Good morning, ladies and gentlemen, and welcome to the Ideal Power Fourth Quarter and Full Year 2024 results call. At this time, all participants are in a listen-only mode. 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 side of your viewing screen. Analysts who publish research may ask questions on the phone lines. For analysts to ask questions on the phone line, please press. 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, operator. And good morning, everyone. Thank you for joining Ideal Power's fourth quarter and full year 2024 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 fourth quarter and full year 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 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. 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'm looking forward to updating you on the progress since the start of the fourth quarter. We accomplished several key 2024 milestones and made significant progress with a number of key customers, including Stellantis. Based on our recent successes, positive customer feedback, and the heightened level of customer engagement, we're excited about how 2025 is shaping up for the company. Since the announcement of our first design win in September, our pipeline has expanded, and the pace of evaluation of our technology and meetings has accelerated. It's just one of the reasons why we're so excited about 2025. We have a roster of large global companies we've been working with for several months and several more in the queue in early-stage discussions. Given the size of these companies, any one of them could represent annual revenue to us of millions of dollars or more over time. A few key design wins would be enough to get us to profitability. I'll briefly cover the key highlights since the start of the fourth quarter and discuss them in a little bit more depth to provide context for their importance. Then I'll turn things over to Tim to discuss our financial results. We'll be pleased to answer your questions after our prepared remarks. First, we secured our first design win for solid-state circuit breakers with one of Asia's largest circuit protection equipment manufacturers serving industrial and utility markets. Our B-TRAN-based solution easily fits in the customer's existing design for a circuit breaker product. This will reduce the time to market for their initial B-TRAN-enabled breaker product. The joint development program in connection with this design win targeted B-TRAN-based circuit breaker prototypes late in the second quarter of 2025 to be followed by commercial sales…

Thank you, Dan, and good morning, everyone. Our fourth quarter 2024 cash burn was $2.6 million, up from $2.1 million in the fourth quarter of 2023 and up from $2.4 million in the third quarter of 2024. Our Q4 cash burn was at the low end of our guidance of $2.6 million to $2.8 million due to the timing of spending and related payments. Our full-year 2024 cash burn was $8.2 million, net of $1 million in proceeds to the company from warrants exercised in the third quarter. Our full-year 2024 cash burn was at the low end of our guidance of $8.2 million to $8.4 million, net of the $1 million in proceeds from warrant exercises. We continue to manage expenses prudently and aggressively. We expect first-quarter 2025 cash burn to decrease to approximately $2.2 million to $2.4 million, with a full-year 2025 cash burn of 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 $15.8 million at December 31, 2024. We have no debt and a clean capital structure. We recorded modest revenue for the fourth quarter of 2024, driven by our prioritization of devices for automotive qualification testing. While initial orders from large companies evaluating our technology 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 first 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 fourth quarter…

Operator?

Thank you. At this time, we are conducting a question and answer session. Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of your viewing screen. Analysts who publish research may also ask questions on the phone line. Handset before you press the keys. Thank you. Your first question is coming from Jesse Sabolson of DeBoral.

Thanks for taking the questions here. Yeah. It's an exciting time. So, you know, good to hear everything is developing well. I'm curious. You mentioned several hundred thousand in revenue in the first year of sales with this one SSCB customer. Is that implying that the second half should see that number of revenue, or is it a twelve-month from sales beginning in late Q2 2025?

It's the second. So it is from when they start their initial sales for the first twelve months of the product launch. That's their expectation.

Okay. Great. Cool. Understood. Yeah. You know, so beyond this initial design win, can you disclose or give an idea of just how many additional SSTB customers are in active evaluation phases? Maybe, additionally, you know, could you clarify what the typical sales cycle length is for this market segment?

Yeah. So there's over a half dozen very large companies that are evaluating our technology right now for solid-state circuit breaker applications. The design cycles, I mean, each customer is a little bit different. We saw with the first design win we announced, it was just a few months to get from initial discussions to actually having prototype products in their hands. So it can be pretty quick. The industrial design cycles are typically closer to a year. Obviously, it's much faster than, like, the automotive design cycle.

Is it possible that we might be able to hear about some more design wins in the space and some more potential revenue generation opportunities in fiscal 2025, or is that more of a fiscal 2026?

We're targeting getting more into the queue here for 2025.

Awesome. Awesome. It's good to hear. Okay. I'll take one more just on the EV side, and I'll then let the others run in. But I'm just, you know, there's some really exciting news here when it comes to the expansion of the partnership with Stellantis. I'm just kind of curious with regards to the EV contactors. You mentioned the scope and cost will be discussed in March. Could design wins for this opportunity be in 2025 as well?

Well, the automotive program will take longer. It would be a funded program. But we would expect to see funding from the program in 2025 for sure.

Okay. Great. Yeah. I understand that these can be a little bit more lengthy in their evaluation phase, but it's good news that you guys are expanding the partnership there and have so much interest in the products.

Yeah. They are happy with the progress we made to date, and it turns out we're in a good position to solve some other problems that they've got.

Great. Well, thanks for taking the questions, guys.

Thanks, Jesse.

Thank you very much. I will now turn the call back to Jeff Christensen to read through questions submitted via the webcast.

Thank you, Jenny. Our first question is any additional color on the program review and the new EV contactors program with Stellantis?

Yeah. You know, working with Stellantis has been interesting. They're such a big company, and what we're finding is the decision-making process there, part of what drives it to be so long is the fact that you've got groups in the US that have to weigh in on things, groups in France that have to weigh in on things, and groups in Italy that have to weigh in on things on both the engineering and production side. So we were pretty excited to actually have the opportunity to have them all together in a room, get them, you know, kind of all on the same page, but also to have the key people there. Because we came in prepared to pitch them on the EV contactor work. And when we did, the response we got was pretty impressive because, clearly, they had been exploring another silicon carbide-based solution that wasn't getting them there, and that work had apparently been underway for quite a while. So while they're happy with the work we've been doing on the original program, they pretty quickly jumped to, you know, having everybody in the room saying, hey, this is what we need for our contactor issue here. So it was a really interesting and dynamic meeting with lots of good questions. We got a lot of insight into some other things they were doing where we can play a role. So it was a very, very good meeting for us.

Thank you. The next question is, can you talk about how complementary your technology is with the DesignWin customer's products? What other technology did the customer consider?

The customer actually had a silicon carbide solution that wasn't hitting the performance metrics that they needed. So, you know, it was a case to really bring them an alternative when they understood a little bit about what B-TRAN is capable of. So we're finding this happening in a couple of places, both on circuit breakers and contactors, where the current path that many of them are on is really creating an opportunity for us to bring a better solution.

Thank you. What size circuit breaker is the first design win for, and what market is it targeting?

It's an industrial-sized circuit breaker that can handle several dozen amps. So it's a pretty good size in terms of its power rating. But what's interesting is because of the fact that we have such low losses, there's very little thermal management that needs to be done. So this breaker that can handle, you know, dozens and dozens of amps can literally fit in your hand, which is part of what has them excited. That you've got something that high performance and small with low thermal management means to them means a lower-cost product. And they have several other products in the industrial size and the utility scale. So we're really focusing on making sure the first one goes well so that we can start to bring out other products that would utilize our technology.

Thank you. Our next submitted question is, will the solid-state circuit breaker design win be sold to other companies, or is this a specific design win for the current design win customer only? Will it fit into existing breaker panels as well as new ones?

Yeah. I mean, this is an industrial breaker, so we're not going to be constrained in any way. We can take the work that we're doing here and go elsewhere. What's interesting is, because of the capability of our die, we could actually have breakers at different ratings using the exact same design that we've got now. It's going to be a function of conduction losses versus how high a current rating you want. So we're actually going to leverage this work with other companies that we're already engaged with. And because we're already through that design cycle, it really helps us with the solutions that we can bring to other companies that we're working with on circuit breakers.

Thank you. Are additional design wins expected in the short term by large OEMs in your T&E roster, or are they coming from your three distributors?

Yeah. So it'll be a mix. For the distributors, they do introduce us to large companies that then our business development team engages with directly. So they're really contributing to the funnel of those large customers that we're working with for potential design wins. So it will be a multiple-pronged approach where we have our team going out there through their networks, leveraging our board members to get to certain customers. And then for customers that we don't have contacts with or are just geographically in areas where our team doesn't have the same level of connections, we have those distributors to really assist with that effort.

Thank you. Our next question submitted is, well, Stellantis, are they close to deciding on the tier-one supplier or any thoughts on that?

Yeah. What we discovered in the meeting is, you know, Europe had a different view of this than the US teams. So it looks like they're actually going to use a couple of tier ones. They want them kind of competing against each other. So we're going to be, fortunately, the ones that they are interested in, we're already working with for other things. So it's going to be a couple of tier ones that will be in the inverter program that we will be supporting as they do their inverter design.

Thank you. What are you doing to expand the industrial and automotive pipeline?

Yeah. For that, I think it's kind of been answered a little bit with our really multi-pronged approach to it. So again, we have, for instance, Drew Freeman on our board, who ran automotive sales at NXP for semiconductors. So he has connections. We have our existing team with connections. Actually, our Stellantis relationship resulted from a connection that our VP of business development had based on prior roles that he's been in. And then we're specifically targeting distributors that have really creation capabilities in terms of demand. So these are companies that have relationships with very large companies that can make those introductions and open those doors for us. We've obviously mentioned we have Richardson Electronics here in the US. We have two different distributors now in the Asian markets. And we're working to add a European distributor here in the near term.

Thank you. Regarding the contactors in automotive, how many devices would that translate into revenue per vehicle?

Yeah. So in terms of the number of contactors, we've mentioned it's typically about five to eight per electric vehicle. In terms of content, it's probably two to three hundred dollars of content. Our opportunity specifically for that. So if you look at the opportunity with any specific automaker, it really just depends on how many models they put it in. I mean, anybody can model out for a specific automaker what their vehicle count is. That's generally public information on vehicle sales and to really see what the potential opportunity is with any of these large automakers, and you can do the same thing for Stellantis, obviously, as well.

Thank you. What is your headcount now, and how many are in sales? And what is the expected headcount growth in 2025?

Yeah. We have a very light SLA business model. So we're highly outsourced, obviously, for things like wafer fabrication, for packaging. Right now, our headcount is at sixteen. It'll probably be closer to twenty by the end of the year. We have four people currently on the sales side. We'll probably, going from sixteen to twenty, add one or two more on the sales side specifically. Just the number of engagements is increasing, and we really need additional support from the sales side. There are still opportunities at places that are companies that we haven't gotten hardware in their hands yet, and we want to get the doors open and get that hardware in their hands because there's such a broad market for this technology, we'll have to beef it up a little bit.

On the third-party automotive qualification and reliability test, is it common or rare to have no failures going through testing? Is there a certain number of failures allowed to still pass? And does the automotive certification require no failures during testing?

No. That's a good question. The automotive standards actually allow a certain number of failures. They also specify the amount of change in performance that a device can have. So, you know, we still have a lot of testing to go yet, so we may see some failures as we go along, but that won't, you know, prevent us from being auto-qualified. The failures, if they do happen, you want them to be on the packaging side, not the die side. Because packaging-related failures usually have to do with things like solder voids, or, like, in IGBTs, the most common failure mechanism was the wire bonds to die to the package. We don't use wire bonding, but it's more package-related things through all the thermal cycles where connections fatigue. So there is room to actually have some failures and to make sure that we're within the parameters of how much performance can be lost at the end of all that testing.

Thank you. What are your thoughts on potential design wins for hybrid autos?

Yeah. You know, hybrids have the same issues. I mean, they need better EV contactors. They need better inverters, you know, for their performance. The OEMs we're working with right now, though, seem more focused on the full electric vehicles. So I think it will be a function of as we continue to work with these folks, we'll get pulled into other opportunities. The approach that we're seeing kind of uniformly here is there seems to be a desire to get a common platform across multiple models and brands for these big automakers, and that seems to be their highest priority. I think as we get a little further along, like we give it a contact, there'll be an ability to open the door on what's happening on the hybrid side as well because we should be able to leverage everything we've been doing here so far.

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

I just want to thank everybody who joined the call today and for the good questions. We look forward to updating you with B-TRAN commercial announcements before our next update call. And operator, you can end the call.

Thank you very much. This does conclude today's conference. All parties may disconnect and have a great day.