shareholders and we look forward to answering your questions. Please continue to post them. Our next question is, in light of the recent tariff wars, are there any plans to certify any domestic chip manufacturers to make your product?

Right now, we don't need to do that. The tariffs really aren't impacting us, as I've mentioned in my earlier remarks, since power semiconductors are exempt from the tariffs. It gives us plenty of capacity. But if we do need to go to a U. S. fab, we know kind of where we would go. We did our development work actually here in the U.S. at a fab own by Teledyne, and we know what fab in the U.S. would be a good fit for us. But right now, folks say there's really no tariff impact for us that would require us to go do anything here domestically.

Thank you. Please provide color on the SymCool pipeline.

Yes. So SymCool is actually a vast majority of our pipeline. When we talk about engagements, when we talk about Forbes Global 500 power management market leaders, they're typically looking at the SymCool power module. They could potentially use discrete devices for smaller breakers, but I would say overwhelmingly the interest is in SymCool. We expect design wins here that we'll be announcing to incorporate that SymCool product. So the market reception has been great. And I think the yes, just to reiterate, except for the smaller commercial and industrial breakers, SymCool will be the product of choice for those at application.

Thank you. Our next submitted question is of the prospective customers that engaged with Ideal Power, how many are no longer involved and have you lost some programs in your pipeline and why?

We haven't lost anybody that we've been working with. It's challenging at times when you're working with these very large companies because they do move very slowly, but we haven't lost anybody that's engaged with us.

Thank you. What will it take for you to get to cash flow breakeven?

Yes. For us, it depends on the mix, but it's really just a few key design wins. I mean, these are very large companies. The design win could be millions or even in excess of $10 million in terms of what the annual revenue could be to Ideal Power. So it would just really take a few key design wins to get us there.

Okay, thanks. Our next question is, how long is the sales cycle for your products?

So it varies completely by customer. I mean, the typical process goes from educating the customer on the technology, then we go through and actually provide them with product. They typically order products. Sometimes we provide them with solid-state circuit breaker reference design, if that's their application of choice. They go through testing. We provide testing data that they always request from us. So that's part of the process. And then it gets into them deciding kind of on the product that they're looking for, what they potentially want to prototype. And it gets all the way through obviously design win and then rollout of the product, which I mean, they have some work to do between when they decide on proceeding and actually getting it ready for production. So I would say for industrial customers, ignoring that front-end education piece, it's about roughly 12 months, but it can vary widely by customers. Some customers are aggressive like our first design win customer is moving at a very fast clip. With some of these large companies, it's taking a little bit longer.

Thank you. Our next submitted question is why is now a great time for the company?

Yes, I would say it's because we're really on the cusp of having some significant commercial announcements. I mean, we're making great progress with Stellantis. We've announced our first design win, but we expect to have more to follow. Some of them with very large companies that could be really large revenue opportunities for us. So I mean, we spent a decent amount of time developing this technology. It's very novel. But it really has some significant competitive advantages and we expect to be able to show that to people in the form of commercial announcements here as we progress.

Thank you. The next question is, what is the expected value of Ideal Power technology in electric vehicles?

Yes, that's in our presentation. So it's about we still estimate it's roughly $1,100 per vehicle and that includes multiple applications within the EV. So within the drivetrain, with EV contactors on the circuit protection side, the onboard charger. The EV contactor alone is probably $200 to $300 per vehicle. So it's a great opportunity for us. And that opportunity is really exciting for us because one, we have a significant competitive advantage over silicon carbide MOSFETs or IGBTs. And the second thing is implementing EV contactors. It's just a much simpler process and much shorter process than being part of an entirely new drivetrain.

Thank you. Our next management question is when will auto certification be completed?

We're targeting the end of this year, sometime in the fourth quarter to get it done. That process has actually been going very well. We've gone through several of the key parts of that certification process already without any dye failures. Part of why it takes so long is there are a whole variety of tests you have to go through, including some that, for example, take tens of thousands of power cycles, lots of exposure to heat and humidity cycles and so forth. But we're still on target to get that done this year. It is one of our milestones, and we're happy with the way it's going.

And it's not a gating item for any of the electric vehicle opportunities. And we really think it has the opportunity to accelerate the pace with option of our technology in industrial applications just because it's a much higher standard, different extremes in terms of humidity and temperature, things like shock and vibration that aren't even tested in industrial standards. So we really think it will get it can be conservative industrial customers. It can help with those customers in terms of getting over the finish line. So we're excited for that to happen here later this year.

Thank you. The next submitted question is any conversation with Slate, the new Bezos pickup truck company?

Yes. So generally, when we're engaged with customers, they don't want their competitors to know what they're doing. So they generally request even for initial conversations, an NDA be put in place. So we can't speak specifically to any the only customer that's allowed us to name them to date is Stellantis. So as it relates to specific opportunities with specific companies, unfortunately, we can't really share any detail on that.

Thank you. The next question is, in your press release with the first design win deliverables, it was mentioned that it included lighting and air conditioning systems. Is this a new market that you have not mentioned before? Also do you know what Ideal Power's serviceable addressable market would be if you were selling B-TRAN's devices into those markets?

Yes, it's actually part of what we generally consider the industrial market for circuit breakers. Utility breakers tend to be very large, but there's a lot, in fact, if you look at the total number of breakers that are sold, there are more that are actually sold in the industrial size that tends to be smaller. So we've actually already kind of taken a good look at where the opportunities are. And it's not just lighting and air conditioning. It's just power coming into manufacturing facilities. It's providing circuit protection for sensitive equipment. So we view that as part of that overall industrial breaker market that we referred to. And it's about $1 billion market on the breaker side for us.

Thank you. Next question is, is the company aggressively promoting solid-state contactors that opportunity to all EV manufacturers?

It really kind of is mission number one here, because now that we're particularly once we are able to formally announce the purchase order with Stellantis, we really have already started going out to all the Tier 1s and to folks that are in the EV business. Part of why we put relationships in place with folks like Quest Semi that have their own auto relationships because we view that as just such a big opportunity where we can really leverage everything we're doing and learning from Stellantis and don't have to start from scratch with coming up with designs that fit the application. So it's a pretty high priority for us as well as the just solid-state circuit breakers for industrial and utility applications as well.

Okay. Thank you. Yes. Lots of questions and please continue to submit your questions. The next submitted question is, what kind of impact do you think the auto qualification will have in the as it relates to customers outside the auto industry?

It's a pretty positive impact. If you're an industrial customer, if you can buy a part that's actually been through auto certification, it speaks really highly to the robustness of the product. Because in just two applications, you think about a breaker sitting at a utility substation, if the devices that are in it have already been through shock and vibration testing and extremes in environment testing, it can certainly do well in the environment where the conditions are less demanding. So it sends a very positive message broadly to any potential industrial users.

Thank you. What's the power rating increases you're working on and the significance of them?

Yes. So we haven't announced the specific rating increases yet. Obviously, that's one of our 2025 milestones, so that will happen here later this year. But I mean, it's really a win for both us and the customers. So when we're increasing our rating, this is not due to a design change, it's not a new product necessarily. It's really us getting comfortable. We intentionally set the bar kind of well in terms of what we rated our products at. And that was because you don't want to have challenges early on with customers where you overpromise and underdeliver. So for instance, on the SymCool, we've already increased here last year the rating from 150 amps to 200 amps. We're expecting to increase it again. And what that means for a customer, if you're building a larger breaker and you're using 250 amp or 300 amp devices rather than 200 amp devices, you need less of them for your OEM product. So it's a cost benefit to them. It allows us to get a little bit more of a premium because generally the cost of the devices connect -- or the selling price of devices connected to the power rating of the device. So it's really a win-win for us and we'll be providing more detail here later this year when we formally roll out the new ratings.

Thank you. That concludes our question-and-answer session. I would like to now turn the call over to Dan Brdar for closing remarks.

I just want to thank everyone who joined us on the call today and for all the really good questions. Our news flow before our next update call will continue to focus on commercialization and customer engagement activities, and we look forward to updating you on our progress. Operator, you may end the call.

[Operator Closing Remarks]