Ideal Power [IPWR] Conference call transcript for 2022 q1
2022-05-16 21:16:03
Fiscal: 2022 q1
Operator: Good day and welcome to the Ideal Power, First Quarter 2022 Results Conference Call. Today’s conference is being recorded. At this time, I’d now like to turn the conference over to Carolyn Capaccio of LHA. Please go ahead ma’am.
Carolyn Capaccio: Thank you, operator. And good afternoon everyone. Thank you for joining Ideal Power's first quarter 2022 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 2022 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 industry 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. Please refer to the company’s SEC filings for a list of associated risks. And we would also refer you to the company’s website for more supporting industry information. Now, I will turn the call over to Ideal Power’s President and CEO, Dan Brdar. Dan?
Dan Brdar: Thank you, Carolyn. Good afternoon everyone and welcome to our first quarter 2022 financial results conference call. I'll begin by giving you an update on our progress and achievements on our strategy to commercialize our B-TRAN semiconductor technology. Then I'll review our plans and key priorities for 2022 for B-TRAN commercialization. Then Tim Burns, our CFO, will take you through the numbers after which we’ll take your questions. Let's get started. Well, it's only been two months since our last call. The first quarter was successful and productive as we made significant advancements along our 2022 roadmap, the commercialized B-TRAN as a disruptive, highly efficient, bidirectional energy control semiconductor technology. It solves immediate needs in our target electric vehicle, EV charging, renewable energy, energy storage, UPS for data centers and solid-state circuit breaker end markets. This is a very busy and exciting time at Ideal Power and we're happy to update you on our progress as we remain on track to achieve our goals for 2022. Let's begin with our test and evaluation program. Since the year began, we expanded our roster of participants in the B-TRAN test and evaluation program. These new participants include a Fortune 1000 global semiconductor manufacturer that serves a variety of commercial and military sectors. This OEM will evaluate B-TRAN for its low losses and bidirectional capability initially for test and measurement equipment applications. We also added an established aerospace and defense systems contractor interested in evaluating B-TRAN for solid-state circuit breakers with whom we are jointly pursuing additional government grants. Also, as we mentioned on our last call, a leading manufacturer of commercial electric vehicles, EV powertrain components and EV charging infrastructure, we'll test and evaluate B-TRAN for use in power conversion applications in their commercial EVs initially for the DC-to-DC converter with other EV and EV charging applications potentially to follow. This is our third announcement in the EV space. We also added a space applications system developer that will evaluate BT-TRAN for solid-state circuit breaker applications. The lower thermal management requirements and fewer devices needed with BT-TRAN are advantageous given the size and efficiency constraints of their target applications. And finally universities that hold connections to large commercial businesses, where they officially function in the role of testing and evaluation of new technologies, such as BT-TRAN for large commercial OEM organizations. These program participants are all looking to incorporate innovative, advanced technologies and new approaches into their product offerings to improve performance, increase efficiency and lower cost. And they all have the technical resources to commit to evaluating a cutting edge technology and the improvements and capabilities it can create for them and their product designs. This interest in new technologies was clearly demonstrated in March when we exhibited BT-TRAN at the Applied Power Electronics Conference in Houston. The prevailing focus during the conference in recent years has been wide-gap materials, but this year, the significant theme of the conference was focused on bidirectional applications, such as electric vehicles, vehicle-to-grid, micro-grids and renewables paired with energy storage. This is a result of the two macro trends driving growth in the industry, the adoption of both EVs and renewable energy. Our exhibition and presentation at the conference resulted in us adding several medium and large companies through our target markets in our pipeline. Two of which recently joined our test and evaluation program in the weeks following the conference. Our technology was well received in our presentation, entitled operation and characterization of low loss bidirectional junction transistor, B-TRAN, won an APEX 2022 Outstanding Presentation Award. It's great to see our team and technology receive such recognition from the technical community. Further, we exhibited B-TRAN at the Power Conversion and Intelligent Motion conference in Nurnberg, Germany last week. B-TRAN was again well received for its compelling benefits of bidirectional capability and low losses. Our team engaged with potential customers from e-mobility, energy storage, industrial motor drive, and solid-state circuit breaker applications, as well as potential collaborators in the power device, module packaging, driver, intelligent power module and semiconductor manufacturing spaces. With at least one Test and Evaluation Agreement in place in each of our target markets and a large pipeline of potential additional collaborations, we're well positioned to evaluate B-TRAN’s capabilities across our target end markets. These collaborations will provide the ongoing information to drive the features and performance of our commercial product offerings. Over time, our ongoing engagements will likely result in a variety of B-TRAN-based modules, customized towards specific applications as is common in the traditional power semiconductor market. Now let's move on to our work with the United States Navy. As we've discussed previously, Ideal Power is collaborating with Diversified Technologies or DTI on a project for the Naval Sea Systems Command or NAVSEA on the development and demonstration of a B-TRAN-enabled direct current solid-state circuit breaker. This program is supported by the Department of Defense’s Rapid Innovation Fund, which invests to accelerate the commercialization of high-value, high-impact technologies and is part of the U.S. Navy's strategic focus on ship electrification. Our project with DTI for NAVSEA is intended to develop and demonstrate a B-TRAN enabled high efficiency 12 kilovolt medium voltage direct current solid-state circuit breaker for the U.S. Navy with the subsequent objective of introducing a family of medium voltage DC circuit breaker products incorporating B-TRAN for sale to military, industrial and utility markets. Initial wafers from the latest fabrication run completed by one of our domestic fabrication partners are ready for dicing and packaging into devices, which will then be tested for delivery to DTI. We'll continue to provide program and technical support through the demonstration of the B-TRAN enabled DC solid state breaker later this year and keep you apprised of our progress within the limitations of our NAVSEA confidentiality restrictions. Let's move now to our work with the Department of Energy and our submissions for other government funding opportunities. In the first quarter, we announced that we delivered on our project commitments and provided our final report under a Phase 1 Small Business Innovation Research, or SBIR grant funded by the Department of Energy. This project is our second collaboration with DTI and the SBIR grant will potentially fund the development of a B-TRAN-based low loss, 13.8 kilovolt alternating current solid state breaker intended to be used in medium voltage power distribution in renewable energy and microgrid applications connected to the utility power grid. The B-TRAN-based solid-state circuit breaker is expected to limit fault energy by orders of magnitude compared to conventional mechanical circuit breakers due to its much faster speed of operation. Phase 1 of the project focused on the simulation, device design and the design of a multi di-module packaging concept leveraging our current di-design to allow B-TRAN to be assembled in series or parallel configurations for a higher voltage or current rating capability. We conducted a comprehensive semiconductor device optimization, optimized, the B-TRAN device design and wafer layout for potential fabrication in Phase 2, accommodating a multi die packaging design. And with the assistance of a world-class packaging firm completed the conceptual multi die packaging design with double sided cooling, assessing both the thermal performance and inductives. Our simulations and design analysis confirms the ability of B-TRAN multi di-modules to interrupt AC power efficiently and quickly. Last month, we collaborated with BTI on the submission of an SBIR Phase 2 grant proposal to move ahead with the development and demonstration of a 13.8 KV alternating current solid-state circuit breaker. If we receive the Phase 2 grant, BTI would build and test a full 50 megawatt 13.8 KV alternating current solid-state circuit breaker using multi die B-TRAN packages. As the 13.8 KV level is commonly found in utility distribution networks, the resulting breaker design can be applied directly to existing utility transmission and distribution systems, as well as micro grids. Following the demonstration BTI would have the ability to sell the breaker to utility industrial military customers and license the breaker design to others for sales to end users. We would also expect to partner with other circuit breaker companies so they can design and bring their own B-TRAN based products to market. We look forward to hearing back from the Department of Energy on our Phase 2 application, and we'll keep you updated. We expect to leverage the valuable knowledge we now have in designing and packaging, multiple devices in parallel and in series configurations for applications such as electric vehicles, as well as for other commercial applications going forward. Our solid-state circuit breaker projects with the U.S. Navy and Department of Energy have raised the visibility of B-TRAN as enabling technology for low loss, fast acting circuit breakers. Two of the most recent additions to our test and evaluation program are customers specifically looking for better semiconductor solutions for circuit breaker applications. While the addressable IGBT market is large and growing rapidly, we expect there will continue to be new market segments, not currently served by conventional semiconductors, such as solid-state circuit breakers that are enabled due to the low loss, bidirectional capability of our technology. We continue to seek opportunities to participate in government funded programs that support technology development, particularly for future commercial applications. In the first quarter, we submitted several proposals and content papers for government funding opportunities, including proposals with three new partners. These new partners include a system integrator affirm with packaging and driver expertise and a university contracted to act as a technology evaluator for large commercial product OEM. Depending on the proposal, we could either be the prime or subcontractor if awarded funding under one or more of these submissions. These proposals cover several applications, including solid-state circuit breakers, current source inverters, and modules for electric vehicles. Our development activities also made significant progress during the quarter. Teledyne has been a valuable fabrication partner and we'll continue to work with them as part of our government-funded development projects. Since the year began, we further build out our roster of production partners to ensure we have sufficient capability to support our ongoing development activities and prepare for anticipated higher volume fabrication demand in 2023. We completed the qualification process of a second domestic semiconductor fabrication partner. This partner brings bipolar fabrication experience supporting our ongoing development activities as well as silicon carbide fabrication experience, potentially making them a good partner for pursuing government funding opportunities, while supporting our longer term technology roadmap to develop the silicon carbide B-TRAN. Additionally, as we discussed on our last call we recently began the qualification of a non-domestic production level fabrication partner. This fabricator will initially be conducting engineering short-loops, an evaluation program involving a subset of process production steps to enable us to assess their process capability and limitations and key fabrication steps that are crucial to making a high performing double-sided device. If the short loops are successful, the next step will be a full process flow engineering run later this year. A fabrication partner capable of high volume production will drive improved quality, faster runs, and higher wafer output per run compared to our current development fabricators, while helping to ensure sufficient supply capacity for large customers in mitigating supply chain risk. On the packaging side, our world-class packaging partner completed design work and trial mechanical builds is now packaging its first B-TRAN devices to support device testing followed by the packaging of devices for our test and evaluation program. We also completed a pilot run with a domestic packaging firm to support the NAVSEA program. This firm will support not only with the NAVSEA program, but also other potential future government funded – development projects and programs. And now let's review our roadmap for 2022. Our objective for this year remains to introduce our first commercial products by year-end realizing the potential of B-TRAN's unique advantages, bidirectional switching capability, lower switching and conduction losses, improved and more compact thermal management requirements, lower user costs for OEM products in our target markets. We made strong progress-to-date and to recap our key steps for this year are: first, we're working closely with the growing number of participants in our B-TRAN test and evaluation program will be providing package devices paired with a driver to facilitate and accelerate their evaluation process. These customers will share their testing results with us and provide application specific feedback on the design and operation of the package devices and driver, the feature set they require and their priorities for individual applications. We'll incorporate their feedback into our commercial product offerings. This will allow us to determine common requirements across applications for our initial commercial products. And as our test and evaluation program will remain an ongoing aspect of our sales and marketing process. We'll continue to work to add additional potential customers to it. Second, as our test and evaluation program progresses, we're preparing to engage a third-party to support our design efforts for our initial commercial product. This effort is intended to run parallel with the test and evaluation program, with the device design iterating and evolving through the incorporation of feedback from program participants. Our intention is to offer a module rather than a discrete device as our first commercial product. This should accelerate B-TRAN commercialization and adoption by solving the hurdles we know customers will face with respect to bidirectional driver and packaging optimization. Saving customers from having to design themselves will be ready to design custom modules for potential customers, such as those looking to apply B-TRAN in electric vehicles and solid-state circuit breaker use cases where multiple B-TRAN die may be needed to be combined into a single package, either in series or in parallel to accommodate higher voltages and currents. Again, we expect our multi-die design from the Department of Energy, SBIR Program to become a commercial product for the solid-state circuit breaker market if we're awarded Phase 2 of the program. Third, we'll continue to collaborate with DTI on our B-TRAN enabled solid-state circuit breaker projects specifically for NAVSEA, delivery of optimized package devices for incorporation into demonstration of a 12 kilovolt MVDC breaker later this year. Subsequent to the demonstration an objective of this program is for DTI to introduce a family of medium voltage DC circuit breaker products, incorporating B-TRAN for sales to military, industrial and utility markets. And under the DOE SBIR grant, if in collaboration with DTI, we're awarded a Phase 2 grant, the completion of the build-out and testing of a 50 megawatt 13.8 KV alternating current solid-state circuit breaker incorporating B-TRAN's. Fourth, award toward completing the qualification run of a high volume production wafer fabricator to assess their potential to support our plans for commercial sales. Our intent is to have a high volume wafer fab, ready to support our volume requirements for 2023 and beyond. Lastly, we continue to work on submitting additional proposals for government funding. As I mentioned with respect to the proposals already submitted, we have a potential to be the prime or subcontractor on these proposals, and we expect to collaborate with various OEMs in universities on submitting proposals as those funding opportunities' become available. Looking at the B-TRAN Patent Estate, we currently have 67 issued patents with 29 of those issued outside of the United States and 25 pending B-TRAN patents. In April, we added to the geographic breadth of our patent portfolio with the issuance of our first patent in India. Our current geographic coverage includes North America, China, Japan, South Korea, India, and Europe. And these along with the United States represent all of our high priority geographies for patent coverage. And all the first quarter was very productive and our momentum continued into the second quarter. We're making strong progress toward commercialization and are very excited about our prospects for B-TRAB as a disruptive technology over the coming years. Despite the global uncertainties that businesses must deal with today such as: supply chain disruptions, COVID pandemic, high inflation and rising interest rates we remain on track to introduce our first commercial product by the end of the year. We're increasingly excited by new customer and collaboration opportunities that were being created as a result of our government funded solid-state circuit breaker projects. As multiple years of cash on the balance sheet, a talented and highly motivated team, strong IT portfolio, a world class fabrication and packaging partners. We're fortunate to be able to remain focused on executing our commercialization strategy, delivering on our 2022 objectives and realizing the potential of our technology. We'll keep you updated on our progress as we hit each milestone on our roadmap. Now I'd like to hand the call over to chief financial patrol officer Tim burns for review of our first quarter, 2022 financial results. Tim?
Tim Burns: Thank you, Dan. I will review first quarter 2022 financial results. In the first quarter we recorded $125,000 in grant revenue with offsetting cost of grant revenue as we continued our work on the Navy Funded NAVSEA program and completed our work under the DOE funded SBIR Phase 1 grant. We expect almost all of the remaining grant revenue under the NAVSEA program to be recognized in the next one to two quarters. If our SBIR Phase 2 application is approved, we potentially expect revenue under this program to begin in the fourth quarter. We also continue to pursue additional government funding opportunities that if awarded could result in initial revenue as early as the second half of 2022. Consistent with our expectations operating expenses were $1.9 million in the first quarter of 2022 compared to $924,000 in the first quarter of 2021. Research and development and sales and marketing expenses trended higher on additional wafer fabrication runs and higher personnel costs for employees added over the course of the last year to support both development activities and the test and evaluation program, as well as higher third-party development costs. The incremental growth and expenses was planned as we increase our development and commercialization efforts in advance of introducing our initial commercial product by the end of the year. General and administrative expenses increased this quarter on higher investor relations spending in board, search and replacement fee as we added two Independent Directors to our Board. Operating expenses were also impacted by higher non-cash stock based compensation expense. Our development in commercialization plans for the balance of 2022 include additional larger wafer fabrication runs including a qualifying run with a high volume production wafer fabricator. Third-party testing of the B-TRAN adding more engineering and front end talent supporting our test and evaluation program, designing and introducing our initial commercial product and other B-TRAN commercialization activities with potential new customers and partners. We continue to expect some quarter-to-quarter variability and operating expenses, particularly our research and development spending due to the timing of semiconductor fabrication runs and other development activities, as well as the potential impact of additional government funding. We expect general and administrative expense to be relatively flat over the remainder of the year despite the impact of inflation on the cost of services. Net was in the first quarter of 2022 was $1.9 million compared to $924,000 in the first quarter of 2021. First quarter 2022 cash used in operating and investing activities which is net of the cost reimbursement under the NAVSEA program was $1.4 million, up from $874,000 in the first quarter of 2021, and from $1.3 million in the fourth quarter of 2021. This is consistent with the expectations we provided on our year-end call. We continue to invest in both sales and marketing and research and development, and continue to expect cash burn for full year 2022 of approximately $7 million with a second quarter 2022 cash burn of $1.7 million to $1.8 million. Cash and cash equivalents totaled $21.7 million at March 31, 2022. Given our plan cash burn, which remains modest, our balance sheet gives us ample liquidity to fund multiple years of operations and to be a well capitalized partner for the broad spectrum of companies that are either already participating or we expect to participate in the testing and evaluation of our B-TRAN technology. As of March 31, we had 5,903,797 shares outstanding, and $1,040,248 warrant outstanding, including 595,982 stock options in restricted stock unit's outstanding, diluted shares outstanding at December 31 totaled 7.5 million shares. At this time I would like to open up the call for questions. Operator?
Operator: Thank you. We'll take our question from the line of David Williams with Benchmark. Please go ahead. Your line is now open.
David Williams: Hey, good afternoon and congrats on the progress.
Dan Brdar: Thanks David.
Tim Burns: Thanks David.
David Williams: Forgive me. I jumped on a bit late here. So if you discussed this and I missed my apologies, but I guess as you kind of think about your commercial revenue, when do you think that that falls in? I know before we thought we'd have first commercial sales in 4Q, is that still on track? And is there anything there that's been pushed or pulled?
Dan Brdar: Yes. The Q4 of this year is still an opportunity for our first initial revenue. The 2023 is really where we're going to start to see revenue just because of the timeframe that it takes to actually get through these evaluation cycles and get through design cycles, but it'll be modest. We also think there's opportunity for non- recurring engineering dollars with some of the customers we're working at that want us to do some work that is specific for them for or products they would ultimately use in their OEM products.
David Williams: Okay, fantastic. And I know you touched on this a bit in your script, but just kind of given the test and evaluation program ramps, you added a few to this quarter. What types of applications are these being tested for, maybe just a little more color into that? And then are you seeing new used cases developed or may be traction area is not previously thought of to be an opportunity?
Dan Brdar: Yes. The one thing that is actually been a little bit of a surprise to us is, we initially pursued this solid-state circuit breaker concept in the project that we've proposed to the Navy but we've got several players now that are in our program that it is a specific interest of theirs. From very large players to universities to commercial companies that have been kind of just patiently waiting for there to be a better solution because solid-state circuit breakers can be applied in electric vehicles, they can be applied in utility and distribution systems, protecting data center is as a whole, protecting renewable energy installation. So the popularity of the solid-state circuit breaker I think catches a little bit by surprise. And then we have a couple other folks that are in our program that are looking at some unique applications that we hadn't been thinking about. Some things that are power control sort of applications that are really all about getting fast acting devices, to protect equipment, a little different than circuit breakers but really power control devices. And as you think about the applications the ones that we're seeing that there's sort of the most interest in is obviously electric vehicles with several portions of the EVs, the drivetrain, the DC to DC charger and the onboard charger. We're seeing a lot of interest in EV charging solutions as people look at mobile EV charging solutions and stationary ones, particularly those that might incorporate offer batteries. And then the interest in renewable energy coupled with energy storage where you need bidirectionality is another one that seems to be pretty popular with the folks that are in the program.
David Williams: Perfect. And then as you – just when your – how is your customer reception been when engaging with prospective customers and the prototypes as you're sampling? And have you seen that change at all in terms of those types of customers beyond maybe what you just spoke to?
Dan Brdar: We're seeing it's really good. We're finding that we're as the visibility of B-TRAN is grown, as people are learning about the projects rather than us just reaching out to the targets that are on our list, we're starting to see more and more inbounds. So our business development guys are having to screen out a little bit of folks that we think it makes sense to spend time with. And some that maybe it's too small, where we really have to think about what's the opportunity cost if we were to get tied up with some of the smaller companies that are out there that would need a lot of technical support. So just happy to see that there's more inbound and at the last couple of conferences, the Bipower Electronics Conference, and then also at the Power Control Conference here last week. Just a lot of people seeking us out wanting to learn more to think about how they can incorporate B-TRAN into some of their potential products, so it's nice to see the recognition rising and us not having to pursue everybody directly, but have them start to look – look to us as a way to collaborate.
David Williams: Great. And then maybe just one last one for me. Just on the custom driver, any color around that and again forgive me if I missed this, but just kind of curious how that is going and maybe what the reception has been around the custom driver?
Dan Brdar: Well, the driver that we are bringing out, it's fairly complicated because we wanted to make sure we had a driver that could pretty much do everything for everybody. So it has more features than the commercial version of it would have. And I think what we're finding is people are appreciating the fact that if they're thinking about B-TRAN for multiple different applications, there's a driver that can kind of do it all for them. And then we can start to parse out what needs to be in a driver for individual applications as a result of their testing. What we are seeing though is the folks that want to do their own driver and the electric vehicle folks are perfect example of it. They like having a driver to start with because the things we have to think about in terms of how you control bidirectional device we've already spent a lot of time working on. One of the things that’s been exciting for us is we got a great post hoc at UT Austin who developed initial version of this driver and he has now joined us. So we have his as an ongoing source of all the taught that went into, all the used-cases and all the things that driver is going to be capable of doing but you can speak to customs about, why do we made certain design decisions and what the pros and cons of that are.
Operator: Thank you. We'll take our next question from the line of Orin Hirschman with AIGH Investment Partners. Please go ahead. Your line is now open.
Orin Hirschman: Hi, congratulations on a lot of progress.
Dan Brdar: Thanks.
Orin Hirschman: I dialed in a drop late. I apologize; I dialed in a drop late. Can you go through and you may have answered it, so I apologize. Can you go through what you think is going to be the first one or two or three products released and are they going to be a standard product? I’m little confused on that, or a family of standard products?
Dan Brdar: Yes. The first one's going to be a module. It'll either be a module that includes the driver – a simplified version of the driver that we have or it may be a multi-die module also because we're finding that there's increased interest in that where it could be used for things like the solid-state circuit breaker application, where they want to put multiple dies together to achieve either higher current rating or higher voltage rating. And the electric vehicle folks are interested in multi-die versions of a module as well. So it'll be something coming out of our current effort here with solid-state circuit breaker activities or an adaption of the engineering prototypes that would be useful for any power converter application, things like renewable energy or energy storage?
Orin Hirschman: Is that product going to be in a form where it's customized enough for a mainstream use or it's going to be, have almost for an initial usage like almost overkill in terms of capabilities. And it has to be almost dummy down for most customers. How should we view that?
Dan Brdar: We're really going to target something that will really hit a mainstream opportunity that does not have the long design cycles like EV, typical power converter application, where we're going to take what we've got. It'll be the by itself, will be packaged in a form that the industry would recognize, and it'll be a simpler version of the driver. That takes a lot of the features and capability out that you don't need for all the applications where we currently have it covered. So it'll be smaller, simpler, really targeting initial applications that don't have the long design cycles of EVs.
Orin Hirschman: Okay. And if you can just reiterate once again, those initial applications and whether the customers that you've been in tests with are really the lead customers there to start?
Dan Brdar: Yes. It'll be things like solar coupled with energy storage or standalone energy storage or EV charging.
Orin Hirschman: And the initial customers are the same ones that have actually been going through tests right now, or not necessarily, or them plus more?
Dan Brdar: Well, the testing with those customers hasn't started yet. After we finish our deliveries to NAVSEA we’ll be delivering the prototypes for the customers in the program. We've been engaged with them, really going through, bringing them up to speed, technically on the technology, on the driver design and them bringing us up to speed on their application how they are thinking about using it. So when they get parts, everybody will be able to hit the ground running with the evaluations.
Orin Hirschman: Okay, great. Thank you very much.
Dan Brdar: Thanks Orin.
Operator: We'll take our next question from the line of Don Slowinski with Winslow Asset Group. Please go ahead, your line is open.
Don Slowinski: Good afternoon. Thanks for taking my questions,
Dan Brdar: Hi, Don.
Don Slowinski: How you doing today?
Dan Brdar: Good. Yourself?
Don Slowinski: Good, good. Congratulations on the APEC presentation award. Good job.
Dan Brdar: Yes, thank you. It's nice to have the industry actually acknowledge what the team did. It's good work.
Don Slowinski: Yes, fantastic. In regards to that APEC presentation, the technical data was that real-world manufactured B-TRAN devices, or were you still talking about simulations? Because it seemed like that was actual die that were tested and then compared to simulations. Can you clarify that?
Dan Brdar: Yes, it was actual die compared to simulations.
Don Slowinski: Wow! Congrats to come that close to your simulated models. That's fantastic. Another question that came to mind was you had mentioned on a previous call that you were talking to a major auto company about maybe a large number of device samples. It would be a custom project and maybe result in some development revenue. Could you just maybe give us an update on what's going on there?
Dan Brdar: Well, in terms of engaging with them we're increasingly understanding why car designs take so long. The manufacturers they are slow. We're still engaged with that customer. They have a program that they working on. For them, when you think about it, I mean, they do things at very large scale. So their development work and their programs to evaluate technology are pretty in depth with a lot of resources, a lot of rules that they got to follow in terms of how they structure programs, how they get funded. So it's been a long process with them, but I think, we're getting there with them. I wish they could move more quickly, but it's just the nature of the industry.
Don Slowinski: Well, I mean, I realize that the automotive sector is going to be your longest adoption cycle just from the nature of that business. So that does make sense.
Dan Brdar: Yes.
Don Slowinski: So it looks like the solid-state circuit breakers would be kind of the low-hanging fruit. Is that accurate?
Dan Brdar: Yes, it is. We continue to be surprised by the number of companies that want to do something on the solid-state circuit breaker side. Companies that have good power electronics products do other things like power converters, and so forth and view the solid-state circuit breaker, just kind of a logical extension of their capability, which is a pleasant surprise. And I think there will probably be some other ones as B-TRAN becomes just more widely known in the technical community.
Don Slowinski: Well, fantastic. Thanks for taking my questions and congratulations on all the progress and look forward to hearing more in the future.
Dan Brdar: Thanks, Don,
Operator: We'll take our last question from the line of Kelly Thurman Private Investor. Please go ahead your line is now open.
Unidentified Analyst: Hey, Dan, Tim thanks for taking my question. I was wondering as far as scaling up on the circuit breakers for especially the Navy, do you guys see any issues at all scaling up to a large run on those once an order is placed?
Dan Brdar: No, we don't because part of the way we've approached this is the actual die itself is going to be the same regardless of the applications, because we really wanted to make sure that the changes were dealt with either in the packaging of the die or in the driver. So if we had to make a lot of devices for a circuit breaker or for a power converter or one of the EV guys, if they want to test something for a traction drive in terms of what we would do at the wafer fab, it's the exact same wafers that we would run and the changes all happen and how they get placed up and packaged.
Unidentified Analyst: Okay. And the next question are you guys going to have any kind of formal announcement about the companies that you picked up at these conferences?
Dan Brdar: Our hope is that as we get a little bit further with them, particularly those who we are going to do a program where they might be funding something, we'll be able to announce them.
Unidentified Analyst: Okay. And last question are any, IGBT companies interested in testing BTRAN and how are you going to handle that when that situation occurs?
Dan Brdar: We do have a semiconductor company that is actually in our test and evaluation program. They have some specific applications they are interested in. They are not one of the giant players. But our approach is going to be, we want to be able to collaborate with these guys because the large end user customers like the automobile folks are going to want to have an alternate source of supply other than just a small company, like Ideal Power. So, if we think it's somebody where there's a good fit we would want to explore some kind of a collaboration where we can leverage the front end of the industry. They have already built the sales, service and support and distribution networks and potentially even license the technology to them where they could leverage the scale that they have in wafer fab.
Unidentified Analyst: And final question is when do you think the circuit breaker for the Navy will be finalized? Will they actually be able to purchase a large quantity of them?
Dan Brdar: It's going to be part of a program with the Navy because the Navy is looking for this family of products that DTI needs to propose to them at the end of that program. We think the Navy program is great, because it's great validation. But we think the alternating current circuit breaker that we're doing at the Department of Energy is going to be a much quicker opportunity for products. It's really the market that's here today. The utility and distribution network is alternating current. The customers that are coming to us that want to partner to do evaluations for circuit breakers, they are thinking alternating current. So we think that's actually the quicker opportunity for product revenue.
Unidentified Analyst: All right. Thanks for taking my question.
Dan Brdar: Okay. Thanks Kelly .
Operator: There are no further questions at this time. Mr. Brdar I'd like to turn the conference back to you for any additional or closing remarks.
Dan Brdar: I just want to thank everybody for joining us on the call today. We will be participating in the H.C. Wainwright Global Investment Conference in May. And we look forward to giving you another update on our second quarter call. Have a great day, everyone.
Operator: This concludes today's call. Thank you for your participation. You may now disconnect.
