Good day and welcome to the Ideal Power Fourth Quarter 2014 Earnings Conference Call. As a reminder, today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Matt Hayden, Chairman of MZ North America. Please go ahead.

Thank you. Good afternoon, everyone and thank you for taking the time to listen to Ideal Power’s fourth quarter and full year 2014 earnings conference call. Your hosts today are Mr. Dan Brdar, Chairman and CEO and Mr. Tim Burns, the company’s CFO. Dan will provide a business update including recent commercial orders and product announcements, while Tim will discuss the financial results. A press release detailing the earnings crossed this afternoon at 4 PM Eastern and is also available in the company’s website at idealpower.com. Following management’s prepared comments, we will open the floor to questions for those dialing in and also for those participants joining via webcast. Before we begin the formal presentation, I’d like to remind everyone that some statements made on the call and webcast, including those regarding future financial results and industry prospects are forward-looking and maybe subject to a number of risks and uncertainties that could cause actual results to differ materially than those described in the conference call. Please refer to the company’s SEC filings for a list of all associated risks. In addition, we’d also encourage visitors to visit the company’s website at idealpower.com to find supporting industry and other information that will help you to understand the products and also the markets in more detail. At this time, I would like to turn the call over to Dan. The floor is yours.

Thank you, Matt and thanks everyone for joining us today. Since this is our 2014 year end call, I want to provide a summary of what we accomplished during the quarter and the past year and discuss our recently announced deals. After that, I will turn the call over to our Chief Financial Officer, Tim Burns to review the quarterly and fiscal year financials. Following Tim’s review of the financial data, I will provide a preview of what we see coming in 2015 and provide some insight as to how to measure our progress. Before I review the quarter and the year, I want to summarize our strategy and the disruptive nature of our technology platform for those who maybe new to Ideal Power. Ideal Power is at its heart, a technology company that has developed a patented, completely new approach to power conversion. Our Power Packet Switching Architecture is a technology platform that has broad applicability to many types of power conversion markets. Our PPSA technology offers the ability to perform power conversion with transformer-less isolation. What does this mean in practical terms? It means our PPSA technology can provide power conversion with electrical isolation that is one-fifth the size and weight of a conventional power converter at higher efficiency, higher reliability and lower cost than conventional power conversion systems. Power conversion is a huge addressable market, more than 50 billion a year by published estimates and is projected to grow to 70 billion a year by 2020. Power conversion is used not just in energy storage, solar and other renewable markets, but also in automobiles, air conditioning systems, computers and many applications and devices we use or rely on everyday. As a small company, we need to be very focused in selecting our initial markets and introducing our…

Thank you, Dan. I will run through the fourth quarter and the full year financial results. Total revenue for the first quarter was $504,000 consisting of product revenues of $373,000 and the balance coming from grants. Total cost of revenue was $694,000, which included $146,000 in grant research and development costs. Operating expenses which includes $690,000 in research and development spending totaled $1.8 million yielding a net loss of $2 million. Total revenue for 2014 was $1.8 million with $1.2 million in product sales, up $800,000 from 2013 and $579,000 in grants. Total cost of revenue was $2.3 million, which included $643,000 in grant research and development costs. The net loss was $6.9 million, consistent with our expectations. The $2.5 million Department of Energy ARPA-E grants has been fully funded as of year end. So we will not have grant revenue or grant research and development costs in 2015 for this program. We are going to introduce backlog for the first time we reported on a quarterly basis going forward. We ended December 31 with a backlog of just over $2 million. As a general rule backlog will be converted into revenue with an average of about 6 months. We anticipate strong revenue growth in Q1 with first quarter revenue approaching total product revenues for all of 2014. In addition we anticipate reaching positive gross margins in the first half of the year, possibly as early as Q1. With improvement in gross margins during the back half of 2015 validating our business model and the inherent leverage it provides. At December 31, 2014 our balance sheet had just under $8 million in cash and cash equivalents and no debt. Our cash balance is sufficient to meet our strategic plan for 2015. We’ve a federal NOL in excess of $50 million which will help shield us from income taxes as we become profitable. At December 31, 2014, we had just over 7 million shares of common stock outstanding and just under 10 million shares outstanding on a fully diluted basis which includes approximately 1.6 million warrants and 1.4 million options outstanding. I will now turn it back over to Dan. Dan?

Thanks Tim. Looking forward to 2015, we believe our business is clearly at an inflection point. In 2014, we put the commercial foundation in place and this year is about execution and expanding our commercial reach both in terms of channels to market, producing new products and new applications for our technology and entering new geographies for our products. Entering 2015, we already have backlog that is almost twice our product revenue for all of 2014. Our existing customers are successfully ramping their businesses and we are focused on seeing them succeed and continuing to bring them new and innovative products to give them a continued reason to keep us as their source for power conversion systems. Coda Energy, Sharp and Green Charge Networks are clearly leaders in the battery energy storage system business. And we are proud to have them as our customers and are committed to their success. We are adding additional world-class partners and channels to market with global reach such as Rexel and Gexpro. We have several more such relationships in development that we will be announcing during the course of the year. The new alliances we are bringing on this year will broaden our geographic reach and also enable us to penetrate other high priority market verticals such as microgrids. As our business ramps, the high degree of leverage in our business model will become readily apparent in our financials. We anticipate our gross margins turning positive in the very near-term and continuing to improve as our order volume grows. Accompanying this will of course be growth in our top line with an increasing amount of our product revenue coming from our new 125 kilowatt product family. In order to protect our technology positions and to build on the strength of our intellectual property, we…

Thank you. [Operator Instructions] And we will go first to Philip Shen of Roth Capital Partners.

Hey, guys. This is actually Justin Clare on for Philip Shen. First off, I guess given your new hybrid and 125 kilowatt product introductions, could you share what the product mix is of your $2 million backlog and possibly how you expect that to change throughout the year?

Yes, the backlog right now is predominantly on our 30 kilowatt battery converter product. There is some backlog related to actually both the hybrid and the 125 kilowatt. But as we look forward into the year that will be shifting more and more particularly towards both the 125 kilowatt in the back half of the year, but the hybrid’s contribution will increase as well. So, really for the first half of the year, we are looking at the 30 kilowatt battery converter driving the revenue and in the back half it will be a mix.

Okay, great. Thank you. And then moving on to margins, I know last quarter you had mentioned a target of maybe 30% to 40% gross margin. I was wondering do you have a sense for what kind of volumes need to hit that and then also you need to introduce the new bidirectional switch technology to hit that target?

So, the answer to the first question is no, we don’t need to introduce the bidirectional switch technology to hit that target. I think it is probably in a few 100 units to actually get to the 30% margin, 30%, 40% is the product margin target. So, as we look into 2015 and into 2016 with our volume growth, we should be particularly in 2016 much closer to that target.

Okay.

If I could just add to that, one of the things that we see over time is there will be price pressure that will show up in the storage market. And we need the bidirectional switch as a way for us to maintain a competitive advantage for the longer term, not just from a performance standpoint, but also the ability to protect those margins even when price pressures starts to show up in the marketplace for storage systems as all.

Okay, that’s helpful. Thank you. Maybe just one more for me then, just a housekeeping question. So, considering that you are rolling out new products and you are making R&D investments to develop your new technology, can you give us an idea of how your OpEx will turn through the year?

So, our OpEx from a G&A perspective will remain relatively flat. Our R&D will increase particularly with the bidirectional switch development and there are some costs associated with rolling out those new products will have contribution here in the latter half of the year. But on the switch side of that we expect pretty significant revenue growth and additional contribution from that.

Alright, that’s it for me guys. Thank you.

Thank you.

Thanks Justin.

And we will go next to Colin Rusch of Northland Capital Markets.

Thank you, guys.

Hi Colin.

Can you talk a little bit about the sales cycle at this point now with the backlog that you got, how would you think that turns over, is that – are you searching to have the channel backlog three four times a year or is that kind of once or twice a year kind of trial them?

I think a lot of it is as we look at the forecast that we get from our existing partners is the ability to absorb those units is really paced by their ability to install. So what I would expect is during the course of the year as they get more efficient their ability to place an order with us, completed installation and commissioning at their end customer is going to shorten. I would guess that we are probably going to see that backlog trend probably two to three times a year for ’15. I think what’s more important is what are we getting in terms of new customers that are coming in that are adding to that existing backlog, because we are seeing that the folks like Gexpro and others that we are going to be announcing are really targeting a different customer base. So we think that while they are all going to start and go with their own pace as they ramp up their businesses the ability to just continue to bring on more of them is going to gives us some ability to really get several players ramped up and driving some pretty significant revenue for us in back half of ‘15 and into ‘16.

And what are you saying with third party finance folks in terms of being able to underwrite residual value and then performance over an extended period of time at this point?

It looks to be a pretty significant accelerator. If you look at Green Charge Networks for example, I mean it raised $56 million with K Road. And it was really around project finance. If you look at folks like Stem, they are doing the same thing. If you look at Coda Energy they have the backing of Fortress. So the ability to bring a complete solution, so that you can actually get out of the whole capital appropriation cycle with the commercial and industrial customer seems to be a pretty significant issue in terms of driving the sales cycle to closure quickly. You can largely make a no risk decision for the customer if you can take the technology risk out of their hands and bring financing and do a performance-based contract that guarantees savings, which is what we are seeing increasingly be the model out there.

So help me understand what the bottleneck is, so clearly you have been qualified with all these customers, they have all raised money, there is now underwriting hurdles have been, it sounds like pass-through, so what is inhibiting in you or them to accelerate the growth in this market and what sounds like a pretty significant way in a fairly short-term?

We actually see them accelerating. I mean the folks that at the beginning of ‘14 were ordering units 5 and maybe 10 at a time were back ordering by 100. So I think they are actually often running and it’s a matter of them just getting multiple installers the ability to actually install the units in a way that they are comfortable with. So it looks to us as they are actually moving forward pretty aggressively.

Okay. And then help me understand the backlog with those hundreds, those orders by the 100, why aren’t we seeing bigger backlog numbers?

So our backlog reported on 12/31 was largely related to Coda, Green Charge, and Sharp, so the battery energy storage system integrators that we are working with. As we roll into 2015, we are starting to add additional customers in channels outside of that core base and we will continue to see backlog grow through out the year.

So should we think about those as not purchase orders, but indications of where their demand is going to be for this year and if we are talking about hundreds converters we are talking about 30, 3 megawatts to 10 megawatts type orders rather than orders in really smaller chunks so far?

Yes. So we have not received purchase orders for all of 2015 from any of our customers and what we have reported backlog is actually committed customers POs maybe for a few months to 6 months out. So, we will be turning over that backlog and reporting increased backlog throughout the year as those customer orders grow.

So, for example, the megawatt that we announced with Gexpro, the megawatt with Eos building orders, none of those are in that backlog numbers since it was as of December 31.

Okay. Thanks so much guys. I appreciate it.

Sure.

And we will take our next question from [indiscernible] of MDB Capital. And [indiscernible] your line is open if you could please check your mute button or if you are on speaker, please pick up the handset.

Yes, hello. Good afternoon. Thank you very much for the presentation. We have a couple of questions relating to the market you are addressing right now. Do you identify any new technologies that pull the scale into the general markets that will be naturally matching with your device right now?

Actually, there are several. We see several new battery chemistries that are reaching commercialization. We see some new players coming into the small scale fuel cell space. We see considerable uptick in the activity surrounding small scale wind. So, it’s pretty interesting that we are seeing a real push towards all things distributed generation and regardless of the source, they are all potential candidates for us, because our technology is pretty flexible in terms of its ability to work with any of those technologies.

Okay, perfect. And in terms of the isolation, do you see any of our buyable solutions for customers that need isolation, for example?

Yes, I mean, anybody that want isolation today really have to go with a conventional technology and add the cost, weight and expense of a transformer. We don’t see anything out there that is even remotely similar to our technology that can provide the transformer-less approach to isolation that we have. And with that such a strong patent position around it, I think it would be pretty difficult for someone to come up with anything that’s even remotely similar to it. But we do scan pretty regularly. And when we go to the tradeshows, we make sure that we see what people are talking about introducing for new products and through 2014, we didn’t see anybody and even closely resembling our technology.

Thank you. And the final question, we have seen that in the industry the nature of key players are very interesting. Are some of them evaluating your technology for insertion of their offers that you know?

When you say key players, they take many shapes and forms. There are folks that are out there in the solar space that are moving into storage. There are battery companies that are out there. There are other solar inverter companies. We actually had quite a string of folks coming through. And we think we are going to have some very interesting announcements here in the very near term about some other very large players that are creating relationship with us as a way to enter the storage market and take advantage of what our technology has to offer. So, you would like to see several of those this year.

Thank you, guys.

Welcome.

And we will go next to Marcel Herbst of Herbst Capital Management.

Good afternoon and thanks so much for taking the question. Can you remind us again how many of the larger system integrators you have designed win service and maybe give us a little color on your pipeline there?

Yes, the major system integrators that we see today that are actually putting hardware on the ground are there are three of them, the Sharp Electronics, Green Charge Networks and Coda Energy. We see several others that are coming to this market in 2015 and we are actually going to be announcing some relationships with them. We have also seen several folks who want to buy from someone like Gexpro or someone else that is a large brand that can bring a consolidated system. So, you will see some approaches like that as well. But from the players that we see that are actually doing the most in terms of installs, it looks like we have captured all of them. The only one we haven’t captured yet is Stem. Stem made some significant awards as part of some of the utility programs that are out there, but we are working to bring that solution as well, because we understand what they are looking for. And there is we think is a good path to actually capture their business here this year as well.

And regarding the Rexel distribution partnership, can you give us a broad idea of what kind of annual revenue potential this can have for Ideal Power?

It could be pretty significant. And we know what they are targeting. They haven’t let us share that with folks, but they could become a pretty significant source for us. I think some of the things that we're talking about announcing here in the coming months as an expansion of that relationship will give you some color in terms of the size of the commitment they are making to all this, but we expect them to be a pretty significant piece of our revenue coming out of ‘15.

Great. Thank you very much.

You are welcome.

And we will take our next question from Don Mccune [ph] of [indiscernible] Securities.

Thanks. You guys have done a phenomenal job in the last year and a half and congratulations, it’s very, very exciting.

Thank you.

So I kind of have a general sense that 1 megawatt of course with the 1000 kilowatts. And isn’t that roughly about 33 units in terms of the 30 kilowatt converters?

Yes. That’s correct.

Alright. So that would translate in about 400,000 in revenue at 12,000 a piece, am I correct in that number?

It will be a little less than that because when people order in volume we give them a discount, but you are not too far.

Alright. So when you talk about on your press release, 9.5 megawatts of business, granted they are not in the backlog because they are not from purchase orders, but really looking at maybe something closer to 4 million in revenue out there from just the announced opportunities that we’ve had in the last six to nine months?

Yes. Well just to clarify that, the 9.5 megawatts number that you are referring to, that was our orders since the beginning of 2014, that would include the 2014 revenue which is about 1.2 million, as well as the backlog which is just over 2 million.

Right. And then subsequent to - you’ve had like a megawatt out of the Rexel deal and maybe some other things. So..

Yes, megawatt out Eos and we announced Boeing and there are some quarter’s [ph] follow-on orders we haven’t announced.

Right, right. On your website, maybe I read this wrong, but it says the bidirectional switch would be - begun to be used in your products in 2015. Granted they are maybe at the end of 2015, but so that translates to me that you will have a product ready to go this year into the marketplace, that sound right?

It won’t stay [ph] in the marketplace. It will be in a prototype that we are testing. We will probably exercise it pretty heavily before we finalize that design and send it off for third-party certification.

Okay. And once that - so once you bring it to market, will this be a significant catalyst to growing your business, I know you have enough catalyst [ph] right now, but will this be a real transformative piece?

We think it absolutely will be because it not just makes our products even more competitive. When you start to get to very high efficiency and very compact size, it starts to open up some other very mature markets that we chose not to try and enter with the current state of the technology. Things like motor drives and traction drives and all kinds of things that use conventional power conversion. So it really opens up the whole new channel of partners and I think it’s first to introduce some interesting licensing opportunities for us as well.

And there’s nothing like it on the market, right, nobody has..

Yes, there isn’t.

And is breakeven on a quarterly run rate basis about 5 million or 6 million, is that out right today?

We haven’t talked about that specifically. We said it’s about 2000 to 4000 units if you work it in our baseline 30 kilowatt product. And the reason for the range there, it just depends on our cost to develop additional products and also additional applications. So we have some control over that obviously in terms of where we fall in that range, but within a range of 2 to 4000 units on an annual volume basis.

Alright. And then your platform on your PPSA technology, I mean even you’ve been introducing new products on a regular basis. I am assuming you’ve got plenty more to bring out on this platform, I mean you’ve got a..

We have more ideas than we have people and time.

Well of course. And then last question on the EV market, electric vehicle, I haven't made any comments today on that. Is that kind of slow to develop, any thoughts there?

Yes. It is slow to develop. Our real shift in the EV market is one, we have to include buffer storage to actually make the economics work. What we're seeing is, at least for the early rounds of what’s being installed, a lot of it is just simple and straightforward charging, low cost, get as many in as possible to build some basic infrastructure. We're also starting to see pressure in places like California to start to put buffer storage in, because that infrastructure is creating its own set of issues. So I think as that infrastructure starts to mature a little bit more that’s where you will start to us see us get voted [ph] in, because we are not interested in competing in just a simple charger market. We really wanted to include the buffer storage because that’s where we can really show the advantages of our design.

Well, thank you very much and have a great 2015. Thanks.

Thanks, Don.

Thank you.

And we will take our next question from Mike Cahill of Crispin Capital.

Hi, Dan. Thanks for a great quarter and it’s nice to see all your hard work translate it into revenue. I had a question on the first quarter guidance. I wasn't sure when you said that the revenue could be almost as much as 2014. Was that in reference to the 2014 product revenue or the total revenue? Thank you.

It’s product revenue. And we actually I did mention during the prepared comments that the RPE program is fully funded. So we would not expect any more revenue for that program.

Right. I did hear that. That was - but - thank you for the clarification. Thank you.

Sure. Yes.

And we will go next to John Bronzo [ph] of [indiscernible] Capital.

Hey guys.

Hi, John.

Thanks, thanks for taking my questions. So the first question I have is to take you back a little bit off of Colin’s [ph] question. Could you talk a little more about your production turn in your lead time, just sort of what kind of time has to go by between when an order is placed so then you can actually - when a customer could actually take delivery?

In the agreements that we have with the system integrators, that, what we kind of find up to with them is a 90-day lead time. As we start to ramp the production itself that lead time will actually shorten, we expect it to get down closer to 60 days. Now that assuming that we don't want to have anything already sort of in with or in inventory for shortening those cycles. Right now we're trying to make sure we don’t tie up cash for those sorts of things. But today it’s about 90 days. It’s largely driven by not the contract manufacturer’s timeframe to actually build the product. It’s really to get some of the long lead parts like the heat exchanger on the unit or the enclosure that’s unique to our product.

Got it. Thanks. And if I can just ask one more.

Sure.

With respect to 2015, could you maybe expand on some of your expectations for any licensing agreements or any deals you are seeing in that sense?

I think the licensing is really, it's more a function of the folks that we work with. There are some players in the queue who will probably never do license with us. It’s just - it’s not, doesn’t fit their business model, they don’t want to actually be in the mode of having to make product and that's fine. There are some that depending on how quickly their business grows, are probably going to want to move at least to a purchasing license. I’d be surprised if we saw those happen in ‘15, I think all was - need to get pretty high levels to actually justify the resources that they’ve got to commit to go manage this supply chain and contract manufacturers. On the bidirectional switch development, I think we really need to get to showing that, that is working in a product out in the field which will be later in ‘15. So I think it’s all we can demonstrate operating data on a fully implemented unit with the bidirectional switch. They’d be premature to do licensing, so I would expect ‘16 to be the earliest that we would see any kind of an arrangement there.

All right. Thanks a lot. Appreciated. Congrats on a great quarter.

Thank you.

And we will take our next question from Jared Mayer of Confido Holdings.

Hey guys, thanks for the call today.

Hi, Jared.

So, sort of just taking a step back for a minute given the adaptability of the technology. Help set some light on sort of how management looks at sort of choosing the best markets to go after and so the chronology of rolling out in those markets and allocating resources to exploiting them?

Yes. For us it’s really all about looking at where can we bring our product, where it will have a unique set of attributes and where we can capture the best possible price for it because our objective is to get to profitability as quickly as possible. So to give you an example, we could sell our 30 kilowatt unit as a solar inverter. We have no interest in doing that because the solar – the plain solar space highly commoditized a unit that we sell as a battery converter for kind of $11,000 we would have to sell for $7,000 or $8,000 to sell it as the solar inverter. So we really look for what are the markets that are growing quickly, have the ability to really value our technology, modify that value in the price that can we get from them. And for us to move into those base it takes the minimum amount of modification and development to larger to the firmware since the hardware is pretty adaptable. So while we look at all those things that we can go do, we are really staying pretty focused on first starting with storage, storage plus solar since that’s a different kind of application and microgrids and some of the other ones are bit of things we could do. We are really not spending much time on because it’s an opportunity cost issue for us.

Okay. And just to follow up from that, as you sort of focus on those sort of three areas that you mentioned, what is the service sales ramp and just sort of partnership ramp look like, how would you sort of look to grade yourself going out let’s say two to three quarters in terms of what industries you expect to see?

I think you should expect to see two or three significant new arrangements by the summer. And you will probably see at least another one in the fall. Probably more at the rate things are accelerating the number of people that are coming to see us.

Is there a cap there just in terms of the resources that you have to allocate to those partnerships?

Not really, I mean it doesn’t take a lot of support to use once we get them through initial startup, it’s really making sure that we get them up the learning curve on understanding the product and technology. If we have to add another application engineer or two to support the growth of their business, it’s a relatively small expense in terms of the magnitude of revenue they can drive.

Okay. And lastly for me, I mean given your current cash expected to be fine with through the end of 2015 and revenue starting to pick up, in 2016 what does that look like in terms of your capital position and the potential need for a raise?

So we filed S3 on December 1 which was the first day we were actually eligible for add filing. And that was really to provide us flexibility in any event that we needed or wanted to raise additional capital. An S3 is a 3-year instrument, so it is not something that we necessarily would look to use here in the short-term, but it does give us flexibility if there are business opportunities. They would require short-term investment in the business that is in excess of our strategic plan. There is always the opportunity when you have that in place to go the capital markets and try to bring additional capital into the business. But what our raise would look like I am not going to really answer that question because until those opportunities present themselves and we evaluate those opportunities, we don’t have plans for a specific raise?

Understood, that’s it for me. Thanks guys.

And we will take our next question from Mark Brancel with Niche Capital.

Hey guys, thanks for taking my question. I have a few questions. Obviously you are developing the business with Sharp and Coda and Green Charge, can you expand a little bit so I can understand better the real potential with the microgrids obviously not just with Boeing, but is there a lot of opportunity out in this marketplace besides Boeing and how large could that marketplace be. And then if you could touch on the recent deal that you folks did with Eos Energy, what was interesting to me about that deal was in New York and I expect you working more with utilities in California or Texas, so I just wanted to get a sense for how large that market is, do you expect to see other deals like that with other stakes, if you could give us a little more color there that will be great?

Sure, let me start with Eos. When you look at kind of where the markets are, it’s become bicoastal. The commercial and industrial market today is really driven by demand charges and the highest demand charges in the country right now are actually in Boston. So Boston key market, New York has both high timed use and demand charges and then of course California. New York has always been a little bit tougher to penetrate, because Con Ed was not one that was embracing new technologies coming in, which is why I thought it was really good to see Con Ed as really a sponsor for the demonstration that Eos did. We think going successful they were able to actually make some decision about where they are going with their business and they have got some pretty significant opportunities that are follow-ons in that area. And we are glad they have picked us as part of that. We think they have got some pretty interesting announcements coming. And part of what really gives them a competitive advantage is their chemistry is projected to be very low cost compared to the traditional lithium-based opportunities that are out there. The other thing that we are seeing is with the existing partners that we have Green Charge Networks and Sharp and others, they are actually now pursuing opportunities in the New York and East Coast area as well. So, California is what usually happens and kind of starts the trend and then it goes to the East Coast. So, you are going to see installations and orders in New York area and Boston and elsewhere in the Northeast this year get announced as those markets are starting to take off as well.

Can you give us a sense what you think the potential for the market is?

The standalone storage market itself, I mean, it’s hundreds of megawatts of addressable opportunity. What was interesting to us part of what we are focused on microgrids is from everything that we are seeing, the microgrid opportunity is going to be even bigger, just because you have so many people around the world that are dependent on diesel fuel and don’t have access to the grid. But we see power actually kind of fallen what happened with telephones. If you look at India and China and North Africa, they did put in hard lines for phones, they just gifted one’s rate to cellular. Power is going to do the same thing. Rather than build the grid infrastructure, it’s going to microgrids, because those technologies have now become very cost competitive and are displacing power that would be made with really high cost fuel that’s going to be also difficult to get to a lot of those locations. So, from everything, we are seeing microgrids are projected to grow like 20-fold over the next 10 years and actually will significantly eclipse your standalone storage.

So, from understanding what you are saying in the microgrid opportunity is more of an international opportunity than domestic, am I getting that right or am I not getting that?

Yes, it is. There are domestic opportunities where you see a lot of college campuses and hospitals that really want to have the ability in the case of power outages to be isolated and continue to have complete power for their facility, but when you look at places that just need a basic supply of power the microgrid is going to be an answer for a lot of the international opportunities, which is why you are going to see us doing more and more with folks that have global reach.

Obviously, these were all the problems they have, but my next question is priority of focus, I mean, you are getting – the good new is you are getting orders from a variety of different spaces. As a small team, Dan, how are you managing and making sure nothing slicks through the cracks operationally?

There are several things we are doing. Gexpro is a perfect example of one of the things that we are doing to sort of make sure we stay focused. We have end-less inquiries that come in people that are doing projects. We would tie up a lot of people a lot of time to try and figure out the right solution for them. We don't really have the ability to support folks that are doing two, three, four unit opportunities. We really want people that are doing 200, 300 level opportunities. A company like Gexpro is exactly what they do, basic port, electrical installers and others that might be doing projects we get them trained on the technology can literally outflow that. From that technology standpoint and a product standpoint, part of what we do also is we make sure that we're not getting out for over our skies here with new opportunities that come along. If you look at units that we’re shipping whether it’s going to a wind power application, which we have orders in hand for that, whether it’s going for standalone storage, whether it’s going for microgrids, for us it’s not a new product. There may be some things that we learned that want to make some improvements in the firmware, but we are fortunate we are not having to turn entirely new design to do these. It’s really leveraging the core design of that 30 kilowatt product and just expanding its capability. Things would get pretty far fields from that and we have actually had several of these here just in the last couple months will be booked at. We have just said interesting but we are not going to do, we just can’t lose focus. If we don’t have really stellar successes right out of the gate, it just makes it harder to recoup from that.

And guys, the last question I have is in terms of the contract manufacturing, I know you have announced that you are dealing with a second outsourcer. Are you able to release the name of who you are working with there?

We have it mostly because we don’t want our competitors to know who we are using, but it’s the U.S. in the Midwest.

Okay, that’s fine. That’s all I need.

Yes.

Alright, guys. Thanks for your time.

Thank you.

Thank you.

And this does conclude our question-and-answer session. I will turn the call back to Dan Brdar for closing.

Well, thank you very much operator. And I want to thank everybody for joining us today. We hope you are as excited about what 2015 looks like as we are. We think we are going to have a lot of great things we will be talking about in future calls. And we are looking forward to keeping you apprised of our progress. Thank you very much.

And this does conclude today’s conference call. Thank you again for your participation and have a wonderful day.